Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Skelmersdale) (Con)
My Lords, the Grand Committee is now in session. If there is a Division in the House, which I am told is extremely likely, the Committee will adjourn for 10 minutes, as recorded by the Annunciator.
Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority Order 2014
Baroness Stowell of Beeston
That the Grand Committee do consider the Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority Order 2014.
Relevant documents: 24th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, the order we are considering this afternoon, if approved, will bring about the establishment of another combined authority in another major area of our country—this time across the area of Durham, Northumberland and Tyne and Wear.
The order is very similar to those that the Grand Committee considered on 24 March, and I am happy to report that the combined authorities for the areas of greater Merseyside, South Yorkshire and West Yorkshire were established on 1 April. Noble Lords may also recall that I explained to the Committee then that the establishment of the combined authority enables the councils and their partners to work together more effectively and efficiently to promote economic growth, to secure more investment and to create more jobs.
The establishment of this combined authority opens the way for more effective collaboration between the councils and their partners to pursue more efficiently economic development and regeneration. Crucially, all the drive and initiative for establishing the combined authority has to come from the places involved. It is a process where the first steps are taken by the councils involved—what we sometimes call bottom-up.
As with the others, this combined authority will be responsible for economic development, regeneration and transport across the functional economic area. The combined authority will take over the transport functions currently exercised by the Tyne and Wear Integrated Transport Authority, which will be abolished when the combined authority is established. The combined authority will also undertake similar transport functions currently exercised by Durham County Council and Northumberland County Council. The seven councils within the area have agreed that the combined authority will be able to exercise their functions on economic development and regeneration.
By taking on those functions, the combined authority will be central to delivering the outcomes envisaged in both the Newcastle City Deal and the Sunderland and South Tyneside City Deal, the latter of which the Government have recently agreed. The combined authority will also provide the governance needed for any future growth deals drawing on resources of the local growth fund.
As I set out to the Grand Committee the other week, the Government’s approach to combined authorities is one of localism, which reflects our belief that residents and their representatives are best placed to decide what happens in their area. Where councils come forward with a proposal for a combined authority that commands wide local support and we consider that the statutory conditions have been met, we invite Parliament to approve a draft order to establish the proposed combined authority.
If in future local councils decide that changes are in the area’s best interest—perhaps another council joining, or one leaving—and statutory conditions have been met, we would bring a new order to Parliament for approval to enable the change to take place. What is important here is the area’s best interests.
We have considered the particular circumstances of this proposed combined authority, as made by the councils, against the statutory conditions, as the law requires, making sure that the proposal: is likely to improve the exercise of statutory functions relating to transport, economic development and regeneration in Durham, Northumberland and Tyne and Wear; is likely to improve the effectiveness and efficiency of transport in Durham, Northumberland and Tyne and Wear; and is likely to improve the economic conditions in Durham, Northumberland and Tyne and Wear. The Government consider that the tests are unambiguously met. The Government have also had regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government. Further, we are clear that the combined authority would command wide local support—from local businesses, other public bodies, and local people and their democratically elected representatives.
The draft order specifies the formal, legal name for the combined authority to be the Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority. All those councils have consented to that legal name but, as we discussed previously, how that authority will brand itself, including the use of any brand name, will be entirely a matter for the combined authority. That was an important point that we debated the other week, and I am sure it will be raised again by noble Lords in the discussion that follows. The draft order makes provision: for the abolition of the Tyne and Wear Integrated Transport Authority; about the transport and economic functions that the combined authority will have; and about its membership and constitutional arrangements. The combined authority will be for a larger area than that currently covered by the Tyne and Wear Integrated Transport Authority, reflecting the functional economic area. Accordingly, the combined authority will also have some of the transport functions currently exercised by Durham County Council and Northumberland County Council.
The combined authority will be governed by its members and subject to scrutiny by one or more committees with a membership drawn from members of the councils concerned, to hold the combined authority to account. As we discussed previously, good governance practice will mean that such committees will be politically balanced, enabling appropriate representation of councils’ minority parties in the governance of the combined authority. I am pleased to inform the Grand Committee that, following my exchange with my noble friend Lord Shipley during the debate on the other combined authorities, the Government have now written setting out the good practice guidance, and a copy of that letter is being published on the Government’s website. We, of course, intend to write to this combined authority in similar terms.
Noble Lords may have seen that the councils concerned with the combined authority have already confirmed that its constitution will be formally adopted at its first meeting and provides for a politically balanced overview and scrutiny committee of two members from each constituent authority, in line with good practice. Combined authorities are also subject to the same transparency and audit requirements as local authorities, so the combined authority will be audited by an external, independent auditor. Meetings of the combined authority and its committees are open to the public and minutes of the meetings are made publicly available, in the same way as for local authorities. In future, people will have the right to film and use social media to report on council meetings; that applies equally to meetings of combined authorities as it does for local authorities. Again, noble Lords may have seen that the councils have confirmed that the meetings of both the overview and scrutiny committee and the combined authority will be open to the public and their minutes published.
This draft order will enable the seven councils concerned and their partners to work together more effectively to deliver economic growth across their areas. Establishing the combined authority is what the councils and their partners in these areas want, because they believe that it is the most effective way for them to do what councils across the country should be doing: putting the promotion of economic growth at the heart of all that they do. That is a priority for them, and a priority for the Government. I commend the draft order to the Committee, and beg to move.
Lord Adonis (Lab)
My Lords, I strongly support the order and I commend the noble Baroness for the extremely able way in which she introduced it—though, taking up her point about the title, it is one of the greatest mouthfuls in the history of mouthfuls. I am sure that the authority will rapidly come to be known as the north-east combined authority, which is the right thing.
Two years ago I was privileged to chair the North East Independent Economic Review. My fellow commissioners included the then right reverend Prelate the Bishop of Durham before he was translated—or as some in the north-east think, demoted—to become the most reverend Primate the Archbishop of Canterbury, and the noble Lord, Lord Curry of Kirkharle. The key recommendation of that review was for a combined authority, broadly as proposed in this order, uniting seven authorities of the region, together with the local enterprise partnership, with a mission to improve transport, infrastructure, skills and economic development in the region.
I pay tribute to the chair of the local enterprise partnership, Paul Woolston, and his team, and to the leaders of the seven local authorities for embracing this agenda, which has led to the order before us today. I also congratulate Simon Henig, the leader of Durham County Council, on his election as chair-designate of the combined authority, and I am also very glad to see that all seven leaders of the local authorities within the north-east region are taking constructive leadership roles within the new combined authority.
This order is about the legal structure and mechanisms of the combined authority. However, it cannot be stressed too much that the combined authority is a means to an end. The report of the independent review highlighted five priorities in particular, on which we very much hoped the combined authority would focus. First, we hoped that it would champion North East International, promoting the region at home and abroad as a magnet for trade, talent, tourism and inward investment. The north-east is doing very well on inward investment. It is the only region of the country with a positive balance of trade. Nissan is one of the most successful exporters in the country, and I am delighted that recently another major Japanese exporter, Hitachi, has also invested in the north-east. It is creating upwards of 700 jobs and is at the moment constructing its new factory in the north-east. However, much more can be done. As those companies have said, they are sure that the north-east could do even better in attracting inward investment and using it as a basis for exporting to the continent. I am glad to see the noble Lord, Lord Wrigglesworth, the former chair of the Port of Tyne in his place. The ports in the north-east are excellently placed for exporting to mainland Europe. The potential for using the north-east as a platform for significant further exporting industries is huge with the right economic infrastructure in place.
The second priority that we identified for the combined authority was doubling the number of youth apprenticeships to tackle the evil of low skills and high youth unemployment, alongside higher skill standards and an increase in the proportion going on to higher education. The north-east needs a further skills revolution. It will not be able to compete successfully without higher skill levels. Regrettably, it has a lower than national average proportion going on to higher education and fewer than one in 10 of 18 year-olds goes on to an apprenticeship. That situation needs to change radically if the north-east is to be able to compete. A focus on a really significant improvement in skill levels by the combined authority is important.
The third priority we identified is the development and strong innovation in growth clusters, stimulating universities and their graduates, existing companies and public institutions to create and finance new high-growth enterprises and jobs. The north-east has four outstandingly good universities that are all strongly committed to economic growth and regeneration within the north-east, and the combined authorities of which their representatives would also be members through the local enterprise partnership could make an important contribution there, too.
The fourth priority identified was the need for big improvements in transport infrastructure and services to overcome the relative national and international isolation of the north-east, and to improve connections within the north-east so that people can get to and from work more easily. It cannot be emphasised too strongly that transport connections and improvements in national and international connectivity are crucial for the future of the north-east. The west coast main line has significantly improved in recent years, which has brought Manchester and the north-west relatively closer to London. The journey times on the east coast main line have regrettably slowed down over the period. Despite the debate that we had within the north-east economic review about what we hoped was the imminence of a transatlantic flight starting from Newcastle Airport, that still has not happened, and improving transport connections will be important. Within the region, there is significant room for improvement in the ITA’s activities but it has done good work. However, this order also brings County Durham and Northumberland within the ambit of the combined authority, and that could be very beneficial for improving transport connections within the region.
Fifthly and finally, we identified the need for the creation of stronger public institutions, including the location of key national institutions in the north-east. In the report we identified the British Business Bank as a possible candidate for location in the north-east. I regret to say that that opportunity was passed by, but there are many other candidates that we ought to review. In what noble Lords think was one of my more quixotic moments, I even suggested that your Lordships’ House might be relocated, and I cannot think of a better location for it than the north-east. However, I mainly offer that as an illustration of the possibilities that might be available.
Lord Shipley (LD)
My Lords, I, too, strongly welcome the draft order. I agree with every word that we have heard from both the Minister and the noble Lord, Lord Adonis. It is a tribute to the noble Lord’s leadership—this was one of the five key recommendations that arose from the north-east economic review—that we are in the position that we are today. There has been a lot of discussion on the way, and I hope that discussion is now at an end; as the noble Lord has said, the combined authority is a means to an end. It has to achieve real outcomes, and for that it has to work with a clear understanding of its remit, with clear joint working with the local enterprise partnership and with the support of all parts of the north-east combined authority area, both rural and urban.
I thank the Minister for what she said and particularly for having issued guidance on the issue of transparency and membership, following the discussion that we had about greater Merseyside, West Yorkshire and Yorkshire. I am particularly pleased about the specific draft order because it represents another step in the gathering pace of devolution and decentralisation in England, and because combined authorities provide a structure within which that devolution and decentralisation can be achieved. There are now several combined authorities in place deriving from the legislation of 2009, and I am really very pleased that that has been achieved. It is very welcome because, as so many local authorities now realise, sharing power can drive faster and more sustained growth, both in the functional economic area that they are part of and in their own council area.
I shall not repeat here some of the things that I said about greater Merseyside, West Yorkshire and South Yorkshire, except to say this: I think it will be important for this combined authority to demonstrate clearly its capacity to cover rural as well as urban issues, to work very closely alongside the LEP and to include opposition political parties at every level in what must be an open decision-making structure. This is because we know that councils working together will achieve more than if they just compete with each other. Investment and risk can be shared and co-ordination can be more effective.
More broadly, I have every confidence that combined authorities will prove a success in taking on greater powers. That leads me to suggest two ways in which further devolution might start to be considered.
First, once they are working effectively, the next step for combined authorities might be to secure London-style powers in transport and strategic planning, among other areas. It is hard to see why London should have a different set of powers from other cities or why the combined authorities may have slightly different powers and responsibilities from each other. The right way forward seems to be to move towards a common approach.
Secondly, other major natural sub-regions do not have a combined authority and could benefit from having one, or at least a more formal structure for collaboration. I hope that the Government will now encourage this as we move on from the combined authority orders that we have had in recent weeks.
I will make one final, important point. In all that I have said, the role of the local enterprise partnerships will be essential to the success of the combined authorities. They must have a clear strategic purpose and a clear leadership role, and they must remain at the heart of delivering economic growth in their areas.
As in Greater Manchester, the LEP and the combined authority each has a key role to play in driving jobs and growth. The same can be true in the other combined authorities, in particular in this one, and I wish it every success. As the noble Lord, Lord Adonis, made absolutely clear, a combined authority as a structure is a means to an end, but not the end in itself.
Baroness Quin (Lab)
My Lords, I, too, believe that what we are considering today is a very significant and welcome development, and echo the comments that were made on this by both previous speakers.
This combined authority brings together authorities of a distinctive part of the country, which have a common heritage. In many ways it is the core of the north-east and, if we go back even further, of the kingdom of Northumbria, although that covered a much wider area. It has a very strong industrial vocation, which it has had since the beginning of the Industrial Revolution, and still has a manufacturing and industrial vocation today, as well as many of the related skills of those sectors. Certainly the area covered has an economic coherence, which is important when we are talking about a combined authority, one of the main objectives of which is to be the promotion of economic development.
This move can also be very significant as regards transport, which was mentioned by my noble friend Lord Adonis. To pick up on a point made by the noble Lord, Lord Shipley, it is good that in the combined authority we are bringing together urban and rural areas, particularly on transport issues. The authority will be able to make a success of bringing closer to the Tyne and Wear conurbation, through transport infrastructure, what we think of as the outlying areas of the old Durham and Northumberland coalfields, which are perhaps not classically rural, but which have become semi-rural today. There is a real need for people there to be able to access easily and successfully the conurbation itself.
The authority is an excellent basis for co-operation with the economic forces within the area. Certainly the authorities concerned are used to working with both industry and representatives of employees’ trade unions. It was the area where the regional development agency was the most successful and where good relationships, despite the change, have already been established with the LEP to try to promote the economic development of the area as positively as possible.
I very much echo what my noble friend Lord Adonis said about the excellence of universities in the area concerned. Again, they have a tradition of working together and of working with the wider community, in particular as regards research and development, looking for advantages for the local and regional economy as well as the wider economy.
I, too, echo what was said about the welcome investment we have seen, particularly the recent announcement about Hitachi. My only slight reservation here is that while I am delighted that Japanese investors have seen the potential of the north-east, I still urge British investors to look closely at the region, perhaps more than they have done. There is still a bit of a psychological north-south gap in that respect. It always seems to me that British investors do not fully appreciate what a great place the north-east is in which to live and work, and the fact that it has a positive trade balance and great economic assets and potential which need to be exploited.
I am glad that the council with which I have been most associated in my career, Gateshead Council, is a key part of this organisation. I always like to pay tribute to it at every possible opportunity; I happen to think that it is the best council in Britain. It has a proud record as a public entrepreneur, working with private industry and being very outward-looking in order to promote the regeneration of the region. I believe that the combined authority, too, will be able to work alongside the private sector and make a very successful public/private partnership. Very often, we see these two things as opposites, but I know from my experience that it makes huge sense for these sectors to work closely together for the future benefit of the region.
I conclude by again wishing this project every success. I hope that it will co-operate with neighbouring areas, both to the south on Teesside and to the north in Scotland—where I hope it will be able to continue to do so following a successful no vote in the Scottish referendum later this year. I am sure that, given the outward-looking nature of this enterprise and of the councils and the people involved in it, it will have every success. I think that this debate today, with the warmth of the tributes that have already been paid to the project, is strong evidence that that will be the case.
Lord Walton of Detchant (CB)
My Lords, I shall speak very briefly because I have to confess that local government is not a matter which usually brings my interest to the attention of your Lordships. However, the order gives me the opportunity to make one or two personal remarks. I was born in a little place called Rowlands Gill, the son of a schoolteacher and the grandson of a miner. I went then to a little school at the Hobson colliery near Burnopfield in Durham county and later to a grammar school in Spennymoor, County Durham, before moving to the medical school in Newcastle, which was then part of Durham University.
I feel a great loyalty to the north-east of England, which has meant a great deal to me throughout my life. I now live in north Northumberland, but I spent much of my professional life in Newcastle. I am greatly honoured by the fact that, in 1980, 34 years ago when I was dean of the medical school in Newcastle, I was one of eight people honoured to become an honorary freeman of the City of Newcastle. I know that the noble Lord, Lord Beecham, played a part in that particular decision. Five of the eight honorary freemen were former lord mayors; the other four were Colonel George Brown of Newcastle Breweries, Cardinal Hume—whose father, Sir William Hume, was professor of medicine at Newcastle and taught me briefly as a medical student in wartime—and then Jackie Milburn and me. I shall never forget that, in his speech of acceptance on behalf of all the honorary freemen, Cardinal Hume said that it was the greatest day of his life—because it was the first time that he had an opportunity of meeting Jackie Milburn. That was his remark, which I have always remembered since that time.
I come to the reason why I am so enthusiastic about this new organisation. Its name is not exactly characterised by brevity, but it seems to me nevertheless to be the proper name for it because some of us look back upon the ill fated Tyne and Wear authority of many years ago. What that authority did was to impose an additional layer of bureaucracy on local government throughout the north-east. Within a few years, seeing that everybody had to recognise that almost every decision had to be stamped by the Tyne and Wear authority and discussed by it, even if it should have been made at local council level, that authority had to be dissolved. This is why I am glad that the new authority will not be called the Tyne and Wear authority, which I think would bring back to many people unhappy memories.
It is good to know, according to the information we have been given, that this new combined authority will use a light touch in its relationship with the local authorities. As such, it will continue nevertheless to have an extremely powerful voice. I am very glad that it is going to exercise its authority in collaboration with the local enterprise partnership. This means that it will probably bring back and be able to implement many of the policies which were, I think, effectively carried out by One North East. This should be greatly welcomed. It is good to know that the combined authority will have an overview and scrutiny committee made up of members across the parties, thereby increasing transparency and accountability. As a proud Northumbrian, I welcome the establishment of this new authority.
Lord Wrigglesworth (LD)
My Lords, it gives me great pleasure to support the comments that have been made by other noble Lords during the debate and to support the draft Order.
I think everybody these days is in favour of extending resources and power to the people and decentralising power. Many of us have been in favour of it for a very long time. Getting government to do it is another thing. I can think back very many years and the resistance of Whitehall departments to devolving people, power and resources to the regions. It is therefore a very welcome step today to see the combined authority being established and I hope that the united support of the region will enable it to get the resources and enhanced powers that my noble friend referred to in the future.
However, the region is undoubtedly facing many challenges. I want to refer to the central challenge for this organisation and others in the region in the years ahead. Before doing that, I will say a word about what I think is of absolutely crucial importance: the relationship between the combined authority and the LEP. They both have the job of building up the economy of the north-east, which is central to the interests of the region, the people who live in it and the national economy. That can be done only if those two bodies work harmoniously and closely together.
As well as being chairman of the port, to which the noble Lord kindly referred, I have spent the past 25 years—I declare a continued interest in this—building industrial estates and offices around the north-east. I think I have probably done more to regenerate the north-east in that capacity than I ever have done in Westminster. I have certainly created a lot more jobs. However, I have seen it from a worm’s-eye view in relation to local authorities and other bodies that are responsible for development. As a developer of industrial estates and offices, I can tell you that it is sometimes a nightmare dealing with so many different bodies in the region that are dealing with the same thing. I see this happening with the LEP and with the local authorities. That is why I say that they have to work harmoniously together. They have to do it also in relation to inward investors. I was a director of the Northern Development Company and we had a very good routine which we had worked out with the local authorities so that they each got a turn when an inward investment came along. Those of us who were involved will recall that the debates over where Nissan was going to be placed within the region were extremely difficult but were resolved, successfully. The task of doing the job with inward investors, developers and other investors is crucial.
I assume each local authority is going to continue with its own economic development department. How are they going to relate to each other? Seven economic development departments—that is a pretty big number of people and a big budget—and the LEP will be doing very similar things. I am not going to prescribe how it should work; I just want to flag it up as one of the crucial issues if this new arrangement is going to succeed. If there is a will, it will succeed. I hope that the economic development departments of the local authority, because of the success of the LEP and because of the whole thing, will gradually wither away and will not be seen to be as necessary, as they have often been in the past by individual local authorities.
I have those reservations but, to me, the crucial issue for the region and for the development of its whole economy is not to do with the physical infrastructure; it is to do with our people. The reason we have a millstone around the economy of the north-east is that we have too many people who do not fulfil their great potential. Look at the LEP economic plan: it has highlighted that as one of the most important issues facing us. I hope that the combined authority, the LEP and everybody in the region will do whatever they possibly can to help all the Easingtons and the Benwells—we know the places in the north-east—that have people leaving school without qualifications of a high enough standard to be able to get them into the labour market. That is the challenge above all for the north-east.
The substantial growth of apprenticeships has been one of the most encouraging things that one could have imagined. I checked the figures: we have 61,000 apprentices in the region, a tremendous number. That brings hope to those many young people who get training of that sort, but there are many other skills that they have to get—computer skills and all sorts of modern skills to deal with the businesses expanding in the region today. Look through the names of all those businesses that have had money from the regional growth fund: what a wonderful roll call of high-tech, pharma, engineering and other businesses. They are just the sort of businesses that we all want to see, many of them exporting products throughout the world. However, to work in those businesses, you need qualifications.
The focus of all of us in the region, and of the organisations in the region, must be on those people who have not been able to achieve their full potential and will not be able to in the future unless they are given the tools to get the jobs available to them. I very much hope that the new combined authority will work well; it certainly has my best wishes, and I am sure that we in this House will do everything to support it. The whimsical comment about this House possibly moving to the north-east would no doubt please many people in the Room today. I would only say that if any whimsical person should come along and take it seriously, there is a wonderful county hall becoming available in Morpeth. It has a wonderful chamber and lots of administrative facilities. We could move there overnight, almost. That would make up for the bank that we did not get to which the noble Lord, Lord Adonis, referred. I wish the organisation well and look forward to seeing it operating.
Lord Scott of Foscote (CB)
My Lords, I have a short point about the order, which came in front of the scrutiny Select Committee of which I have the honour of being a member some weeks ago; I made the same point there. It relates to the name of the new combined authority. It will of course be a corporate authority in its own right. It may sue and be sued in its proper name. My recollection of the wording of the order is that it states that the combined authority shall be “known as” and then sets out the name. I said on the previous occasion—I repeat it—that it is an absurd name for a corporate entity. It would be easy for somebody to make a slight slip and get the name wrong, upon which the lawyers might go to town and deny the proposition that action has been properly brought or defended, as the case may be. In the Select Committee, I suggested that a provision be added to the order to say that the new combined authority may sue or be sued as the “north-eastern combined authority”. I do not know whether that has been done; I imagine that it has not, but if it has not it really ought to be.
Baroness Armstrong of Hill Top (Lab)
Part of the problem is that the new combined authority does not cover the north-east. I am sure that the Minister replying will want to—I am sorry; I thought that the noble Lord from Teesside was replying. However, this problem is where we are and I am very supportive of what we have got.
However, I must be getting old. We have been around these houses time and time again. When I was first elected to Parliament in 1987, my good friend and neighbour, now my noble friend Lord Radice, brought forward a Private Member’s Bill to establish a north-east assembly. Governments have responded to these proposals, but the next Government then want to unpick everything that has been done and we start again. I do not want to bear a grudge today, but the Government have taken us around the same sort of territory yet again. We will do it, because what we in the north-east want more than anything else is for our region and the people living in it to have every possible opportunity. I am sorry that the region has now almost been split in two. It is not a large region, and the region as a whole should be coming together and acting together. However, that was undone in the first years of the coalition, and we are not going to get back to that, even though folk like me get a bit worried about it every now and again.
I pay tribute to my noble friend Lord Adonis. He did a magnificent piece of work for the north-east LEP—as it is called, even though it does not include Teesside. He did a really good job of getting people who were fed up with what was being done to them from London around the table to think about the future and what the priorities should be. In his report he identified the key priorities for the region. I looked on it as an exemplary piece of work from a member of the Opposition working in a cross-party way and making sure that the Government knew exactly what was going on. We in the region owe him an enormous debt of gratitude.
I did not have quite the same view of Tyne and Wear met as the noble Lord, Lord Walton. Apart from anything else, the one good, important thing that it did—even if it did nothing else—was to identify and secure large pieces of land for development. I suspect that Nissan would never have come to the north-east if it had not been able to get permission on such a large site with the potential for further development. You needed a large organisation, working across authority boundaries, to come up with those sites. That has been important in our development. I hugely welcome Hitachi coming to Newton Aycliffe with the promise of many more jobs.
As the noble Lord, Lord Wrigglesworth, said, that also really heightens our focus on getting skills. This morning I was with people from Sunderland and the chair of the university council, Paul Callaghan, who was for a short period chair of the regional development agency until, two weeks later, the Government had a different idea about them. He runs a significant global IT company. He has just opened his offices in Australia and is now looking to four other countries; he has them already in America and goodness knows where else. That is a Sunderland-based company that is at the absolute forefront of IT. He chaired a conference a couple of weeks ago on bringing together IT companies in the region, and said that while they do not have problems with premises or local authorities, the one thing they have problems with is getting a suitably skilled and educated workforce. That was from about 70 local companies. This needs addressing, and the combined authority is really going to be pushed to come together to address this across the board. It is a real challenge to our universities. We have good universities in the region; Sunderland has been acknowledged as the university that does most in the country about widening access, and that is very important in our region because we still have the lowest proportion of young people going into higher education.
Baroness Williams of Trafford (Con)
My Lords, I apologise for arriving late for the Minister’s introduction. As one of 10 leaders who worked in the Greater Manchester authorities in the lead-up to the formation of the combined authorities, I welcome the order today.
The backdrop to this is that nearly 30 years ago in Greater Manchester we had something called the Association of Greater Manchester Authorities, which was, if you like, a voluntary combined authority. We worked together because we wanted to. The combined authorities will have a great ability to strengthen leadership, but will not necessarily create it where it is not there. However, it will give a real opportunity for a strategic approach among those combined authorities that have been set up, and that is the first step towards devolution.
I will comment on a couple of things that the noble Baroness, Lady Armstrong, said about transport just before she finished. It is no great surprise or coincidence that Greater Manchester has been allocated to high-speed stations or that it was so successful as regards the Northern Hub. I declare an interest on both those topics. House prices have seen the greatest increase in Manchester, which has been named the second city. I know that some people would like to think that Hebden Bridge is the second city, but it is in fact Manchester. Manchester Town Hall features so much in television dramas on the Houses of Parliament that if the administrative centre is to be moved, it should be moved to Manchester. I thank noble Lords for indulging me.
Lord Beecham (Lab)
My Lords, I am grateful to the noble Baroness for making a contribution from outside the north-east today. We have heard from seven speakers from the region and, but for the fact that he is a Whip, I dare say that the noble Lord, Lord Bates, would have been contributing to the debate. We are very glad that we have a Minister from the north-east in the Government, at least for the next year. I hope that during that time he will continue—as I am sure he does quietly behind the scenes—to advocate our cause.
It is also a particular pleasure for me that the noble Lord, Lord Walton, contributed to this debate. He has contributed an enormous amount to the region and its reputation. Like him, I very well remember the occasion when the freedom of the city was conferred upon him and others, including Cardinal Hume. I had the pleasure of nominating them all at that ceremony, and well remember the cardinal’s remarks at that time. Perhaps he might have a celestial word with the powers that be in favour of the team which at least the noble Lord and I support, and perhaps also in favour of the team which the noble Lord, Lord Shipley, supports, which is a little further away in Sunderland. We can certainly do with some divine intervention at the moment. I hope that the noble Baroness will receive some of that benefit this evening.
I also thank my noble friend on my left, Adonis to the north-east’s Venus, as it were, whose report was clearly very influential in promoting the cause of the region.
Like those who spoke in last week’s debate—by the way, there were not as many from those four combined authorities as there have been speaking today for just this one—I extend a very warm and unreserved welcome to this order and congratulate the seven local authorities and the Government on this important measure. It follows the creation of the Greater Manchester combined authority some years ago, currently chaired by my noble friend Lord Smith of Leigh, under the auspices of the Labour Government’s legislation. It is right for us in the north-east to thank the local authorities in Greater Manchester for successfully blazing the trail for this new approach to sub-regional co-operation and development. I am glad that one of the leaders of Greater Manchester at that time is with us today.
Even in the closest families, sibling rivalry is often present, and elements of such tribalism in the north-east have existed, and perhaps always will. Thirty years ago, I circulated anonymously, via the then leader of Northumberland County Council, a paper calling for the creation of a north of England councils association, to speak for the region. The association, now the Association of North East Councils—since Cumbria was subsequently hived off to the north-west—survives to this day. I fear it would have been still-born if its paternity had been revealed at the time.
Happily, however, the seven local authorities in today’s order have now come together. They encompass five metropolitan authorities and two counties, with a rich history and culture, fine cities and attractive coastline and countryside. It is not quite the desolate and underpopulated area described by one of the Minister’s colleagues last year in some remarks about fracking. The region’s coalfields, shipyards and engineering works have made a huge contribution to the UK economy, and its people yearn to do so again. As we have heard, overseas companies such as Nissan, Hitachi and Siemens recognise what the region has to offer. However, as my noble friend Lady Armstrong has pointed out, sadly British business has too often overlooked its potential, though in Sage and other companies operating in the fields of high-tech and the biosciences, there are companies able to compete in world markets.
Welcome though the new authority and the two City Deals which have been negotiated are, we have to recognise that the region comprising both the combined authority and Teesside has been ill served by the abolition of the successful regional development agency, the closure of the government regional office, and particularly by the appalling cuts in local government funding, still to reach their estimated total of 40% of local council budgets. The local authorities comprising the combined authority have demonstrably suffered from an increasingly unfair distribution of government grant and a skewed allocation of infrastructure investment to other better-off areas. Even as we hear of the HS2 programme, which will not reach the area for decades, we learn that the vastly expensive Crossrail line is to be extended to Reading, another example of the much higher infrastructure investment per head in London and the south-east.
The combined authority, the LEP and its business partners will undoubtedly seek to use their powers to maximise investment in skills, infrastructure and business support. To do that they will need a fair allocation of resources to, for example, improve transport links within the region and sub-region and to the conurbations of Yorkshire and the north-west, and, I hope, to see the dualling of the A1 to Scotland.
However, other resources need to be harnessed. As we have heard, there are four very good universities in the area of the authority, and several FE colleges. They need to be involved in developing the skills of the area’s young and linked ever more closely with industry, translating research into production, as so often our economy has failed to do.
Similarly in health, education, the environment, culture, leisure and welfare there needs to be strategic co-operation within the combined authority area across the public sector, together with the private and voluntary sectors. The Labour Government proposed the concept of Total Place, seeking to look at the totality of public expenditure across an area rather than from the perspective of service or departmental silos. Will the Government revive what seems to be a flagging concept in the combined authority area, and play their part in ensuring local accountability and locally driven programmes to achieve major strategic goals? In this way, we can better meet the social and economic needs of an area and its people suffering from high unemployment. At the same time, through a drive to share services, efficiency savings can be engendered.
Baroness Stowell of Beeston
My Lords, first, I join the noble Lord, Lord Beecham, in welcoming so many noble Lords with genuine knowledge of the area that we are debating today. I certainly welcome the support of my noble friend Lord Bates alongside me today, although he does not have a speaking role, and noble Lords will have to settle for me instead.
I join the noble Lord, Lord Adonis, in congratulating those in the area who have worked hard together on the proposal for the combined authority. I also want to acknowledge at the start how positive, inspiring and exciting I found all the contributions today—until, perhaps, the noble Lord, Lord Beecham, just now. It is important that we all focus on the opportunities for the north-east and the people who live there.
The noble Lord, Lord Adonis, my noble friend Lord Shipley and, perhaps most powerfully of all, my noble friend Lord Wrigglesworth, talked about the importance of the combined authority being an effective collaboration between the councils, the LEP and all the different interested parties in the area. My noble friend Lord Wrigglesworth said that what is really important is the focus on people—that was echoed by all noble Lords who spoke today—and on making sure that the skills are available in the north-east to take advantage of new inward investment. The point was not lost on me. I certainly share that view and am pleased to be part of a Government who are making a great deal of effort to improve the skills of our young people and promote apprenticeships.
I think that it was the noble Baroness, Lady Armstrong, who mentioned the university technical college proposed for that area. She and others referred to the recent commitment of Hitachi to move its global rail HQ to the UK. It is already planning to build a factory in Newton Aycliffe. It is worth noting that Hitachi is one of the key employers supporting a UTC bid which, sadly, failed its first submission but will be resubmitted for the next round, led by Sunderland University. The college, to be based on the Newton Aycliffe business park, would open in September 2016. I very much hope that we will be able to celebrate that soon, because, like other noble Lords, I feel very strongly about the importance of the arrival of UTCs and their role in our education system.
Many noble Lords referred to the name of the new combined authority. The noble Lord, Lord Adonis, mentioned that it was a bit of a mouthful and somebody else said that it did not trip off the tongue. There are a few important points to make about the name of the authority. First, the noble and learned Lord, Lord Scott of Foscote, queried whether the name would create any legal difficulties. The name has been formally consented to by all seven councils, so I think that we can be confident that there will not be any legal difficulties. As the noble Baroness, Lady Armstrong, mentioned, while the councils concerned asked for “north-east” to be included in the name of the combined authority, in response to the consultation some neighbouring local authorities and the Tees Valley local enterprise partnership asked the Government not to include “north-east” in the name for risk of confusion. So we went for the approach that was signed up to by all the local authorities; that is, to list the names that are in the order. However, as I said in my opening remarks and am happy to restate now, it is very much up to the combined authority to decide what it wants to call itself and how it markets itself to the rest of the country and the rest of the world. That is a matter for it.
The noble Lord, Lord Adonis, said that he expected the authority to be called the north-east combined authority. That is a matter for it, but one of the reasons why the Government were keen not to offer that as a name in the order was that we did not want to imply that there is an additional tier of government. I can reassure the noble Lord, Lord Walton, who gave us an important history lesson, that it is certainly not a repeat of what he described. What we are looking for from this combined authority is for those existing local authorities to collaborate and not to introduce a separate, independent layer of government. To the point made by the noble Lord, Lord Beecham, I say that it is most definitely not a replacement for the RDA; it is not a new tier of government.
My noble friend Lord Shipley asked about more powers for combined authorities. Certainly, we would be interested to hear from combined authorities about what more they believe could be done to empower them to deliver economic growth—from today’s debate, we know of the real commitment from people in the area to get behind that clear strategic objective. However, we should be careful as well not to rush to give new or additional powers to combined authorities before they have been able to exercise what they have already been given, so I would not want to commit to something more prescriptive in addition to what exists already.
My noble friend referred also to other areas having a combined authority. As I said earlier, it is very much for local councils to come forward with their proposals for a combined authority. If they do that, we will consider it carefully against the framework that exists.
The noble Baroness, Lady Armstrong, was clear in the points that she raised about transport being a key part of this new entity’s responsibilities. I agree that transport is a key issue and the combined authority will improve the area’s ability to make the case for transport improvements. Overall, though, it is safe for me to conclude that we are in general agreement that establishing this combined authority will support these councils to drive their commitments to deliver growth and prosperity for their area, a priority which should be at the heart of everything that councils across the country do.
We have already made reference to Hitachi. I agree with the noble Baroness, Lady Quin, that it should not just be foreign firms that are looking to invest in the north-east. I hope that that will not be the case, and that there will be greater investment from national organisations as well.
I am not going to comment on the House of Lords moving to the north-east, but I will commit to a visit to the north-east myself. I regret that I will not be able to do so on HS2, because it would clearly be a long wait before I got there. However, HS2 will bring benefits to the north-east, and I am told that the rail service patterns have not yet been developed but indications to date suggest that HS2 services going on to the north-east will improve connectivity. I look forward to visiting.
I am grateful to all noble Lords for their support and contributions today.
County Court Remedies Regulations 2014
(10 years, 8 months ago)
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Lord Faulks
That the Grand Committee do consider the County Court Remedies Regulations 2014.
Relevant document: 24th Report from the Joint Committee on Statutory Instruments.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, this statutory instrument revokes and replaces the County Court Remedies Regulations 1991—the 1991 regulations. A draft was laid before Parliament on 10 March 2014 and is also being debated in the other place today. Subject to your Lordships’ consideration, the real change that will be made by this instrument concerns the county court’s jurisdiction in respect of applications for freezing orders. A freezing order is an interlocutory injunction that restrains a party in civil proceedings from disposing of or dealing with their own assets before judgment can be obtained or enforced. They are usually sought before proceedings are issued when the claimant fears that the defendant is likely to dispose of assets before proceedings are issued. However, a freezing order may be sought at any time during the course of proceedings and after judgment has been obtained.
The purpose of this instrument is to remove the current limitations that restrict the county court from issuing freezing orders. It will enable the county court to make freezing orders in all cases and enable claimants to make their applications for a freezing order in the court where their substantive cases are being heard. This may be at the High Court or, from 22 April, a county court hearing centre. The Committee will note, however, that the draft regulations do not lift the restrictions that prohibit the county court from granting a search order, which is an order—often known as an Anton Piller—requiring a party to admit another party to premises for the purpose of preserving evidence. The draft regulations therefore retain the current prohibition placed on search orders. The aim of the reform is to rebalance jurisdiction between the High Court and the county court and to make optimum use of judicial resources by widening, where appropriate, the jurisdiction of the county court, while enabling High Court judges to focus on cases that require a greater level of expertise.
Before setting out further details about this instrument and why the Government are taking this action, I will briefly explain some background to the reform. In March 2011, we set out our policy to reform the structure of the civil courts in a series of proposals in the public consultation document, Solving Disputes in the County Courts: Creating a Simpler, Quicker and More Proportionate System. Those proposals were based on some of the recommendations made by Sir Henry Brooke, a retired Lord Justice of Appeal, in his report Should the Civil Courts be Unified?, published in August 2008. The recommendations, which included permitting the county court to grant pre-judgment freezing orders, were aimed at improving the administration of civil justice and providing a more efficient use of judicial resources. In endorsing that recommendation, the Judicial Executive Board, which was chaired by the then Lord Chief Justice, Lord Judge, commented that it would introduce flexibility and obviate the need for technical transfers between the High Court and the county courts. The instrument under consideration today accordingly reflects Sir Henry’s recommendation in this regard.
I will now set out the problem with the current jurisdiction of the courts in relation to freezing orders and why the Government are taking this action. Currently, under the 1991 regulations, the county court’s jurisdiction to make freezing orders is limited to making orders for the purpose of preserving property that forms or may form the subject matter of proceedings, or to preserve assets following judgment, but prior to execution of that judgment.
Those limitations do not apply if the order is made by a Court of Appeal judge or a judge of the High Court sitting in the county court or a mercantile judge in respect of proceedings in the Central London County Court mercantile list. Save in those circumstances, the county court is prohibited from making pre-judgment freezing orders. In all other cases, if a freezing order is required in county court proceedings, the application must be made to the High Court, even though the substantive case is being heard in the county court.
The result is that in county court proceedings where a claimant wants to apply for a freezing order to prevent the defendant from moving or disposing of his assets, the claimant will have to apply to the Chancery Division of the High Court at the Royal Courts of Justice in London, the London Mercantile Court or the nearest local district registry. In doing so, the county court would have to transfer the case to the relevant court to consider the freezing-order application. Once the application is determined, the court will transfer the case back to the county court.
The implication of the current procedure is that claimants—for example, estate agents suing for small amounts of unpaid commission—have either to inundate the mercantile courts with applications for pre-judgment freezing orders or to apply to the Chancery Division of the High Court or a local district registry. That increases the workload of the High Court, which is unnecessary, particularly as the High Court should not be the point of entry for comparatively low-value claims for what could be a simple and straightforward case. Also, those transfers often result in delays not only in dealing with a particular freezing-order application, but in dealing with all cases promptly.
The Government are committed to providing an effective and efficient civil justice system with a flexible judiciary that is deployed in the most appropriate way. In view of the time and costs associated with issuing and allocating freezing-order applications in the High Court and the time taken to transfer the substantive cases, consider them and then transfer them back to the county court and the potential costs to parties, the Government considered that the jurisdiction of the county court to grant freezing orders ought to be extended. It was on that basis that the Government consulted on the proposal in its 2011 Solving Disputes consultation paper. Ninety per cent of respondents, who included legal practitioners, members of the judiciary, judicial bodies and regulatory bodies, were in support, on the basis that only suitably experienced and qualified circuit judges of the county courts should be given the jurisdiction.
In view of that overwhelming support, the Government announced their intention to enable the county court to grant freezing orders in all cases under its jurisdiction. The jurisdiction will be extended to circuit judges who have been nominated by the Lord Chief Justice. Consequently, the statutory instrument before us today gives effect to that commitment by revoking the 1991 regulations and, in doing so, removing the current limitations, to enable the county court to make freezing orders in all cases.
The changes brought by this statutory instrument support the Government’s commitment to an effective and efficient civil justice and courts system. We consider that the current position is disproportionate and that unnecessary costs are incurred. It follows that the current restriction on the county court’s jurisdiction to grant freezing orders constitutes a restriction on access to justice for court users. Consequently, it is our intention to lift those restrictions to broaden the county court’s jurisdiction in this regard to improve access to justice while optimising the use of judicial resources. That would mean that court users can have their freezing-order applications considered in the court where their substantive cases are being heard.
Invariably, this should contribute to a reduction in the volume of transfers from the county court to the High Court and the number of applications considered in the High Court. It would thereby provide efficiency benefits for the courts, since less time and fewer administrative and judicial resources would be needed to allocate these applications and transfer the substantive cases to the High Court. For the same reasons, court users could experience a more streamlined service and a reduction in transfers. As one respondent pointed out:
“Any power to help enforcement is a good move. Having to apply to the High Court often many miles away or in London can be wasteful in costs and time. There is no reason for a Circuit Judge not to deal with these applications”.
I therefore commend these draft regulations to the Committee. I beg to move.
Lord Beecham (Lab)
My Lords, I had anticipated that the noble and learned Lord, Lord Scott, would speak, which would have made me even more the lowest-ranked member of the legal profession to have spoken today, but I defer in any event to the Minister’s legal knowledge and expertise. As already indicated, I have no particular problem with this instrument.
However, it is ironic that the title of the response to the public consultation, which is not in itself a very brief title, is Solving Disputes in the County Courts: Creating a Simpler, Quicker and More Proportionate System. It is ironic because the original report on which the regulations are based was, as the Minister pointed out, published in 2008. It has taken three years from the publication of the response to bring forward the proposals before us today. This seems to be an example of the Bleak House style of legislation: you take an eternity to produce a response. That is not the fault of this particular Government; it seems to me characteristic of the way, perhaps in particular in legal affairs, matters take an inordinate time to be resolved. One thinks of the length of time it takes for any Law Commission report to come forward in the form of legislation. It is something perhaps that the Government could look at.
On the substance of the order, there is no particular problem, but I have just one question to ask about it. To begin with, it struck me that, even if there was an argument about the decision that might be taken by one of the newly appointed circuit judges as opposed to a High Court judge, there is of course in any event a right of appeal, so that those decisions can be challenged. However, I notice that, just four days ago, it was announced that the Supreme Court, following a hearing in the Court of Appeal, will now hear the case of Ablyazov, where the assets frozen amounted to some £40 million—this is not freezing a vehicle or goods; it is a very substantial sum of money. I wonder whether any consideration has been given to a threshold above which it might be expected that a case will still go to the High Court. I am not saying that circuit judges would be incapable of dealing with cases involving £40 million or more, but there might be some questions to be asked about that. Of course, even if people were dissatisfied with an order made by such a judge, there would still be the right of appeal, but I wonder whether consideration was given to some threshold above which a higher court judge might in the first instance be asked to make a determination. That is an aspect that might be kept under review. Subject to that, we would not quibble with the instrument before us.
Lord Faulks
My Lords, I am grateful for the observations from the noble Lord, Lord Beecham, who, as ever, is far too modest about his skill and expertise. On consultation, there was quite a hiatus following the original publication of the Brooke report. The consultation was deep and wide, involving all the appropriate parties—judicial and legal bodies, regulatory bodies, representative bodies, such as civil court users, local authorities, mediation and mediation advocates, academics, citizens advice bureaux, financial organisations, government departments and members of the public. It took a little time for the Government to produce their response, which was published in 2012, but since that time they have taken forward the Brooke recommendations to implement the single county court in the Crime and Courts Act 2013. In the light of the changes being made to the county court as a result of that legislation, we considered that it was appropriate for this and other Brooke recommendations to come into force on the implementation of the single county court.
On the second point made by the noble Lord, Lord Beecham, I think that he may have somewhat misunderstood the purport of this instrument. Of course, it extends the jurisdiction of the county court, but if it is attached to a money claim, the ceiling is £100,000, so that his scenario of £40 million would not come within the county court’s jurisdiction. It is always alarming to freeze a sum of that nature but, if there is a freezing order, as he will know, it may be ex parte originally, but there is always the possibility of the respondent coming back to court to modify, discharge or vary it or to apply exceptions to the order. Therefore, it is not as draconian a remedy as it seems, but it is an essential remedy sometimes to stop the dissipation of assets. The purpose of this extension of jurisdiction is to make sure that that valuable remedy exists whether the claim is £40 million or a much more modest sum. It allows there to be convenience for court users and it gives judges, who will have the necessary training, as wide a jurisdiction as required to enable those who seek to ensure that their assets, which they have a reasonable and proper expectation of recovering, are not frittered away and dissipated without justification. I hope that that satisfies the noble Lord.
Public Bodies (Abolition of the Committee on Agricultural Valuation) Order 2014
(10 years, 8 months ago)
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Lord De Mauley
That the Grand Committee do consider the Public Bodies (Abolition of the Committee on Agricultural Valuation) Order 2014.
Relevant documents: 34th Report from the Secondary Legislation Scrutiny Committee, 22nd Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
I welcome this opportunity to introduce the order. It may be helpful if I explain why the Government have proposed to remove the Committee on Agricultural Valuation. The origins of the committee go back more than 60 years to the Agricultural Holdings Act 1948. On repeal of the 1948 Act, the committee’s existence was continued by the Agricultural Holdings Act 1986. The role of the Committee on Agricultural Valuation is to give advice to Ministers about provisions to be included in regulations on tenant-right matters and the amount of compensation for improvements to be paid to tenants at the end of an agricultural tenancy in England and Wales. Ministers are not obliged to take account of the advice of the committee.
There are no current members of the committee and the last time members were appointed was in 1990. It has not functioned for more than 20 years, hence the committee exists in legal name rather than reality. The Tenancy Reform Industry Group, known as TRIG, has provided advice to the Government on agricultural tenancy issues since 2003. TRIG is a non-statutory body, which comprises representatives of the main industry and professional organisations, such as the National Farmers’ Union, the Tenant Farmers Association, the Country Land and Business Association, the Farmers’ Union of Wales, the Central Association of Agricultural Valuers and the Royal Institution of Chartered Surveyors.
TRIG has not replaced the Committee on Agricultural Valuation and provides advice on a non-statutory basis across the range of tenancy matters, rather than just on end-of-tenancy compensation provisions. However, the existence of TRIG means that it is no longer necessary to retain the legislative provisions for the Committee on Agricultural Valuation to give specific advice on end-of-tenancy compensation matters.
As noble Lords know, the Government have made a commitment to reduce the number of unnecessary public bodies. In July 2010, my right honourable friend Caroline Spelman, then the Secretary of State for Environment, Food and Rural Affairs, announced proposals to reform a number of departmental public bodies; these included the Committee on Agricultural Valuation. The Public Bodies Act 2011 provides the legislative mechanism for the Government to carry out reform of public bodies. The Committee on Agricultural Valuation is listed in Schedule 1 to the Act. This enables the Minister to lay an order under the 2011 Act to abolish the committee.
In accordance with the requirements of the Public Bodies Act, a consultation was carried out in England and Wales last autumn. Having carefully considered the consultation responses, it is now proposed to repeal the legislation which provides for the Committee on Agricultural Valuation by an order under the Public Bodies Act.
Welsh Ministers have given their consent to the abolition of the committee. A legislative consent Motion was agreed without debate in the Welsh Assembly on Tuesday 1 April. The abolition of the committee has no impact on the ability of agricultural tenants to claim compensation at the end of a tenancy. As the committee is already effectively moribund, its abolition will have no impact on jobs, nor will it result in any savings for the Government. However, it will remove an unnecessary public body from the legislative framework.
I should probably disclose the fact that I am a landlord and have a tenant. I hope that this explanation has been helpful.
Lord Grantchester (Lab)
My Lords, I thank the Minister for his explanation of the order. I will make a declaration of interest as a farmer, but I have no tenants.
The Minister can relax and be assured that we are happy to endorse the order. He will forgive me if I delay the Committee for a few moments to ask a few questions for clarification. I appreciate that the committee has not met for over 20 years and that the term of the last appointments to the committee expired in 1993. Its abolition will have no impact on the functioning of agricultural tenancy legislation, especially as most new tenancies are now farm business tenancies under the Agricultural Tenancies Act 1995, for which different legislative arrangements apply for end-of-tenancy compensation.
We also have TRIG, as the Minister explained, set up by my noble friend Lord Whitty, to provide advice to government on agricultural tenancy matters as a non-statutory advisory body. Can the Minister confirm that there have been no costs from this committee’s dormancy and that, therefore, there are no savings to be achieved through this abolition.
In the explanatory document, the results of the consultation on this order were summarised. Notably, the Tenant Farmers Association made comments that the abolition should follow the enactment of the amended Agriculture (Calculation of Value for Compensation) Regulations 1978 agreed by TRIG, which have been with Ministers for some time and need urgent attention. I have no doubt that the Minister would want to bring this forward with any further amendments to the compensation regulations as part of the wider package of tenancy reform to ensure that legislative changes are complementary.
In the consultation, the chairman of TRIG also stated that abolition was supported, provided that TRIG’s proposed amendments to the Agriculture (Calculation of Value for Compensation) Regulations 1978 were enacted. I therefore ask the Minister whether the TFA gave any reasons in its consultation response as to why it felt that abolition should follow enactment of the new regulations. Was it consequential in any way or does it merely reveal frustration that these regulations have not been amended since 1983? Does the Minister have a timeframe in mind for bringing forward these amended regulations?
The Minister has already updated us on the situation in Wales, for which I thank him. Finally, I want to widen our consideration to include understanding the current position of his department under the Public Bodies Act 2011. There was some debate in the other place on this point, but no discussion concerning the money saved, which I understand was to be the main justification for the great burning of the quangos. While this order is a tidying-up exercise, no money will have been saved from the committee’s abolition. Will the Minister update this Committee on how much dead wood has now been burnt, how much has been saved by his department and what further savings may be expected?
I should be happy to receive an answer in writing listing the full names with commensurate cost implications of the quangos that have been abolished or reconstituted as a committee of experts, which are being retained and which are still to be reckoned with. We can then judge what percentage have been burnt and how successful the Public Bodies Bill 2011 has been in its contention to save public money. An outline today would be most appreciated, provided that the Minister will confirm that he will write with a full assessment of the Public Bodies Act on his department. With that, I am content to agree to the order today.
Lord De Mauley
My Lords, I thank the noble Lord, Lord Grantchester, for his comments, and for his general support of the order to remove the Committee on Agricultural Valuation. As I said, this order removes what is effectively a moribund body that has not met for more than 20 years. Its removal will have no impact on the relationship between agricultural tenants and their landlords. Qualifying tenants will still be entitled to claim compensation at the end of a tenancy, in accordance with the current legislative provisions.
Following recommendations from the Tenancy Reform Industry Group, we will shortly be consulting on changes to the Agriculture (Calculation of Value for Compensation) Regulations 1978, with a view to updating them as part of measures for wider reforms of tenancy legislation. That partly answers the noble Lord’s question, which I shall come back to in a moment. This will ensure that the compensation regulations and other tenancy legislation are brought up to date to provide a modern framework for the future.
The noble Lord asked various questions, the first of which was about savings. I can confirm that there are no savings. This measure is about not savings but tidying-up. Returning to the issue of the order of the various reforms, the abolition of the Committee on Agricultural Valuation is not dependent on amending the compensation regulations. As part of the agriculture theme of the Red Tape Challenge process, my department will be consulting on a number of changes to reform agricultural tenancy legislation. It was felt that it would be more sensible to take forward amendments to the Agriculture (Calculation of Value for Compensation) Regulations 1978, which were proposed by the Tenancy Reform Industry Group, as part of this wider package of tenancy reform. This will ensure that the proposed legislative changes complement one another.
We will be consulting on all proposed amendments to agriculture and tenancy legislation in 2014 with a view to making the changes in this Parliament where the legislative timetable permits. Moreover, as the legislation currently stands, we would be required to reconvene the Committee on Agricultural Valuation to make changes to the compensation regulations. As there are no current members of the committee, it would be time-consuming and would require a public appointment exercise, which would not be cost-effective. We took the view that abolition of the committee should not be delayed but should take place as soon as possible.
The noble Lord asked a more general question about progress on reform of public bodies. We have made good progress on the major reforms. We have been working to reduce the number of bodies from 92 in 2010 to 36 by 2015. So far, we have abolished 50 non-departmental public bodies. There are now only a few bodies still to be abolished and these are mainly defunct or non-operational. We are also making progress on 120 bodies that were due to be retained and substantially reformed. The vast majority of these are internal drainage boards, for which reforms are under way. Substantial reforms have already been made to the Environment Agency and Natural England. On his detailed questions, I will take advantage of his invitation to write to him.
Lord Grantchester
Has the Minister any idea on cost savings to his department under the Public Bodies Bill to date? That would be most helpful.
Lord De Mauley
May I include that in the letter? On that basis, I commend this order to the Committee.
Dogs: Electric Collars
(10 years, 8 months ago)
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Baroness Miller of Chilthorne Domer
To ask Her Majesty’s Government what action they intend to take with regard to electric dog collars following the conclusion of their research on the effect of pet training aids.
Baroness Miller of Chilthorne Domer (LD)
My Lords, I shall concentrate my remarks today on dogs. This issue has quite some history. The last time that this House addressed it substantially was in 2006 with the Animal Welfare Act, when I tabled some amendments. At that time we took a lot of evidence from the police and other serious dog trainers, and none of those serious dog trainers, such as the police, had a good word to say for electric shock collars as a training method, and no force would use them. Nor would any of the other organisations training dogs as help animals, whether for the visually impaired or for the deaf. Nevertheless, after strenuous lobbying from the electric dog collar manufacturers, the then Government resisted a ban.
A few things have changed since 2006. Public support for a ban has grown even stronger; 79% of people would now like to see these things banned. I accept that it might be a bit different in your Lordships’ House, having just had a lively debate over tea with a number of colleagues, but nevertheless 79% of the general public would like to see them banned. Since 2006, Defra has commissioned and completed the research on this issue, on which I congratulate it, and I will mention the conclusion shortly. Since 2006, I have become a dog owner again after a long break. That is relevant to this debate in so far as our dog Beano was the runt of the litter for whom food was of no interest, which made her especially difficult to train.
Why do I see a severe problem with England continuing to allow such things to be used and misused as training aids? As dogs are both the most faithful and the most useful companion animals to man, we feel that we can make great demands on them when it comes to training. Every day in your Lordships’ House, for example, the spaniels are at work keeping us safe as sniffer dogs, while guide dogs guide some of our noble friends. As I mentioned, none of the trainers who train these dogs would dream of using this device. They want and need well trained dogs, that result from positive training and dogs that have a really high level of trust with their handler.
There have been a number of academic studies on this subject. I could quote the 2004 study by Schilder, who found that there were many signs of stress. His conclusion was that the dogs learn that the presence of their owner announced the reception of shocks even outside the normal training context. That demonstrates a lack of trust between dog and handler. I saw for myself a vivid example of the confusion of a dog subjected to an electronic training aid. A small terrier, on the beach where we were walking our puppy in the winter, was attracted by our young puppy and ran towards her. Each time the small terrier approached, his owner zapped him. He screamed and jumped. It was quite clear that he did not understand whether it was our puppy, us or the sea that was the problem but I am sure that he lives in fear of his owner.
In 2006, the arguments against a ban seemed to have two main elements. First, there were livestock concerns. Indeed, the worrying of sheep concerns all of us, and I am as concerned as anybody about that. If we were to think of a real country of sheep in the UK, we might think of Wales. It may surprise your Lordships to know that the Welsh Government banned electric shock collars in 2010. There is no evidence that the Welsh regret this ban. One of the results has been dogs on leads, properly under control—as they should be around sheep. If you imagine the hills of Wales and a dog with an electronic collar on the other side of a hill, it will not even be within range of the zapper. It needs to be on a lead.
Another argument was that a ban would endanger dogs as some owners use collars that prevent the dog leaving their property—say, on to a busy main road. The ban I am suggesting is for manually controlled devices only, not “proximity collars” for those activated by the dog passing a virtual fence line. I agree that the latter have a place and, just as livestock in a field will learn not to approach an electric fence, the dog will learn not to approach that place of danger, such as a road.
The Defra-funded research studies published in 2013 greatly favour the Kennel Club’s and Dogs Trust’s electric shock collar campaign. The first Defra project concluded that there was great variability in how electric shock collars were used on dogs and showed that owners worryingly tended neither to read nor to follow the advice in the manuals. The main conclusion was that there were significant negative welfare consequences for some of the dogs that were trained with electric shock collars in that study. The second study—interestingly, and imaginatively on Defra’s part—was designed with the Electronic Collar Manufacturers Association to make sure that it was fair. It followed all sorts of designs which that association put in place. Yet it concluded that there was still a negative impact on dog welfare.
My noble friend the Minister may say that action following the research is impractical because owners can still get collars from the internet, through the post. That argument does not hold much water because, as I am sure my noble friend will agree, anything that is banned or controlled—whether drugs, firearms, and so on—is rightly banned. Just because you could get them through the post is not a reason for neither controlling nor banning them. Then again, the Minister may feel that guidance to owners is enough already, but the evidence is that many owners are already not reading the manual. Guidance is not amenable to enforcement. You cannot make somebody read a manual; that is really impossible to police and enforce.
I hope that the Minister will be tempted to take some further action following Defra’s research. He may envisage a number of options, and I look forward to hearing them—from an outright ban, for example, to a minimal collar that would allow only a low-grade shock and not something up to six or eight volts. In researching this, I looked up some of the adverts for these collars. You buy the same collar for an extremely small terrier as for a Rottweiler; you simply alter the size of the neck. It gives the same level of shock which, to a small dog, is going to be severe, but I am not arguing that they should continue in any case. Given that the Defra research showed that most people do not read or follow the instruction manual, what does the Minister suggest regarding guidance? With misuse the dog may show absolutely no visible sign of physical hurt. However, given that the Government have declared parity between physical and mental health, and given the Defra research that says that a dog becomes psychologically damaged—and, I contend, in many cases very fearful and cowed—is that an acceptable method of training a dog?
In conclusion, I strongly urge the Government to take action on this. At least two Bills in the other place have called for a ban, both with cross-party support. Such collars are now banned in Germany, Norway, Switzerland, Denmark, Austria, some states of Australia, and, as I mentioned, Wales. Such a ban has widespread public support. There is no argument for their continual use, as we can see from professionals such as the police, who train dogs properly. The Kennel Club and the Dogs Trust, which represent thousands of dog owners, see the efficacy of properly run dog-training classes which result in the sort of effects that owners are trying to get. I therefore hope that this Government will take further action in a positive spirit.
In the end, a decision will not be technical. It will be a political decision based on informed judgment, although at the end of the day it will be a moral decision, such as those taken by those countries that have already chosen to put this ban in place. I therefore hope that the Minister and his colleagues will shortly be able to make a decision on further action.
Lord Scott of Foscote (CB)
My Lords, I regret that I can see no case for any further action being taken with regard to these collars. I declare an interest. I have two dogs; one is a small border terrier, who does not enter into this discussion at all—it has never had a collar put on him and does not need one. The other is something of a cuckoo in the nest. It is the result of a piece of enterprise on the part of one of my granddaughters, who saw an advert in the newspaper which sought a home for a dog. She asked her father—my son; he and she live in Leicester—who said, “No; we’ve got no room”. She then rang us and asked if we would have this dog, and we replied, “No. We’ve got the room, but we don’t want this dog”.
Being a self-willed girl, she then got on the bus, got the dog and brought it home to Leicester. It came down to visit us in north Buckinghamshire; we have lots of room and a largish garden, and it was quite a nice dog, although nothing special. It went back to Leicester with the family, and began to get bigger and bigger—it was a bitch—and eventually, out popped five little puppies. Goodness knows what the father was. The bitch herself was a big mongrel, and the puppies were of a parentage undiscoverable. However, puppies are always lovely, so all the puppies came down to spend weekends with us, and eventually my enterprising granddaughter sold four of them, for £80 each. She is 18 years old and is obviously on her way to becoming an entrepreneur of some sort. They kept the final puppy, which grew and grew, and got bigger and bigger. They could not possibly have it in Leicester as they live in a house in the middle of the town and the puppy needed space. We have the space, so it came down to us as a puppy and stayed with us, and has stayed with us ever since.
It is a very big dog indeed. It has a head and jaws like a Rottweiler, the coat and the demeanour of a Rhodesian Ridgeback, massive feet which suggest that it has mastiff ancestry, and it is a lovely dog with people. It is a beautiful dog, admired whenever anyone takes it for walks by people, who say, “What a lovely dog”. However, the problem is that it is very aggressive towards other dogs. We have consulted dog psychiatrists, who say, “The trouble with your dog is that he regards all dogs, particularly ones that yap at him, as potential prey”. So he deals with them as he would deal with any prey—rabbits are fair game and every now and again he has caught one, though not very often—and when he gets in the way of these little—what is this?
Lord Scott of Foscote
I have had a note that says “One minute left”. I am afraid that I am going to ignore it. This debate is scheduled for an hour.
Baroness Northover
You are speaking in the gap, which is time-limited to four minutes.
Lord Scott of Foscote
I am going to continue with my speech unless I am instructed by the Chair to sit down.
The Deputy Chairman of Committees (Baroness Andrews) (Lab)
I am afraid I have to instruct you, my Lord. It is a rule of the House that speeches in the gap are limited to four minutes.
Lord Scott of Foscote
Well, the upshot is that this dog is controllable by an electric collar. We have an electric wire going around the house and he wears an electric collar that means he gets a bit of a shock if he goes out into the garden, so he does not. That works.
When we take him out for a walk we take that off and put another collar on him. We have a little zapping instrument, and if he shows signs of aggression towards other dogs, which he has done—he has damaged dogs severely, and I have paid vets’ bills for the owners of these dogs that now run into four figures—we start using this collar, which works. He is learning, and is becoming a manageable and controllable dog because of the collar. He is intelligent enough to know that when he gets zapped, he gets zapped. He is beginning to leave other dogs alone now. He is only two years old and a lovely dog, and the notion that I would have to have him put down because of some idiot proposition that any use of collars is bad I find repulsive. I quite agree that any excessive use or misuse is serious, and that would be a criminal offence, but when they are properly used they can render a dog controllable and avoid it being put down.
Lord Geddes (Con)
My Lords, I was delighted that my noble friend Lady Miller excluded the wiring of gardens. It is on that subject that I want to speak, and I will continue so to do, to dissuade my noble friend from ever bringing in a ban on such electric fencing, if I can call it that.
Like the noble and learned Lord, I also speak from personal experience. We have a four year-old working cocker spaniel on whom we put one of these electric collars when she was about nine months old. Our garden is small and is totally ringed, with the exception of one gate, which is relevant to something that I shall say in a minute. It took only about two hours to train her, and no distress whatever was shown. When we take her on a walk, we take off the collar. We have just one gate on to the road that she will go through. The interesting point, and the reason why I mention it, is that the dog will not go near going through the main gate into our property, which is wired—it is for vehicular access—even without the collar on. Four anchors go down and she just stops rigid. It is amazing what training does. That is without the collar on—she has never tried it with the collar on.
The alternative of, let us say, perhaps one or two slight shocks in this very short training period is for a dog to go, as I have written down here, AWOL—absent without leave—causing death or injury to the dog concerned and indeed to others. I illustrate that with my son’s Labrador, some 30 years ago at a different house. Unfortunately, the postman left the gate open when he came to deliver the post. The dog escaped and was hit by a car and fatally injured, causing injury to the driver of the car, not to mention £1500 of damage to it. That just shows what can happen when a dog can get out. As far as I am concerned, the trade-off is between the electric collar to keep the dog in or the risk of injury to the dog and others in a serious accident on a busy road.
Lord Grantchester (Lab)
I am grateful to the noble Baroness, Lady Miller of Chilthorne Domer, for bringing the subject of man’s best friend before us today for debate. I am grateful for the further contributions from the noble and learned Lord, Lord Scott, with his particular experience, and the noble Lord, Lord Geddes, to whom I listened with interest, as I once lent my daughter electric fencing equipment from my farm when she was living in Battersea to keep waif and stray cats from using her garden as their toilet, at great detriment to her children. I listened with interest to the noble Lord’s comments about boundary fencing with that in mind.
I am also grateful to the Royal Society for the Prevention of Cruelty to Animals and the Kennel Club for their assessment of the use of electronic training devices. The RSPCA strongly opposes the use of electric collars to train and control dogs and believes that the Government should follow the lead of the Welsh Government and prohibit their use. As the noble Baroness clearly stated, the RSPCA argues that applying the use of aversive stimuli to suppress unwanted behaviour carries a number of risks: most notably, increasing the dog’s fear and anxiety about the situation in which it is used, associating other coincidental events with a fear-provoking event and decreasing its ability to learn. Dogs’ experience of the electronic shock will be affected by their temperament, previous experiences, frequency of application, location of shock, thickness of hair and the level of moisture on the skin.
The Kennel Club has also been campaigning for the ban of electric shock collars, which it believes is a barbaric method of training dogs. Since 1997, electronic shock collars have not been allowed at Kennel Club-licensed events. The Dogs Trust is also against the use of electric shock collars. Instead, it argues that every dog should be trained using kind, fair and reward-based methods.
In her opening remarks, the noble Baroness, Lady Miller, outlined the results of scientific studies. She is correct that numerous studies indicate that electric shock collars can cause a dog to develop behavioural problems, especially increased aggression, and certainly found an association between the use of aversive training techniques and the occurrence of undesired behaviour in dogs.
Electronic collars can pose health risks. There have been reports of physical lesions on the necks of animals caused by high intensity shocks as well as burning and skin irritation. Defra’s code of practice for the welfare of dogs in England specifically states that dog owners should:
“Only use positive reward-based training. Avoid harsh, potentially harmful or frightening training methods”.
Defra-funded research found inconsistencies between manuals included with the purchase of such collars, that there was generally not enough information provided for the inexperienced and that point-of-sale material did not allow sufficient comparison to be easily made between different products.
Currently, no national legislation or regulation covers electronic dog collars. However, in March 2010, under Section 12 of the Animal Welfare Act providing for regulations to promote welfare, passed by the Labour Government in 2006, the Welsh Assembly prohibited the use of electronic collars designed to administer an electric shock to cats and dogs. Defra’s research, conducted in two studies that ended in 2010 and 2011, concluded that the use of such collars can lead to a negative impact on the welfare of dogs.
The noble Baroness is right to press the Government for a response. They have spent £500,000 of scarce resources on research that they initiated. Will the Government now take action to curtail or ban the use of electronic collars? Will they take further steps to encourage dog owners to undertake more positive, research-based incentive training rather than negative e-collars? Have the Government made an assessment of the long-term effects of using such devices on dogs? The Minister may want to comment on the Welsh experience since they brought in their ban in 2010. Perhaps the Minister could also give the Committee an indication of the size of the market in electronic collars and whether there have been further discussions with the Electronic Collar Manufacturers Association.
In 2006, the Labour Government brought forward the Animal Welfare Act. Section 4 says:
“A person commits an offence if an act of his, or a failure of his to act, causes an animal to suffer …and the suffering is unnecessary”.
Section 9 says:
“A person commits an offence if he does not take such steps as are reasonable in all circumstances to ensure that the needs of an animal for which he is responsible are met to the extent required by good practice ... An animal’s needs shall be taken to include its needs to be protected from pain, suffering, injury and disease”.
I quote this at length, because I would like to ask the Minister whether his department has made any assessment of whether the use of electronic dog collars conflicts with this legislation. What considerations have the Government given as to whether suffering could reasonably be avoided or reduced should the use electronic collars be prohibited?
Police dogs, Armed Forces dogs and assistance dogs are never trained using electronic shock training devices. Will the Government now take action on these devices to enforce best practice?
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, I thank my noble friend for securing this debate. Before I get into the detail, it is worth reminding your Lordships, as did the noble Lord, Lord Grantchester, that it is an offence under Section 4 of the Animal Welfare Act 2006 to cause any unnecessary suffering to an animal.
In declaring my interests, I should say that I have been a dog lover all my life. My wife and I now have a particularly wonderful rescue dog which is reputed to be a cross between a poodle and a shih tzu—I leave it to your Lordships to suggest a name for that combination. One of the great pleasures of my current role has been to become well acquainted with our wonderful dog charities, which do such wonderful work.
I will return to the Animal Welfare Act. If anyone has evidence that an animal has suffered as a result of the inappropriate use of an electronic collar, a prosecution under the Animal Welfare Act can be taken forward by any person or organisation; the act is what is known as a common informers Act. My noble friend set out very eloquently her concerns and the concerns of others about the general availability and use of such devices and their potential effect on dogs. These concerns are what motivated my department to commission research into their use and the effect they have on the dogs, because we take dog welfare, like all animal welfare, extremely seriously.
I understand the strength of feeling some people have about the use of such devices, but before introducing a blanket ban on their use, the Government would need to be satisfied that such a ban was in the public interest and could be supported from an animal welfare point of view. The research was published last year and concludes that electronic training aids had a negative impact on the welfare of some dogs, but not all.
Based on the research, we do not believe that the evidence is strong enough to introduce a legislative ban on e-collars. Furthermore, the fact that such training aids are no more effective than other training methods is not a reason to introduce a ban or impose any restrictions. The Government recommend that people use positive methods in the first instance, then consider using these devices when other methods of training have failed, having taken professional advice, for example, from their vet.
I was taken by the argument of the noble and learned Lord, Lord Scott, that without his collar, his dog might have to be put down. I agree with him that it would not be difficult to envisage a situation where a reasonable and sensible person owns a dog which is a danger to no one but itself, for example, because of a tendency to act erratically but not dangerously, which but for its collar would have to be put down.
However, we need to ensure that e-collars are used responsibly and manufactured to a high standard. The reports showed that there is variation in the design and operation of e-collars. Noble Lords may be interested to hear that I have done my own rather unscientific research of these devices, which bore this out. I borrowed two of them and tested them on myself. While one gave me a minor shock which I would certainly not describe as painful, the other when turned up to maximum power certainly gave me quite a jolt. We have asked the industry to work up standards for their design and manufacture to reduce the likelihood of their causing unnecessary suffering due to manufacture or misuse. We are also working with the Electronic Collar Manufacturers Association, which is drawing up guidance for dog owners and trainers advising how to use e-collars properly.
I acknowledge that some owners do not read the instructions, as my noble friend said, and that some electronic training aids can be obtained over the internet from overseas. That is why it is important to get the message out to unwary dog owners who are considering purchasing one of these devices to make sure that they obtain one from a reputable manufacturer, rather than a cheaper alternative which may not be safe or operate properly. Our position is consistent with the 2012 report from the Companion Animal Welfare Council, entitled The Use of Electric Pulse Training Aids in Companion Animals, which concluded that there was no evidence to justify a ban on welfare grounds.
Once again, I thank my noble friend for introducing this debate and conclude by reminding the Committee that under the Animal Welfare Act 2006, it is an offence—the noble Lord, Lord Grantchester, said this—to cause unnecessary suffering to a dog through the use of an electronic collar, or any other means and could be punishable by a fine of £20,000 and/or six months’ imprisonment.
Wales: Economy
(10 years, 8 months ago)
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Baroness Morgan of Ely
To ask Her Majesty’s Government what is their assessment of the prospects for economic recovery in Wales.
Baroness Morgan of Ely (Lab)
My Lords, historically Wales has languished economically behind the rest of the UK for generations. Following the boom years of the coal era, harsh reality struck in the 1970s and 1980s when communities across the country were devastated by the loss of big industry—coal and steel, in particular. Wales has taken a long time to readjust to the new world, but at last we are seeing really positive signs of growth. That growth is currently outstripping the rest of the UK thanks in large part to a completely different approach in Wales using direct intervention—good, old-fashioned Keynesian economics by the Welsh Government. We moved to plan B rather than sticking to Osborne’s plan A for as long as he did and we are reaping the rewards quicker.
Rather than declaring a war on Wales the Conservatives should be looking to emulate the success of the Welsh Government on the economy. Unemployment rates in Wales have been tumbling, with the unemployment rate in Wales now lower than in England, Scotland and Northern Ireland. Can you believe it?
Lord Thomas of Gresford (LD)
What does the noble Baroness mean by a war on Wales? Who is supposed to be waging a war on Wales?
Baroness Morgan of Ely
It is pretty clear that there have been attacks and noises coming from Ministers, such as Grant Shapps, for example, who visited Wales and said that the Government are using Wales as a battering ram ready for the next general election.
Plan A by the UK coalition Government in large part has cut and cut public services white crossing their fingers in the hope that the private sector will take up the slack. The Welsh Government have deliberately taken a different approach and intervened in stimulating economic growth through a number of measures, standing by the struggling private sector in maintaining jobs through the tough times of the recession, stimulating economic activity through maintaining Welsh Government investment in infrastructure, and developing an aggressive approach to stimulating inward investment and boosting an export drive.
These measures are now paying off, which is, I suggest, the main reason why Wales is coming out of the recession quicker than other parts of the UK. The unemployment rate in Wales is now 6.7%, lower than the UK average of 7.2%, a 20% reduction in the past year. Despite the fact that there has been a 31% cut in real terms to the Welsh capital budget between 2009 and 2016, the Welsh Government have reserved £1.3 billion of investment in capital funding to improve Welsh infrastructure—more money for transport, housing and flood defences.
Wales will be one of the first countries in the world to ensure superfast broadband for 96% of properties. In England the figure is 90%. Upon completion, Superfast Cymru will make Wales the most connected country in Western Europe. Inward investment in Wales has increased by 200% and produced 7,000 new jobs. Who knows, though, what impact the ambivalent attitude of the Tory Government towards EU membership will have on inward investment in future?
One of the first things that the coalition Government did on coming to power was to scrap the Future Jobs Fund. Wales reacted by creating its own Jobs Growth Wales plan, which has created 11,000 job opportunities for unemployed 16-24 year-olds in Wales. However, while I think it was right for the Welsh Government to concentrate on unemployment because it is the key to better health, better education and better outcomes overall, we are still struggling in terms of wealth. Wales is still poorer relative to the UK as a whole, but the Welsh economy is growing at 1.6%, one of the fastest rates in the UK. The problem is that we are starting from a low base.
We need to continue our focus on driving up GDP levels, a much tougher task. This is about what kind of jobs we have in Wales and encouraging the export of Welsh goods. The Damocles sword hanging over the Murco oil refinery could reduce our export figures significantly. The oil refineries in Milford Haven are critical to the Welsh economy. The Valero refinery alone is responsible for 25% of all Welsh exports. So the closure of any refinery would not just have a devastating impact on employment in the area, but would have a disproportionate impact on Welsh GDP figures. I know that the Welsh Government are doing everything in their power to try to save the refinery. What is the Secretary of State doing to help to find a buyer for the plant? The Welsh Government have developed a programme of support that identifies and helps to build companies’ capacity to export. This is already paying dividends, with an increase of 11% in exports compared with a rise of just 0.4% for the rest of the UK.
Central to improving GDP is the need to build the skills of the Welsh people and to upskill the workforce, ensuring a good stream of graduates. Despite the fact that some Conservative MPs have suggested that applications to universities from people living in Wales are down, the truth is that when the Tory-led Government trebled tuition fees there were 42,000 fewer applications from English students while in Wales there was a fall of just 100. That was because the Welsh Government stood by students from Wales, capping the fees at £3,000. Welsh apprenticeships have seen completion rates rise from 54% in 2006 to 85% in 2012, beating England’s 73% completion rates. Some 90% of these have gone on to find sustained employment or engage in further learning.
There needs to be a particular focus on developing skills in the engineering sector, which will be key to the economic growth prospects of Wales in future. The Royal Academy of Engineering has suggested that there are 95,000 Welsh people who declare themselves as being engineers; 30% of those are over 50 years old and yet only 1,500 applicants were accepted on to engineering courses in 2012-13.
Given the profile of the engineering workforce in Wales, there are not enough young people coming through the system to replace the ageing workforce. That will ultimately result in skills shortages and we will have to recruit from outside Wales. A deliberate focus on that and on driving up the pool of those able to enter the field through better results in maths in school is imperative. Again, the Welsh Government’s focus on numeracy in schools should help with that.
The gap between Wales and London has now become a gulf. Although that has certain advantages in terms of the costs of living in house prices and childcare costs in Wales compared to London and the south-east, the coalition Government need to demonstrate to the country that they are in touch with the pressures that are still being felt outside the M25. We have not seen much evidence of that. The measures that they have taken to stimulate the economy have exacerbated the situation rather than helped it, as evidenced by research by the Centre for Cities, which recently suggested that for every public sector job created—yes, created—in London, two have been lost in other cities. The Help to Buy scheme has undoubtedly helped to cause a housing bubble in London, causing huge resentment outside the capital, where people watch as those who have already bought watch their wealth grow with no effort. That is not help for hard-working people; it is the luck of the draw on where and when you bought a property. It is also unsustainable in the long term.
In December, the UK Government announced their £375 billion infrastructure spending plan for the next two decades. If Wales were to get its 5% share, we should see £18.7 billion of investment coming to Wales. We know that the Wales Office boasts of £2.5 billion of investment that will come to Wales, but I ask the noble Baroness where and when we will see the rest of it and what we can do to speed up spending of the investment already promised. Will we see any of the infrastructure promised by the UK Government delivered during this Parliament?
Wales is absolutely on the right track in terms of the prospects for economic recovery, but more needs to be done to ensure that the two arms of government at UK and Welsh level co-ordinate their efforts to reduce the gap between Wales and London. That means more economic intervention from the UK Government and a more proactive regional approach further to stimulate the Welsh economy and to cool down the overheating that is occurring in London. I ask the Minister to ask her Government to stop the war on Wales and engage in more constructive politics with the Welsh Government. England could learn from Wales on the economy; and, yes, on aspects of education and health, Wales could and should learn from England.
Lord Bourne of Aberystwyth (Con)
First, I congratulate the noble Baroness, Lady Morgan of Ely, on securing this important debate. I agreed with some of what she said, although I must say that she often exemplifies a creationist approach to politics, as if nothing had ever happened before the Conservative victory and the alliance with the Liberal Democrats in 2010. There were, of course, deep historic problems with the Welsh economy well before 2010. We can understand the challenge only if we consider the historic position of Wales. Wales has had problems of poverty, particularly in west Wales and the valleys well before 2010. Nor is it just about employment, important though that is.
Let me say something about GVA, because that has been an historic problem in west Wales and the valleys, in particular. It has been falling for some time. It was falling well before 1997 and continued to fall until the present. That remains a massive problem with the loss of heavy industry. We have seen the growth of the service sector, which is significant, with employers such as Admiral Insurance, which is in the FTSE 100—our only FTSE 100 company. That is concentrated in south-east Wales. There is Moneysupermarket in north-east Wales, and there are iconic brands, such as Airbus. Much is going on in Wales that is very good.
It is true that the position on employment in Wales is healthy. Unemployment is falling fast and we have a good story to tell. Of course, the noble Baroness did not say that that is also true of England, Scotland and Northern Ireland: it is falling there too, despite the predictions of the Labour leader that we would have 1 million extra unemployed through the recession. We are no longer in a recession; it is not that Wales is coming out of the recession more quickly than elsewhere; we are all out of recession. That is an important point to make. It is the position in the whole of the United Kingdom that unemployment is falling and continues to fall. Nor are the economic levers just with Wales; they are also with Westminster. One thing that was stressed in Silk II—I declare an interest as a member of the Silk commission—was the importance of partnership between Westminster and Wales. I think that we would all subscribe to that, because there are things that have to be done together.
I think that it is fair to say that this coalition Government have pushed things forward where they were not pushed forward by the previous Government. For example, rail electrification, announced first to Cardiff and then to Swansea, had not been tackled by previous Governments—and certainly not by the previous Labour Government under either Prime Minister Blair or Prime Minister Brown at a time when we had more resources. That project is very good news. I know from first hand that the Prime Minister took a great personal interest in it, not least because he travelled to Swansea and recognised the difficulties of that journey and how important it was for Wales to improve on it.
Let us look at the recent Budget. There are many things that successive Budgets have done to help Wales. Successive Budgets from the coalition Government have seen 155,000 people in Wales taken out of tax altogether. In the most recent Budget, which I think has been widely welcomed, the cost of energy has come down, which is good news for Wales.
The noble Baroness mentioned, and I agree with her, the problems at Murco—I declare my interest as chair of the Haven enterprise zone, which includes Murco as our second most significant employer after Valero, also mentioned by the noble Baroness. That situation exemplifies the need for a partnership between Westminster and Wales to save those vital jobs. They are vital for Pembrokeshire, but the whole of that plant is vital for the United Kingdom, as the noble Baroness rightly said. We have lost Coryton. Given the problems of energy security, which have been exemplified and thrown into high relief by the situation in Ukraine, we need concerted action from both Governments to save those jobs. I have contacted the Department of Energy and Climate Change, which would perhaps be more central to this matter even than the Wales Office, to see what it is doing. I look forward to what the Minister has to say in that regard.
So, much that has been happening in Wales is good. There are historic problems and there is some good news that has been brought forward by this Government. I also welcome the news on Wylfa B and look forward to hearing what the noble Lord, Lord Wigley, has to say on that, because I think that he would take a personal interest in it, being from north Wales. I think that all parties, notwithstanding perhaps some difficulties on their policy stance on nuclear energy, have got behind that project and said how important it is. That, too, is something for which the Government deserve credit.
It has not been a question of waging war on Wales; I do not recognise that. That is certainly not the way in which the Prime Minister and the Chancellor have approached Welsh issues. From the referendum held in 2011, which I think was successful from all our points of view, to the commitment to look at Barnett when circumstances make that easier to tackle and a general approach to devolution and other issues in Wales, this Government have a lot to be proud of. Yes, there are historic issues that need addressing, but that is best done in a spirit of partnership. We would do well to recommend that approach to others in another place and at the other end of the M4—a phrase I hate, but it seems to exemplify the correct wording in this regard.
Baroness Gale (Lab)
My Lords, I congratulate my noble friend Lady Morgan of Ely on securing this debate. Since the advent of devolution in 1999, Wales has seen many changes. One big change was the election of so many women—it was the first time in the history of Wales that such a number had been elected—with women Cabinet members holding important portfolios and providing good role models for the women of Wales.
How does this have an effect on the economy of Wales, with women being generally lower paid than men and more likely to be working part time, and with so few women at the top table? Women in all walks of life in Wales are undervalued. The recent report from the Equality and Human Rights Commission in Wales, Who runs Wales? A Lost Decade—No Change shows that Wales remains a country where those taking the major decisions that impact on everyone in Wales are overwhelmingly men. What is needed is better representative decision-making in all walks of life, at both the Wales and the UK level. Organisations, especially business and industry, are not using all the talents of Wales. There are so many women who could, if they were allowed, play a big role in driving the economy of Wales.
I was therefore pleased to see that the Welsh Assembly has recently established a cross-party group which will consider new research on women and the economy. It will be looking at several things, such as gender segregation, career progression, the under-utilisation of women’s skills in the Welsh economy, the under-representation of women in business, and modern working practices. That is really important if the aim is to use all the talents that we have in Wales. Women can, and want to, play their full part in the economic life of Wales. The findings of the group will, we hope, find a way forward for women and for Wales. Are any similar initiatives being carried out by the UK Government?
I will now consider some of the measures that the Welsh Government are carrying out to improve the economy of Wales, despite the fact that the cuts made by the UK Government have put the brakes on economic growth in Wales. Those unprecedented cuts mean that, by 2015-16, the Welsh budget will be nearly £1.7 billion lower in real terms than it was in 2010-11. To combat that, the Welsh Government have made the Welsh economy their top priority. As the First Minister, Carwyn Jones, said at the Welsh Labour Party Conference in Llandudno recently:
“There is now unquestionable evidence to show that as a direct result of Welsh Labour policies and intervention and our drive to sell Wales to the world—the Welsh recovery is well underway and in Wales, we are now well placed to take full advantage of any economic upturn … Wales is good place to do business … That is why Wales beat competition from England and Scotland to host the first Pinewood Studio outside London—an investment that will help bring 2,000 new jobs to Wales—recognition that we are now world leaders in creative industries”.
The new 180,000 square-foot studio facility in Cardiff is set to generate an estimated £90 million spent on Welsh business.
Another initiative that my noble friend mentioned is Superfast Cymru; she gave all the figures on that. It should reach completion by spring 2016. That would be a further boost to efforts to attract inward investment.
Unemployment is now lower in Wales than in the UK, and that is to be welcomed. Youth unemployment is also below the UK average, with a 22.5% reduction in the number of 16 to 17 year-olds without work in Wales over the past year, compared with a drop of just 1.2% in the rest of the UK—figures that clearly evidence that the Welsh Government’s policies are working for Wales and that they are stronger than in the rest of the United Kingdom. The Welsh Government have a good record of using all the economic levers at their disposal to encourage economic growth and support opportunities for inward investment and job creation in the Welsh economy
Wales is a small country with big ideas. The Welsh Government are working hard with business and industry to improve the lives of Welsh people. It would be good if the United Kingdom Government could stop criticising Wales and perhaps work in a more constructive way than they have been recently. Working together in partnership would be to the benefit of Wales and the whole of the UK. Perhaps we would then see an even better improvement in the economy of Wales.
Lord Thomas of Gresford
My Lords, I, too, congratulate the noble Baroness, Lady Morgan, on obtaining this debate. Perhaps it is a good thing that it is limited to the Welsh economy, because it would be dangerous for her to refer, for example, to the National Health Service in Wales. The noble Baroness, Lady Gale, has just referred to the Welsh Labour Party conference in Llandudno. In his speech to that conference the First Minister, Mr Carwyn Jones, said that there were “difficult truths” about the NHS in Wales, and that examples of poor care in Welsh hospitals were unacceptable. He conceded that there was complacency at the top of local health boards, and said that Labour Ministers must “hold up” their,
“hands and say, yes we could have done better”.
We sometimes seem to be living in a different country when I hear the Welsh Government praised. The debate might also have been about the state of Welsh education, on which topic in the same speech Mr Jones had no answers but said that the schools system had “coasted” for too long. We once thought we led Britain in educational attainment, but the reality today is that we have fallen too far behind.
What was the First Minister’s answer to these criticisms? To declare that any criticism of his Government was the work of a Tory elite waging war on Wales. Labour, he said, was on the front line of the war on Wales. How pathetic is that, and how disappointing to hear that empty rhetoric, that newspaper headline, being used in this House? I have to say that it causes me great dismay.
The Welsh economy is in need of serious overhaul. The Welsh Labour and Labour-Plaid Administrations in Cardiff Bay have not placed enough emphasis on equipping Wales with the infrastructure and the skills necessary to compete globally. The economy has serious longstanding structural problems. There was a time when Wales attracted inward investment from foreign countries on the basis of low labour costs and low land costs, but that was not sustainable and it is no longer a unique selling point for Wales, nor should it be.
Transport infrastructure is of course crucial. In government, the Liberal Democrats pressed for the electrification of both the Great Western main line as far as Swansea and the totality of the valley lines. The decision has now been taken with the support of the Prime Minister, as my noble friend said. However, it now appears that the Welsh Labour Government are reneging on their financial undertakings to support that development.
What about the rest of Wales? Money is certainly promised for a new line for the M4 motorway across the Gwent levels and relief for the Newport tunnels, but in north Wales, plans to dual the railway line between the two vital business hubs of Chester and Wrexham and their surrounding industrial areas have been scrapped, while we can whistle for the electrification of the north Wales rail line, which carries freight to Ireland. That line is not part of the strategic freight network at all.
An excellent survey was published last weekend by the Welsh policy unit of the Federation of Small Businesses. It accepts that the British economy is recovering: 14% fewer of its Welsh members identify the economy as a barrier to growth than in its previous survey in 2011. However, the comparison in the survey between the views of their members in Wales and those of their members in the rest of the UK is revealing. Significantly, more businesses in Wales are concerned about the cost of finance, and indeed of obtaining finance at all, to expand and develop their enterprises and create more jobs. We would look for a creative solution to that from the Welsh Labour Government, but there is none. Businesses, it appears, are hit by higher business rates than in England, which, with falling rental values, leads to the dereliction of so many of our towns across Wales, as we know as Welsh people.
There is also great concern in the business community about the provision of fast and reliable broadband access. Our digital infrastructure, which should allow business to grow and compete in a global market, is not developed in Wales. We have languished at the bottom of the UK league tables for broadband speeds for years, and we have suffered with a lower proportion of households able to access broadband than any other part of the UK. I wait to hear what is the new initiative to which the noble Baroness, Lady Morgan, referred, to see what it produces or whether the Welsh Government will be holding their hands up again on that issue.
Many employers are concerned about the low skill levels in Wales, which affect productivity and are a source of competitive disadvantage. Basic skills attainment is lower in Wales than across the United Kingdom as a whole and 4% lower than in Scotland. Higher skills attainment is 3% lower than across the United Kingdom and 7% lower than Scotland. Wales is lagging behind. Where is the wonderful improvement to which the noble Baroness, Lady Morgan, referred?
Taking the point of the noble Baroness, Lady Gale, Labour is allowing Wales to fall behind with regard to childcare. It has been said that 1 million women are missing from the United Kingdom workforce, because it does not make sense financially to go back to work. That is even more so in the case of Wales. The Family and Childcare Trust’s annual childcare survey of 2014 showed that childcare costs in England are falling in real terms for the first time in 12 years, while in Wales the cost of nursery care for under-twos has increased by nearly 12%. So there is a massive agenda—
Lord Ahmad of Wimbledon (Con)
The noble Lord’s time is up. This is a time-limited debate to 60 minutes. We can have a brief intervention, but my noble friend needs to conclude his remarks.
Baroness Morgan of Ely
Will the noble Lord comment on the fact that average costs of childcare in Wales are 10% lower than in England in every segment of care from under-twos to after-school clubs. So there is propaganda in his comments that is absolutely not true.
Lord Thomas of Gresford
I am quoting the Family and Childcare Trust’s 2014 survey. In conclusion, there is a massive agenda for the Welsh Government to tackle, but the truth is that the Labour Administration is failing not just the Welsh people but the whole concept of devolution for which we fought.
Lord Wigley (PC)
My Lords, I thank the noble Baroness, Lady Morgan of Ely, for facilitating this debate. I share many of her concerns, particularly those regarding European Union uncertainty. However, I admit that I do not recognise other aspects of the Wales that she describes.
The economy of Wales is still, sadly, the poor relation of the UK. Back in the 1960s Wales had a GDP standing at 92% of the UK average. The GVA per head, today’s measure, has Wales down at 72.3% of the UK—the lowest of any nation or region in the UK. London has a GVA of more than £37,000 per year, Wales under £16,000 per year. This decline is a devastating indictment of the failure of public policy over that period.
Before any noble Lord rushes in to castigate our National Assembly and the Welsh Government, I will point out that much of this decline occurred before 1999 and most of the economic tools are in the hands of the UK Government. Under successive Governments this decline has sadly continued. Incidentally, many of us in Wales are indeed getting sick to the back teeth of some Tory politicians, and the right-wing London media in particular, constantly talking Wales down. The truth is that the polarisation between the haves and have-nots among the UK nations and regions has worsened over recent years. The most recent years for 2012 show the GVA of south-east England increasing by 2.5% and that of Wales, as has been mentioned, by only 1.6%. So the gap is still widening.
The main factor in the GDP or GVA disparity a generation ago was the low activity rates in Wales. Wales was then some 6% behind the UK average. This has changed over recent years and that is to be welcomed. Wales now has an employment rate of 71%, closing in on the UK’s level of 72.3%, yet, sadly, the youth unemployment figures, if one looks at the past three years, not just the past year, have risen five-fold in Wales. That is not acceptable.
In Wales, the inactivity rate has decreased to 23.7%—again, something to be welcomed—lower than the north-east, the north-west and the East Midlands of England and of Northern Ireland, yet still our GVA figures are low. The explanation is the poor quality of so many of the new jobs in Wales. Too many are at the rock bottom of wage levels and many are part-time, zero-hour contracts. This is as much a problem in rural Wales as it is in the old industrial valleys. The two worst blackspots in terms of average wages being below living wage levels of £7.65 an hour are Dwyfor Meirion in north-west Wales, with 39.9% of its workers below a living wage level, and the Rhondda at 39.7% below a living wage level.
Lord Bourne of Aberystwyth
My Lords, against that background we have perhaps all been overcritical of politicians here, so does the noble Lord welcome the fact that the Secretary of State is hosting a job summit in west Wales, talking to local government and local employers to see what the Wales Office can do to help?
Lord Wigley
I welcome initiatives taken by anyone to improve the situation in Wales. To that extent, it is not a party political question; it is a crisis facing all the people of Wales, particularly those on low incomes.
In total, 23% of Welsh workers are below the living wage level. Surely all working people in Wales should receive a living wage. We need to generate jobs paying top-level salaries and wages, not just at the bottom, and public policy must be geared to achieve that. To my mind, one of the worst decisions in recent years was that of Rhodri Morgan to abolish the Welsh Development Agency. I very much regret that that was supported by all parties in the National Assembly, including my own, and including by the noble Lord, Lord Bourne. Even if the WDA cannot be re-established, the Government of Wales should look seriously at the proposal put forward last month by Plaid Cymru, and endorsed by the Federation of Small Businesses, to establish a private sector-led body to identify investment opportunities for EU funds. There is a real danger of EU strategic funds being squandered by successive Governments on projects that do not produce self-regenerative economic growth.
There is a pressing need for much higher capital investment projects, and in that context I include Wylfa—very much so—the M4 link road and the electrification in the south of Wales but also through to Holyhead. Given the Assembly’s limited borrowing powers at present, it is to be welcomed that there is a development in the legislation coming before Parliament but it will be years before it is fully developed if we have to wait for yet another referendum for it to be approved. It is ridiculous that the limited tax-varying powers in the Government of Wales Bill should need a referendum. Why can the Government not take such decisions without running for a plebiscite cover on the most trivial change? If the Government justify themselves on the basis that the Silk recommendations called for that, why ignore the Silk proposal to break free of the lockstep constraint on those tax changes? We also need a public sector development bank in Wales, as they have in Germany, to support small businesses that are neglected by the high street banks.
To secure economic recovery, Wales needs a business-friendly Government with a commitment to the specific needs of Wales, who are not driven either by a statist bureaucratic dead hand or by the perennial prerequisite of protecting the City of London at every turn. The domination of the UK economy by London has gone on for too long. For the sake of Wales, and indeed many regions of England, we need new thinking on that matter, and we need it urgently.
Lord Griffiths of Burry Port (Lab)
My Lords, I, too, am grateful that this debate is being held. I came into the House of Lords 10 years ago and shared an office with the noble Lord, Lord Leitch. I did not see much of him for the first three years of the co-use of my office because he was fronting some research for the then Chancellor of the Exchequer into our skills base and the need for skills appropriate for the evolution of our economic needs over the next 10 years. The Leitch report was published shortly after that.
Skills have been mentioned in the debate, and I am sure that any improvement in the Welsh economy will depend on our having a skills base that is equal to the task. One contributing body to the improvement of skills that I prize almost above all others is the realm of higher and further education. Since the secession of Cardiff from the University of Wales and the break-up of the university as I knew it when I was a student there, the fragmentation of provision in the realm of higher education is to be regretted. I am fearful that Wales will replicate England in having a capital city in the south-eastern corner, hoovering unto itself much of the energy and resource that should be spread more widely across the Principality. As I look at what is left after we take Cardiff out of the equation, I see a little constellation of higher education institutions: in Denbigh, which I believe is struggling, and in Bangor, Aberystwyth and of course Swansea. However, my interest is particularly focused on south-west Wales. The need to take a look at Wales as a whole and to see the needs and interests of people across the Principality is essential in any view that one takes of economic development in Wales.
I commend something that is happening in the realm of further and higher education in west Wales. What was that region left with after the fragmentation of the University of Wales? There is St David’s College Lampeter, Trinity College Carmarthen and little else, although they happen to be the two most ancient higher education bodies in Wales. I myself once taught at the university at Lampeter and am now a fellow there. I have watched with great interest the successive efforts to put something together in the south-west corner of Wales that might respond to present-day needs. I see that it is now called Trinity St David—its name changes every other year, but I think I am up to date at the minute—with a campus in London for the study of business and related subjects. I visited it and talked to the people there with great interest. However, from August of last year, in addition to Trinity College Carmarthen, which was a teacher-training college, and the old liberal arts university at Lampeter, Swansea Metropolitan University joined, as did Coleg Sir Gâr. That brings together further education, a range of vocational qualifications and curricular studies, which makes the whole thing a very exciting body—in potential, at least. Across the two previously differentiated sectors of further and higher education, it can bring together and harness cross-fertilisation from engineering, beauticians and agriculture. It has a large farm, with lots of livestock and so on. The college no longer appoints a principal but appoints an entrepreneurial businessman. That is what is happening in higher education across the board, as survival becomes the name of the game.
As I look at south-west Wales, I think to myself, “That could be a sort of panic move to hold on to something at all costs and to cobble together something that might not work”, and that remains a possibility. However, at the same time it could be an innovative thing. Under the genius of Dr Medwin Hughes it could be a suggestion that provides a model of good practice that could be replicated elsewhere in the United Kingdom—bringing these sectors together, having them capable of looking to each other’s interests and developing each other’s skills. I therefore see in south-west Wales the possibility of providing skills in close communion with the local employment agencies, bodies and personnel, which I find very welcoming. I now know that we owe the electrification of the rails as far as Swansea to the Liberal Democrats. I urge them to use whatever authority they have, or imagine they have, in the Government to get the electrification taken further into west Wales, because that would help greatly. Infrastructure simply has to be provided now so that those welcome developments can flower and contribute materially to the well-being of the region in question.
I therefore just hold up the model of good practice, or at least I hope it will turn out—I really do—to be a model of good practice for south-west Wales. I urge Her Majesty’s Government to do all that they can, in the partnership that we heard spoken of in Silk 2, to contribute to the well-being of a distant part of the Principality, but which is as important to a view that we take of Wales as any other.
Lord Rowe-Beddoe (CB)
My Lords, I, too, thank the noble Baroness, Lady Morgan, for this debate. I wish to place on record my regret that at times it lapsed into political partisanship. In my opinion, the topic that we are debating is far too important to have snide political fights about. I declare three interests that have significant economic impact. One is the Welsh Millennium Centre, the second is the Royal Welsh College of Music and Drama and the third is Cardiff Airport.
In Wales, as we have heard, unemployment is lower than the UK average, at 6.7% versus the UK average of 7.2%. The private sector is growing, youth unemployment is falling and the Welsh economy as a whole is growing. However, there is still much ground to make up because, as has been mentioned today, what we are seeing is all coming off an unacceptably low base. Wales is still bottom of the UK GVA table and, given my passion and commitment to our country—and the same goes for all noble Lords in this Room today—I say that we have to climb that table, and fast. Let us not forget that we have done so in the past.
In many ways, the opportunity and challenge at the macro level is mirrored at Cardiff Airport, which will be the focus of my contribution today. In my current role there, I have witnessed over the past 12 months the enormous potential that exists at the airport as part of a strong and vibrant aerospace enterprise zone, and it will play a significant role in the economic recovery in Wales. We have seen growth in passenger numbers—a mere 9% in the first 12 months but, like the Welsh economy, that started from a low base.
The impact of the airport on the regional economy is multifaceted and complex. First, the airport is a major employer in its own right. Taking into account the world-class British Airways maintenance, repair and overhaul facility, the airport supports over 1,600 full-time equivalent posts. Incidentally, that decision by British Airways to locate in Cardiff was taken in the early 1990s by the late Lord Marshall of Knightsbridge, and British Airways has never regretted it. Yet this direct employment is just the first part of the story. The second is that with the indirect and induced employment across a range of sectors, when combined with the direct employment, evidence now suggests that the airport has a total operational impact of 2,600 jobs. This equates to an overall GVA impact in excess of £90 million.
There is a third part of the story. When we look beyond the perimeter of the airport fence, we can see that it has a wider, catalytic effect on the regional economy. While this is much harder to quantify, the evidence suggests that inbound tourism alone adds a further £50 million to the Welsh economy when its own indirect and induced factors are taken into account. All this from an airport that carries only 1.1 million passengers—fewer than 10 years ago, when it carried over 2 million.
The final part of the story is where there is potential for the airport, as it grows, to contribute significantly more: the enterprise zone. We have already seen examples across the UK, such as in Manchester and Newcastle, of airports now serving as mini-cities and economic hubs in their own right. This potential exists in Wales. We are fortunate to have the St Athan-Cardiff Airport Enterprise Zone, which is already attracting investment and new jobs. The zone has a vision for Wales to truly establish itself as a global leader in the aviation and aerospace sectors. This is no pipe dream. Many noble Lords know about BAE, GE engine maintenance, BA avionics and so on. We have a vital supply chain in the aerospace industry but I never hear anyone talk about it. It is a very strong part of Wales, and these are not low-paid jobs. In the north and the south, this industry is operating and growing effectively and there is much more to be done.
I will say two more things before I sit down. I am sick to death of the Barnett formula. I sat on your Lordships’ Select Committee under the previous Government. We have underfunded Wales for 30 years. The noble Lord, Lord Barnett, if he came into this Room, would say exactly the same, but it is always kicked off into the long grass. Now we wait for something else. Whichever Government are in power, we never get our fair share.
Finally, war has a few outcomes: victory or defeat. Do we want to have war? Would it not be better to have a truce and move towards real partnership—partnership between Cardiff and London?
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)
My Lords, I thank the noble Baroness, Lady Morgan, for securing the debate today on this important issue. I have to remark on the change of rhetoric from the Opposition. A year ago, when unemployment was still higher in Wales and the statistics were not so good, we discussed this issue and the Labour Party told us that it was all the UK Government’s fault that Wales was lagging so badly behind. Now that unemployment in Wales has fallen and there are signs of recovery, which we would all welcome strongly, of course, the rhetoric from the Benches opposite is that this recovery is due entirely to the Welsh Government: the UK Government bear no responsibility for it at all.
The truth of the matter, as all noble Lords actually know, is that we all strongly welcome the fact that Wales is at last starting to catch up. Several noble Lords have referred to the fact that the problems with the Welsh economy have existed for many decades, and GVA—to which the noble Lord, Lord Wigley, referred—has been a persistent problem as it has declined over the years. These are not sudden problems and it is absolutely clear that there are levers in the hands of the Welsh Government, but the macroeconomic levers of course remain with the UK Government. It would be helpful if the noble Baroness took some of the advice of the noble Lord, Lord Rowe-Beddoe, and adopted a more open-minded approach to this.
The truth is that, since 2010, the UK economy has gone from rescue to recovery. Wales is now in a great position to take advantage of this. The economy is growing and, as the Chancellor outlined in the Budget, Wales is growing faster than forecast, as is the UK. We are now growing faster than Germany, faster than Japan and faster than the US. I remind the party opposite that it claimed that none of this growth would be possible if the coalition Government continued to take the difficult decisions to deal with the deficit. It predicted disaster, and disaster we have not seen.
I will refer to one or two issues relating to employment. It should be emphasised that since the end of the first quarter of 2010, employment in the private sector in Wales has increased by 114,000. Over the past quarter alone, private sector employment increased by 12,000. Although there has been, as the noble Baroness said, a decline in the number of people employed in the public sector, that decline has been proportionately very much lower than in the rest of the UK and has been very significantly outstripped by the number of jobs created in the private sector.
Reference was made to youth unemployment, which of course seriously worries us all, but youth unemployment was a long-standing problem in Wales. It rose by 74% under the previous Government. It is therefore hugely welcome that the youth claimant count was down by 3,500 in the most recent statistics in February last year. Once again, there appears to be a better picture.
The noble Baroness, Lady Gale, referred to women in the labour market. I am so pleased that she drew attention to that. Since May 2010, the number of women employed in Wales has increased by 36,000. I draw her attention to the fact that, on International Women’s Day, I hosted an event in the Wales Office with leading businesswomen and women in academia in Wales. She asked whether the UK Government had a similar scheme to the one in Wales. The Women’s Business Council has existed for a considerable time and is designed to encourage women at the top of business and to ensure that there is a better spread throughout the business world.
More people have been going out to work in Wales than at any time in our history. Since the election, 81,000 more people are in work in Wales. The employment rate, as has been noted, has increased by more than in any other region of the UK over the year, and unemployment in Wales is now below the UK average, at 6.7%. We absolutely agree that times have been tough for households as the economy recovers, throughout the UK and in Wales, but it is important to acknowledge that, last year, average earnings in Wales increased by 4.4%. That is more than twice the rate of inflation, inflation now being 1.7%, at a four-year low.
Central to the coalition Government’s measures to support families and those in work is the increase in the income tax personal allowance. Only last week, a further 13,000 people in Wales were taken out of income tax—in fact, that happened only yesterday—and 144,000 have already been taken out of income tax altogether in Wales. With our further increase in the personal allowance announced for April 2015, a total of 155,000 people will have been taken out of income tax in Wales as a result of the Government’s decisions. That will make a real difference and will be worth £805 per year to those people, providing a boost to living standards. I also say that, with 1.2 million people working in Wales, virtually everyone in work in Wales will have benefited from the income tax cut to the personal allowance. I see that there is a Division.
The Deputy Chairman of Committees (Baroness Gibson of Market Rasen) (Lab)
My Lords, there is a Division in the Chamber and this Committee will therefore stand adjourned for 10 minutes.
Baroness Randerson
Thank you, my Lords, I will resume. I wanted to speak about the support for business that the UK Government have been undertaking. In the Budget, the annual investment allowance was doubled to £500,000 from the end of 2015 to support businesses across the UK in investing and expanding. There was a business energy package, which is important for Wales because businesses like Celsa have high energy requirements in Wales. That package will be worth up to £240 million to businesses between 2016 and 2019. We are also extending by three years the period in which enhanced capital allowances are available to companies investing in enterprise zones: until March 2020.
Mention has been made of the investment in broadband. I remind noble Lords that this is UK government money. The UK Government have provided £69 million to Superfast Cymru and £150 million to tackle mobile coverage across the UK. Some £10 million has gone to Cardiff and £6 million will go to Newport for the Super-Connected Cities Project, so the concern about broadband connectivity is right but it is important that we pay attention to the speed with which it is being tackled, as indeed the UK Government are tackling the issues of infrastructure across Wales and the UK.
The noble Baroness referred to a war on Wales. Scrutiny is not war, nor is criticism. With government comes responsibility—the responsibility to deliver. One must not confuse wanting the best for Wales, pointing out where there are problems, with talking Wales down. It is important that the Labour Government in Wales take that scrutiny on the chin, if I may put it that way, and accept that they have to take responsibility.
I welcome the constructive comments from the noble Lords, Lord Griffiths and Lord Rowe-Beddoe, about the key aspects of our economy, the higher education institutions and the airport, which are essential to the growth of the Welsh economy. This debate has highlighted the fact that Wales is on the up but there is a long way to go. The proof is there that this Government are creating the right conditions for growth, but we fully accept that our job is not done and that there is still a long way to go.