Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Harris of Richmond) (LD)
My Lords, if there is a Division in the House the Committee will adjourn for 10 minutes.
Pensions Act 2011 (Consequential and Supplementary Provisions) Regulations 2014
(9 years, 10 months ago)
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Lord Bates
That the Grand Committee do consider the Pensions Act 2011 (Consequential and Supplementary Provisions) Regulations 2014.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments
A further, and more detailed set of regulations, The Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014, deal with consequent changes to secondary legislation. These were laid before Parliament on 3 July 2014. Both sets of regulations will come into force at the same time as the clarified definition in Section 29 of the Pensions Act 2011.
The clarified definition of money purchase benefits will ensure that only benefits which cannot develop a deficit in funding can be money purchase benefits. Noble Lords may be familiar with the decision of the Supreme Court in 2011, in the case of Houldsworth and another v Bridge Trustees Ltd, that certain benefits which could develop funding deficits or surpluses could still fall within the definition of money purchase benefits.
While this decision concerned two specific types of benefit structure found in a particular scheme, it created widespread uncertainty in the pensions industry. That was because the decision could also be interpreted as covering other types of benefits and place these outside the protection of the regulatory framework for benefits that are not money purchase, even though they had the potential to develop funding deficits.
Section 29 of the Pension Act 2011, which has retrospective effect, and the supporting regulations remove that uncertainty. Where in the past decisions have been made by schemes that are in keeping with the clarified definition, the retrospective effect of Section 29 will ensure they remain valid, despite the fact that those decisions may be incompatible with the Supreme Court’s judgment. Where decisions have been made that are inconsistent with the clarified definition there is transitional provision in the regulations so that schemes will not need to unpick past decisions. Going forward, however, it is important that the trustees and managers of schemes know what action they need to take in respect of benefits they have previously treated as money purchase, but which do not meet the clarified definition. That will ensure that their members are protected.
In particular, these regulations amend Section 84 of the Pension Schemes Act 1993 to provide an alternative method for trustees or managers to revalue certain types of benefits known as cash balance benefits. The cash balance method allows the sum available for a cash balance benefit for a deferred member to be revalued by any method that is applied to the benefits of active members where it cannot be calculated by reference to the salary.
The regulations also include decisions made by the board of the Pension Protection Fund that relate to benefits affected by the clarified definition as matters that are reviewable under Schedule 9 to the Pensions Act 2004. That will ensure that during the transitional period, where the board has exercised discretion as to whether to treat benefits as money purchase benefits, that decision can be challenged and subject to a formal review process.
The Government have worked closely with the pensions industry to identify the type and number of schemes that will be affected by the clarified definition of money purchase benefits. The majority of schemes will be hybrid schemes—that is, they will contain a mixture of money purchase and non-money purchase benefits. Hybrid schemes make up about 2% of the estimated 40,000 private occupational schemes in the UK which include money purchase benefits—that is, approximately 800 schemes.
I commend the Pensions Act 2011 (Consequential and Supplementary Provisions) Regulations 2014 to the Grand Committee and ask its approval to implement them.
Lord Kirkwood of Kirkhope (LD)
My Lords, I am pleased to have the opportunity to contribute to this technical debate. I declare an interest as chairman of the defined benefit superannuation scheme of the General Medical Council, so unfortunately I know nothing about money purchase schemes. I did try, honestly—I took home the 36-page judgment of the noble and learned Lord, Lord Walker, and read it carefully until Germany scored the second goal. I still do not understand the noble and learned Lord’s reasoning, but I am sure that it is sound.
I hope that the Minister can help me. I understand that we are dealing with two sets of statutory instruments. The department deserves credit for taking on board the suggestion made by the Secondary Legislation Scrutiny Committee of teasing out the negative from the affirmative. That is always good practice. However, I do not know where the transitional regulation, Regulation 1711, comes from. I assumed that it would have been sensible to have taken these together because they talk about the same thing and are all part of a piece. However, I may have missed something and the Minister might be able to put me right on the procedure that is involved.
This is a small but important issue and anyone who looks at it will be reminded of the ineffable complexity of our pensions system. I have to say that although this is the right thing to do and I am content with the regulations, they form another layer of complexity—because they have to. If money purchase is not defined in this way, it would leave a terrible amount of uncertainty. If people do not understand a valid, watertight description of money purchase, chaos will ensue. Lots of schemes could get into even greater difficulties in the future.
We always have to be careful about retrospective provision. These regulations go back to 1 January 1997. I understand perfectly why and, in the circumstances, that is justified, but, as I say, we must always be careful about retrospective provision. However, I think this is the right tactic. It is not perfect because retrospection never is, but the stated case is accepted, certainly as far as I am concerned. Clarity is the order of the day, as much as we can achieve it in pension provision.
I have a couple of questions for the Minister. Some of these things are imponderable because the data are not available in money purchase schemes to the same extent as in defined benefit schemes, but the number of affected schemes has been listed as being around 800. Is there an update on that figure and is there now a better definition? Has the number gone up or down since these matters started to be drawn up by the department? I also want to try to understand what the costs of non-compliance would amount to. What is the worst that could happen? If everything that can go wrong does go wrong, what would happen to hybrid schemes such as these which involve money purchase in a way that we have to change through these regulations?
As the chairman of a superannuation scheme myself, the key and overriding priority of a trustee is to protect the members’ benefits. Are there any circumstances where benefits afforded to members could be prejudiced by these changes? I have looked at the very helpful Explanatory Memorandum. Paragraph 19 explains the provisions of,
“transitional measures to assist affected schemes in three ways”.
The first bullet point talks about,
“retrospective protection so that schemes do not have to revisit past decisions”,
and goes on to conclude that,
“there is very likely to be no detrimental material impact on member benefits”.
That is a nuanced subordinate clause, and perhaps it has to be so. I would rather have the truth than be given a more definitive statement that was easier to understand and more reassuring. However, that is a key question for me. If I could be given some reassurance on that point, I would be even happier than I am at the moment.
Finally, I think that the consultation was exemplary. I looked at the document very carefully and the department did everything it could. The consultation was responded to well and those who did respond are experts who know the exact consequences of these changes. For me, that has lifted a great deal of concern and apprehension about the effects of these changes. These regulations reflect circumstances that no one could have foreseen and the Government have responded to them in the best way they can. The situation is still a bit fuzzy at the edges, but I hope that the Minister will give us an assurance that the appropriate officials who understand these things will monitor the position so that we can be assured in the fullness of time that the assumptions we are making of very little or no loss of benefit to individual members are found to be what happens in practice in the future.
Baroness Drake (Lab)
My Lords, I declare my interests as a trustee of both the Santander and Telefónica pension schemes.
This statutory instrument has been on a rather interesting journey. In part it supersedes draft regulations published in May, which were withdrawn and subsequently divided into two in order to separate provisions required to go through affirmative procedure from those required to go through negative procedure. It has therefore been a little confusing to try to anticipate the affirmative provisions to be relaid in the form of a pared-down instrument, as this SI was not laid until last Thursday. Having said that, I appreciate that dealing with the uncertainties and complexities that flow from the Supreme Court decision in Bridge cannot have been straightforward for the Government. I compliment the drafters of the Explanatory Memoranda and the impact assessment, who tried to provide clarity as to what the Government intend and why, in what to most normal people would seem a rather dense and complex set of requirements.
The two regulations have separate Explanatory Memoranda, but they share a common impact assessment, so one can assume that certain key assumptions and conclusions underpin both orders. I refer in particular to the fact that, having considered the consultation responses, the department has changed its policy on retrospection for non-compliant schemes. Decisions taken by schemes between 1 January 1997 and the coming into force of Section 29 will be validated, except in two limited circumstances that relate to winding up and employer debt, where there is a risk to members’ benefits.
The department has been persuaded that it would therefore be unduly burdensome to require schemes to revisit past decisions, which could give rise to expensive administrative costs that could deplete scheme assets and therefore the ability to fund members’ benefits—that is the argument put by the Government—and that the impact of members’ benefits of revisiting past decisions since July 2011 would be negligible. In summary, the Government are persuaded that with two exceptions, Section 29 will come into force only with prospective effect; there will be retrospective protection for schemes and past decisions will be validated.
However, in coming to that view and giving that retrospective protection to decisions made, the department is unable to quantify the impact of the regulations on schemes likely to be affected. There are no data available at an industry-wide level. The consultation did not elicit sufficient data at scheme level to allow the department to produce reliable estimates of the impacts on schemes and on members—and indeed, on employers. The department engaged further through the pensions regulator’s annual survey and the wider pensions industry to enable some quantification of costs and benefit. However, insufficient information was forthcoming.
A question must be, therefore: are the Government right to be persuaded, and indeed confident, that except in the defined limited circumstances that they have identified, there is negligible risk to members’ benefits in validating decisions taken by schemes before the coming into force of Section 29? Should there be more exceptions to the retrospective validation? How do the Government give themselves the level of confidence they need to give that retrospective validation? I will illustrate my concern with reference to a couple of examples.
The very important rules which govern any attempts to change pension rights or entitlements are detailed in Section 67 of the Pensions Act 1995, popularly referred to as “Section 67 rights”—an often quoted phrase because of its protected nature. During the course of the consultation on the regulations arising from the Pensions Act 2011, stakeholders advised the department that there could be schemes which had inadvertently changed their benefits from non-money purchase to money purchase; for example, by removing a guarantee from a cash balance scheme because of their interpretation of the law in force at the time. In doing so they may not have secured the members’ consent as is required.
The department has taken the view that schemes should not be required to revisit these decisions and that it would deem that the requirements of Section 67 of the Pensions Act 1995 had been satisfied where the actuarial equivalence requirements were met before such a scheme modification took effect. But those actuarial equivalence assumptions may not hold good over the longer term, and the issue remains that a guarantee or some other right has been removed without consent. The Section 67 requirements have not been met and the beneficiaries may be worse off.
Baroness Turner of Camden (Lab)
My Lords, my noble friend Lady Drake has made an exhaustive study of this complicated matter. I certainly do not have her kind of in-depth understanding. I came this afternoon because I am interested in what happens to members of DB schemes who have been concerned that the various changes would threaten the safety of their benefits.
As we have heard this afternoon, there have been quite heavy assurances from the Government that the protection of members is paramount to them; that is of course important. We have already heard that there have been assurances on retrospection. The changeover in some schemes from non-money purchase into money purchase can give rise to uncertainty and a lack of assurance among the people receiving it. I am therefore interested to hear what the Minister has to say in response to my noble friend, who has raised these points sharply and with great clarity. It is necessary when you are making adjustments in pension benefits in whatever area to make sure that people who are on the receiving end are confident that what they have been paying for and supporting all their lives will be safe. That is terribly important.
We understand that the Government have given assurance both in relation to protection under the ECHR, which is important, and to general protection as well as protection of some means of challenging if people feel concerned and are not happy about what is happening. I await with interest what the Minister has to say in response to the issues which have been raised, which are very pertinent in the circumstances.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his introduction to these regulations and for explaining how we got to this place, the noble Lord, Lord Kirkwood, for some very good questions, and my noble friends Lady Drake and Lady Turner for raising some significant concerns.
There has rightly been a long consultation on this issue, and it is right that the Government have taken the time to listen to a wide range of voices, particularly regarding the retrospective nature of the changes, the significance of which has been highlighted by the noble Lord, Lord Kirkwood, and others. While on one level these are very technical changes—I say to my noble friend Lady Drake that, being a relatively normal person as far as pensions are concerned, if in no other respect, I found that “complex” did not begin to describe my emotions—sadly, I felt the same way as Brazil when I was reading these. None the less I confess that the questions I am asking the Minister are quite genuine and I will find the answers fascinating, because I certainly do not pretend to understand the exact implications of what is happening here.
As my noble friend Lady Drake explained, the original draft SI was withdrawn after being challenged by the Joint Committee on Statutory Instruments. It has been replaced by two orders: this affirmative draft instrument and a negative instrument, the Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014, to which I shall refer from now on as the negative instrument, if noble Lords will bear with me. Those two orders are completely intertwined. Indeed, the Government issued a single impact assessment covering both. Therefore I hope that the Minister will forgive me if some of my questions end up straying into that territory. I simply want to understand the settlement that the Government reached, and inevitably the ground is split in practice between the two instruments.
On commencement, my noble friend Lady Drake explained that these regulations will apply primarily with prospective effect, with the exception of two limited circumstances relating to winding up and to employer debt where there is a risk to member benefits. However, there will be retrospective protection for the affected pension schemes, with earlier decisions effectively being validated. The key effects of that of course—as has been mentioned—are on schemes that switch from being money purchase to defined benefit, with all the significant regulatory, governance and funding implications that that switch carries. There is also the effect on wind-ups and administration and the impact on employer debt. The Government originally intended that the provisions should all be retrospectively applied, but changed their position on consultation. The Government response to the consultation on the definition of money purchase schemes says at paragraph 50:
“However the Department has been persuaded that, where there is negligible risk to member benefits, it would be unduly burdensome to require schemes to revisit past decisions. This would give rise to expensive administrative costs that could deplete scheme assets and therefore, the ability to fund members’ benefits”.
Paragraph 51 continues:
“Nevertheless, where there is a real risk to member benefits, it is right that the legislation provides that employers fund a scheme deficit if a scheme is underfunded on wind-up, or if the scheme is unable to put in place a recovery plan”.
The response goes on to explain that in practice the transitional regulations validate the actions of trustees or managers in respect of those non-money purchase benefits, except in limited circumstances.
If that is the basis of the transitional protection that is being offered by the Government, can the Minister tell the Grand Committee a bit more about the basis of their assessment? The impact assessment says that,
“there is insufficient information available to accurately estimate the number of schemes affected by these regulations”.
It goes on to say that there are approximately 40,000 private occupational pension schemes in the UK that include money purchase benefits, of which about 2% are hybrid schemes.
The impact assessment says that during the consultation the department held four stakeholder forum events, with more than 100 stakeholders in attendance. It had 95 responses to the consultation document. The department also made direct approaches to relevant organisations, including employer representative bodies. As my noble friend Lady Drake mentioned, it also went out and made direct attempts to get data, in order to better understand this. However, paragraph 25 of the impact assessment says:
“Despite these efforts the Department is unable to quantify the impact of the regulations on the schemes that are likely to be affected. There is no data available at an industry-wide level and the consultation did not elicit sufficient data at scheme level to allow us to produce reliable estimates of the impacts on schemes, employers or members”.
However, the Government were obviously given a pretty clear steer by the industry that the consequences of retrospection would be significant, because the impact assessment says at paragraph 30:
“The Department have taken into account the strongly expressed views of those in the industry. Having carefully considered these responses, the Department is persuaded that this change to the policy”—
as was quoted—
“will not appreciably increase risk to members’ entitlement or make any material difference to members’ pension outcomes, given the protections put in place through these regulations”.
My noble friend Lady Turner said that she was pleased the Government were able to give assurances that members would not find their benefits being affected. However, I have to ask—along with my noble friend Lady Drake—how the Government can be confident that the risk to members’ entitlements is negligible and will not increase appreciably, when they are unable to quantify even the number of schemes affected, never mind the number of members, and when they do not seem to have been able to gather any data about what the quantum of that effect might be. I understand that they are in a difficult position, but I wonder what degree of confidence the Government have, and therefore what degree of assurance the Minister can offer the House through this Grand Committee, that these regulations will have the effects that the Government believe they will.
Lord Bates
My Lords, a number of questions have been asked. I have counted 19, which compares to the five that were asked when these regulations were scrutinised in the other place. I am sure that that is a reflection of the quality and expertise, if not the viewing habits, of the members of the respective committees. I confess that at one point last night I was not sure whether the scoreline reflected the football match I was watching or the judgment of the Supreme Court which happened to be open on my lap at the same time.
Lord Bates
At half time.
There are many questions and I want to try to address as many of them as possible to get the responses on the record for people to scrutinise. First, my noble friend Lord Kirkwood asked how many schemes were affected by the clarified money-purchased benefits definition. It has not been possible to quantify the exact number of the affected schemes as trustees and scheme managers are only required to make detailed reports to the pensions regulator on benefits that they consider to be non-money purchase. Schemes are not required to provide detailed reports of benefits that they consider to be money purchase, so any information held by the regulator here is self-reported by the scheme on a voluntary basis.
We consulted extensively on this point, and the regulator has also tried to secure additional data. However, stakeholders have been unable to share with us the detailed scheme-level data because that information is sensitive and restricted. A small number of consultation responses indicated the size of the scheme and the potential costs involved. However, the information is not representative of all the schemes affected, and cannot be reliably used to produce an aggregate estimate. The DWP continues to work with the regulator to identify and communicate with effective schemes to establish more comprehensive data on how many schemes are to be affected.
My noble friend Lord Kirkwood also asked whether with the new definition the Government are adding costs and increasing the administrative burden on the schemes. I can assure my noble friend that that is not the case. Although the clarified definition is retrospective to 1 January 1997, in most cases the regulations modify the retrospective application of regulatory legislation so that schemes will not need to look back at events where benefits could fall into a category affected by the Bridge judgment or the clarified definition in Section 29. The clarified definition will mean that the member benefits are protected. The transitional measures will bring schemes into compliance, are proportionate and bear in mind the risks and the burdens on members, schemes and employers. We believe that that is the sensible approach, precisely because the Government want to minimise the additional requirements on schemes without jeopardising the protection of the scheme’s members.
My noble friend also asked why the Government insisted on a change of definition, and asked whether the Supreme Court decision was wrong. The Supreme Court judgment concerned two specific scheme benefit types: benefits which provided a guaranteed pot, otherwise known as cash balance benefits, and pensions in payment from schemes derived from money purchase benefits, both of which the court decided could be money purchase. The decision meant that some guaranteed benefits from outside the regulatory regime conflicted with the Government’s view of what constituted a money purchase benefit.
Why are the regulations not together? The department’s advice was that both sets of regulations would be debated together subject to the affirmative procedure. However, following comment from the Joint Committee on Statutory Instruments, the department decided to split the regulations. However, we expect that because both sets are closely linked together, the discussion will encompass transitional arrangements for both regulations.
I have addressed the question of why there are two separate regulations, but I will add one additional point. It has been necessary to divide regulations in that way because the primary legislation under which the regulations have been made—Section 33 of the Pensions Act 2011—provides a different parliamentary procedure for regulations which amend primary legislation. I appreciate that that procedural requirement has not made discussion and debate in this area easier, but I am happy for this debate to encompass both sets of regulations, as it has already done. On why the clarified definition of money purchase benefits is retrospective to 1 January 1997, the Government have decided on retrospection to that date so that the effect of the clarified definition coincided with the inception of key pension protection legislation. Provisions of the Pensions Act 1995 largely came into force in April 1997, hence the chosen date, but retrospection was set up on 1 January 1997 as the financial assistance scheme eligibility began for schemes which started winding up from that date. However, since the Pensions Act 2011 was passed, we have no evidence that any of the schemes in this position would have been affected by the Bridge Trustees judgment or Section 29.
The noble Baroness, Lady Drake, asked whether there was a pre-existing requirement to have benefits valued consistently with legislative requirements in the past. Some schemes may have valued in a way that was not consistent with those requirements. Evidence from the consultations showed that members’ benefits which here are affected by Section 29 and the regulations might have been revalued by the application of notional interest or investment return. It is possible that this would have been less than revaluation in accordance with statutory requirements. However, we had to balance the protection of members against avoiding administrative complexity for schemes. Evidence suggested that the cost of applying revaluation arrangements would outweigh the benefit to members.
The noble Baroness, Lady Drake, also asked what the new cash balance method was. The new cash balance method is based on an existing flat rate method, which requires deferred members to receive any increases that they would have received if they had still been active members of the scheme. She also asked why there is no requirement to revisit the scheme if it is wound up. If the scheme is still being wound up at the time that the regulations come into force and is underfunded, trustees will be required to revisit an employer debt before the regulations come into force. If the scheme has completed winding up when the regulations come into force, there is no scheme in existence to unwind; all the assets of the scheme have been dispersed. The regulations therefore do not require a scheme that has completed winding up to be unpicked.
A question was asked about why schemes newly eligible for the Pension Protection Fund will not be treated as such until 1 April 2015. That date marks the beginning of the first full levy year after these regulations are planned to be in force. The delay will allow the schemes time to correctly determine whether they are eligible for the fund and to carry out the necessary valuations on which the first levy bill will be based. It also ensures that schemes will not be required to pay the levy in respect of past periods. It would not be fair to other levy payers to provide protection for an earlier period for a scheme that has not paid any levy.
The noble Baroness, Lady Drake, raised the question of flipping. The department’s consultation exercise did not identify any scheme that will become newly eligible for the Pension Protection Fund that has a sponsoring employer likely to become insolvent in that small window of time. If such an event does occur, the Government will give consideration to the most appropriate way of protecting scheme members. It would therefore not be fair to other pension protection levy payers to protect the members of a scheme in respect of a period of time when the scheme had not paid into any levy.
The noble Baroness, Lady Drake, asked whether once the regulations are in force it would still be possible to change the scheme benefits without member consent from one form of non-money purchase arrangement to another with a lesser benefit promise. A change of this nature—a detrimental modification under Section 67 of the Pensions Act 1995—would still be subject to a requirement that the value of the members’ rights or benefits was not less than before the change. If this requirement were not met, the change would be subject to being made void by the Pensions Regulator.
The noble Baroness also suggested that there were insufficient data for the Government to be able to conclude that there will be a negligible effect. Section 67 will continue to apply except in very limited circumstances where schemes have changed benefits from cash balance to money purchase. This circumstance is catered for in the negative set of regulations, which require the actuarial calculation between cash balance and benefits collected in the money purchase schemes to be maintained. In addition, the trustee approval and reporting requirements must have been satisfied.
The point was made that retrospection makes these regulations too complex. The clarified definition, when in force, will be retrospective to 1 January 1997. Retrospection to January 1997 is needed to protect the position of schemes that had taken decisions in accordance with the clarified definition in Section 29—that is, not in accordance with the Supreme Court’s judgment—but for schemes that have acted in accordance with the judgment, these regulations modify the application of regulatory legislation with retrospective effect and for the transitional period where necessary. The regulations cover the many different types of pension arrangements that currently exist and which could have been affected by the judgment of the Supreme Court in respect of Section 29.
Baroness Drake
My Lords, this may be an appropriate moment to intervene because I want to push the Minister on a couple of points. I have been trying to anticipate when he would be coming to the end of his remarks.
Perhaps I may go back to two points. First, Section 67 rights under the 1995 Act are pretty important rights that get people rather excited. The concern I was trying to express was that this seems to set the precedent that you can provide retrospective protection for schemes that have breached Section 67 rights and obligations. What level of assurance can the Minister give that this is not a precedent that could be used for undermining the strength of Section 67 in the future by giving retrospective protection?
Secondly, in terms of how this retrospective protection applies where schemes have breached Section 67, I should point out that the Government do not know which schemes have done this. They have just heard about this from the industry, so they are giving a sort of blanket assurance without knowing the number and type of breaches of Sections 67. If they do not meet the actuarial equivalence terms, it is not clear whether they will have to go back and redo it.
Thirdly, if they did it inadvertently, they probably did not do any actuarial equivalence exercise at the time. Is it therefore being said that they can do one with hindsight now, and can look back and say, “Had that been applied at the time”? It is quite important to get clarity on this Section 67 point, because there are lots of disputes and case law around it. It tends to get people who are interested in members’ benefits quite excited if there is an attempt to compromise it in some way.
On the flipping schemes, which are not protected in terms of access to the PPF until April 2015, I note that, as was said, if you have not paid the levy then the liability if your employer goes insolvent should not go to other levy payers. However, the issue is that it is a government responsibility, because the Government are obliged under the EU directive. I was looking for as firm an assurance as possible that, if an employer with a scheme that has to flip from DC to DB goes into insolvency before or up to April 2015, the Government will not walk away from giving some kind of protection to those schemes with DB benefits the members of which may now be caught outside the protection regime; hopefully there are none or, if there are, they are very tiny.
Lord Bates
I am grateful for those additional points. Let me try to answer them as best I can. It might be helpful if I wrote to the noble Baroness and shared those responses with the Committee. I realise that they are important issues.
To respond to the specific issue of Section 67 rights, the appropriate regulation is Regulation 8(3)(b). The Government believe that the protection is not undermined, because there must have been an actuarial equivalence. If they do not meet the actuarial equivalence requirements, they will have to go back and unpick them. In fact, the regulations introduce a new protection for members, which underpins the benefits. However, as I said, I shall seek further guidance on that and write to the noble Baroness and other Members of the Committee.
These draft regulations make modifications to existing primary legislation to provide supplementary and consequential measures to support the coming into force of the clarified definition of money purchase benefits in Section 29 of the Pensions Act 2011. I hope that I have set out for the Committee the rationale for these regulations and have responded to the matters raised. I commend these regulations to the Committee.
Public Bodies (Abolition of Food from Britain) Order 2014
(9 years, 10 months ago)
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Baroness Northover
That the Grand Committee do consider the Public Bodies (Abolition of Food from Britain) Order 2014.
Relevant documents: 1st Report from the Secondary Legislation Committee, 1st Report from the Joint Committee on Statutory Instruments
Baroness Northover (LD)
My Lords, I welcome this opportunity to introduce the Public Bodies (Abolition of Food from Britain) Order 2014. First of all let me explain why the Government have proposed to abolish the public body, Food from Britain. The rationale for this is quite straightforward and I can assure noble Lords that I am not actually abolishing all food from Britain, which might be a little more controversial than this order.
The Government have made a commitment to reduce the number of unnecessary public bodies. In July 2010, my right honourable friend the then Secretary of State for Defra announced proposals to reform a number of departmental public bodies. These included Food from Britain, which—if I can use inverted commas throughout—was set up under the Agricultural Marketing Act 1983. It operated between 1983 and 2009, focusing mainly on the promotion of UK food and drink exports. In 2008, the Food from Britain Council took the decision that the body should be administratively wound down, following a reduction in its grant in aid by the previous Administration. Food from Britain ceased its activities in March 2009. All the staff were made redundant and the body vacated its former offices in 2009. However, Food from Britain was not formally abolished at that time.
Although the legislation which provides for Food from Britain remains in force, the Government continue to have a legal obligation to publish annual reports and accounts. Despite having no activity to report, the cost of preparing and publishing the reports is in the region of £3,000 a year. Formal abolition of Food from Britain will eliminate this unnecessary cost. The Public Bodies Act 2011 provides the legislative mechanism for the Government to carry out reform of public bodies. Food from Britain is listed in Schedule 1 to that Act. This enables the Minister to lay an order under that Act to abolish it. This order, when made, will dissolve Food from Britain in law by repealing the legislation which first established it.
In accordance with the requirements of the Public Bodies Act, a UK-wide consultation was carried out in the autumn of last year. Having carefully considered the consultation responses, it is now proposed to repeal the legislation which provides for Food from Britain by an order under the Public Bodies Act. Ministers in the devolved Administrations have given their consent to the abolition of Food from Britain, as required under the Act. As Food from Britain is effectively defunct, its abolition will have no impact on jobs. However, it will remove an unnecessary public body from the legislative framework and will reduce costs to the taxpayer. Abolition of Food from Britain is a legal tidying-up exercise, but I can assure noble Lords that the Government are firmly committed to strengthening the UK food and drink industry.
The agri food and drink sector is already the UK’s largest manufacturing sector, supporting 3.6 million jobs and adding £97.1 billion to the economy. British food and drink is known throughout the world for having the highest standards of quality, safety and traceability. By increasing food and drink exports, the sector can grow further. My honourable friends the Defra Ministers have made it a priority to promote British food and drink at key international trade shows, and negotiate to remove trade barriers and open up new markets overseas. In 2013, my right honourable friend the Secretary of State at Defra, Owen Paterson, visited China on two occasions to support UK produce and to negotiate market access. Last week, he was in the USA to discuss the opportunities the EU-US Transatlantic Trade and Investment Partnership offers for our producers and exporters. My honourable friend the Farming and Food Minister George Eustice also visited the Gulfood trade fair in Dubai, in February, to promote UK food and drink. In 2013 Defra opened 112 new overseas markets for animals and animal products, increasing exports outside the EU by £179 million to £1.35 billion. Some 54 new markets have been opened in 2014.
UK Trade and Investment provides both potential and active food and drink exporters with a range of advice and assistance to help them take advantage of new markets, including providing funding to attend international trade fairs; organising international “meet the buyer” events; running GREAT week events in priority markets worldwide; and offering a range of seminars and advice.
In October 2013 Defra and UK Trade and Investment launched the UK Food and Drink—International Action Plan at the Anuga trade event in Cologne, the world’s largest food and drink fair. The plan sets out how the Government are working closely together with the industry to promote trade, break down barriers, open up new markets and champion what is great about British food and drink. The export action plan outlines, among other goals, an ambitious target jointly agreed by the Government and industry to add £500 million to the UK economy though assisting 1,000 UK food and drink companies with their international growth by October 2015. That is a 400% increase in support for the sector.
I hope that it has been helpful to give this explanation about the rationale for the abolition of the body entitled Food from Britain and the continuing support that the Government are giving to the food and drink sector. I commend this order to the Committee.
Lord Grantchester (Lab)
My Lords, I remember Food from Britain very well. It appeared just before the introduction of milk quotas and has not quite been able to outlast quotas over the last 25 years. I declare my farming interest in a dairy farm.
I thank the Minister for her introduction and explanation of the order before the Committee. I am very happy to support the order to abolish the organisation Food from Britain. However, it is interesting to put it alongside the quota regime in its timing and duration. Agriculture has an almost universally recognised leadership as an industry for its productivity and efficiency improvements since the Second World War. Farmers are very good at producing, especially when working with science. However, they are somewhat less good at marketing their produce. Food from Britain represents one of the many and continuing ventures into marketing assistance.
As ever thus, as a non-departmental public body Food from Britain was brought to a close by the withdrawal of funding. Can the Minister say whether these organisations ought to have sunset clauses included in their set-up legislation to complete the administrative processes. However, it seems rather extravagant that the Ministry should agree with its order to pay £3,000 a year for a nil return from a defunct organisation.
The Explanatory Memorandum is excellent in explaining the tidying-up operation regarding pensions and the transfer of functions to other bodies. The legacy of Food from Britain is a good one. UK Trade and Investment, together with the Food and Drink Exporters Association, have collaborated to produce the UK Food and Drink—International Action Plan—although the Food and Drink Federation contends in its consultation submission that it was only the desire to tidy up administratively that led to this progress. Once again, sunset clauses would be a catalyst for improvement. The local and regional food marketing organisations also do an excellent job in these times of localism and evolution to local people and local funding.
Regarding the explanations in the memorandum concerning the protected food name scheme, I will ask the Minister one or two questions. Can she clarify Defra’s role under the scheme? Is it devolved? If it has a presence within Defra, is that as a proactive support to companies, regions or organisations in their plans for recognition, or as a certifying body to organisations in their applications for recognition at EU level—or, indeed, something else? Finally, the Explanatory Memorandum underlines that the legal ownership right to the name “Food from Britain” and the domain name, foodfrombritain.com, remain with Defra. That this is retained may signify that Defra recognises that it still has some value. Ministers may well have used the name Food from Britain in championing British food at international trade shows. Does Defra have any plans for the name, Food from Britain? Has it considered licensing the name for a fee or for a length of time, or even considered selling it? Does it intend to add value to UK food by the use of this name in any way?
While agriculture still needs marketing improvements, I am content that Defra has made the case for the abolition of Food from Britain. In conjunction with the Secondary Legislation Scrutiny Committee, I am happy that the abolition of Food from Britain will make a small contribution to improving the exercise of public functions.
Lord Rooker (Lab)
My Lords, I had hoped that I had seen the last of this Room when I left the Government. I find it the most depressing place to work in the whole Palace of Westminster, but I wanted to come today to say a few words and, it turns out, to set the record right.
I am a great believer in Ministers being accountable to Parliament for the decisions that they take. There was never an opportunity to be accountable for this decision, which I personally took early in 2008. Defra was in real trouble. So bad was it that we had to revisit the budget for the year that we were in. The rationale had absolutely nothing to do with food policy. The fact is that I had to find in the area that I was responsible for some £4 million or £5 million of cuts.
I always said that I did not agree with top-slicing to cut budgets, because you end up cutting good things to protect the bad. I was always in favour of saying, “Let’s stop doing something”. I think that I was presented with three or four options—I have not been back to check because this is from memory. There were a couple of serious animal health issues that I had to keep in the budget. This body was a prime candidate for being cut—I did not want to do it, but I could not conjure up £5 million.
We looked at the effectiveness of the body. We have seen from the way in which the Minister has presented the overall issue of food—the phenomenal, record-breaking level of exports—that this is the biggest manufacturing industry that we have. It is very important, although I do not want to go down that road. But if this body appears on a list of quangos cut by the coalition on the basis that “We’re having a bonfire”, that is a lie that would be challenged and I do not want to start a row. As the Minister knows and as the memorandum says, the body ceased activity in 2009. All the staff were made redundant. It had nothing to do with the coalition Government. The fact is that the mechanism for winding it up was not there. I am just amazed that it took five years to get us to this point. In fact, I suspect that the memorandum before us has cost £5,000 to put together, let alone the money that has been spent on accounts for no reason.
This discussion also gives me an opportunity to say that, although I had representations from some of the regional groups, I owed an enormous debt to the chair of Food from Britain, who I recall was the noble Baroness, Lady Jay, for the positive way in which she operated in this area. We had discussions about it. She went back to discuss it with the council and got the decision. I put it on record that she made my job a lot easier, because there was no great row about it ceasing activity.
The Explanatory Memorandum mentions that no one wanted to take over the work of Food from Britain because of TUPE. I do not want to make a big thing of it—I rang the office of the noble Lord, Lord De Mauley, yesterday to give notice of this—but I recall that there was a peculiar arrangement with certain members of staff about their salaries. However, the fact that we were going to abolish the body meant that we did not have to go down that route. The pension payments were substantial—they were a few million pounds—so it probably took a couple of years before the savings started to accrue to Defra.
While this has taken a long time to do, it is good that it is now wrapped up. I do not know what has happened with the rest of the Public Bodies Act and all the big organisations, but it is amazing that this should have happened with such a tiny body. By the way, I freely admit that I do not recall consulting any of my devolved colleagues on this. This was a straightforward matter about Defra running out of money and needing to cut something on the basis that we were not going to top-slice. We got the agreement of the council to wrap itself up.
Baroness Northover
My Lords, I thank both noble Lords who have contributed to this mini-debate on the order to abolish Food from Britain. I thank them both for their support. As they made clear, the order removes what is effectively a defunct body that has not operated for more than five years. It is excellent to have the noble Lord, Lord Rooker, contribute on the back story and I hope that historians will take note of what he said. It is clear from what both noble Lords have said that the body’s removal will have no impact on UK food and drink exporters but will save the taxpayer around £3,000 a year.
The noble Lord, Lord Grantchester, is right in his reference to the name: Food from Britain is indeed a rather wonderful name. I assure him that Defra owns the legal rights to the name and to the website domain name. There are no plans to use the name or the domain name, but he may be reassured to know that we own them.
The noble Lord, Lord Rooker, wonders why it took so long to abolish Food from Britain. The kernel of that is perhaps in what he said—the body was so small that it fell down the order of priority. As he will note, primary legislation was formally required to abolish the body; it would have to repeal the Agricultural Marketing Act, which set the body up. I note with interest what the noble Lord, Lord Grantchester, said about sunset clauses and how useful they might be in certain circumstances. However, they were not built into the legislation on this body, so we took the earliest opportunity to abolish it by including it in the Public Bodies Bill, which, as noble Lords know, was introduced in late 2010. Defra then had to prioritise which bodies should be abolished first. Given that this one no longer operated in practice and was, as the noble Lord noted, smaller, it came later in the process. We also, of course, needed to co-ordinate the process, including the UK-wide public consultation and the devolved Administrations.
Defra has, so far, abolished 51 non-departmental public bodies and it now has very few left to abolish. These are mainly defunct or non-operational and include Food from Britain, but I am very glad to be bringing the order forward to such acclaim this afternoon. I thank noble Lords again for their support and the time that they have taken to consider the order, which I commend to the House.
Legislative Reform (Patents) Order 2014
Viscount Younger of Leckie
That the Grand Committee do consider the Legislative Reform (Patents) Order 2014.
Relevant document: 1st Report from the Regulatory Reform Committee
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, this order concerns an amendment to the Patents Act 1977. The change will allow medicinal product assessments to be carried out without risking patent infringement. This will benefit patients by giving them earlier access to new medicines. It will also reduce a legislative burden on business, and encourage our important life sciences sector to run clinical trials in the UK. The life sciences sector is of significant economic importance to the UK. It generates turnover of more than £50 billion and accounts for over 6.6% of gross value added in the UK manufacturing sector. Exports of pharmaceuticals and medical technology accounted for 11% of UK goods exports by value in 2012.
I will explain the background to the order. In 2011, the Government committed to ensuring that the intellectual property system supports the life sciences sector. Removing the risk of patent infringement when assessing a new medicine will do this. This measure delivers on that commitment. Under current UK law, the regulatory regime for new medicines and the patent system are at odds with each other. The regulatory regime requires a company to demonstrate that a new medicine is safe for patients by carrying out clinical trials. Under the patent system, that company may be sued for using a patented drug in the trial. Of course, that does not make sense. The development of new medicines is critical for public health and the pharmaceutical industry plays a key role in meeting this challenge.
Pharmaceutical companies spend large amounts of money developing new products. In 2012, the industry spent more than £4 billion on research and development in the UK. However, only a small proportion of drugs in development ever reach the marketplace. Stakeholders have told us that it can take seven to 10 years to get approval to sell a new product. In addition, the success rate for early-stage studies can be as low as 18%.
Some drugs developed by pharmaceutical companies are combination products that combine a number of drugs into a single pill, which increases patient compliance. I will explain. Many patients have to take a number of pills several times a day. It is easy to forget to take some of them. Combination products make it easier for patients to follow their doctor’s orders by reducing the number of pills they need to take each day. These products often combine a new drug with an existing patented medicine, and it is the safety of the combination that is assessed in a clinical trial. In addition to clinical trials, tests called health technology assessments may be needed before a product can be recommended for use by the National Health Service.
To summarise: many of the tests that are carried out on new drugs require them to be compared to an existing medicine, which may be patented. The patented medicine could be used as a comparator or could be part of a combination product. The infringement risk is particularly high if the patented medicine that needs to be used is not actually for sale. When this is the case, the company carrying out a trial must first make the product.
There is even some legal uncertainty in the UK as to exactly which activities in this area are infringing and which are not. Because of this risk, companies often carry out expensive and time-consuming legal assessments to determine whether it is safe to run a clinical trial in the UK or whether they should run a trial elsewhere. One company said that it spends up to £135,000 assessing the risk of infringement for each product in development. The infringement risks, and resulting costs, do not exist in many other member states of the European Union. In fact, the United Kingdom is one of only eight member states where clinical trials may infringe a patent.
The UK is in direct competition with countries such as Germany and France as a location for clinical trials work, as well as countries outside the EU, such as the US. With its narrow legal framework, the UK is at a competitive disadvantage as a location for trials and, consequently, as a manufacturing location for the final medicine. This is clearly undesirable. We want companies to be able to prove that their new medicines are safe and useful, without fear of possible legal action. This will allow them to bring new treatments to market as efficiently as possible. We also want UK patients and the economy to benefit from trials being run here. One large pharmaceutical company said that, due to current UK law, it may decide to run a particular trial abroad. This trial is for a disease which is prevalent in the UK, and there would be a clear benefit to both the company and patients for the trial to be run here in this country.
European legislation already allows trials for generic medicines to be run in the UK, to show that they are the same as the patented product of which they are a copy. This means that, as things stand, different classes of medicines and different types of trial are treated differently in UK law. This cannot be right. This legislative reform order seeks to address these problems by clarifying one of the existing exceptions to patent infringement. The change will specifically exempt from patent infringement those activities which are undertaken for the purposes of a medicinal product assessment. The change will allow data from trials run in the UK to be used for assessing medicines in any country.
The Government consulted on the changes. The overwhelming majority of responses agreed with the proposals. Responses also suggested that they will improve the desirability of the UK as a location for trials.
It is the responsibility of the Government to ensure that patent law achieves an appropriate balance between protecting the rights and interests of patent holders, and the wider public interest in new medicines coming to market as quickly as possible. To maintain this balance, commercial use of a patented product after obtaining regulatory approval or a health technology assessment recommendation is not covered by the amended exception. Someone who has completed successful trials and wants to commercialise a patented medicine in combination with their own product will still need the patent holder’s permission to do this.
The draft legislative reform order was laid before Parliament on 6 May and is made under Section 1 of the Legislative and Regulatory Reform Act 2006. This allows a Minister to make an order which reduces burdens resulting directly or indirectly from legislation. As I have previously explained to noble Lords, under the current legal provisions, companies often carry out expensive legal assessments before running trials in the UK. It is these cost burdens which will be removed by the order. The changes will also remove the cost to a company of a clinical trial being delayed by legal challenges. The Legislative and Regulatory Reform Act also requires that certain conditions are met before an order such as this can be made. Exempting medicinal product assessments from patent infringement cannot be achieved by non-legislative means.
The changes contained in the order will apply only in limited circumstances. They will not allow the commercial exploitation of a product containing a patented component without the agreement of the patent holder. In any case, a company that wishes to avoid the risk of infringing a patent in the UK may simply choose to locate the trial in a country where the risk does not exist. A patent holder cannot prevent this. For these reasons, I am satisfied that the conditions of Section 3 of the Act are met.
Finally, it may be helpful if I briefly summarise for the Committee the benefits of this order. It will remove the risk of patent infringement when companies are assessing the safety of medicines, and this will make the UK a more desirable location for clinical trial work and help to support our life sciences sector. This in turn will bring economic benefits to the UK and new medicines to patients more quickly. I commend the order to the Committee.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the Minister for his comprehensive introduction of this order. It is an important one and I recognise the case that is being made. I should like to cover three issues because in essence I do not have any objections to what is being proposed; indeed, quite the reverse. I compliment the team responsible on a good job well done because it was a joy to read the order. I understand fully what is being done and therefore my questions are really rather trivial, which I am sure the Minister will be pleased to hear.
It is good to see that the LRO system is working well. It was introduced by the previous Government precisely for the sorts of purposes that are being envisaged today. There are hurdles in the way of its use, but they can be jumped over easily in the way that has been expressed today, and I understand why the LRO route has been taken. I have already touched on my second point, which is that this is a well-explained document which I enjoyed reading.
The issue as I understand it is that it is unfortunate that the way in which the original exception for research set out in Section 65(2) of the Patents Act 1977 has been to some extent subverted by judge-led changes in the sense that what the document refers to as a very “narrow interpretation” of that in terms of what constitutes research has been brought forward. My first question turns on this issue. I wonder whether the Minister has thought about reforming the Patents Act 1977 so as to introduce a broader definition of “research”. In saying that I am minded to think about other areas where the narrowing of what constitutes research may cause problems. One can see where this is going: research is obviously done for experimental purposes related to the subject matter of an invention, and that is a clear and important definition. However, we live in the real world where people who are doing what is called research do it in an applied environment in which one may be testing the efficacy and effectiveness of what was originally discovered or developed. I worry slightly that we might be stumbling down a cul-de-sac in terms of other policy areas in the future. I think that the Minister is in a good position to reflect on that and give us his thoughts. Having said that, I think that the LRO route is the correct one, but I would be interested to know what arguments were used within the department, if they can be shared with us, as to why it was taken.
I understand the noble Viscount’s position on ensuring that clinical trials, field trials and health technological assessments can be carried out in the future without any risk of infringing a patent. He explained with care what the benefits would be not only to UK pharma, which we obviously support, and to UK plc in terms of economic developments but, more importantly, to future patient health that will benefit from new medicines and technologies that preserve lives and extend people’s ability to enjoy a good life.
My questions, apart from the principal one that I have already asked, are really about the consultation process; I was intrigued by the worries that seemed to be behind the idea of not one but two consultations. Governments are pretty bad at consulting. They do not like to do it; it slows things up and sometimes they get results that they do not want, so perhaps the Minister can reflect and let us know why, in October to December 2012, the same sort of questions were repeated that were asked in June to July 2011. One consultation would seem to be enough; two seems somewhat otiose. I am interested to know whether there is an answer to that.
Secondly, despite the fact that this is an important change and obviously one that will have good economic and, indeed, health outcomes, why did it take so long from the decision arising from the Plan for Growth report to get to this point—which is, after all, July 2014? Given that, as I understand it, the consultees were ranked in the tens rather than the hundreds or thousands, one would have thought that things could have been done better. Was there a particular issue that needed to be resolved, given that the consultation seemed to go well and the results were very clear?
My third and really very trivial point—which the Minister may dismiss and not answer—is that I have a slight whinge about consultations involving very small numbers being summarised in a numeric rather than qualitative way, so that on page 7 of explanatory document we initially get a response to the informal consultation that talks about “almost unanimous agreement” and the “majority of responses”. Given that we are talking about—as I think it says in the note—something like 16 responses, I find the terms “unanimous” and “overwhelming” a little underwhelming. That approach is taken again in paragraph 2.12 on the second, formal consultation, which refers to the “overwhelming majority” of responses. In this case, in notes 26 and 27, we again discover that there were 16 responses. I wonder whether they are the same ones that came up with an “overwhelming” figure. It is a trivial point, but I think you demean the quality of the response if you try to overclaim for what was happening. It would have been interesting just to see the formal responses that the Government got, even though the number of respondees listed later on in the document shows that very few actually did respond. However, the responses clearly were of very high quality and allowed for a decision.
To conclude, I simply wish to record that this is a very good document. It is well expressed and the right route has been chosen for it. The reasons for it have been so well explained that I have no wish to delay further the implementation of the order.
Viscount Younger of Leckie (Con)
My Lords, I start by thanking the noble Lord, Lord Stevenson, for his general support for this particular order. I note, and thank him for, his complimentary comments on its drafting, which will be very much appreciated by the officials involved. A number of questions were raised, although I may not be able to answer all of them. I also have questions of my own that I will answer myself in the process, which may help to round off this short debate.
The first question raised by the noble Lord concerned the definition of research and its scope. That was a fairly strong question and I will write to him with an answer. The second question was about the consultation. He will know that he mentioned that there were two consultations required; needless to say, they were to try to clarify the exact scope of legislative change and to gather evidence from industry. It is fair to say—and the noble Lord may have read—that there were issues in trying to get enough evidence. We were determined to push the evidence base and that is why we needed to go for the second consultation. It was a challenging process but that may give him an answer which satisfies him.
However, I want to raise a point that was made in the other place concerning the Regulatory Reform Committee, which had raised concerns about the lack of monetised evidence for the change. That links in with the consultation. We have considered very carefully the points made by the RRC and we did the best that we could to obtain evidence from the industry and apply the current guidance. We note, however, that at the end of the day the RRC recommended that the order be approved, although I imagine that it would be in its gift not to approve it.
A further issue that was raised in the Commons and which I thought might be helpful for the noble Lord and for the Committee is whether a patentee can have access to data generated on their own drug. The aim of the legislative change is to remove the need for companies to carry out assessments of infringement risk prior to running clinical trials. For this reason, it is entirely possible that the patent holder will not be known. To require sharing of data would simply replace one burden with another—that is, replacing assessing the infringement risk with identifying the rights holder. That would go against the aim of simplifying the patent landscape in relation to clinical trials. However, clinical trials regulation will require clinical studies to be properly acceptable.
I should like to answer a point raised by the noble Lord, Lord Stevenson, concerning the Patents Act, which needs to balance the rights of the patentee with benefiting legitimate research. To define the term “research” in legislation—this comes back to the point that I was going to write to him on, and I believe that I will still write to him—may cause some difficulty in the future. We have attempted to clarify the research exception in a proportionate way to target a specific problem. However, I will write to the noble Lord with a fuller answer.
I think that there were a couple of other questions. I will revert to Hansard, which no doubt in its usual way will report accurately what the noble Lord said, and I will then respond to the final question, if not two questions, that he raised. In the mean time, I commend the order to the Committee.
St Helena
(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Shutt of Greetland
To ask Her Majesty’s Government what assessment they have made of the opportunities for the economic benefit and the enhancement of the lives of the citizens of the Island of St Helena consequent upon the expected opening of the new Department for International Development-funded airport in 2016.
Lord Shutt of Greetland
My Lords, I am delighted to have been able to secure this debate to discuss matters relating to St Helena.
It was precisely 50 weeks ago that I was privileged to visit St Helena on a second occasion. It was a privilege to go once but an immense privilege to go a second time. The reason for that visit was that the CPA had been invited by the governor to find people to conduct a seminar on governance for the newly elected councillors. As well as me, there was the honourable Tim Crookall from the Isle of Man, Deputy Barry Paint from Guernsey and Joyce Watson, a Member of the Welsh Assembly, and we had the tremendous benefit of a clerk, John Grimes, who is the former Head of Governance of the National Assembly for Wales.
We were there for the governance seminar but had been there for eight days or so, during which we became thoroughly aware of the prevailing issues on the island. We kept being asked, “Are you going to produce a report?”. We were asked that so many times that we discussed it among ourselves and said, “Well, we had better do it”. So we did produce a report, which went beyond observations about the seminar, covering the position of St Helena at that time. A year on, I think it is appropriate to see where we are.
We were delighted to visit the airport construction site and to see what an immense task it is. I certainly congratulate the Government on the important and early decision to build the airport and on the current news, which is that it is on time and on budget. It is always gratifying to hear news such as that about a big construction development, and that development is well over half way.
I am surprised that, 32 months after the signing of the contract and with the work more than half done, we still have no knowledge of any air service, where it will go, how often and at what cost. I am aware that tenders are out, but I am not clear even on what the preferred route of the air service connection is. Indeed, what are the suggestions for the future of freight to the island?
There is a further complication in what is to become of the Ascension Island link. The Wideawake agreement—named after the airport at Ascension—was renewed on 1 October 2008 for five years. It is a very important link, currently by sea, for Saints to go to Ascension for work, and to go on further to the Falklands for work. We do not yet know about any renewal of that link. I find it strange that the US and the UK, which are friendly nations, are having difficulty securing a further agreement. It would be interesting to see whether the Minister has anything to tell us about that.
The new airport will bring clear benefits to islanders in terms of communication and people being able urgently to get to hospitals that can do work beyond what can be done on St Helena. There is also the economic benefit for the island of what I call “sensitive tourism”, for which there is a need for more hotel accommodation. A year ago, we were made aware of three propositions: the luxury Shelco development; the renovation of a fort overlooking Jamestown; and Nos. 1, 2 and 3 Main Street, Jamestown, right in the heart of the town. I wonder what the progress is on those developments. Is there not a problem that hotel developers do not yet know what the air links are going to be? I have looked on the internet and it is clear that you can now make bookings for exotic places in 2016. People who want to go to exotic places often think ahead quite a long way. Is there not a difficulty for St Helena, since we do not know where, when and at what cost aeroplanes will start?
On the Sunday evening when I was in St Helena, I attended the evening service at the Baptist church. The minister’s text on that occasion was, “Is your destiny sealed, secure and irrevocable?”. That is quite an interesting text for St Helena today. I am not certain that that question can be answered. Is the Department for International Development using its best endeavours at this very important time?
Since we were there 50 weeks ago, I have looked at every release on the St Helena Government website, which is very interesting. One of the features is the comings and goings of various people—people completing a term of three years and going back to the UK, new people coming and so forth. There seems to be a problem with vacancies. I am aware of one very important vacancy, which may now just about have been filled: that of the head of Enterprise St Helena. When we were there 50 weeks ago, we were made aware that the person then occupying the post was about to leave and only now has an appointment been made. Yet it seems that that job is absolutely crucial at this stage. I wonder whether DfID is using its best endeavours.
On the subject of employment, employment opportunities and the comings and goings, is DfID using its best endeavours to encourage the indigenous population and to train people up so that we are not constantly having to get people from the UK who do two or three years and then go back home again, with those who do not like it going home sooner? It would be useful to hear what is happening on that front.
Finally, we have the United Kingdom Government and the important Department for International Development on the one hand and, on the other, the St Helena Government and their arm’s-length agency, Enterprise St Helena. Are the rights, duties, responsibilities, obligations and expectations of each clear? I look forward to the wise words of colleagues who will follow and to those of my noble friend in responding to the debate.
Lord Brooke of Sutton Mandeville (Con)
My Lords, I congratulate my noble friend Lord Shutt of Greetland—now a considerable authority on the affairs of St Helena—on having secured this debate and on the germaneness of his wording in concentrating our minds. On 31 October last year, I intervened during the gap in a debate, initiated by my noble friend Lady Hooper, on the overseas territories. Today I seek to return to the questions I raised then. It is a pleasure and a coincidence, rather than motivations of egocentricity, which cause me to direct anyone interested in these issues to col. 1787 in the Official Report of that day, in which I alluded to a forebear of mine becoming Governor of the island in precisely the year 1787.
These issues are about how, when tourists arrive at the airport, they can be encouraged to recommend the experience to others through the fruits of improved conservation of both local natural history and Georgian buildings. I did not seek to be plaintive, but I did indicate that I had hitherto had difficulty in finding out how well meaning citizens in this country could assist in this project. The device I deployed through last year’s intervention was extremely successful in that it provoked responses from a worthwhile posse of interested and interesting correspondents. I have spent part of the seven and a half months since then becoming an octogenarian and the rest of the time seeking to put my affairs in order to respond to these intimations of mortality. However, I fear that I have consequently been guilty of discourtesy in not responding to each and every one of these very useful correspondents. I hope that if any of the writers pick up this debate too, they will regard my participation in it as evidence of my continuing interest.
I was especially grateful to the director of the St Helena National Trust for a long e-mail about the trust’s background and functions. I have been tempted to quote from it passim and verbatim but I felt that would be presumptuous without his authority. I would be happy to show the text to those noble Lords interested in the affairs of St Helena hereafter. However, I emphasise that there is no link between the St Helena National Trust and the National Trust in the UK, though both are members of the acronymic INTO, the International National Trusts Organisation, which is based at the National Trust in this country. This long and helpful e-mail, which embraced both the natural heritage and the built environment, went on to furnish an attachment from the St Helena National Trust on the immediate future of the built heritage on St Helena. This is, in the short term, my principal interest and I will return to it to ask a specific question of my noble friend who is replying for Her Majesty’s Government. However, I shall first seize the opportunity to make brief reference to the natural heritage in order to indicate its attractiveness. This comprises, inter alia, the very significant and tiny world populations of the critically endangered wirebird, the spiky yellow woodlouse, the black cabbage tree, the he and she cabbage trees, and other very special fauna and flora, and their natural habitats. I am not going to dwell on them, save to say that great attention has already been paid to them; however, I should declare an interest as a trustee of MEMO, which acronymically derives from the Mass Extinction Monitoring Observatory.
I return to the issue of the built environment, where there is a drawback from the lack of the assignation of responsibility for St Helena’s built heritage to any government department, office or institution. This is a discouraging first impression in the context of the terms of this debate and the concerns for tourism; for it implies no responsibility for these structures, nor yet support for their maintenance. To shine a searchlight on this dilemma, the small NGO that I mentioned is in receipt of a £17,000 annual grant from the St Helena Government, while the two core staff alone require almost £30,000 per annum in salaries. This shortfall’s cure lies with the 4,000 souls on the island and those who come to visit, who are the subject of this debate.
On a more cheerful note, after the initial six-week training exercise last year for Six Saints under Henry Rumbold MBE—a redoubtable heritage stonemason with form on Fountains Abbey and the Prince’s Trust—all six have been assured of their certification within the UK’s NVQ3. In that regard, I should declare another interest as having been a long-term president of COTAC. I am looking forward to hearing whether these skills have been successfully engaged on site. In that regard, the attachment to which I made earlier reference is constructive. There are 967 historic structures recorded in the St Helena Historic Environment Register, with new discoveries daily still to be properly recorded. All these buildings would respond to the care of Mr Rumbold’s six charges and, even more, if intact, would make a lively contribution to the island’s economy.
I am not in a position to report on progress on the Governor’s own initiative in this area, but I will cite the opportunities available to clarify what could be achieved. This is, to some extent, a laundry list: replacing the mass concrete fill of inner courtyard at Plantation House with locally cut island stone flags, repointing the upper storey of the Essex House frontage—the lower storey was properly repointed with a lime mortar four years ago, and completing the partial restoration of Lemon Valley Lower Farmhouse, which was the site for the Six Saints’ training last year.
In parallel, there are structures not in daily public use that need to be brought back into management in a planned programme, which, again inter alia, could be deployed towards tourist use as weekend and short-stay holiday accommodation for island visitors and tourists—which is relevant to this debate. Access, water supply, litter prevention, sewage works and day-to-day control would all help to minimise vandalism.
To identify specific target projects, I refer to Broadway House, which is now let to the trust—the NGO I mentioned—High Knoll Fort’s two major wall collapses, and urgent attention needs to be paid to Munden’s structures that are now slipping away. I shall mention a few more: Bank’s; the steps and railings of the Ladder; Ladder Hill Fort; Munden’s walls and paths; Man and Horse signal station; the Wharf Buildings and mortuary, and the Papanul wreck’s salvaged contents. I have tolled this requiem towards collapse in order the make the point that there is a ready-made programme available to the skills already locally acquired if financial means were available.
This brings me to my question for my noble friend. The 4,000 souls on the island and the present level of tourists will not be enough to capitalise on this opportunity, so the responsibility comes back to us. I have been advised that tax-advantageous devices are being devised to encourage heritage and conservation disciples in this country to make a contribution, which is what prompted my interest in the debate last year. Therefore my query to the Minister is whether Her Majesty’s Government are taking an interest in this domestic venture as regards a conduit, and if so, what progress has been made and in how long a future timeframe.
Lord Jones of Cheltenham (LD)
My Lords, I, too, congratulate my noble friend on securing this important and timely debate. Last month, a ceremony was held at the airport site in St Helena to mark the construction of the airport terminal building. His Excellency the Governor of St Helena opened the ceremony with a speech to the invited guests. In his speech the governor praised the airport construction company, Basil Read, for the marvellous work it is doing. He said:
“Over the past two years when asked about the biggest challenges of my job I have always said that the least of my concerns was construction of the airport. Why? Because it was clear from early on that Deon de Jager and Basil Read were up to the job”.
Other speeches by St Helena officials also praised the airport construction company, Basil Read, and the company’s island director, Deon de Jager, for keeping the project to schedule, budget and specification. It is reassuring to know that the St Helena airport project is proceeding to its completion without any problems serious enough to cause significant delays. That is good news; it is a government project which is not overrunning on cost or timescale.
Our Government were right to decide to build the airport. Currently, St Helena has an odd sort of society made up of grandparents and grandchildren, with the intermediate generation earning a living off-island because there is next to no economy on St Helena. In 2016, there will be the prospect of a tourism industry that may eventually lead to the island becoming self-supporting economically, which will save the British taxpayer tens of millions of pounds each year.
St Helena has many attractions for tourists, some of which we have heard about already. They include Napoleon’s Longwood House, which is a little bit of France on a UK island; 1,100 shipwrecks; spectacular birds and abundant varieties of fish; endemic species of flora—I understand that it is hoped that the St Helena ebony will be made the national flower; the unique St Helena wirebird, which is a kind of plover, which we have already heard about; Jacob’s Ladder, with 699 steps, for those who are a bit fitter than me; Jonathan, the giant tortoise who lives in the grounds of the governor’s residence, Plantation House, who is reputed to be 200 years old and to have met Napoleon; and a golf course with horizontal trees. There is also plenty of history about the appalling slave trade in which the island played a part.
It is vital that we keep it in mind that the airport itself is only the foundation for the hoped-for economic development of St Helena. The goal is to transform St Helena from a small and remote community that is dependent upon grant-in-aid from Her Majesty’s Government to an island which, in time, can become self-sustaining based on a thriving tourism economy. To achieve that goal, the airport is one part of several interrelated and interdependent developments to which my noble friend has already referred to and which are all needed in order for St Helena to achieve at least some degree of economic independence. The airport will, of course, need aeroplanes flying in and taking off. The passengers carried by those aeroplanes will need somewhere to stay. A further aspect directly related to that crucial interdependence between airport, airline and tourism accommodation is the securing of a new shipping service to bring bulk cargo to St Helena. That is needed because the Royal Mail Ship “St Helena”, which the noble Lord and I both travelled on and which has been the lifeline to the island for the past 25 years, is due to be taken out of service after the airport opens.
Each day the airport buildings rise higher from the dust of Prosperous Bay Plain. However, the other vital components remain very much in the early stages of development. The governor of St Helena acknowledged the magnitude of the task ahead in his speech at the ceremony I referred to earlier. He said:
“The more complex, less easy task, is preparing St Helena to be able to benefit from new economic opportunities. But we can do it”.
The acting head of economic development exhorted her listeners,
“to rise to this opportunity and that means all of us working together to grow our economy. To do this we must put business first. This means we must encourage business development, and we must encourage entrepreneurs, both local and overseas”.
With a mere 19 months left before the airport is due to open, progress on developing some parts of the infrastructure for St Helena’s new tourism-based economy have remained virtually static while other parts started to move very late and continue to move slowly. I understand that the first stage of the tendering process for the contract to operate an air service to St Helena will not be completed until 17 July, with the contract scheduled to be awarded in February or March 2015. This gives the successful tenderer no more than one year to successfully complete the job of attracting an adequate number of passengers to a new air service flying to a new and little-known tourism destination.
Beyond that, the technical clearances and ticketing arrangements all have to be resolved at the same time. To attract the number of tourists envisaged, which it is estimated may reach 30,000 a year, there will need to be flights from Europe—the UK and France in particular—as well as from Africa. I hope that the Minister will be able to report significant progress on this, including which airlines have expressed an interest—BA, South African Airways or Atlantic Star, perhaps? When does she anticipate a contract will be signed? The earlier it is signed, the better. This contract-signing could unlock significant inward investment once investors can be assured that flights really are going to arrive.
The other main consideration is accommodation that offers a quality of service for the high-value, low-volume sector of the tourism market that St Helena is aiming to attract. Tourists will need somewhere to stay and so far I understand that no hotel development has started. With completion of the airport just 19 months away, we need to get a move on to build at least one.
Last week at the meeting of the St Helena group, I met two councillors from St Helena—Les Baldwin and Gavin “Eddie Duff” Ellick—who told us that the St Helena Government have set up a company called St Helena Hotel Development Ltd. It would be helpful if the Minister could say something about this. Is the contingency amount for the airport project going to be used to build a hotel? That would make some sense because it could be argued that the hotel is part of the total airport project. In which case, will Basil Read build the hotel? It is already on the island and has a successful track record. Is the Minister able to tell us the situation with Shelco’s plans to build a top of the range eco-hotel? Lastly, I understand that the first stage of the tendering process for the contract for a shipping line for bulk cargo to serve the island after the airport opens will be completed later this month. This contract is scheduled to be awarded in April 2015.
The islanders who are in contact with me are very enthusiastic about the future. I hope the Minister will give credible assurances that Her Majesty’s Government and DfID believe that, as my noble friend Lord Shutt sometimes puts it, “they have all their ducks in a row”.
Finally, many Saints live and work on Ascension and in the Falklands. What progress has been made with the USA over using Ascension as the divert runway for St Helena and on operating a shuttle service between the islands? This would open up the possibility of commercial flights from St Helena and Ascension to the Falklands, thus providing a more complete package for adventurous tourists. In the longer term, have the Government thought about a south Atlantic federation of overseas territories linking St Helena with the Falklands, Ascension and Tristan da Cunha?
Lord Collins of Highbury (Lab)
My Lords, I, too, thank the noble Lord, Lord Shutt, for initiating this debate. Building the airport, which is scheduled for completion in 2016, will be a catalyst for change in the island. It provides great opportunities for growth and jobs, but without proper investment the cost of failure will be high. As is common to small islands, St Helena is dependent on importing even basic items. It has a limited economy focused on less than a handful of sectors, a large public service, and as we have heard, hundreds of Saints have left in the last decades to seek opportunities abroad.
As the noble Lord, Lord Jones, reminded us, there is no doubt that we need to support and develop sustainable enterprise if St Helena is to be weaned off that budget support of around £25 million to £30 million a year. This Government reviewed the postponement of the project when they came into office and concluded that, provided certain conditions were met, the best long-term solution from an economic and financial perspective for both Her Majesty’s Government and St Helena was to construct the airport.
The noble Lord, Lord Shutt, said the airport was on time and on budget, but I would be grateful if the Minister would update the Committee on the progress in meeting the specific conditions, not least on handling the risk of cost and time overruns. One other key condition in that decision was for the St Helena Government to implement the reforms needed to open up the island’s economy to inward investment and increased tourism. The opening of the airport, as we have heard, will clearly have a substantial effect on visitor numbers to St Helena, but in the absence of accurate data it is difficult to forecast precisely what the numbers will be. I know both Her Majesty’s Government and the St Helena Government have commissioned a number of studies into the potential demand for travel following the airport opening.
As we have heard, current tourist accommodation on St Helena is severely limited. Meeting the visitor targets relies on the expansion of island resources and hotel capacity, but the infrastructure required to maintain a vibrant tourist industry is not just reliant on hotel rooms—important as that is. I refer to the comments of the noble Lord, Lord Brooke, about the specific elements of what a successful tourist industry needs to be.
I also refer to Horatio Clare’s excellent article supplied in the Library brief for this debate. He highlighted that without the Caribbean’s beaches or climate, even locals are a little unsure about what a tourist might do on St Helena. One said:
“A mix of walking, fishing, diving, heritage, Napoleon and wildlife”,
which agrees with what the noble Lord, Lord Brooke, said. Even that mixture requires investment, with support to heritage sites and wildlife protection. It also means investment in skills to ensure that the island has people who are qualified to maintain its natural sites of scientific interest, which will be an incredible attraction to the sort of tourists that we seek.
Internet connections are also vital to develop new industries, especially in supporting tourism. As the noble Lord, Lord Shutt, said, the Government are investigating funding and construction options with the aim of completing a hotel around the time of the opening of the airport. We have heard about the development agency that is seeking to work with selected air providers to develop and implement a marketing plan. However, that is all difficult while we do not know who the air supplier is. It will be very difficult to square those things together.
From what I have read in the briefing, it appears that a game of chicken and egg is being played out between the development body and the group of investors with ambitions to build the hotel discussed in this debate. Enterprise St Helena wants the developers to commit to building their hotel so that it can attract airlines. The developers—Shelco—say that the agency should produce an airline before it begins work on the hotel. We have to break that cycle somehow. The Minister wrote at the end of last year that there is an expectation that an agreement will be reached with the airline in early 2015. Like other noble Lords, I would appreciate an update for the Committee on what progress is being made.
As the noble Lord, Lord Jones, said, time is clearly running out on this issue. In January, the Minister reported that passenger numbers for the airport over its first five years would be 14,000, of which 10,200 would be leisure visitors. In May, the noble Lord, Lord Bates, who I am pleased to see here, said that the UK Government expect tourism to be the driver of growth on St Helena once the airport opens. In June, the Minister said in a Written Answer that Enterprise St Helena, the development agency, is leading plans to develop the tourism industry and accommodation. In parallel, ESH is working with local businesses to ensure that the island’s tourist attractions are developed and accredited to international standards. I cannot stress the importance of the points that the noble Lord raised on this particular case.
However, it appears from newspaper reports that there is a little scepticism locally about the projected figures for tourists and the speed at which the necessary infrastructure can be developed. I thank the noble Lord, Lord Shutt, for letting me have sight of the report he referred to from last year’s CPA visit to the island following the general election. For me, an important element of that delegation was that it also embraced representatives from the Isle of Man, Guernsey and Wales. As a point of interest, my own family is from Bermuda so I am familiar with small, remote islands. Some are more beautiful than others, as they say.
When I was at the T&G—the Transport and General Workers’ Union—I also had responsibility for establishing a forum of union membership from the Channel Islands, the Isle of Man and Gibraltar. As I said, such territories have many challenges in common. Sharing experiences is important not only to address the issue of isolation—which is an important factor of development in St Helena—but also for looking at how to develop best practice and new opportunities, and see common ways forward, as we saw from the excellent report produced. I am glad it was produced. It highlighted a range of options, not least not to restrict yourself to tourism as other industries need to be built upon.
To conclude, could there be renewed focus in the department to encourage exchanges on best practice, support and information with other Crown dependencies, specifically—obviously, in the case of St Helena—on the development of tourism and new employment opportunities. Could such exchanges embrace the full range of stakeholders in those societies?
Baroness Northover (LD)
My Lords, I start by thanking my noble friend Lord Shutt for initiating today’s debate and for his keen interest in St Helena. In this debate and through other channels he has rightly been a champion for this project and consistently highlighted the very considerable barriers to the development of one of our most isolated overseas territories. I thank other noble Lords who participated in this debate for their contributions, knowledge and engagement.
As noble Lords noted, we took decisive action to address the constraints of St Helena in November 2011 by approving the construction of an airport that would bring to an end 500 years of isolation. I thank my noble friends Lord Jones and Lord Shutt for their tributes to this decision. For the first time in the island’s history, it will be possible to travel to St Helena in less than a day, opening up this beautiful island to the world and providing opportunities for economic development and the enhancement of the lives of its citizens. I take what the noble Lord, Lord Collins, said about the special beauty of many islands, and it is clear that St Helena has much to offer. It is an unspoilt island of dramatic beauty, biodiversity and heritage, as we have just heard. From its fantastic marine wildlife to its diverse landscapes and unique endemic flora and fauna, the island that hosted Napoleon until his death also played a big part in the emancipation of slaves on the south Atlantic trade route. It is one of the most remote inhabited islands in the world and has the potential to attract visitors from around the world.
My noble friend Lord Shutt clearly appreciates, as do other noble Lords, the scale of the challenge for the island’s small population to turn the opportunity that has been granted to them into a reality. I know that when he visited the island in 2013 as leader of the Commonwealth Parliamentary Association team, he will have seen at first hand the scale of change needed to transform a community that has been in receipt of budgetary assistance from the UK for over 40 years into one that takes control of its own future. I know that his work was greatly appreciated by the new council.
The airport will impact on every aspect of life in St Helena. With construction work on the airport now at its peak, we have already seen a reverse in the population decline which has had such a marked impact on the social and economic life of the Saints, and which my noble friend Lord Jones so graphically made clear. The continual outflow of the most economically active Saints to employment in the Falklands, Ascension and the UK reduced the population from 5,500 in 1995 to around 3,800 at its lowest point. The airport construction project has seen the population rise again to over 4,500, with the creation of more than 350 jobs for Saints. As the noble Lord, Lord Collins, and others have made clear, the challenge will be retain those Saints once the construction has been completed and to harness the skills they bring to help build up St Helena’s long-term economy. DfID is working closely with the St Helena Government to put in place the building blocks that are required to deliver economic growth. The St Helena Government, with funding from DfID, has established Enterprise St Helena, an arm’s-length body tasked with driving private sector-based growth, helping local businesses respond to increased tourism demands, and stimulating local and overseas investment to ensure that the island is ready to capitalise on improved access.
Securing investment in a new and untested market presents significant challenges. While air access is coming soon, currently it still takes three weeks to visit the island, time that few potential inward investors can afford. Nevertheless, progress has been made. A local developer has completed the construction of eight new rooms in Jamestown, and only last week an inward investor announced the development of 20 wood cabin lodges aimed at the big game fishing market, with construction to commence this year. These are small beginnings, but they are significant in the context of St Helena and are likely to encourage others. Enterprise St Helena is also exploring options for the development of a hotel in Jamestown, building on the island’s unique heritage, mentioned by my noble friend Lord Jones, the noble Lord, Lord Collins, and others, by converting Georgian buildings that are currently being used as government offices into a small, 40 to 65-bedroom hotel. The initial design is under way and the St Helena Government are actively pursuing funding options. DfID is working very closely with Enterprise St Helena and the St Helena Government to support their efforts.
I was asked a number of questions about accommodation and I shall provide some fairly rapid updates. There are currently 41 service rooms on the island, 30 with en-suite facilities. In addition to that there are a number of self-catering establishments, which bring the number of rooms up to 113. Many, as the noble Lord, Lord Collins, indicated, may not be at the standard expected by modern travellers at the moment.
I was asked about St Helena Hotel Development Limited. That has been set up to try to kick-start hotel development in Jamestown. Initially it will be wholly owned by the St Helena Government. If plans proceed, shares will also be issued to investment partners. The St Helena Government would look to divest their entire shareholding over time. Clearly, as noble Lords indicated, access, constraints and uncertainties over air services make it challenging to attract private sector investment, but early interest has been shown by two hotel groups. However, both have put plans on hold due to uncertainties in visitor numbers. I have just mentioned the chalets, though, and the plans for Jamestown. DfID itself has no plans to provide funding for hotel development, and it would not be appropriate to use airport contingency funds for a hotel.
I was asked about Shelco. It has revised its proposals to bring forward the development of a 35-room boutique hotel and golf course, with the aim of having it up and running by the time the airport opens. Funding remains an issue, and Basil Read would need to tender for any work that it wanted to undertake.
I was asked about the proposed hotel developments in Ladder Hill and Jamestown. Both Protea Jamestown and Mantis Ladder Hill have put their proposals for hotel development on hold for the reasons that I have given, but the St Helena Government are currently exploring funding options for a medium-sized hotel in Jamestown.
As to when it will be possible to book holidays in St Helena and whether that could happen already, it is of course possible to book the accommodation that I have already mentioned through the tourism office. My noble friend is clearly a forward thinker, way beyond anything that I consider, I am afraid, but we note what he says. He always was extremely well organised.
DfID also supports Enterprise St Helena to offer a range of business advice, training grants and small capital investments to local businesses in the sectors of tourism, hospitality, agriculture and fisheries. We are seeking to give St Helena the opportunity to develop further. It cannot be DfID’s role to undertake each role of that development itself. As my noble friend Lord Shutt indicated, there is mutuality here: DfID is investing in the airport and other areas, and we hope to see a necessary response within the island, including in the conservation skills that my noble friend Lord Brooke has mentioned. Obviously we take the points that he makes very seriously.
Securing air services to support tourism and to maintain access for Saints to travel to and from the island is a key requirement for achieving economic development. Twelve potential service providers have registered early interest, and a formal call for expressions of interest was issued on 12 June.
However, the airport will not just bring economic development. Economic growth on St Helena will mean more jobs and prosperity on the island, reuniting families of Saints who have previously had to travel overseas to find employment. It will mean the potential for faster evacuation in medical emergencies, and easier access to education overseas.
My noble friend Lord Shutt pointed to the difficulties of recruiting staff on the island. He is of course right. DfID is providing £2 million this financial year to provide staff to fill short-term specialist positions that cannot be recruited locally. We support long-term positions in key areas on the island.
My noble friend Lord Brooke highlighted the range of work that could productively be carried out on the island. My noble friend and the noble Lord, Lord Collins, asked about a range of skills. Enterprise St Helena, working through the education directorate, has established or is establishing training programmes leading to qualifications covering a wide range of skills. I have a list here. The ones they might be particularly interested in hearing about are building and construction, hospitality and catering, leisure and tourism and environmental conservation. I can go into further detail about them, should the noble Lord, Lord Brooke, in particular, want more on that.
My noble friend Lord Jones asked about a South Atlantic federation. That is very interesting, but it is not currently under consideration. He has lobbed it in, so no doubt people will consider it.
I shall answer some specific questions on the airport as rapidly as possible. I was asked whether it will be possible to fly directly from Europe. The length of the runway on St Helena, unless we flatten St Helena, will not support direct flights to Europe. Johannesburg and Cape Town in South Africa are the nearest international hubs with excellent direct links to most European cities. The current tender for air services will look at all options.
Prequalification questionnaires for the air service are due to be submitted on 17 July. More than 12 potential service providers have downloaded the documents—of course, one of them may have been my noble friend Lord Shutt—and currently five have indicated that they will respond. At this stage of the tender process, it would not be appropriate to name airlines. The current target date for signing a contract for air services is March 2015, but that will depend on the nature of the response received. It is intended that air services to St Helena will be operated on a purely commercial basis and that that should be achieved as early as possible. However, it is recognised that this may be challenging in the early years, and air service providers have been invited to put forward proposals for any required research.
The noble Lord, Lord Collins, asked about risk. The fixed-price, lump-sum contract with risk transferred to the contractor is the arrangement. The airport is now 60% complete and to date is on time and to budget. There is also a temporary jetty at Rupert’s Bay.
Wideawake Airfield on Ascension, as noble Lords will know, is a military airport operated by the US to military standards. It would not be possible to meet minimum civil aviation standards, but we expect that the US will agree to the use of Wideawake as a nominated alternative for flight planning and for domestic services between St Helena and Ascension only. We work very closely with the United States on that.
There will be a limited amount of air freight, and alternative arrangements are being made for sea freight. In fact, the St Helena Government have commenced a tender process to secure post-airport shipping to the island and are expecting to receive expressions of interest this Friday, 11 July.
This is a long-term investment trying to ensure that this dependent territory is less dependant in the future. The business case depends upon not rapid development but slow growth over 25 years. I was asked about the value of cross-learning between islands and development. That is absolutely right. The Joint Ministerial Council is an obvious vehicle for putting that into practice, as is the Overseas Territories Consultative Committee.
The airport is key to the economic development of the island. These are challenging times for St Helena, but they also carry the promise of a brighter future made possible by this airport investment. Noble Lords have very effectively laid out the challenges that St Helena faces and how this new opportunity could and should unlock a transformation of the island and its people in the way we all wish to see.
Books
Baroness Miller of Chilthorne Domer
To ask Her Majesty’s Government what assessment they have made of the role of books in promoting a civilised society.
Baroness Miller of Chilthorne Domer (LD)
My Lords, about 450 years ago Michel de Montaigne said:
“When I am attacked by gloomy thoughts, nothing helps me so much as running to my books. They quickly absorb me and banish the clouds from my mind”.
Montaigne was a great example of a man who tried to live what he believed. He was tolerant, even when sorely provoked. He was hospitable to strangers, even though he lived in a time of feuds and war. He was always a prolific writer and reader, even while councillor and legal adviser to parliaments and kings. His essays are as vivid and relevant today as when he wrote them some 450 years ago. His diaries and essays reach out to me across the centuries.
That is the point of books. They can reach across centuries and national borders and promote comprehension of other cultures and other nationalities. Books are increasingly important, being reflective in our age of instant reactions. Books take us beyond ourselves to a wider humanity. I passionately believe that books promote understanding, tolerance and reflective attitudes in societies. Noble Lords will be able to recall many intolerant regimes which have destroyed tablets or scrolls or books as one of their first acts of aggression before turning against their own people or other people. Noble Lords have only to look at the list by Index on Censorship to see that the world is still not free from that sort of tyranny against the written word.
We in the UK have a terrific tradition of free speech and a free press. That freedom has relied on the book trade to nurture authors, their ideas and the books they write. I am sure that other noble Lords today will speak of how important this is to a number of matters, such as education, the role of libraries and other important issues. I will concentrate on the part that the Government can play in keeping that proud tradition of a vibrant, creative book trade.
It is a time of great change in the book trade. Much of that change comes from the move from print to digital. That move offers opportunities, but it also comes with enormous risks. There is a lot to be positive about. The book trade is worth £3 billion a year to the UK, and the quality and range of British writing is recognised around the world. Forty percent of publishing industry revenues are derived from exports, a bigger proportion than in any other country. The UK is the largest e-book market in Europe.
The past 20 years have seen a huge rise in the number of book clubs, literary festivals and creative writing courses. Book prizes highlighting all the new writing are sponsored by imaginative parts of the corporate world, such as Costa, Baileys and of course Man Booker, so the corporate world is playing its part. The National Literacy Trust’s 2013 study of children’s and young people’s reading was sponsored by the international law firm Slaughter and May. The appetite for reading is very healthy but—and this is a big “but”—the money made by authors has fallen by some 30% in the past decade. As a former bookseller, I am really sad to say that the number of independent bookshops in the UK is now fewer than 1,000. That is down by 500 over the past few years. Publishers face a dramatic challenge in the rise of self-publishing.
The book trade as we have known it is metamorphosing. The Government have a part to play in ensuring that the outcome is a continual flowering of creative talent. There are four practical ways in which they can help.
The first is with copyright. As I have said, it is a time of rapid change from print to digital. There are pressures to relax or ignore laws on copyright, which would be a really bad move. Happily, the Government have already made a move in the right direction. In March 2013, the noble Viscount, Lord Younger, announced £150,000 of government money to fund the innovative Copyright Hub, the development and growth of which he said could add £2.2 billion per year to the UK economy by 2020. The hub will support open and competitive markets for copyright licences, present a more efficient online marketplace and cut costs for businesses. Importantly, it will simplify copyright licensing for customers—that includes everyone from the public to schools. Does my noble friend the Minister agree that further disruptive changes to copyright law at both UK and EU levels must be resisted? Can he update us on how the Copyright Hub’s development is progressing?
Secondly, author incomes have fallen in real terms by about 30% in the past 10 years, so fair contracts are incredibly important. Oddly, the Unfair Contract Terms Act 1977 excluded intellectual property. Given how valuable the creative industries are to the UK, surely this is an urgent issue for UK plc as well as for authors. Will the Minister see whether the Consumer Rights Bill offers an opportunity to remove this anomaly and to provide fair contract protection to authors and other IP creators?
The third issue has been on the table since I was a bookseller in the 1970s and the 1980s. It is the threat of removal of zero-rated VAT on books, which is still a live issue. No Government since the Second World War have elected to tax books, but there is now some pressure—I think coming from the European Commission—to end 0% VAT on printed books. Are the Government committed to maintaining zero-rated VAT on print books? What about e-books? They attract a 20% VAT rate, but a couple of other EU countries which really value their books, France and Luxembourg, have unilaterally reduced the rate of VAT on e-books. Will the Government follow their positive policy and reduce VAT on all books, e-books included?
The fourth issue is the rise of Amazon, which has a big share of print sales but almost a monopoly—around 90%—in the e-book market. As we know, it has a disgraceful attitude towards paying its taxes—that is a slightly different issue. Given that Amazon has a 90% share of the e-book market, will the Minister ask the Competition and Markets Authority whether that constitutes a monopoly and, if so, to act accordingly?
There are therefore several practical things that the Government can do, but they need to be aware that they are one of the main drivers in the attitude and framework surrounding books. They are doing lots of positive things; for example, the involvement of the Department for Business, Innovation and Skills with the Creative Industries Strategy, which it has just developed. The Department for Education has certainly created a debate around books, with the slightly negative comments from the Secretary of State about Steinbeck and Harper Lee. He is perhaps a little misguided in thinking that there is not a place for a globalised attitude to literature. Although UK writers should always have a special place in our literature courses, I would hope that our children are studying literature from China to Colombia to Russia.
The Government set an attitude, and perhaps the most negative is that of the right honourable Chris Grayling about books for prisoners. The support for the Howard League for Penal Reform and the English PEN campaign on this issue goes far beyond people who normally worry about prisoners. I very much look forward to hearing the remarks of my noble friend Lord Dholakia with all his experience of rehabilitation, and to what he will say in greater detail about this issue. Indeed, I am grateful to all noble Lords who have chosen to speak today and who will share their perspectives on the critical issue of the role of books in our society.
Lord Norton of Louth (Con)
My Lords, I congratulate my noble friend Lady Miller on raising this important question. I declare an interest as someone who has spent his academic career writing and editing books.
Books are fundamental to a civilised society. They are the means by which knowledge is transmitted in a tangible form. As my noble friend has already indicated, they are at the heart of a free society. As Dame Rebecca West put it:
“God forbid that any book should be banned. The practice is as indefensible as infanticide”.
Good books are a way of nourishing the mind and the human spirit. As Thomas Carlyle said:
“A good book is the purest essence of a human soul”.
The context in which he said it is pertinent: it was in a speech in 1840 in support of the London Library.
Books, then, are crucial to promoting a civilised society. I am not sure that the Government need to devote resources to reach that conclusion. I am much more concerned by what, if anything, flows from that in terms of the actions that the Government should take that they are not already taking. Is not the value of books obvious? Well, I am not sure the value is as obvious as it was. There is a challenge to get people reading books. As my noble friend has already indicated, the internet is both a resource and a threat. It is a resource because of the availability of books through this medium. People can read e-books conveniently when travelling without the need to carry heavy printed books. Sales of e-books are increasing significantly, but the market remains dominated by the printed word.
Although the printed book remains dominant, we are seeing a threat from the internet—or an opportunity. It is a challenge as well because it facilitates the growing demand for instant gratification. It also provides a myriad of distractions. It is a challenge to book reading, which requires the investment of time. The danger is that people will come to rely on digests rather than absorb themselves in the real thing. Given that, what action can Government take? My noble friend has already dealt with copyright, author’s income—I have a particular interest there—and VAT. I shall not repeat her points but merely commend them to the Government. I just want to add a couple of suggestions in the light of our discussion. Book reading should be seen as a necessary component of education policy, but its importance, as my noble friend indicated, should not be seen as confined to the Department for Education. It is as important to BIS and Culture, Media and Sport as it is to education in terms of creating the creative workforce that is essential to our society.
In terms of education policy, there is a notable debate about the content of the national curriculum, but not so much attention is given to the form in which it is delivered. The Government need to be alert that books remain at the heart of any educational establishment. Schools should be encouraged to ring-fence budgets for purchasing books, be that in hard copy or electronically. I am not entering the controversy as to which books should be used. Rather, the emphasis should be on ensuring that students are exposed to a range of texts and encouraged to explore for themselves.
The other suggestion that I have relates to primary education. We know that pupils are disadvantaged by coming from family backgrounds where there is no history of reading and from homes where there are no books. There would be no harm in a campaign to encourage all new parents to expose their children to books, but there should also be leadership by government in encouraging primary schools to place a particular emphasis on book reading and indeed, making books available for young children to explore, if only for the purpose of their seeing them and becoming familiar with them. These suggestions stem from the view that we cannot take the value of books as simply given. We need to ensure that their value is recognised and that we do all we can to encourage young people in particular, of the benefits they will accrue from devoting time to a good book, or better still, a great many good books.
Lord Parekh (Lab)
My Lords, I, too, would like to begin by thanking the noble Baroness, Lady Miller of Chilthorne Domer, for securing this debate. I wonder whether I should declare an interest here by virtue of the fact that I happen to be the author of at least nine or 10 books and the editor of about a dozen. I do not know whether that disqualifies me from speaking about the subject—but I shall, nevertheless, persist.
Books, as the noble Lord, Lord Norton, said, play an indispensable role in creating and sustaining a civilised society. They are the repositories of thought. I do not think we fully appreciate the fact that, compared to television or radio and many other means of communication, books play a unique role. Books are the systematic statement of an individual’s real thinking, spread out over a large number of pages after careful thought. They also force the reader to engage in a dialogue with the author. Unlike television, where the images come and go and I have no time to pause because its immediacy simply overwhelms me, a book allows me to go back and forth, carry an idea with me, sleep on it and return to it a bit later. A book, in other words, is the repository of the dialogue between the reader and the author and, by implication, within the reader himself. Having read the book, the reader wrestles with the ideas in the new world to which the author has introduced him or her, and feels enriched. That is something that a radio or television programme simply cannot do. A book has a certain solidity. It is outside “me”, and therefore a book can be shared collectively in a way that a radio or television programme cannot. A book creates a world. It creates a public; a world in which we all share in common and which binds us into a community.
I say all that boring philosophical stuff not to make out a good case for books but simply to show that a civilisation from which books disappear and in which thoughts are communicated only through images or sounds is a civilisation that will be deeply impoverished. That may partly explain a paradox. We seem to think that as civilisation marches on with more and more technology, the human mind is becoming more sophisticated. The opposite thesis, I think, is more true. Because we are dependent on technology and because our thought processes are conditioned in a certain way, our brain capacity, our cognitive capacity, declines. That is why, in the past 100 years, we have not produced a Shakespeare, a Beethoven or an Einstein. All the greats who shaped our civilisation, who shaped modernity, are conspicuous by their absence.
It needs to be explained why there is progress in every sphere of life and yet, when we come to the fundamentals, the deepest forms of thought, we do not seem to be able to measure up to our ancestors. Forget Plato, forget Aristotle; even a Kant or a Marx would do, but we do not seem to have any. I think that that may have something to do with the fact that the solidity of the process of thinking that a book generates seems increasingly to be absent.
Having said that, I recognise that historically the book cannot remain what it is. Increasingly, it is difficult to define what is a book. Then I saw the title of the debate, and there are two things to be said about it. The first is about the phrase, “civilised society”. Coming from India and being constantly told by our colonial rulers that we are barbarians and uncivilised, the words “civilised society” rang alarm bells in my mind, just as did the word “book” because I was not quite sure what “book” referred to. Is an e-book a book? Is a blog or a series of blogs a book? Increasingly, publishers predict a future in which “physical” books—that word itself is disturbing—as we know them are likely to disappear. That worries me for all kinds of reasons, but that is not what I want to talk about. As of now, we have e-books, which, happily, sell about 80 million, compared to 393 million physical books; they bring in about £320 million, as opposed to £2.3 billion for physical books.
A physical book has an aesthetic appeal. It has what is beautifully called a jacket. We project anthropomorphic categories onto a book. A book has a jacket, a shape and an appearance which an e-book by definition cannot have. That appearance seduces us into reading it. It draws us into its own world. Therefore a book is not merely a repository of thought, it also has an aesthetic quality and is a cultural artefact. My worry is that if we are not careful—or even if we are very careful—there is a danger that books might disappear. Either they will be replaced by blogs or they might not be written at all.
They might not be written for two reasons. First, increasingly in the academic world a book is equal to three or four articles. Why not write an article instead of writing a book? I am told that there is an increasing tendency not to write big books. Secondly, it becomes very difficult for publishers to pay the author because people can read their books on a Kindle or in many other ways; publishers do not make money and they have nothing to give to the author. Increasingly, the recent phenomenon where an author can earn his or her livelihood simply by writing books may not be the case. In that case, why write books? If it cannot be your source of livelihood, only two things can happen. You will write or you will do other things while writing. That is what has happened throughout history. Shakespeare was doing his own things, Charles Dickens was a journalist. Therefore I suggest that we must find some ways in which the love of owning books can be encouraged in our children.
Lord Dholakia (LD)
My Lords, I add my thanks to those offered to my noble friend Lady Miller for securing this debate. Let me consider one issue and one issue alone: prisons and books.
The process of rehabilitation requires a number of initiatives and fundamental to this principle is ensuring that inmates are better prepared to face the outside world upon their release. The most disturbing aspect of the recent developments is the prison policy which bans friends and relatives sending books into prisons for prisoners to read. This change was made last year as part of the Government’s revision of the incentives and earned privileges scheme in prisons. The change means that friends and relatives in the outside world can no longer send small items to prisons, and this includes books. As a result, prisoners can access books only if they borrow them from prison libraries or if they buy them from their prison earnings. Both these options have serious restrictions and limitations. The Chief Inspector of Prisons drew attention to the restrictions on times at which prisoners can gain access to libraries. In addition, prison libraries are run and financed by local authorities. My noble friend made a substantial point that many of the libraries are now closing down, and there is less and less expenditure on books.
It is very difficult for most prisoners to buy books out of their prison earnings. The earnings amount to about £8 or £10 per week, out of which they have to buy their toiletries, stationery, stamps, phone cards to ring home and other items. Do we genuinely expect the prisoner to spend £8 out of £10 to buy a book to read?
There are a number of powerful reasons for reversing this unfortunate ban. First is the damaging effect on the literacy and education of prisoners. The poor rate of literacy among prisoners is well known, as is the research showing that poor reading ability is strongly correlated with difficulty in obtaining jobs on release, and with reoffending. The experience of literacy tutors shows that prisoners are more likely to be motivated to practise and develop their reading ability if they are able to read material on subjects in which they have particular interests. This is where reading material sent in by relatives can play a very important role.
The facts are just as unfortunate for better educated prisoners who want to pursue vocationally linked courses of study which can provide them with a positive alternative to their continuing life of crime. In a recent survey of the incentives and earned privileges scheme published by the Prison Reform Trust, one prisoner said:
“I am about to start a distance learning course. A friend of mine has done all these courses and is fully qualified and was going to send me all his books but we can’t have books sent in anymore”.
The rationale behind preventing prisoners from receiving books which can help them with educational courses is almost baffling, but the rationale behind preventing prisoners receiving books for leisure reading is also doubtful. I shall explain. In many prisons, inmates can spend around 16 hours a day in their cells, and it can be as much as 20 hours a day. Limiting the opportunity for prisoners to read in these circumstances is unreasonably punitive. Moreover, there is a real risk that it will have an adverse effect on prisoners’ mental health and emotional well-being. At a time when the number of suicides in prison last year reached an all-time high, this is a very disturbing development.
The Government have rightly received strong criticism from many quarters for this policy. In the face of this criticism, the Government have belatedly started to advance an argument which says that parcels containing books could be used as a way of smuggling drugs into prisons. This was not part of the original reasoning which the Government put forward when they established that change. It is true that many prisons have a drug problem and most drugs are brought into prisons—and I speak from experience, having been on a board of visitors in my younger days—by visitors, by prisoners returning from temporary release and by a minority of offending prison staff. It is noteworthy that the Prison Officers’ Association—a tough body which is as concerned as anyone about drugs in prisons—has said that attempts to smuggle drugs in parcels are rare and that the systems for security checks on parcels were working well before the ban was introduced. The Government’s argument therefore does not stand.
I hope that the Government will think again and acknowledge that they have made a mistake in prohibiting prisoners from receiving books from their families and friends. It is not too late to reverse this change, which is likely to worsen behaviour in prisons and increase reoffending rates.
The Earl of Clancarty (CB)
My Lords, I am grateful to the noble Baroness, Lady Miller, for the opportunity to talk about the importance of books within our culture.
Proper contact with books starts in the home or in schools, and if not in the home then it should certainly begin in schools. My daughter, who is now nine, has been lucky in the two primary schools she has been to—one private, one state—in that they both have decent libraries and librarians, one full time, the other coming in twice a week. But more than this, in both cases the library is located at the geographical centre of each school, not off to one side where it can be lopped off or forgotten about. It is a place through which children have to pass at least twice a day, and for primary school children, in particular, there is then this immediate contact with books. The Libraries All-Party Group chaired by the noble Lord, Lord Tope, in the title of its recent report put together by the Chartered Institute of Library and Information Professionals, calls the library:
“The Beating Heart of the School”,
which is exactly what the library should be.
I am not someone who believes that it should be a choice between the internet, e-books or hard-copy books. They all do different things and should complement each other. The internet is great for focused research on a specific topic, up to a point, but a school library enables a pupil to expand their horizons in important, less predictable ways. For example, a good teacher or librarian will say to a pupil, “You’ve read this—now try this”. The adventurous and browsing elements which good school libraries enable are greatly underrated in the development of a child’s interests. Books can and should be at the very heart of this process.
My child is lucky at her state school but, unhappily, this is not the case everywhere. I find it extraordinary that school libraries are not compulsory at a time when we as a society are so concerned about literacy; the link between school libraries and literacy is one of the things which the Libraries All-Party Group report recommends that the Department for Education thoroughly examine. It is clear that there is a crisis, with threats to the continuing existence of libraries and librarians. For example, the DfE school workforce data for England show a reduction of 280 librarians within a two-year period. The report also cites the 2010 UK national survey of school libraries, showing a 7% fall over three years in the number of primary school libraries with library space. The same survey showed that while relatively few primary schools had a designated school librarian, 90% of them accessed support via the schools library services. However, because that is often a traded service to schools, some schools are choosing to no longer use those services when money is tight.
A major problem is the lack of comprehensive data about the number of school libraries and librarians. One of the other recommendations that the report makes is that the DfE should ensure that that information becomes part of the annual data submission for schools. Nevertheless, the current evidence, however patchy and anecdotal, suggests that this situation is continuing to worsen.
A good school library should be represented in all areas: fiction, non-fiction, arts and sciences. Art books have traditionally had a special place in school libraries, in part because of their visual immediacy, and art teachers continue to use books as a vital resource in classes. This raises another issue: libraries need to be kept up to date. In the case of art, this means purchasing catalogues of new exhibitions. As the National Society for Education in Art and Design told me this week, “It is almost a given that teachers will supply their own up-to-date art books in schools”. Indeed, one teacher told me that she has spent more than £500 a year on visual resources, such as books, DVDs, posters and art magazines. It is admirable that art teachers are so passionate about their subject and their pupils’ engagement to make these outlays—if, of course, they can afford to do so— but it is a sad reflection on the amount and system of school funding that libraries or departments cannot purchase these books that can then be made available to pupils in the long term.
Every pupil at primary and secondary school level deserves access to a good school library. I hope that the Government will take steps to reverse the current trend and ensure that this becomes a reality.
Lord Addington (LD)
My Lords, when I saw this debate going down, I thought that it would be a good idea to make a speech. Indeed, one of my noble friends said, “Why don’t you speak about books, you can talk about dyslexia again”. Looking at this, I realised that my attitude towards books is not quite the same as other people’s because I am severely dyslexic. I have had access to much of the heavier, deep literature of the 19th century in an audio format. What is a book? I had a think about it. It is not a piece of paper but a pile of knowledge either edited or put together in a whole. That is my attitude towards it.
The audiobook fulfils that function of knowledge. True, having someone who reads it well is a help but it still fulfils that function. It brings things together and allows you access to knowledge. Whether or not we like it, in our society there is a great deal of snobbery about books. Anybody who does not have access to a book or who does not read is regarded as below the salt intellectually. Regardless of whether or not you understand the words that you read, reading them is regarded as a great thing.
The new format, the audio component, has been incredibly popular for a long time. The growth of the audiobook started in the 1970s and many of us have lots of audiobooks that we are now told are fit only for recycling because they are on tape—maybe that is just in my household. But the idea that a book can be accessed in various formats is one that we should take care of.
On the subject of libraries, the huge amount of effort that goes into them to make sure that literature is in audio format—in most libraries—is something, in the accessing of literature, to which I believe that the Government should pay attention. The link between being literate and accessing literature is no longer absolute. You do not need the intermediary of another person to read to you; the capacity to get at it is there. In our society, that is very important. It is an asset to everything else that you do.
On emerging digital technology, the idea that you can access any book via these means is now a reality. It affects many of the ways in which we have been assisting people who have learning difficulties or sensory impairment. I hope that the construction and control of the digital world, and the interrelated way in which we reward people who produce books, are brought into the whole discussion about books. If there is intellectual snobbery around books, it is because this is how we have conveyed ideas, particularly complicated ones, to our society.
I hope that when my noble friend replies he pays some attention to this and shows us how we are going to make progress. We should not ignore that part of it, and my noble friend did not do so when she started this. She said that a book in a digital format is probably easier to access straight away than one in written format—you can still do it but digital is easier. If we make sure that is worked in, we will expand the basis of ideas, discussion and thought. We may even be able to remove the exclusion of those who have bad technical reading skills.
Literacy may be a value to society, but the idea of study, knowledge and the interaction of knowledge is more valuable to society again. Looking at the way new technology works, we can expand the basis of those who can get into a book—that lovely package of ideas and thoughts, good or bad, well done or not. We now have the capacity within society to make sure everyone can access this. I hope that when my noble friend replies he will have given some thought to how audiobooks and e-books can be made more accessible to society as a whole.
Lord Popat (Con)
If you cannot be here at the beginning of the debate, you cannot speak in this gap period. My apologies.
Baroness Jones of Whitchurch (Lab)
My Lords, I am very grateful to the noble Baroness, Lady Miller, for tabling this debate and for giving us the opportunity for a very thoughtful and passionate discussion about an issue which we all take very much to heart. Unlike some of the debates that I have to speak on, I very much enjoyed doing the preparation for this one. Noble Lords have identified so many ways in which books can be life-changing. They can inspire, educate, amuse, challenge and elevate. For me, reading books is special precisely because it is a one-to-one personal thing and cannot be replicated. What you take out of a book is very different from another person reading the same one. I cannot imagine a world without books.
In the short time available, I will mention three threats which will affect the centrality of books in our lives. First, nothing epitomises better our understanding of the importance of books in society than our fantastic library services, where access to books is free. We should be proud of the fact that our library network has flourished for more than 150 years and remains unrivalled in the world. This free access has been embraced by working class movements from the moment that the printed word became mainstream and I am very pleased that, for example, the Working Class Movement Library in Manchester is still going strong. Books became vehicles for big ideas and social visions as well as new ways of thinking about truth and beauty. I can still remember the thrill of getting my first library card as a child and the excitement of the weekly visits to choose a new book. The thrill of having and holding that book felt like a rite of passage into a secret adult world.
It is, therefore, very frustrating to hear the extent to which the service is under threat at the moment. UNISON has estimated that nearly 500 libraries are being closed, privatised or run by volunteers on a reduced service. The truth is that once that service is closed we will not get it back and another celebrated feature of our cultural heritage will be gone for good. What steps is DCMS taking to ensure that a comprehensive network of libraries is retained so that future generations can benefit from access to the civilising power of books in the way that we have done?
Secondly, the noble Baroness, Lady Miller, talked of all the positive developments in book reading but, sadly, the size of the printed book market slumped in 2013 to an 11-year low in terms of both volume and value. As she pointed out, many much loved independent bookshops are closing around the country, with almost 550 going out of business in the past 10 years. This has to be a concern. We know of at least two main reasons for this: first, as noble Lords have pointed out, the domination of online purchases through Amazon; and, secondly, the growth of the digital e-book market in which Amazon also has a major hand via the Kindle. It already controls 41% of all book sales in the UK.
I do not pretend that there are any easy answers to these trends but there have to be deep concerns about intellectual property and diversity when a single operator can become dominant in the market in this way. Already, there are worrying signals. It is alleged that, in renegotiating its contract with independent UK publishers, Amazon is now insisting on the right to print books itself if publishers fail to provide adequate stock. Can the Minister say whether any discussions are taking place to protect us from exploitation by this market dominance? As I think the noble Baroness said, should not this issue be referred to the competition authorities? Would it benefit from a Europe-wide investigation?
Finally, we face the challenge of the reading habits of the next generation. We know that the incidence of children reading regularly for pleasure is more important than either wealth or social class as an indicator of success at school. However, alarmingly, just over a quarter of children in a National Literacy Trust survey said that they read outside school, and one in five said that they were embarrassed to be caught with a book. I suppose that is the opposite of the snobbery to which the noble Lord, Lord Addington, referred. Even more alarmingly, a survey in 2011 showed that three in 10 children in the UK do not own a single book of their own, with boys being even less likely to own a book than girls. The noble Earl, Lord Clancarty, made a passionate case for school libraries. I think that is part of the solution. However, it is clear that, without a better education strategy, we are in danger of losing the civilising impact of books for good. Therefore, I would be grateful to hear from the Minister whether the department has a book strategy. What are its plans for extending the love of reading? How does it plan to protect our future access to the freedom of ideas contained in all the great works of fiction and non-fiction?
Lord Gardiner of Kimble (Con)
My Lords, I, too, congratulate my noble friend on securing this debate. It has been an exceptional one which has highlighted how books are central to all our lives. Like all speakers in the debate, I come to it as a great supporter of books and, indeed, bookshops. I am afraid that I probably have far too many books cluttering my house but they are much loved and much enjoyed. This came to me very vividly when I saw a photograph in the newspaper only last week of a man in Ukraine rescuing his books from his burning house. I also reflected on how totalitarian regimes have suppressed and destroyed books, fearful of the power that they represent. Dreadful massacres have, alas, often been accompanied by the destruction of books. The dark age and destruction of civilisation that, alas, our continent has seen all too much of, contrasts with the age of the enlightenment that is represented by the book.
Books at their best are a source of information, knowledge, thought and pleasure for all age groups. As my noble friend Lady Miller said, they cross international boundaries and promote understanding and tolerance. My noble friend Lord Norton referred particularly to free speech. The noble Lord, Lord Parekh, referred to the unique role of books in his thought-provoking speech. Unlike him, I do not see this age as marking the beginning of the demise of the book. I think that we will value books increasingly as we go through the technological revolution and that many people will continue to treasure them. The noble Baroness, Lady Jones of Whitchurch, referred to the challenge and elevation that books bring to us. Indeed, I think that books for children have a special significance. They undoubtedly transform the life of a child and thereby contribute to the shaping of our society in the future. The noble Baroness was right to talk about the excitement and thrill we experience when we first start reading and continue to do so.
My noble friend Lord Norton referred to how essential reading is. Its development should be nurtured from an early age. Parents, family members and the home environment are essential to the early teaching of reading and in fostering a love of books. Clearly, there are parts of the community where that does not happen, and therefore schools are essential in developing the habit of reading books. The Government are committed to encouraging all age groups to read more.
A number of noble Lords referred to the curriculum. The new national curriculum for English aims to make sure that all pupils develop the habit of reading widely and often both for pleasure and for information. Teachers are encouraged to promote a love of reading and to inspire their pupils to choose and read books independently for challenge, interest and enjoyment. The Department for Education has strengthened the English curriculum and the support offered to schools to help children. There is now a phonics screening check for six year-olds and a greater focus on grammar, spelling and punctuation, with a new test for 11 year-olds, along with a strengthened requirement in GCSEs to use accurate spelling and punctuation. There is increased support for pupils in Year 7 who have not achieved level 4 in reading at key stage 2, as well as a greater focus on reading for pleasure, requiring pupils to study a range of books in order to develop a lifelong love of literature. All children deserve to be taught a rich curriculum that encourages extensive reading both in and out of school. The noble Earl, Lord Clancarty, referred to school libraries. I agree that the library should be at the heart of the school and well placed to help provide a love of reading. The Government fully support school libraries. It is a matter of choice for the head teacher, but we very much encourage the part that school libraries play in schools.
Adult literacy must also be addressed. BIS supports a wide range of different and flexible types of provision so that adults can learn in the way that suits them. This includes learning in the workplace, in community settings and through traditional college courses and using technology and online learning. BIS is ensuring that good-quality English and maths provision is at the heart of traineeships and apprenticeships to put people in a better position to take up an apprenticeship or other job. It will be piloting a new scheme supporting 18 to 21 year-olds on jobseeker’s allowance to ensure they can improve their English and maths to help them find and stay in a job. In addition, it is offering bursaries of £6 million in 2014-15 for maths, English and special educational needs teachers to attract more graduates. It is terribly important that we ensure that, in looking after children and young people, we also think about provision for adults so that their reading skills, and therefore their opportunities to read books, are much enhanced.
Outside the school curriculum and adult learning, a number of organisations that receive public funding, such as the Reading Agency and Booktrust, also deliver programmes to children and adults. The Reading Agency receives public funding from Arts Council England and runs a number of programmes to support people and develop an interest in literacy. Its programmes are targeted at specific age groups. For children, this includes the summer reading challenge, chatterbox and reading activists programmes. For adults, programmes include the six-book challenge and reading groups for everyone. All these programmes are developed and run in partnership with public libraries.
Booktrust, a UK-wide charity, is receiving £6 million this year from the Department for Education to assist delivery of a number of programmes aimed specifically at getting parents or carers reading to their children and to build children’s own love of reading. Its initiatives include the national flagship programme, Bookstart, which gives free books to all children at two key ages before they start school. This means around 3.8 million books are distributed to children up to the age of four. Booktrust delivers its programmes in partnership with children’s centres, health visitors, schools and local authorities.
Let us not forget the important contribution of the National Literacy Trust. The trust is a national charity dedicated to raising literacy levels in the UK. It works to improve reading, writing, speaking and listening skills in the UK’s most disadvantaged communities with the focus of its work on families, young people and children. Only last week, the trust unveiled new research revealing that children’s enjoyment of reading had increased for the first time in eight years. The latest figures show that 53.3% of children enjoy reading. However, that is not the sort of figure that we should be satisfied with. We obviously all have much more to do in this regard.
The noble Baroness, Lady Jones of Whitchurch, quite rightly referred to the importance of public libraries. The service has a central role to play in spreading the book-reading habit and provides access to a range of free reading material. It is indeed a treasure house of all kinds of books. There remains—I do not deny it, and indeed none of your Lordships will do so—the issue of the gravity of the economic situation in this country, but we still have a strong library service in England, with some 3,181 public libraries. Those libraries remain very popular and a large number of people visit them annually. There were 238.9 million physical library visits and 222.4 million book issues in 2012-13 in England. This is a service that is not just a repository of books in the traditional paper form. The public library service is adapting, as it should, to the changes in digital technology, and we have seen the number of e-books being issued increase by 80% in recent times. My noble friend Lord Addington referred to audiobooks. These are available and can be accessed from public libraries. Moreover, the public lending right was recently extended to the loan of audiobooks as well as e-books.
I was particularly struck by what my noble friend Lady Miller said about the book trade. The statistics for the UK show that book clubs, festivals and so on comprise the firmament of the love of books and of reading. The extraordinary success of book festivals is an indication of the place of the book in our national life. My noble friend also raised a number of points about copyright, and indeed my noble friend Lord Younger would wish me to stress how strongly the Government support the efforts being made by the creative industries to simplify the licensing of copyright material through the Copyright Hub. In terms of progress, phase 1 of the hub was launched in July last year and provided information for those seeking copyright material. Much work needs to continue on that, but because it is a detailed subject, perhaps I may write to my noble friend.
As I have said, the Government fully recognise the importance of authors, and this is why it is so helpful to extend the public lending right to e-books for onsite lending. We have a problem, because of current EU copyright law, about remote lending at this time, but that is also a work in progress. Although I will write more fully, the noble Baroness, Lady Jones, and my noble friend Lady Miller raised the issue of Amazon. This is of course a matter for the Competition and Markets Authority, but there is more that I would like to say on that.
My noble friends Lady Miller and Lord Dholakia mentioned books in prisons. I will write more fully on this subject, but I will say that the Government have not banned prisoners from having access to books. There is library access for every prison, and indeed prison library budgets have been protected. Moreover, as has been said, prisoners may also use their own funds to buy books. The Government’s policy is about restrictions on sending items into prisons, not specifically books. There have always been restrictions on what can be sent into a prison, and this policy simply seeks to ensure that there is greater consistency across all prisons in terms of their security. However, I will write more fully about this issue.
I was struck by what is involved in the creation of a book: the writing, the production, the author, the publisher, the literary agent, the printer, the illustrator and the photographer. All these are part of what make up books, and I am very conscious of the remarks of the noble Lord, Lord Parekh. I looked at the number of books in his entry, and it is very considerable. It is a great privilege to reply to this debate and I wish that we had longer to discuss these issues. I hope that I have been able to set out what the Government, public bodies and charities—I particularly congratulate the charities on the part that they are seeking to play—are doing. As far as I am concerned, a civilised world without books is unimaginable.
House of Lords
Tax: Aggressive Tax Avoidance
(9 years, 10 months ago)
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Lord Barnett
To ask Her Majesty’s Government what is their definition of aggressive tax avoidance; and what specific examples they can instance.
Lord Peston (Lab)
My Lords, on behalf of my noble friend Lord Barnett, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
Lord Newby (LD)
My Lords, the Government have taken a wide range of actions to tackle all forms of tax avoidance. The general anti-abuse rule, which this Government introduced, specifically seeks to tackle abusive tax-avoidance schemes. HMRC has provided examples of the arrangements that will be captured under this rule in its very detailed published guidance. A further example of aggressive tax avoidance is detailed on the front page of today’s Times.
Lord Peston
My Lords, the reason that your Lordships are stuck with me and not my noble friend is that he is very ill indeed, and I know that all noble Lords will wish to send wishes that he recovers quickly.
Lord Peston
In particular so that he can occupy his usual place and ask some really difficult questions.
In so far as I understand this subject at all, is it not the case that aggressive tax avoidance leaves companies making enormous sums of money and millionaires paying lower rates of tax than those with average or around average incomes? Does this not bring the whole tax system in our country into disrepute? How urgently are the Government trying to deal with aggressive tax avoidance, with a view to punishing those who do it?
Lord Newby
My Lords, first of all I ask the noble Lord to pass on my good wishes and, I am sure, those of the whole House to his noble friend.
The Government take this issue extremely seriously. We have invested additionally in this area more than £1 billion over the spending review period, and taken on another 2,500 staff to work on it. The compliance yield that flowed from this work in the past year was £23.9 billion—the highest ever—and we have increased the number of people being prosecuted for tax crime to 2,600 in this Parliament, which has resulted in 2,700 years of jail sentences.
Lord Razzall (LD)
My Lords, at the G8 meeting last year—it is now the G7—the Prime Minister led on the question of tax avoidance by the multinational companies that we all know, such as Starbucks, Amazon and Google. They seem to do significant business in the UK but pay very little tax. What progress has been made in that area?
Lord Newby
My Lords, the work in that area has been carried forward by the OECD, which produced a comprehensive 15-point action plan. Work on all those points is now under way. The first deliverables, on transport pricing, are due in September this year. At the EU level, noble Lords will have seen that the EU is currently investigating the tax position in Luxembourg, Ireland and the Netherlands, specifically with Amazon, Apple and Starbucks in mind.
Lord Rooker (Lab)
I do not wish to be misunderstood, but is it not the case, generally speaking—there is evidence to support this—that when tax rates are lowered, more revenue flows into the Treasury?
Lord Newby
My Lords, there is very extensive academic literature about the so-called Laffer curve, and I suspect there are very different views on it in your Lordships’ House. It is undoubtedly the case at the extreme ends of the curve that if you tax very highly the rate falls of because people find ways of avoiding it, and if the tax rate is very low the rate falls off simply because the rate per taxable unit is so much less.
Lord Mackay of Clashfern (Con)
My Lords, is it not correct that the principal weapon of aggressive tax avoidance is misuse of allowances that are permitted for various reasons? The complexity of that system is so great that it is extremely difficult to analyse transactions to see whether or not they comply with these particular conditions properly.
Lord Newby
The noble and learned Lord points to a very important problem. There are over 1,000 tax allowances, all of which have been introduced individually for very good economic development reasons. The problem is that they are now very complicated. Some tax advisers have been extremely creative at finding ways to use these allowances, which were developed for perfectly good reasons, to enable people to avoid their tax.
Lord McFall of Alcluith (Lab)
My Lords, is the term “aggressive tax avoidance” not just semantics? Tax avoidance is tax avoidance, whether aggressive or not. By doing this we are encouraging complexity, which is to the benefit of sharp-witted accountants and lawyers. Tolley’s Tax Guide is now 20,000 pages long. I suggest that the Minister should have two ambitions: first, to have the tax book the same length as War and Peace at 1,200 pages. Secondly, he should take up the suggestion of the noble Lord who said that we need to ensure these tax-avoidance schemes are referred to the Treasury first of all to determine whether they are tax avoidance. That would eliminate the complexity.
Lord Newby
My Lords, at the start of this Parliament, we established the Office of Tax Simplification. It has done useful work in reducing the body of tax law, although clearly it has a long way to go. On the work that has been going on to tackle tax avoidance schemes, I think that the tax avoidance industry has got the message; the number of potential avoidance schemes notified to HMRC fell by 75% in the two years from 2010.
Lord Lawson of Blaby (Con)
My Lords, my noble and learned friend Lord Mackay is absolutely right, as is the noble Lord, Lord Rooker—the two things go together. When I was Chancellor some years back, I reduced tax rates substantially, eliminated a whole range of allowances and indeed abolished some stupid taxes altogether, and the result was a great increase in revenue. However, is there not another point? If, after you have done that—which I commend to the Government—there is still a real problem with avoidance of a particular tax. Is there not a case for abolishing that tax and replacing it with another one that is less easy to avoid?
Lord Phillips of Sudbury (LD)
My Lords, will my noble friend tell the House whether the Government refuse to grant contracts to the companies and individuals that are engaged in this ludicrous and anti-social avoidance?
Lord Newby
My Lords, I think that there have been a number of cases in recent times where companies have lost contracts because they have been behaving in an unreasonable way, and that is a very good principle.
Finance: Fiscal Devolution
(9 years, 10 months ago)
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Lord Harris of Haringey
To ask Her Majesty’s Government what progress has been made in considering the proposals for fiscal devolution set out in the London Finance Commission’s report Raising the Capital.
Lord Newby (LD)
My Lords, the Government have recently devolved a range of responsibilities and funding through the Localism Act 2011 and they have decentralised local government finance through the Local Government Finance Act 2012. Any further fiscal devolution to sub-national authorities in England would represent a significant change to the existing tax landscape, with potentially significant legal, economic and constitutional implications.
Lord Harris of Haringey (Lab)
My Lords, the Minister will no doubt have read the report issued this morning by the House of Commons Communities and Local Government Committee, which says that it supports the principle of fiscal devolution and found no evidence opposed to it. He will also be aware that the major cities of this country apart from London—Manchester, Leeds, Newcastle and all the other core cities—all agree that they need to see bolder fiscal devolution if they are to invest for their longer-term growth. Is it not time for the Treasury to undertake an economic analysis of how the full suite of property taxes could be devolved to England’s great cities in line with the recommendations of the CLG report and the London Finance Commission report and the devolution being delivered in Scotland and Wales?
Lord Newby
My Lords, the first point that the noble Lord makes is summed up very well in the introduction to the report to which his Question refers, in which Tony Travers, who chaired it, says:
“Devolution and localism face little opposition apart from national politicians’ cautious approach to constitutional change in Britain”.
That sums up the position very well, and I think that there has been considerable movement under this Government. I will take back the noble Lord’s second point to my colleagues in the Treasury.
Lord Razzall (LD)
Does the Minister agree that every political party during his adult lifetime has fought elections on the basis that it wants greater devolution of power to the regions or the cities and then, when it gets into power, it finds a reason not to do so?
Lord Newby
I am afraid that there has been a very chequered history of attempts to devolve power—within England, at least. This Government, by devolving half the income generated by business rates, have begun a process. The growth deals announced at the beginning of this week—under which, over a period, £12 billion will be devolved to local enterprise partnerships, whereas it would otherwise have been administered by central government departments—is a big move towards greater devolution. I suspect that in the next Parliament there will be much more pressure to do more.
Lord Anderson of Swansea (Lab)
My Lords, if London benefits with its high property values and other advantages, does that not inevitably mean that other parts of the UK will not benefit? How does one prevent that sort of fiscal competition, which surely cannot be to the benefit of less favoured areas?
Lord Newby
My Lords, the principle that operates if one is devolving tax revenue to a lower tier of government is that the amount of tax devolved is subtracted from the amount of grant which that tier of government would otherwise be getting. Therefore, at the start of the process at least, there is no net shift of revenue from one area to another.
Lord Flight (Con)
My Lords, will the Government consider allowing our cities to raise their own municipal bond funding, as is the case in the US and as was the case in this country in the greater days of our cities? It has only had to be done through gilts since after the Second World War.
Lord Newby
My Lords, there are obviously strong arguments which would enable cities to raise more funding. Those have been resisted by the Treasury under successive Governments. As they are moving towards drawing up their manifestos, I am sure that all the parties are considering whether they want to change those long-standing practices.
Lord Foulkes of Cumnock (Lab)
My Lords, rather than more piecemeal devolution, is the time not now right for a more comprehensive and coherent look at devolution throughout the whole of the United Kingdom, so that we have a sensible system, and that some kind of commission—a constitutional commission or royal commission, under a wise and experienced chairman—should be set up as soon as possible?
Lord Newby
My Lords, I was waiting for the last part of that sentence. I am sure that all noble Lords will bear the noble Lord’s expertise in mind, should a commission be established. I think that, once we have the outcome of the Scottish referendum, all parties and all people who are interested in constitutional change in the UK will want to revisit the issue. The exact way we do it is also something that I think all the parties are thinking about as they draw up their manifestos.
Lord Davies of Oldham (Lab)
My Lords, the Government seem to be extraordinarily complacent about the response to increasing demand from our great cities for increased powers. The Minister said that it was all too complex, and then his noble friend from the Liberal Benches produced the usual note of cynicism that people never fulfil their promises when in government. I assure the Minister that we intend to have a thorough examination of the powers to allocate greater resources to our cities and regions, very much in line with the noble Lord, Lord Heseltine. Does the Minister agree?
Lord Newby
My Lords, I am always pleased when the Labour Party rethinks its policies. However, the premise of the point that the noble Lord raised was misguided. This Government, through the city deals, has devolved significant funding to the major cities for the first time. As I said earlier, with the growth deals which we announced at the beginning of this week, £12 billion is being devolved to the LEPs from what were central government allocations. This is a very big shift of economic and social decision-making going down to the cities and regions.
Health and Social Care Act 2012: Risk Register
(9 years, 10 months ago)
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Lord Brooke of Alverthorpe
To ask Her Majesty’s Government whether they will publish the Risk Register drawn up for the Health and Social Care Act 2012.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
The Government’s position has not changed since the noble Lord asked the same Question last December. We are not proposing to publish the risk register. This decision is based on the principle that Governments and their civil servants need to be able to consider the risks associated with policy formation in private. It remains our view that a full and candid assessment of risks and their mitigating actions should be carried out within a safe space.
Lord Brooke of Alverthorpe (Lab)
My Lords, the logic of that is that no risk register should be released to the public and I do not believe that is the Government’s policy. Given the Secretary of State for Health’s recent encouragement and support for NHS whistleblowers, and as the original risk register was released into the public domain by a whistleblower, what would the Government do if the continuing cover-up was then blown by a whistleblower before the next general election?
Earl Howe
My Lords, I am sure the noble Lord would expect me to say that hypothetical situations are not in my domain, and that is true in this case. The Government’s position is that there is a balance to be struck between transparency of activity in government and the safe space required for effective policy-making. That is why, in November 2011, I laid out for this House a comprehensive list of the areas covered by the transition risk register, but also why, at the same time, the Government decided to withhold publication of the register itself.
Lord Marks of Henley-on-Thames (LD)
My Lords, my noble friend will well remember the concerns of my party on this issue in 2012. I wonder whether he considers now, two years after the Act, that even if the private advice of civil servants should retain protection, the factual information in the register could now be published. That would enable everyone to monitor how the Act is working against what was predicted in 2012.
Earl Howe
My Lords, it is possible to monitor how the Act is working without publishing the risk register. It is quite true that the transition to the new commissioning system is over. However, the risk register related expressly to the implementation of the reforms and the system is still bedding down. Therefore, we are still of the view that it is inappropriate to publish the register.
Lord Kakkar (CB)
My Lords, I declare my interest as professor of surgery at University College London and chairman of UCL Partners. At the time of its Second Reading, the Minister was kind enough to indicate that the Health and Social Care Act would enjoy post-legislative scrutiny after three rather than five years. Does that remain the intention?
Lord Hunt of Kings Heath (Lab)
Referring to the noble Lord, Lord Marks, methinks the Lib Dems are trying to rewrite history. They underpin this dreadful change that the 2012 Act brought to the NHS and they bear responsibility for the shambles that it has caused. I am very confused by the approach of the Department of Health. It has berated the National Health Service for not being open and transparent; in fact, it published a league table of those who are good and those who are not good. The NHS bodies are required to publish risk registers, so why should it be different for the Minister’s own department?
Earl Howe
The Government of which the noble Lord was such a distinguished member took the same approach to risk registers. Of course, transparency is an important principle in health and care. It is important to drive up performance and expose institutional failure, and I believe there is a revolution taking place in the level of transparency and access to health and care information. I am sure we are agreed on that. The point that I sought to make earlier is that when it comes to policy-making within government, Ministers and civil servants are entitled to some safe space, so the principle of transparency has to be moderated to a certain extent. That is the balance that we have struck.
Baroness Knight of Collingtree (Con)
My Lords, is it not the case that a recent independent Commonwealth Fund report said that Britain had the best and safest healthcare system of all the 11 wealthiest nations? Since we know that the NHS is the biggest organisation and business of its kind in Europe, with all the opportunities for it to go wrong, is this not an extremely telling assessment of the real situation?
Earl Howe
I agree completely with my noble friend. The Commonwealth Fund report covers the period from 2011 to 2013—exactly when we were in the middle of reforming the NHS. The findings of the report were a credit to all those working on the front line of the healthcare system throughout that period of change.
Baroness Farrington of Ribbleton (Lab)
My Lords, the Minister is right to refer to that report, which I believe was based on 2011 figures. Does he accept that it is not politicians who are entitled to see the risk register but the public, particularly when the coalition Government promised separately and together that there would be no top-down reform of the health service? Are the public not entitled to know what regard this coalition Government have to the public’s need to know? The public want to know if the risk register identified risks post-2011.
Earl Howe
The noble Baroness is absolutely right. The public are entitled to know the areas of risk identified by the Government at the time that the transition risk register was drawn up. That is exactly why I laid out for the House a comprehensive list of the areas covered by the risk register on 28 November 2011. That was a full list, which nevertheless did not disclose the actual content of the risk register. That is the balance that I believe any Government are entitled to strike. The public are therefore in a position to judge how well the system has done.
Lord Grocott (Lab)
Can the Minister confirm that one of the unarguable costs of the reorganisation has been the number of people previously employed by the health service as administrators who received their redundancy settlements and pay-offs but were subsequently re-employed by the health service? Will he tell the House how much this has cost—the initial redundancy settlements, the subsequent salaries that are being paid and the number of people involved? If he does not have that figure to hand, and as he will not publish the risk register, will he at least make available in the House the precise figures of the cost to the taxpayer of this aspect of the reorganisation?
Earl Howe
I am certainly happy to write to the noble Lord with whatever figures I have on that front but, of course, those who were made redundant as a result of the reorganisation received payments of no more and no less than they were entitled to under their contracts of employment. There are more than 19,300 fewer administrative staff in the NHS than there were when we came to office, but more than 16,300 more clinical staff, including 7,400 more doctors and 3,300 more nurses.
Health: Cancer
(9 years, 10 months ago)
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Baroness Gardner of Parkes
To ask Her Majesty’s Government why the number of National Health Service patients treated for cancer by stereotactic ablative radiotherapy has fallen since April last year.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, before NHS England began commissioning specialised services in April 2013, many local arrangements that were in place were outside recommendations issued by the National Radiotherapy Implementation Group, the NRIG. Since April 2013 a consistent national policy has been in place, backed by robust clinical evidence. In line with this evidence, the number of SABR indications commissioned has reduced. It is important to ensure that treatments commissioned are supported by robust evidence of their benefit to patients.
Baroness Gardner of Parkes (Con)
I thank the Minister but, as recently as February this year, I asked him a question on another form of very specifically targeted radiotherapy. He replied that access would be guaranteed to innovative radiotherapy. My Question today relates to another innovative form, one that targets the particular cancer without damaging the surrounding tissues. Can the Minister explain why the figures have fallen and whether these machines, which are very valuable, are being left unused? If they are, is it because of the lack of people being trained to use them? Do we have enough skilled staff to allow patients to benefit from what is greatly improved radiotherapy?
Earl Howe
My Lords, there is no shortage of investment in radiotherapy and no barrier, indeed, to clinically appropriate access to radiotherapy. A lack of trained staff to operate the machines is not the reason that the use of SABR has fallen. The reason is that the clinical and commissioning decisions have been taken to reflect the evidence of what is clinically effective for certain cancers. That is why clinicians are no longer commissioning this form of radiotherapy for cancers which do not respond adequately to that form of treatment.
Baroness Finlay of Llandaff (CB)
Do the Government recognise, though, that there are times when commissioning has to invest to save and has to support evaluation while a treatment is ongoing, and that the new forms of stereotactic radiotherapy have very good local control rates? For example, in lung cancer the rates have improved from 20% to 30%, with 15 to 20 treatments, to about 70%-plus with only three to five treatments. For patients to be treated nearer home, the costs saved to other parts of the care system need to be considered in the commissioning decisions, where you have better local control and lower knock-on healthcare effects.
Earl Howe
Yes, my Lords. Radiotherapy, particularly of this kind, is highly cost effective when it is clinically indicated. In fact, SABR is available in eight radiotherapy centres in England. The number of centres providing this treatment is increasing, with over a quarter having equipment capable of delivering the treatment. Current evidence supports treating only a small number of patients with this treatment: that is, in early-stage lung cancers for patients who are unsuitable for surgery. That is about only 1,000 patients a year.
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Earl will be aware of a pledge made by the Prime Minister last October that this kind of treatment would be available to cancer patients who needed it. He will also be aware of a statement by Mr Lawrence Dallaglio, who was asked by the Government to help in this. He described it as a “national disgrace” that NHS England reneged on a deal to fund these cancer treatments. Is the noble Earl absolutely certain that the reason the number of treatments has fallen is due entirely to clinical reasons?
Earl Howe
Yes, my Lords: that is the advice I received. It goes hand in hand with other advice around other forms of radiotherapy treatment that are increasing very dramatically. For example, intensity-modulated radiotherapy is a similar form of radiotherapy for different types of cancer—head and neck cancers, principally. The use of that radiotherapy has grown very considerably, partly as a result of considerable investment by the current Government.
Baroness Barker (LD)
My Lords, this treatment works for patients caught very early in the stages of their disease. Is NHS England working with GPs to increase the number of people who they suspect have cases that will respond to this treatment getting into these centres in the first place?
Earl Howe
Yes, my Lords. One of the measures we took some months ago was to enable GPs to refer patients directly to diagnostic centres when cancer was suspected, thereby accelerating the pathway towards effective treatment if cancer is diagnosed. The signs and symptoms campaign is specifically directed at not only patients but also clinicians, including GPs.
Baroness Hooper (Con)
My Lords, is my noble friend aware of the important research carried out over the past 30 years at Southampton University’s centre for immunology to create a treatment based on stimulating the immune system? I appreciate that that is not on all fours with the Question, but it has the same parallel advantage of not causing the debilitating side-effects that traditional chemotherapy and radiotherapy treatments can.
Supply and Appropriation (Main Estimates) Bill
Financial Services and Markets Act 2000 (Regulated Activities) (Green Deal) (Amendment) Order 2014
Baroness Verma
That the draft order laid before the House on 4 June be approved.
Relevant document: 2nd Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on Monday 30 June.
Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1: injunctions to prevent gang-related violence) Order 2014
(9 years, 10 months ago)
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Lord Faulks
That the draft order laid before the House on 9 June be approved.
Relevant document: 2nd Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 7 July.
Adoption and Children Act Register (Search and Inspection) (Pilot) Regulations 2014
(9 years, 10 months ago)
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Terrorism Act 2000 (Code of Practice for Examining Officers and Review Officers) Order 2014
(9 years, 10 months ago)
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Lord Taylor of Holbeach
That the draft order laid before the House on 12 June be approved.
Relevant document: 4th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 7 July.
Universal Credit
(9 years, 10 months ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I should like to repeat as a Statement the Answer given by the Secretary of State to an Urgent Question in the House of Commons earlier today.
“Universal credit is a major reform that will transform the welfare state in Britain for the better, making 3 million people better off and bringing £35 billion of economic benefits to society. Rightly for a programme of this scale, the Government’s priority has been, and continues to be, its safe and secure delivery. This has been demonstrated throughout our approach to date, which started with the successful launch of the pathfinder in April 2013 and has continued with the controlled expansion of universal credit. On 5 December last year I announced that universal credit would be rolled out to the north-west and be expanded to couples from the summer of 2014, and would then expand to families later that year. That is exactly what is happening.
A fortnight ago we began our north-west expansion—universal credit is now in 24 jobcentres and will reach 90 across the country by the end of the year. A week ago we started taking claims from couples. This careful rollout is allowing us to test and learn as we go along, continuously improving the process. My department has always worked, and will continue to work, closely with the Treasury on these rollout plans. As we have made clear in a number of recent debates and answers to Parliamentary Questions, the Treasury has approved funding for the universal credit programme in 2013-14 and 2014-15, in line with the plan that I announced in December of last year.
These approvals are given by the Chief Secretary to the Treasury—such matters are delegated to him by the Chancellor—and these approvals are subject to rigorous controls, in line with recommendations made by the National Audit Office. It has always been our plan to secure agreement for universal credit in carefully controlled stages. First for singles, where we have agreed funding with the Treasury and are already rolling out in line with that agreement; then for couples, where we have agreed funding with the Treasury, and are already rolling out in line with that agreement; then for families, where we have recently secured agreement from the Treasury and will begin rollout later this year.
All of this was confirmed by the Financial Secretary to the Treasury in the answer to a Parliamentary Question yesterday, and that set of agreements confirms the approval of the strategic outline business case plans for this Parliament. The final stage in this process has always been sign-off of the full business case, which covers the full lifetime of this programme, and will eventually bring £35 billion of economic benefits to society. My right honourable friend and I expect to agree that shortly”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that Answer. It was an interesting history lesson, but it did not shed as much light as I would have liked on the Question that was asked. We have been very supportive of the principle of universal credit, but the enormous problems that his department has been having in implementing it are sorely testing our support. If the Minister is to maintain cross-party backing for universal credit, a project to which I know he is personally committed, then we need rather more transparency than the Government have been able to offer during the process hitherto.
On 30 June, the Employment Minister, Esther McVey, said that the Chief Secretary had approved the strategic outline business case for universal credit. On Monday, the head of the Civil Service, Sir Bob Kerslake, said to the Public Accounts Committee:
“We shouldn’t beat about the bush. It hasn’t been signed off”.
I ask the Minister two simple questions. First, Esther McVey and Sir Bob Kerslake cannot both be right: which of them is? Secondly, can he assure the House that universal credit is, and always has been, on time and on budget?
Lord Freud
I acknowledge that in this House there is a supportive atmosphere towards universal credit. The contrast between the dialogues that we have in this House and another place is marked, and always has been marked, and I appreciate that.
On transparency, this programme is subject to an enormous amount of public challenge—whether from the NAO, the PAC or the Work and Pensions Select Committee. A lot of information is available. A couple of weeks ago, I committed to ensure that Peers got more precise information. I am getting a programme going for that, so I hear that and understand it.
On the apparent difference between my colleague, Esther McVey, and Bob Kerslake, they are both right, because they are answering slightly different questions. The first was about the strategic outline business case plans for 2013-14 and 2014-15. I went through in my Statement how they have been approved. Bob Kerslake was answering a question about the entire lifetime. As I said, that has not yet been approved, but we expect to have that cleared up and approved shortly.
Baroness Jenkin of Kennington (Con)
My Lords, as my noble friend is aware, several noble Lords were able to visit the jobcentre in Hammersmith this morning to see for themselves how the programme is being rolled out. Perhaps I may take this opportunity to thank officials from DWP and those at the jobcentre who were able to brief us so fully and to say how impressed we all were by how it is working—in particular, we were impressed by the coaches, who were able to give so much care and attention to individuals. Can my noble friend confirm that other noble Lords across the Chamber will be able to visit the jobcentres where universal credit is being rolled out to see it for themselves in a similar way?
Lord Freud
One thing I want to ensure is that I can get as much information to noble Lords as I possibly can. I am pleased to say that I have extended an invitation, which has been accepted, to arrange for a group of opposition Peers—as many as the noble Baroness would like to bring; well, not quite as many as that; we could not fit them all into Hammersmith; but enough to fill the room with a little standing room—to go through what is happening on the ground and the process.
One thing that I am keen to show the noble Baroness, which we saw this morning with a small group, is access to the work coaches to see how they work with clients in an entirely different way—in particular, to try to help the most vulnerable, whether it is looking at how they budget or various other things that they will need to do under universal credit.
Baroness Hollis of Heigham (Lab)
My Lords, Mr Duncan Smith insists that UC is on time, on track and on budget. I fear that it is not. None of the monitoring bodies—the Treasury, the Major Projects Authority, the NAO, the DWP Select Committee, the Public Accounts Committee, Sir Bob Kerslake—believes that. To paraphrase Sir Jeremy Heywood, the project remains well off-track. We want this to work. Will the Minister, whose integrity we entirely respect, give us the facts and the future plans rather than recycle the empty bluster of the Secretary of State?
Lord Freud
My Lords, this is a very large programme and the way we are doing it is quite responsive. What we have is a test and learn process. That is not just an empty phrase. It is a very large process, based on a live run-out of many tens of thousands of people, which feeds into how we build a fully digital interactive service that we are building at the same time. We will make changes to the process. That is what it is about. It would be silly to do all that work without being responsive. We learn lots of things. One of my jobs is to try to understand what we are finding out and then make those changes. There will be changes. Having said that, we announced a rollout process in December and we are, to my pleasure, managing to get it out to time with those plans. The next stages, which are towards the end of the year, are really important—moving on to families, bringing in childcare and going to that digital place. By the end of the year we will have a working test bed of how a fully interactive process will work. I am not saying it will not change after that, but I am saying that we are doing what we were planning to do.
Lord Kirkwood of Kirkhope (LD)
My Lords, I encourage my noble friend to redouble his efforts, as he has undertaken to do, to maintain cross-party support for this transformational programme which is so important to the future of our country. I am as impatient for implementation as anyone, but I exhort him to do this carefully—as he is doing—even if it means that the programme slips a little. It is better that it works properly than it is rushed and done wrongly. Does my noble friend agree that there is an advantage to keeping some flexibility in the funding of the scheme? Passported benefits, childcare costs and the local support services framework are all massively beneficial, and the Treasury should be persuaded to invest more money so that the programme is even more effective in future.
Lord Freud
My Lords, we are indeed trying to get that flexibility. One can look at our very intensive dialogue with the Treasury—going through point by point and milestone by milestone—in two ways. One can look at it as pretty onerous, and it is. On the other hand, it gives one a chance to look at what we should be doing next and changing it. One example is on the support system delivered locally—in the jargon, the LSSF. We were able to go to the Treasury and get more money put into that process quite recently because it could see how valuable and important that was.
Not locking everything down early and having that dialogue works. Frankly, you do not know what you are going to find out or what you are going to need to do when you have a major programme. Having that understanding from the Treasury of what we are doing and keeping it well-informed so that we can make those changes as we go along does work.
Lord Hylton (CB)
My Lords, most people are not yet eligible for universal credit. Can the noble Lord give the figures for how many people at the moment are subject to benefit sanctions and what is the current delay between agreeing that someone is eligible for a benefit and their actually receiving payment? Are these two factors not responsible for a good deal of destitution?
Lord Freud
In the universal credit build-out, we are fully aware that there is a gap between claim and payment. There is also a gap in the present legacy systems. We have set up a system of advances so that people can get the cash flow to match the differences. Alongside that, where there is, to use the word of the noble Lord, “destitution”, or immediate crisis, we are setting up the local support framework working with local authorities. They can get some of that support to people and are far more efficient at doing that than a bureaucratic central system would be.
Armed Forces (Service Complaints and Financial Assistance) Bill [HL]
(9 years, 10 months ago)
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Lord Rosser
Lord Rosser (Lab)
My Lords, the effect of this group of amendments is to say that a person may not be appointed as the ombudsman if that person has been a member of the Regular or Reserve Forces at any time in the five years prior to the date of appointment. The Bill lays down that,
“A person may not be appointed as the Ombudsman if the person is … a member of the regular or reserve forces”.
The present system has been described by the Service Complaints Commissioner as being not efficient, effective or fair. Indeed, in her most recent annual report the commissioner says that,
“for the sixth year running I have been unable to give … an assurance that the system is yet working efficiently, effectively or fairly”,
and that delay remains the principal reason for unfairness in the system. If we are to have a new system with a service complaints ombudsman with enhanced powers, it is surely vital that, if service personnel are to have a level of confidence in the new system which they do not have in the present arrangements, the ombudsman is seen not only to have greater powers but to be truly independent of those whose actions he or she might be investigating, and of those to whom he or she would be making recommendations.
In that context, it is surely also relevant that the ombudsman will, as I understand it, have the power to seek judicial review if the Defence Council rejects the recommendation. That situation will not be achieved if the person appointed as the ombudsman is perceived to be too close to the Armed Forces establishment and too much ingrained with the culture of the Armed Forces, or one arm of them, and their way of doing things to be perceived as being truly independent. We have had an independent Service Complaints Commissioner with insufficient powers and an unwieldy system. What we do not want to move to is a Service Complaints Ombudsman with greater powers and a more streamlined system for complaints but lacking the perception of being considered truly independent. That will be a risk not just if the person appointed is,
“a member of the regular or reserve forces”,
who would rightly be debarred under the current provisions in the Bill, but if the person appointed had recently been a member of the forces, who would not be debarred under the Bill as it stands.
One amendment in this group proposes that a person who,
“has been a member of the regular or reserve forces”,
should not be eligible to be appointed as the ombudsman for a period of five years after leaving the Regular or Reserve Forces. If the concern is that this would reduce the pool of potential applicants, I suggest that is the wrong priority. The principal concern should be to appoint someone who is not only truly independent but perceived as being so. If it is seriously to be suggested that we might not be able to find an independent ombudsman in whom we could all have confidence from outside the ranks of those who have been a member of the Regular Forces or Reserve Forces in the last five years, I suggest that we have a real problem over the future of this new position.
A detailed knowledge of the culture of the Armed Forces and how they operate and function that could come only from having recently been on the inside is not, I suggest, an essential qualification for being the ombudsman. Rather, the essential qualifications are to be of an open and independent mind, with an ability to weigh up evidence and facts, sort out the salient from the irrelevant, come to reasoned and measured conclusions and be able to question and challenge, as well as to be determined not to be deflected or obstructed by anyone, whatever their level or rank, and to desire to see that justice is done, whether that means upholding or rejecting a complaint.
I hope that the Minister will understand the purpose of the amendment and what it is seeking to achieve. As I see it, the Bill as it stands could mean that a person was appointed to this post the day after they ceased to be a member of the Regular or Reserve Forces, and I am not sure that, from the point of view of being perceived to be truly independent, that is the road we should even contemplate going down.
Lord Palmer of Childs Hill (LD)
My Lords, I understand all that the noble Lord, Lord Rosser, has said about perception, but it is the reality that concerns me. I believe that all the points that the noble Lord has made about the danger of having someone who has just left the ranks of the Armed Forces may be there, but I would like to put the other side.
If we adopt the amendment that the noble Lord has suggested, we are limiting the choice. He may be right that it would be best to have someone who had not left the Armed Forces more recently, within the previous five years, but should we, in primary legislation, reduce the options that are available? If there were someone who had left the Armed Forces, say, two years before the appointment was made and that person was the admirable person for that position, should we, by passing this amendment, cut off the possibility of choosing the right man or woman for the position?
Although I welcome the suggestion that the Minister might give us a little more information about the terms of appointment and the like, which would be most useful, if the noble Lord’s amendment were to be passed we would be limiting choice, and that would be a poor thing.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, the amendments in this group would require there to be a gap of five years between a person ending their service in the Regular or Reserve Forces and becoming eligible to be appointed to the post of Service Complaints Ombudsman. The provision in the Bill requires simply that, to be appointed to the post, an individual is not currently a member of the Regular or Reserve Forces nor of the Civil Service. The service complaints process is in place to deal with a wide range of matters that can give concern to our personnel. For those concerns to be addressed and resolved, it is essential that everyone who might wish to use the process has confidence that it will deal with complaints in an impartial and professional way.
The need for the system to be fair, effective and efficient is already well established, and is the basis in the Bill for the ombudsman’s annual assessment in the ombudsman’s report as to how the process operated during the preceding year. In creating the new role of ombudsman, those principles of impartiality and professionalism are also the characteristics that everyone will expect to see the postholder display. Crucially, postholders must also be demonstrably independent of those whom they seek to hold to account for the way in which complaints have been handled.
That is why the ombudsman is outside the chain of command and has access to Ministers when the ombudsman considers it is necessary. The ombudsman will also be able to approach the chain of command at any level and on any issue, should there be a need to do so. The ombudsman will continue to be accommodated outside the defence estate to reinforce the independence of the role and the ombudsman will recruit its own staff in line with prevailing Civil Service recruitment guidelines. The Bill includes a new provision as a further mark of the role’s independence and security of the postholder’s tenure, in that the postholder’s appointment will be subject to appointment by Her Majesty.
The ombudsman will be a post that is of public interest. As such, the recruitment activity will include a pre-appointment hearing by the House of Commons Defence Select Committee, once a candidate selected by the interview panel has been approved by the Secretary of State. This was introduced for the Service Complaints Commissioner post for the same reasons.
In reviewing the terms that will apply to the ombudsman post, we have considered the length of engagement of other similar posts and, to answer the noble Lord’s question, we have determined that when the next recruitment campaign is run the tenure will be extended to five years. To answer his other question, the term will not be renewable. This will give any future ombudsman sufficient time to familiarise themselves in the role and then become fully effective, which would not necessarily be the case if the term was shorter. Having looked at how other ombudsman institutions in the public sector are set up, we are aware that the Parliamentary and Health Service Ombudsman has a seven-year non-renewable term. By keeping this aspect of the ombudsman appointment in the terms of appointment rather than in the Bill, we retain the flexibility to increase it in the future if experience shows that that might be beneficial.
The skills and experience that are needed for this post are those expected for any high-profile oversight role, with the additional challenges in the short term of transforming the current role of the Service Complaints Commissioner to that of an ombudsman. Proven analytical skills and the ability to make sound judgments and recommendations on the basis of evidence, along with a proven record in change management, will be key. Individuals can acquire these skills in any number of ways and it is for applicants to show how they have demonstrated them in practical terms that will be of benefit in this role.
We are clear that, on taking up the appointment, the ombudsman should not be a serving member of the Regular or Reserve Forces, nor of the Civil Service, so that the independence of the post and postholder is not in question. We do not, however, limit ourselves, as the amendment would, to those who may have left service during any particular period. Our aim is to get the best candidate for the job and to be in a position to encourage applications from as wide a field as possible. To put in an arbitrary bar would disqualify otherwise excellent candidates with potentially relevant and recent experience, a point that was well made by my noble friend.
As part of the recruitment process for posts of this nature, the recruitment consultants who are running the campaign will scrutinise closely the information provided by applicants, and will compare it to the required skills and experience that have been set out in the advertisement for the post. The consultants will also work closely in the run-up to and during the campaign with those who will be interviewing the applicants and recommending the candidate to Ministers for their approval. As has been the case in the past for the Service Complaints Commissioner, the ombudsman interviewing panel will include a mix of military and Civil Service personnel who know the complaints process well and have a clear understanding of the environment in which the ombudsman will be operating. This helps the consultants to understand in more detail the role that they are recruiting to and the benefits and disadvantages that certain areas of previous experience might attract.
The period since a potential candidate left the service might not necessarily be an issue. What may be of relevance is the role and function they carried out and the length of time they were in the service. For example, an individual who served for only a short period but who prior to joining up had experience of particular value to the ombudsman role may be an especially strong candidate who should be given serious consideration. Each candidate is therefore considered on their merits and always with the need for the chosen candidate for the post to be, beyond question, independent of those whom they will be holding to account.
As part of their checks, the consultants will clarify any potential issues that arise that they feel might raise any real or perceived doubts as to an applicant’s independence from the Armed Forces if an applicant were to go on to become the commissioner or, in future, the ombudsman. They will also look for any possible signs that an applicant might not otherwise be acceptable or might bring the integrity of the post into question, which might include, for example, whether they have been or are currently the subject of a complaint. The selection panel chaired by a public appointments assessor must also satisfy itself that all candidates can meet the Standards in Public Life principles and that they have no conflict of interest that would call into question their ability to perform the role.
There is undoubtedly a fine balance to be struck between having some relevant knowledge of the way that the services operate and being completely new to their ethos. The Armed Forces operate in a unique employment environment. Their need for strong discipline is among the factors that make them such an effective fighting force on operations. It can be difficult for someone who is unaccustomed to the way in which that discipline is instilled and maintained readily to understand how this environment differs from the civilian workplace and, indeed, how that might transfer to the way in which complaints are viewed and how the services handle them. By the same token, we need and want a fresh pair of eyes to look at our complaints process and determine what is fair, effective and efficient in the way that we deal with any complaints that might arise within that unique environment.
If an applicant for the ombudsman post had only recently left the Regular or Reserve Forces, we would still want to consider such an application. The checks and balances that we have in place as part of the rigorous recruitment process—and our need to ensure that the postholder is seen as independent—give us the flexibility to consider as wide a range of applicants as possible for this important role and to secure the best possible candidate. These amendments would lead to good candidates being excluded arbitrarily, and for that reason I must resist them. I ask the noble Lord to withdraw his amendment.
Lord Rosser
Will the Minister clarify a point he made? I think he said that a panel will make the appointment. If I understood that correctly, did he say that the panel would recommend a candidate or candidates to those who would make the final decision?
Lord Astor of Hever
I think the answer is one candidate. If I am wrong, I will let the noble Lord know.
Lord Rosser
I thank the Minister for that and for his response. I noted that he said that the intention was for a non-renewable five-year tenure. Obviously, one would want to reflect on that. Personally, I can see some advantages in having a lengthy period of tenure that is not renewable, because then the occupant of the post may not be tempted in their decisions to do things that might lead to the contract being renewed at the end of the period. One could see the advantages of that, but I stress that that is an immediate personal response to that point.
Obviously, I am sorry that the Minister did not feel able to go any part of the way towards the objective that the amendment sought to achieve. The noble Lord, Lord Palmer of Childs Hill, said that we should not exclude people in primary legislation. Of course, a response to that is that we should not enable somebody who left the Regular and Reserve Forces the previous day, metaphorically speaking, to be appointed to this post in primary legislation. Perception is very important here. The reality is that the proposed legislation that we have in front of us enables an appointment to be made of somebody who has literally just left the Regular and Reserve Forces. I am sorry that the Minister did not feel able to make any movement at all on that. From the nature of the response, the Government obviously do not feel able to say that there should be any minimum period before anybody from the regulars or the reserves should be able to be appointed to this position.
However, I am grateful to the Minister for the comprehensive nature of his reply. I want to reflect further on it and on the points he has made and in the mean time, I beg leave to withdraw the amendment.
Lord Rosser
“( ) If the family of a person who has died during the course of his or her service thinks that his or her relative or partner was wronged in any matter relating to his or her service, the family may make a complaint about the matter.”
Lord Rosser
My Lords, I will be brief, not least because I assume that the noble Lord, Lord Thomas of Gresford, although he may not make exactly the same points, will make very similar points. On the issue of service complaints, the Bill refers to,
“a person subject to service law”,
who thinks that they have been wronged. It states:
“If a person who has ceased to be subject to service law thinks himself or herself wronged in any matter relating to his or her service which occurred while he or she was so subject, the person may make a complaint about the matter”.
However, it goes no further than that.
At Second Reading my noble friend Lady Dean of Thornton-le-Fylde raised the issue that when a service man or woman has died without making a complaint there appears to be no room for a family member to pursue a complaint on their behalf. There would seem to be powerful reasons that when an individual’s family or friends have information or evidence to suggest that a member of their family was treated unfairly in their service life, they should be able to take steps to find out the truth, and to be in a position, if needed, to make sure that a complaint that is going through the procedure at the time that the member of the services died can continue.
At Second Reading a number of noble Lords made reference to the case of Anne-Marie Ellement and the investigation conducted by the Royal Military Police which led to a decision being made that no charges should be brought. However, when it came, a long time later, to the inquest, it found that the lingering effect of an act of alleged rape, which was described as work-related despair and bullying, had contributed to that person’s death. There was a feeling that the information about the working and living conditions that the person endured would not have been available had it not been for the lengthy procedure in that case to get a second inquest.
Surely we ought to have a process that would enable issues such as that to be raised by the family on behalf of a member of the services who has died, whether the death occurs before a complaint has been made when evidence comes to light that indicates that a complaint could be pursued, or whether it occurs when a complaint is already going through the process but has not been finalised. Surely giving family members the opportunity to ask for a complaint to be investigated is both just for families and an opportunity for learning and improvement. I think I am also right in saying that the prisons ombudsman has discretion to investigate complaints made by the family members of deceased individuals. I hope that the Minister will look sympathetically on the issue covered in this amendment and in the amendment of the noble Lord, Lord Thomas of Gresford. I beg to move.
Lord Thomas of Gresford (LD)
I will speak to Amendment 5, which covers very much the same ground as that just covered by the noble Lord, Lord Rosser. However, I think that it is perhaps more succinct than his amendment. I do not think that it is necessary for the family to think that a person has been wronged. If there is a complaint, the relatives, next of kin or personal representative should be able to pursue it.
If a wrong has caused the death, the problem with the coroner’s inquest is that those proceedings are not instituted by a member of the family or next of kin but by the coroner himself. That may take time and cause delay. It seems to me that it is appropriate and would avoid a great deal of hurt for the next of kin or personal representative to be able to take the complaint to the ombudsman. That would deal with the situation where a person has died as a result of the wrong but, of course, if there is some other issue, the coroner will have no part in it at all. There again, it should be open to the next of kin to make the application, and to do it in as prompt a manner as possible. A point of principle is involved here and I look forward to hearing the Minister’s response.
Lord Astor of Hever
My Lords, both the amendments in this group deal with an issue that was raised at Second Reading by a number of noble Lords, including the noble Lord, Lord Rosser, and the noble Baroness, Lady Dean. That issue is whether the family of a deceased person should be able to bring a complaint on their behalf or to continue a complaint where it was made before the person died. It is clear that there is support across the House for allowing complaints to be made or continued in such circumstances.
The first amendment in this group would allow the family of a person who has died during the course of their service to make a complaint if they think that the deceased person suffered some wrong in relation to their service. The second amendment, in the names of my noble friends, covers slightly different ground in that it also deals with the situation where a complaint has been made and the complainant then dies. In such cases, it proposes that the next of kin or personal representative can continue the complaint.
The Bill provides for a complaints process that enables serving or former members of the Regular or Reserve Armed Forces to complain about any matter that has arisen as part of their service. That right is subject to certain conditions, such as bringing the complaint within a given period. Certain matters are excluded from the complaints process because there are other, more appropriate, avenues available to deal with the issue raised—for example, a service complaint cannot be made about a matter that can be the subject of an appeal under the Courts-Martial (Appeals) Act or is a decision of the Security Vetting Appeals Panel. The service complaints process allows military personnel to raise matters that relate directly to them and where they will have a clear understanding of what they would wish to see happen to redress the wrong that they believe they have experienced.
As I mentioned at Second Reading, complaints can be brought on a wide range of issues. The type and number of complaints varies from year to year and between the single services, with the majority tending to be about the broad range of terms of conditions issues. Bullying and harassment complaints accounted for 10% of all complaints in 2013 for the Royal Navy, and 43% for the Army. As might be expected, complaints that have the potential to have an adverse effect on career prospects and on pay tend to be the greatest in number. In 2013, such complaints accounted for 89% of all Navy complaints, 50% in the Army and 54% in the Royal Air Force.
For the complaints system to be fair, it has to give equal consideration to all parties who may be involved. That means that the person making the complaint and anyone else who might be implicated in it, or otherwise affected by it, should have the opportunity to put their case. For example, a complaint about whether someone was entitled to a particular allowance may include allegations that someone sought to falsify facts so that their eligibility was in doubt or that someone deliberately misled them about their eligibility. A complaint about harassment might hinge on the intentions behind comments made or on the actions of either the complainant or the person who is alleged to have harassed them. There may be issues of what was considered acceptable behaviour by both parties. There may be witnesses to the alleged behaviour who need to be involved. For any process to be fair, and for there to be confidence in it, all the parties involved must be able to put forward their own version of events and be able to challenge the version presented by others. That is the natural basis of justice. It is particularly important where reputations or future careers may be affected.
In dealing with any complaint, it is important not to lose sight of the implications for the individuals involved. We must not allow a rigid and inflexible process to override the rights of those involved. Any system must be sensitive and adaptable. A person does not make a complaint lightly. Raising a complaint means that something is causing the individual great concern, whether it is their annual appraisal and its implications for their pay and career, the condition of their property, or bullying and harassment. Complaints may also raise issues with wider implications for the services. Tackling complaints quickly and sensitively therefore has benefits regardless of the nature of the complaint. This need for sensitivity, however, is crucial where a person has died, whether or not his or her death has any connection to an existing or potential complaint.
It may also be helpful to give an example of how a service has responded when an issue has arisen in the course of other proceedings, and the potential complainant is deceased. The noble Lord, Lord Rosser, mentioned the tragic case of Corporal Anne-Marie Ellement. Her family, with the support of Liberty, secured a new inquest into her death earlier this year. The coroner presiding over the inquest concluded that Corporal Ellement had been the subject of workplace bullying. The Army had already decided before the inquest that consideration needed to be given to any action it might take, depending on the coroner’s findings. To that end, the Army was able to act quickly to put in place an internal investigation after the judgment was known. That investigation is looking at what happened in this case and whether any action should or can be taken against individuals. The investigation is made difficult by the fact that the person against whom these dreadful acts were perpetrated is sadly no longer able to give her own account of events, while those against whom any allegations have since been levelled cannot challenge fully the record of those events. It is, however, a strong reflection of the seriousness with which the Army takes its responsibilities in situations of this kind that, in this particular instance, it recognised the need to act early, and that it is doing so now.
It may be helpful if I give an example of a case in which the complainant died before their complaint had concluded. Noble Lords will understand that, in doing so, I must be very careful not to identify inadvertently the individual who was involved, so I will not give any specific details. Such situations are mercifully very rare, but when they arise we must respond sensitively and in the interests of justice for all parties.
Lord Thomas of Gresford
Perhaps I may speak to Amendment 5 now, because I do not propose to move it today. The second example given by the Minister makes my point, because that is a situation where a death may have been caused by the matter complained of and the complaint had been lodged—so we understand—prior to the decease of the complainant. No doubt it will be dealt with sensitively, but under the Bill the Defence Council would be entitled to say, “You can’t maintain it any further. The person has died and that’s an end of it. Under this Act, we are not going to take it any further”. The question of whether to continue with a complaint after somebody has died should not be in the discretion of the Defence Council; it should be in accordance with the Bill. It would be for the personal panel of persons appointed by the council or the council itself to determine the complaint if it were maintained, and of course it would hear the evidence.
The evidence would not be as effective from the point of view of the complainant’s personal representatives if the original complainant could not give evidence. However, that is just a matter of evidence; it is not a question of principle. As in the case to which the noble Lord referred, it might be possible to maintain a complaint on documentary evidence or, indeed, through witnesses who would have been called by the complainant in the first place in support of the complaint.
I regret to say that I do not think that the Minister’s answer deals with the point that has been raised, and I shall consider the position for Report.
Lord Rosser
I thank the Minister for his very full reply, for which I am genuinely grateful. The overall impression that I get is that the response is that, if there is to be an investigation in these circumstances, it will be done through, rather than outside, the chain of command. I appreciate that this is a sensitive issue but my immediate reaction is that I find it a little difficult to believe that there is no role at all for the Service Complaints Ombudsman to play, bearing in mind that the ombudsman also has to make a decision on whether a complaint can or should be pursued. Perhaps there should be a little more confidence in the ability of the Service Complaints Ombudsman to handle the matter in an appropriate way. I would hope that somebody appointed to that position would be able to do that.
However, I note, and am grateful for, the Minister’s full response. I wish to leave this in the context that we will clearly wish to consider the Government’s response carefully before deciding whether to pursue the matter further. I beg leave to withdraw the amendment.
Lord Rosser
Lord Rosser
The purpose of the amendments in this group is to find out from the Government why they have decided that the time limits referred to in new Part 14A, introduced under Clause 2, are deemed appropriate. The amendments suggest that they should be longer. However, at this stage the purpose, as much as anything, is to find out why the Government have decided that, for example, in new Section 340B(3) under new Part 14A the reference is to a period of three months, and in new Section 340D(3) there is a reference to six weeks. New Part 14A refers to time limits relating to the day on which the matter complained of occurred. The question is: what does that mean in the context of, for example, a matter, which is the cause of a complaint, that happened over a period of time? Does the time referred to in, for example, the two parts of new Part 14A to which I have referred apply from when the first incident occurred or from the date when the last incident occurred if the complaint has occurred over a period of time? If it is from the date of the last incident, will the earlier incidents also be considered, even though they may be well outside the time limit?
It is also possible that someone might feel they have suffered a wrong but did not realise it for some time because it is only from talking to others that it emerges that, for example, they have been treated very differently and without any obvious explanation. In those circumstances, it might not be possible to raise a complaint within the time limits laid down because the individual was not aware, within those time limits, that they had a potentially justifiable complaint. There may be other circumstances that make it difficult for people who feel they have a complaint to meet the time limits laid down. They may, perhaps, be stationed abroad or in hospital.
It would be helpful if the Minister could say why the time limits provided for in Clause 2 were deemed the most appropriate. What would happen in the kind of circumstances to which I referred? I am again asking the Minister to clarify the point, because I am not quite clear of the circumstances, if any, in which the ombudsman could decide to take a complaint outside the time limit. What discretion will the ombudsman have in that regard? If the ombudsman feels that there is good reason why things were not done within the laid-down time limits, will they have complete discretion to decide that the time limit can be extended? There appear to be references in the draft regulations—frankly, I have not had a chance to fully grasp everything that is in them—to shorter periods of time than those mentioned in the Bill. However, I stress that I am not clear whether what I am looking at in the draft regulations actually relates to the time limits laid down in the Bill. Our Amendments 6A and 8A simply say—in relation to page 3, line 3, and page 4, line 18—that:
“Service complaints regulations must not foreshorten or have the effect of foreshortening the period referred to in subsection (3)”.
I fully accept that I may have misunderstood parts of the draft of the Armed Forces (Service Complaints) Regulations—I mean that quite genuinely—but Regulation 7(2) on page 3 states:
“The Ombudsman must not consider an application under paragraph (1) made more than four weeks beginning with the day the complainant is notified of the specified officer’s decision”.
There is also a further reference on page 5, in Regulation 12(2), to the ombudsman not considering,
“an application under paragraph (1) made more than four weeks beginning with the day the complainant is notified of the decision”.
I am simply concerned that if they do relate in any way to the times laid down in the Bill, that would appear to be a foreshortening; hence these two amendments which would prevent that happening. However, I accept that the Minister may well say that what I have picked up in the draft regulations does not refer to the same things as are referred to in the relevant clauses in the Bill. It would be very helpful if the Minister could give an assurance that there is nothing in these draft regulations that foreshortens in any way the timescales laid down in the Bill. It would also be extremely helpful if the Minister could say why the Government feel that the time limits in the Bill are the most appropriate and what discretion the ombudsman will have to deal with matters that are not raised within those limits. Will it be a complete discretion or not? I beg to move.
Lord Astor of Hever
My Lords, the first amendment in this group would extend from three to six months the period in which a former or serving member of the Regular or Reserve Forces can bring a service complaint. The second amendment would extend from six to 12 weeks the period in which a complainant can submit an appeal about a decision taken on their complaint.
The third and fourth amendments seek to ensure that regulations do not foreshorten periods referred to in the Bill within which a complaint can be made and an appeal can be submitted. The time taken to deal with a complaint from the point at which it is first raised by the complainant with their chain of command, through to their being given a final decision, can be crucial to perceptions that the process is fair. If a complaint is particularly complex and means that a large amount of material needs to be gathered or witnesses interviewed, the time taken may be long, but the parties will most likely consider it to be proportionate and necessary for the interests of justice to be served. In other cases, an informal approach, such as through mediation or a quick discussion to sort out a minor confusion, can be equally as effective in delivering an outcome with which those involved can declare themselves content because it has given them a satisfactory result.
The time allocated in the process for the complainant to formulate their complaint can also be an important factor in whether they consider that the process is working for or against them. If the process gives them only a short time in which to put together their complaint, to gather their thoughts or any material they might need, they may feel that they are being rushed unnecessarily into making a complaint and that they would have been better prepared and would receive a better hearing if they had been given longer. If, on the other hand, they are given too long to prepare, there is a risk that the facts become less clear or are forgotten.
As in any aspect of a complaints process, the procedures should not focus solely on the needs of the complainant, but consideration must also be given to those who may be being complained about. If the period in which a complaint can be made is too long, they may be unaware that they are going to be complained about, so do not capture information or their recollections while still fresh. Fairness must therefore extend to them, especially if there may be consequences for their reputation if they are the subject of a complaint that they have behaved improperly. The time limit in the Bill for making a complaint is the same as that under the current system, which is three months. It is a period that is neither so short that the individual could not corral the facts and put together their complaint nor so long that those details will be forgotten. To extend that period to six months would risk the very problems arising that the current time limit is designed to avoid.
The same considerations influenced the provisions in the Bill for the time limit for making an appeal. At the point that the complainant is considering whether to appeal a decision that has been made on their complaint, they will have a keen sense of what it is that they are not satisfied with, whether that is about the decision itself or the way in which it was reached. The process of setting out the reasons for their appeal should therefore be a relatively quick one, compared, for example, to setting out the original complaint. As ever, there is a balance between the need to keep the process moving on and giving individuals time to gather their thoughts. A lengthy period of uncertainty on whether or not a decision will be appealed can also have consequences for any other party to the complaint, especially someone who has been complained about. For these reasons, extending the time limit for making appeals to 12 weeks is considered to be counter to the principles of fairness. Fairness also requires, however, that there should be the ability to react to unforeseen circumstances. Timescales are therefore not hard and fast, which would give the impression that there is simply a process to be followed without the chain of command being able to take a more pragmatic and sensitive approach when individual circumstances require.
I circulated an initial draft of the regulations on 9 July. As noble Lords will see from these, there is scope for those in the chain of command who are dealing with a complaint to extend both of these time limits if it is just and equitable to do so. It may be, for example, that an individual gives notice that they would be unable to respond by the time stipulated because of a personal matter, such as a bereavement, leave, training or operational commitments, or because they are about to receive medical treatment. In such a situation, it would be just and equitable to agree a new timescale but, again, one that is aimed at moving matters on as quickly as possible, with due consideration to other parties.
There is a similar provision in the new procedures in the Bill for making applications to the ombudsman which gives the ombudsman discretion to extend the time limit set out in the Bill within which complainants must make their applications—this was a point that the noble Lord asked about. The draft regulations show that the intention is that the ombudsman would be able to apply the same test to extend the time limit application if the ombudsman considers it is just and equitable to do so. As these are procedural matters, just as in the case of making an initial complaint and in making an appeal, it is right that this is spelt out in regulations rather than in the Bill.
There are two further safeguards in the Bill that aim to protect the complainant from someone in the chain of command who takes what they consider to be an incorrect decision not to extend a time limit. These are at the point at which that decision would prevent a complaint from entering the system or from progressing to an appeal stage. Under a new right, the complainant can approach the ombudsman at both junctures if they wish to have those decisions independently reviewed. If the ombudsman finds that the chain of command was wrong not to extend the time limit on just and equitable grounds, the ombudsman’s decision is final, and the complaint or appeal will be returned to the chain of command to proceed as normal.
We gave very careful consideration to these timescales and compared them with those under other procedures which, though not directly comparable, provide a useful benchmark about what is considered reasonable. In respect of matters before employment tribunals, for example, the time limit for making a claim is three months from the first incident complained of, and in respect of discrimination claims within three months of the latest incident complained of.
The noble Lord, Lord Rosser, asked when the time limits start to apply when there is a series of related complaints. I cannot read the writing on this, but I will write to the noble Lord on that.
The third and fourth amendments are also resisted. The Bill sets out minimum periods within which a complaint can be made and an appeal submitted. As such, neither of these can be foreshortened by regulations. For the reasons I have set out, we judge that these time limits are fair and reasonable, especially taking into account the important safeguard that they can be extended where it is reasonable to do so or reviewed by the independent ombudsman.
On that basis, I ask the noble Lord to withdraw his amendment.
Lord Rosser
My Lords, I thank the Minister for his comprehensive reply. I think he has confirmed that there is nothing in the service complaints regulations that will foreshorten or have the effect of foreshortening the time limits referred to in the Bill. The Minister has also explained why the time limits that are in the Bill have been felt to be appropriate and related them either to existing time limits or time limits that exist in other situations. I am grateful to the Minister for his response, and I beg leave to withdraw the amendment.
Lord Thomas of Gresford
“( ) The belief of the officer to whom a service complaint is made that the complaint is not well founded does not render the complaint inadmissible.”
Lord Thomas of Gresford
My Lords, this amendment was drafted before I had the chance of seeing the draft regulations. It was, in any event, a statement of the bleeding obvious, as one might say, that the officer to whom the complaint was made could not make up his own mind as to whether it was factually correct, well founded or anything of that sort. I would have hoped for a favourable response from the Minister in any event. However, I now see that the draft regulations flesh out the grounds given in proposed new Section 340B(5)(c). Why that is done in regulations and not in the Bill I do not know but those three grounds are well confined and I am quite satisfied that the fear that I had was ill founded. Nevertheless, I beg to move.
Lord Tunnicliffe (Lab)
My Lords, for the avoidance of doubt, we degrouped Amendment 20 and will move it in its place.
Lord Astor of Hever
My Lords, Amendment 7 would make it clear that a service complaint could not be rendered inadmissible by the officer receiving it simply because he believed it was without merit. It may be helpful if I explain the role of the specified officer on receipt of a service complaint. His or her role will be to decide whether the complaint is admissible in accordance with new Section 340B. The officer will not consider the merits of the complaint at all at this stage. That is not possible under the Bill as the appointment of a person or panel of persons to decide whether the complaint is well founded can take place only after the admissibility decision under new Section 340C. The officer’s function at the admissibility stage is to see whether, first, the complaint is about a matter excluded from the service complaints system in regulations made by the Secretary of State, secondly, whether the complaint is out of time and, thirdly, whether the complaint is inadmissible on other grounds specified by the Defence Council in regulations.
Noble Lords will have seen the initial draft regulations prepared by the department which cover, among other things, the other grounds of inadmissibility. It is proposed that those grounds are that the complainant does not allege any wrong, or that the complaint is a repeat of one already brought by the complainant and being considered in the service complaints process, or one that has already been determined.
The Delegated Powers and Regulatory Reform Committee helpfully reported on the Bill in advance of Committee, for which we are grateful. It drew attention to the powers conferred by new Section 340B(5)(c) on the Defence Council to specify additional grounds of inadmissibility and concluded that those powers were too widely drawn. My department responded to the committee, explaining what these regulations are intended to cover and made reference to the initial draft regulations that are now available to Members of the House.
Now that noble Lords have seen what is intended here, I hope that some of their concerns about the scope of this provision will have been allayed. There is no intention to use this power to rule out broad categories of complaint. That would run counter to the clear policy behind the Bill to consider all wrongs in relation to a person’s service, subject to very limited exceptions. In any event, I have asked officials to explore whether anything further might be done in relation to the scope of this power. That will be done before Report stage.
The role of the receiving officer at the admissibility stage is quite limited and is strictly focused on the matters set out in the Bill, as will be amplified in the regulations in due course. There is no power for a complaint to be declared inadmissible on its merits at this stage. If a receiving officer declared a complaint inadmissible on merit grounds, the complainant would be able to apply for a review of that decision by the ombudsman. In the circumstances, we would expect the ombudsman to overturn the inadmissibility decision and the complaint would proceed. The ombudsman’s decision on any such review will be binding on both the parties. That is provided for in Regulation 7 of the initial draft service complaints regulations. In the circumstances, I must resist Amendment 7 and ask my noble friend to withdraw his amendment.
Lord Thomas of Gresford
My Lords, I am most grateful to the Minister for his clear exposition and statement that this subsection will not be used to extend the grounds of inadmissibility. No officer who receives a service complaint should be under any misapprehension that he is entitled to decide the merits himself before putting it to the panel or Defence Council, who are the proper people for deciding whether it is well founded. I am quite sure that, with that clear statement of policy, there will be no problem. I beg leave to withdraw the amendment.
Lord Rosser
“( ) The Ombudsman may, after advising the Secretary of State, investigate any matter deemed to be in the public interest on—
(a) any aspect of the system mentioned in section 340O(2)(a);(b) any matter relating to the Ombudsman’s functions under this Part;and make a report to the Secretary of State.”
Lord Rosser
My Lords, proposed new Section 340O in Clause 2 provides that the Secretary of State may require the ombudsman to prepare and give to the Secretary of State a report on any aspect of the system mentioned in subsection (2)(a), relating to the complaints system, and any matter relating to any of the ombudsman’s functions in new Part 14A. These powers appear in the proposed new section about the ombudsman’s annual report on the system for dealing with service complaints. It is not clear whether proposed new Section 340O(6) relates to what the Secretary of State may require the ombudsman to include in the annual report, or whether it could also include the Secretary of State calling for an additional report at any time on a particular issue from the ombudsman outwith the annual report. Perhaps the Minister, either in his reply or subsequently, will be able to clear up that point.
Whatever the answer, the reality is that the Secretary of State for Defence has never asked the present commissioner to report on a particular area of concern that she or the Secretary of State may have, outside her normal annual reporting cycle. The Commons Defence Select Committee reported last year that the present commissioner had told it that if she were to report on particular areas of concern, she would look at cases of bullying, which include assault, and issues to do with mental health, and access to services, race and the handling of those cases. The Select Committee went on to report that during visits to units the commissioner had been informed of issues that would not come to her as complaints but on which she thought some work needed to be done. The commissioner told the Select Committee:
“That is what I would do, and that is I think what ombudsmen do. They have this broader view, whether they be the health service ombudsman, parliamentary ombudsman or the Children’s Commissioner, who today has powers to do research and inquiries. They can pull together in an informed and responsible way evidence across the piece and put it forward in a way that is very valuable to the organisation that they oversee”.
The Select Committee went on to say that it believed that there would be value in the commissioner being able to undertake research and report on thematic issues in addition to the annual reports. It said that the commissioner’s experience on these issues should be utilised.
The effect of Amendment 9 is to seek to give the Service Complaints Ombudsman the power, after advising the Secretary of State, to investigate any matter deemed to be in the public interest on any aspect of the system that is mentioned in proposed new Section 340O(2)(a), relating to the efficiency, effectiveness and fairness of the system, and any matter relating to the ombudsman’s functions under new Part 14A. That would mean that the ombudsman would be able to report to the Secretary of State on wider and thematic issues if the ombudsman felt that this was desirable and in the public interest.
The purpose of the amendment, which I hope it achieves, is to give the ombudsman rather wider powers to be able to report on thematic issues—not to appear to be dependent on the Secretary of State asking for such reports but for the ombudsman to be able to make that decision. There has clearly been support for that not only from the present Service Complaints Commissioner but from the Defence Select Committee. I should have thought that there would have been a view that it would be helpful if the ombudsman could make reports on such issues where the ombudsman felt that it was in the public interest and would make a contribution to improving an existing situation which the ombudsman did not think was entirely right or appropriate and needed addressing. I hope that the Minister will be able to give a favourable response.
Lord Thomas of Gresford
I shall speak to Amendment 10, which is in my name and that of my noble friends. I follow very much the thinking of the noble Lord, Lord Rosser. I think that the first paragraph of my amendment, which states that the ombudsman,
“shall investigate any matter referred to the Ombudsman by written direction of the Defence Council”,
puts clearly the Defence Council’s power to give such a written direction. I find the power given in proposed new Section 340O(6) to be slightly confusing. It is under the heading, “Annual report on system for dealing with service complaints”, but it is not at all clear that that is a wide power for the ombudsman to investigate something beyond the preparation of a report and the points on which the ombudsman makes a report in that document.
The ombudsman should have a clear power to investigate matters referred to him. Under paragraph (b) of my amendment, I argue, as has the noble Lord, Lord Rosser, that it is in the public interest that the ombudsman should on his own motion, after advising the Defence Council,
“carry out an investigation of any allegations of systemic abuse or injustice if it appears to him to be in the public interest”.
We have qualified that by saying that there should be compelling circumstances. It is not that the ombudsman could justify investigating anything. It may very well be that, in the course of the investigation of individual complaints, it will come to the attention of the ombudsman that there is a culture of abuse or bullying in a particular area. He may well feel that he would have to investigate that on his own initiative, and not await instruction, following his annual report, from the Secretary of State.
As the noble Lord, Lord Rosser, pointed out, this has the support of the committee that has looked into it, and I hope that the Minister will be open to amending the Act—if not in the precise words that I have put forward, then certainly in the spirit of my amendment.
Lord Palmer of Childs Hill
My Lords, perhaps I may add just a few words to those of the noble Lord and my noble friend. I spoke about this at Second Reading and gave examples of the Canadian authorities. The words “compelling circumstances” were taken exactly from what the Canadians do—to give the ombudsman the power so that he or she can, in compelling circumstances, do what my noble friend Lord Thomas has described. I hope that the Government will consider examples from overseas which we can incorporate into our legislation.
Lord Astor of Hever
My Lords, these amendments would extend the ombudsman’s authority to conduct investigations beyond those matters raised by complainants about the handling of their case to a much wider range of matters, based on the ombudsman’s judgment of issues that are in the public interest. In the second of these amendments, the ombudsman would also be able to investigate the merits of individual allegations. As such, the second amendment in particular represents a significant development in the role of the ombudsman, which it is right that we have debated, as we seek to improve on the way the complaints system operates through the increased oversight afforded by a reformed commissioner role.
Observations on the way the current complaints system has operated since its introduction in January 2008 have focused primarily on the concerns that, in too many cases, the time taken to reach a conclusion is too long. While it is possible for any complaint to take longer than would reasonably be expected, particular concern has been expressed about complaints that involve bullying and harassment, where the consequence of delay can be more keenly felt and which by their nature have a more damaging effect on relationships, and in some extreme cases, on an individual’s health. The current Service Complaints Commissioner covered a range of issues in her annual reports, including delays. For example, in this year’s annual report she has made recommendations that aim to increase the services’ understanding of what the numbers and types of complaints can tell them about the effectiveness of the training they conduct in values and standards and the need to treat everyone with respect. Wider recommendations of this kind might strictly be considered to go beyond the operation of the current system or the exercise of the commissioner’s function, in that they aim to reduce the number of instances of poor treatment by one colleague against another, making a reality of the services’ zero tolerance of bullying and harassment, for example. Recommendations by the commissioner serve a wider aim however, which is to encourage individuals to speak up when they experience such behaviour, as they see that good can come from it, ultimately, if behaviour is changed.
The commissioner is able to make such comments and recommendations under current provisions in the Armed Forces Act 2006 that are replicated in the Bill before us. The focus for the ombudsman will be to provide strengthened and independent oversight of how the complaints process operates. It will hold the chain of command to account for the fairness, effectiveness and efficiency with which it discharges its responsibilities.
Lord Rosser
The Minister said—I think I heard him correctly—that the ability of the ombudsman to undertake the kind of reports and investigations that we are talking about is already contained in previous legislation and is replicated in this Bill. Which are the parts of the Bill that say that the ombudsman can do what we are seeking in this amendment?
Lord Astor of Hever
My Lords, I hope I will come to that point later in my response. The commissioner is able to make such comments and recommendations under current provisions in the Armed Forces Act 2006 that are replicated in the Bill before us. The focus for the ombudsman will be to provide a strengthened and independent oversight of how the complaints process operates. It will hold the chain of command to account for the fairness, effectiveness and efficiency with which it discharges its responsibilities, and through its investigation of individual complaints, the ombudsman will provide a valuable source of lessons that will provide resolution for the individual, and which will also support the Defence Council in its role of delivering a better complaints process.
The service chiefs are clear that the system has not been operating as efficiently as it should and accept the criticism that I referred to earlier, that too many complaints are taking too long to resolve. They are also clear that in taking forward reform of the system, it should continue to be the chain of command that investigates complaints and works with complainants to find a solution that they are satisfied with. That way confidence in the chain of command’s ability to treat them fairly will increase, encouraging more people to speak out when they are unhappy so that, ultimately, we maintain the highly effective fighting forces of which we are rightly proud.
Lord Thomas of Gresford
I am grateful to the Minister for his reply on Amendment 10. I understand him to be saying that it would be possible for the recommendations on an individual case to include a wider overview of the problems that the ombudsman saw. For example, suppose that in a particular unit there were some five or six individual complaints about an initiation ceremony that went far too far. Presumably, according to what the Minister has said—I am sure that he will correct me if I am wrong—the recommendations from the ombudsman in each individual case could get stronger and stronger that these matters must stop and must be investigated and dealt with properly. I hope that I have understood the Minister correctly. If I have, then I shall not be moving my amendment.
Lord Astor of Hever
Before the noble Lord, Lord Rosser, responds, I should say that I misunderstood my brief. My noble friend Lord Palmer asked me about Canada, and the answer that I gave relates to Canada, not to the question that the noble Lord, Lord Rosser, asked. With regard to Canada, we looked at ombudsmen within the public sector in the UK but did not look at models from overseas, so we did not look at the Canadian model.
Lord Rosser
I thank the Minister for his reply. I hope that he will forgive me if I say that I am a little confused about the Government’s stance. On the one hand, part of the answer appeared to be—maybe I misunderstood it—that to give the ombudsman the powers suggested in the amendment could cause conflicts with other inquiries and investigations. Having said that, I got the impression that the Minister was saying that those powers were already there in the existing system, whether under new Section 340O, which deals with the annual report, or in new Section 340L, which deals with reports of investigations. I was rather getting the message that, on the one hand, it would be unacceptable because of possible conflicts but that, on the other hand, the powers were already in those two parts of the Bill to which the Minister referred.
The heading of new Section 340O is:
“Annual report on system for dealing with service complaints”,
so it is not dealing with reports outside the annual report or with something separate. It is interesting that the Secretary of State, who has the power to ask the ombudsman to prepare a report on any matter relating to the ombudsman’s functions, has never chosen to do so, as I understand it, hence our amendment saying that the ombudsman, having advised the Secretary of State, and it being perceived to be in the public interest, should have the ability to do so. That is, the ombudsman should not be dependent on the Secretary of State asking them to prepare such a report, because the Secretary of State has apparently never done so.
One finds it a little odd that, if the power is already there for the present commissioner to do this, one does not get the impression that the commissioner felt that the power was already there when one reads the commissioner’s evidence to the Defence Select Committee. The commissioner proceeded, in fact, to give a list of topics on which a wider report could have been written, which—this is the inference—she might have been interested in doing. That does not suggest that the commissioner felt that the existing legislation already gave her the power to produce the kind of reports that are referred to in the amendment.
In view of what I regard as potential slight confusion over the reply, in that on the one hand it seems to be saying that it is undesirable but on the other it is saying that the power is already there, I will want to read closely what the Minister has said before considering whether to pursue this issue any further. However, I am genuinely grateful to him for his comprehensive reply, and I beg leave to withdraw the amendment.
Lord Rosser
“( ) The Ombudsman must not proceed with the investigation until the Ombudsman is satisfied with the information and evidence received.”
Lord Rosser
This amendment, which is fairly straightforward, relates to the provision in the Bill that gives the ombudsman the power to require a person to provide documents for an investigation. However, the draft regulations appear to provide that if the documents are not received the ombudsman may proceed with the investigation and preparation of a report. Of course, the alternative remedy available to the ombudsman is to go to the High Court if the documents required are not forthcoming. The purpose of putting down this amendment is to seek to clarify two points. First, can the Minister confirm, either now or subsequently, whether the word “may” that has been used in the draft regulations —that is, “may proceed with the investigation” without having got the documents—means that and will not be interpreted as “must”?
Secondly, can the Minister confirm whether the position of the ombudsman in respect of the power to require documents is not weakened if it is already written into the draft regulations, and thus generally known, that an investigation can proceed without the ombudsman having got all the documents that are required? Why did the Government deem it necessary to put that into the draft regulations? Are they saying that the ombudsman could not have decided to start an investigation without all the documents sought without this specific provision being in the regulations? Unless the answer is that the ombudsman could not start an investigation, on the face of it, it does not seem particularly helpful to put in the regulations that documents that have been requested and required but have not been produced will not stop the ombudsman starting the investigation. That does not seem to be exactly encouraging those who have been asked to produce documents to do so.
Lord Astor of Hever
My Lords, I hope that I will get an answer to the noble Lord’s two questions. If not, I shall write, but I am fairly optimistic that I will be able to get an answer.
This amendment would ensure that the ombudsman’s investigations can proceed only when the ombudsman is satisfied with the information and evidence received. This may be considered desirable to ensure that the resources of the ombudsman are used efficiently. It may also be desired that the ombudsman may proceed with investigations only when they have all of the information and evidence that they need in order to do their job effectively. Otherwise, it might be argued that they could come under pressure to conclude investigations in the absence of all of the evidence that they need.
Under new Section 340I(1) in the Bill, it is for the ombudsman to determine whether to begin, continue or discontinue an investigation. Under new Section 340I(4), the ombudsman may make such inquiries as he or she thinks appropriate. Under new Section 340J, the ombudsman also has broad powers to require a person to provide documents or other information in their possession and has the powers of the High Court in respect of the attendance and examination of witnesses and the production of documents. The effect of this amendment, perhaps inadvertently, would be to limit the discretion of the ombudsman to carry out his or her investigations. It is very important that the ombudsman has all of the information required in order to carry out their role effectively, and the Bill provides for that.
Regulation 6 in the draft Service Complaints Ombudsman investigation regulations permits the ombudsman to proceed with an investigation and prepare a report under new Section 340L, whether or not they have all of the information that they have requested. That is a permissive provision, so that the ombudsman does not have to proceed with an investigation in the absence of information, but they can do so if that would be the fair thing to do, bearing in mind the need for efficiency and effectiveness.
The noble Lord asked whether the word “may” means that, and the answer is that it does. He also asked whether it weakens the position of the ombudsman’s power to get documents, and the answer is that it does not do so in any way.
I must resist this amendment. It is right that the ombudsman retains discretion on whether to proceed with an investigation in all the circumstances of the case based on the information and evidence put before them. I ask the noble Lord to withdraw the amendment.
Lord Rosser
I will withdraw the amendment, but are the Government saying that, without that provision in the draft regulations stating that the ombudsman may proceed with the investigation and the preparation of a report under Section 340L of the Act if the documents or other information is not provided within that period or not provided under paragraph (b), the ombudsman would not have the power to proceed with an investigation without having got those documents?
Lord Astor of Hever
I do not have an immediate answer, but I will write to the noble Lord on that.
Lord Rosser
I thank the Minister for his reply. I beg leave to withdraw the amendment.
Lord Boyce
Lord Boyce (CB)
My Lords, at Second Reading the Minister gave us reassuring words about the importance he attaches to the command chain, and that was good to hear. However, I believe that new Section 340K undermines this principle and could be seen to be violating the integrity of the command chain. I have particular difficulty with the argument that this power is necessary because ombudsmen in other organisations have it. The Armed Forces are different, and the Minister does not need reminding about the emphasis given to this in the Armed Forces covenant, especially because other organisations do not have an equivalent of the Armed Forces Act and its inherent disciplinary processes.
If the ombudsman detects obstruction, the Defence Council and the command chain on his or her instruction can issue an order to any person deemed to be obstructing to comply. The failure of that person to comply would be an offence. New Section 340K may be a safety net or a last resort in case such a procedure does not deliver what the ombudsman wants. If so, it might be helpful if that were stated. I welcome the Minister’s comments on this. I beg to move.
Lord Craig of Radley (CB)
My Lords, I have added my name to this amendment—as the noble and gallant Lord, Lord Boyce, has explained, it is a probing amendment—because of the importance that must be vested in, and allowed to, the chain of command. I do not need to rehearse in this Committee that importance. The chain must run, and be allowed to run, seamlessly from the highest legal authority, the Defence Council, down through the ranks to the most junior serviceperson.
Since the major part of this Bill is to amend the Armed Forces Act 2006, this should ensure that service personnel involved in a complaint are to be subject to a single disciplinary statute, and are not, as in matters considered to be human rights, dealt with by separate and potentially conflicting legislation. I welcome that.
However, my concern with new Section 340K is that it allows the ombudsman to opine that a serviceperson is in contempt for some obstruction or act, to certify the obstruction or act, and to refer the person directly to a civilian court for investigation. In other words, the ombudsman is given a power of command over the individual even though he—the ombudsman—is not, as the Minister stated, within and does not form any part of the chain of command. It is argued that this contempt-dealing power is normally vested in an ombudsman, although not invariably. Be that as it may, the Armed Forces are, as the noble and gallant Lord, Lord Boyce, has said, dealt with differently in legislation. No other public servant is treated in the same statutory way as are members of the Armed Forces.
Surely a better approach, which would cover the issue of contempt and retain the position of the chain of command, would be for the ombudsman to report the individual and the perceived contempt to the Defence Council. The council would then instruct the individual to comply with the ombudsman’s requirement and, if the individual did not, it would be a blatant case of failing to obey a lawful command and could be dealt with accordingly.
Allowing the issue of contempt to be taken direct to a civilian court could lead, because of the lack of detailed knowledge of the Armed Forces by the court, to protracted, time-consuming and more expensive consideration of the issue. Surely it is important to the legislation’s aim to speed up resolution of complaints that steps are taken, where possible, to avoid delay and not slavishly to insert and rely on drawn-out procedures, as would be the case with new Section 340K. Bearing in mind the authority invested by new Section 340M in the position of the Defence Council to an ombudsman’s report about a complaint, it would seem acceptable and a more timely solution to the problem faced by an ombudsman of a potential contempt of his authority if that contempt were dealt with through the Defence Council. I urge the Minister to consider this approach and be minded to offer an alternative to the current new Section 340K on Report along the lines that I and the noble and gallant Lord, Lord Boyce, are suggesting.
Lord Deben (Con)
My Lords, it will be within many of your Lordships’ memory that I take a particular interest in those occasions when we are discussing the particular interests of sections of the community. We very often have a discussion when the whole debate seems to be by lawyers about what should happen on the law. Similarly, I am concerned when the debate becomes a debate by members of the Armed Forces about what should happen in the Armed Forces. As a non-member of the Armed Forces I support the concern behind this, for two reasons.
The first is not a military reason at all. It is that I dislike very much the concept that, because somebody else has a power, it has automatically to be put into this legislation. That, of course, is an argument that has been used. It seems to me to be almost always a false argument. Indeed, if it is to be here it should be argued that it is right here, not that somebody else argued about it and said it was right somewhere else. There is much in our legislation which has got in because people have never really debated it but merely said, “Well, every time we have a Bill of this kind, we always put this in”. New Section 340K extends the way in which the ombudsman would work to an unacceptable extent.
I do not understand why it would be better to do it this way than in the way noble Lords opposite have put forward. The Government must explain why going through the Defence Council would not be just as good as doing this. If one went to the Defence Council, one would not open oneself to the concern that is here. It is not the most important thing in the world; the pillars of the temple will not come down if we do not make a change here. All the same, we ought to be very careful about making it difficult for the chain of command in the Armed Forces to be clearly a chain without any interference. There is a mechanism for avoiding that and I hope very much that the Government will look at it and see whether there is any real reason for insisting on this format, which may be all right somewhere else but is not necessarily right here. The only reason I intervene is that I think it is important for somebody who is not in the Armed Forces to say that they think this is valuable.
Lord Thomas of Gresford
As someone else who is not in the Armed Forces, I point out that there is no point in giving to the Service Complaints Ombudsman the powers set out in new Section 340J of requiring a person to provide documents and other information unless there is some sanction. All that new Section 340K does is to put into the Bill the normal sanction that arises in these cases. I draw to the attention of those who have tabled the amendment that the measure does not refer to service personnel but to “a person”. That person could be a civil servant in the Ministry of Defence or a person who has nothing to do with the Armed Forces at all but just happens to have witnessed a particular event, and whose information as a civilian witness would be very helpful to the ombudsman in determining precisely what has gone on. If you are going to give the ombudsman the powers to call for papers and witnesses, as one rightly should, there has to be a sanction attached.
Earl Attlee (Con)
My Lords, I remind the Committee of my interest as I am still a serving TA officer, albeit not very active these days. This is the only area of concern that I have with the Bill and I urge my noble friend the Minister to pay very careful attention to it.
I certainly do not regard this as a probing amendment. I do not understand why the ombudsman would not be able to ask the Secretary of State to get on to the chain of command to get the documents, or whatever information is required, released. The Service Complaints Commissioner made it quite clear to us in a recent meeting, for which we were grateful, that she was perfectly happy as regards her access to Ministers. As the noble and gallant Lord said, Ministers can direct the chain of command to release the information. However, a problem could arise with these arrangements if compliance with the ombudsman’s request interfered with current operations to some extent, especially if staff effort had to be diverted from current operations to meet the ombudsman’s request. I hope that my noble friend can meet the concerns of noble and gallant Lords in this regard. I agree with the argument made by my noble friend Lord Deben. It is fine to make legislation consistent provided that no adverse implications can arise from that. I believe that could be the case if this provision is included in the Bill.
Lord Astor of Hever
My Lords, I am grateful to the noble and gallant Lords, Lord Boyce and Lord Craig, for tabling Amendment 12 as it has provided us with the opportunity to debate this very important issue, particularly as regards the chain of command.
Amendment 12 would remove new Section 340K from the Bill. New Section 340K provides that the ombudsman will have the backing of the powers of the courts if someone unlawfully obstructs him or her in carrying out an investigation or does something which would count as a contempt of court. The effect of the amendment would therefore be that the new ombudsman would have no enforcement powers to back up their general power to require the provision of documents or other information not in their possession or control. That lack of enforcement powers would apply in respect of all persons whether they are members of the Armed Forces, civil servants or, indeed, anyone else who may have relevant information in relation to an investigation.
When investigating the actions of a public authority, any independent body, whether it be an ombudsman, tribunal or court, needs to have appropriate powers to carry out its function effectively. This includes a power to get all the information it needs to investigate and scrutinise the actions of the public authority. The power needs to be backed up with enforcement provisions when co-operation is not forthcoming from the body or individuals under investigation.
The Service Complaints Ombudsman is no different in this respect. Powers of compulsion, such as those provided in new Section 340K, are a common feature of ombudsman legislation. For example, similar provisions can be found in respect of the Pensions Ombudsman in Section 150 of the Pension Schemes Act 1993 and in respect of the Ombudsman for Wales in Sections 14 and 15 of the Public Services Ombudsman (Wales) Act 2005. The reason for that is not because it is envisaged that these powers will be used regularly but because without them there is no effective way of compelling people who are required to help with the ombudsman’s investigations to do so. They may be reluctant to assist the ombudsman for a variety of reasons. The power to require the production of evidence, backed up with powers of compulsion, is therefore necessary for an ombudsman to operate effectively, and this ombudsman is no different.
Earl Attlee
My Lords, I am grateful for the Minister’s response. I am sure that the Committee can understand why the chain of command might be unwilling, without compulsion, to release information. However, if Ministers directed the chain of command, including civilians, to release information, can my noble friend envisage circumstances in which the chain of command would not release the information?
Lord Astor of Hever
I am sorry to disappoint my noble friend, but I cannot give him an immediate answer that I would be happy with. I will come back to him.
Lord Boyce
I am grateful for the Minister’s response to the amendment. I will study what he has said. I am not entirely comfortable, but I take comfort from his comment that new Section 340K would be used only in exceptional circumstances for those in a military chain of command. The noble Lord, Lord Thomas, makes a perfectly fair point that people involved in the Armed Forces but outside the chain of command may be required to disclose things. I beg leave to withdraw the amendment.
Lord Thomas of Gresford
“( ) The recommendations of the Ombudsman may include a recommendation for the payment of compensation to the complainant or, in the event of his or her death, to family or personal representative.”
Lord Thomas of Gresford
I think that I am pushing at an open door here, because in his response on Second Reading the Minister said that the recommendations of the ombudsman may very well include the payment of compensation. I could not resist having a confirmation of that position in Committee, because I think that compensation, where appropriate, is a very reasonable remedy for complaints that may be advanced by a complainant. I beg to move.
Lord Astor of Hever
My Lords, this amendment would add to new Section 340L a specific reference setting out that the ombudsman could recommend the payment of compensation if, having investigated a matter raised by a complainant, it were to find that there was maladministration in the way that the complaint was dealt with by the chain of command that has, or may have, led to injustice that should be rectified.
The Bill provides that the ombudsman may make any recommendations that it considers appropriate. The ombudsman has wide discretion in all aspects of the new powers that are provided for it in the Bill. This discretion is an important element in assuring Armed Forces personnel that the ombudsman is independent, without which they will see no benefit in approaching it and no value in its investigations. The reforms that the Bill provides for in the complaints process itself are aimed at making it possible to reach a final decision on a complaint more quickly while still being within a system that is fair in the widest sense. Together, the creation of a strengthened oversight role in the form of the ombudsman and the shortened process are designed to increase the confidence of service personnel in the chain of command and in the process. If they lack that confidence, complaints will not be raised and matters of concern cannot be addressed, which can ultimately have a detrimental effect on unit cohesion and effectiveness.
The draft regulations, which were circulated to noble Lords, would to a limited extent apply procedures to the way in which the ombudsman would deal with applications made to it by complainants, how it would conduct its investigations if it accepted applications, and how it should respond when producing reports on those investigations. It is right that the Bill provides a framework for how the ombudsman will exercise its functions, and that the regulations provide some further detail to the options that should then be available to it. However, it does not follow that there should be a specific reference to a particular form that a recommendation may take, either in the Bill or in the regulations.
In that respect, it must be remembered that a serving or former member of the Armed Forces can make a service complaint about a very wide range of matters. They may also make an application to the ombudsman about any number of possible variations of a complaint of maladministration—a term that itself is deliberately not defined, in common with all other ombudsman legislation. Maladministration covers traditional grounds of judicial review, such as procedural impropriety and irrationality, but also wider concepts such as excessive delay, failure to give adequate advice, or rudeness.
While the complainant will be asked to set out what form they think the maladministration has taken in their case, it will be open to the ombudsman, having gone on to investigate the case, to find that another form of maladministration has in fact occurred. From a more practical point of view, it is therefore not possible to provide in the Bill for every permutation of likely recommendation that the ombudsman might make. That is why the provision in the Bill leaves it open to the ombudsman to make such recommendations as it considers appropriate, and it is why this amendment is resisted.
Any recommendation should, however, be reasonable and proportionate based on what the ombudsman has found and the degree of injustice that has or may have been suffered. If the ombudsman therefore considers that compensation of a certain value is appropriate, the Bill also provides that the ombudsman gives reasons for the findings in its report and for the recommendation made.
The amendment also refers to the ombudsman’s ability to recommend the payment of compensation to family or a personal representative in the event that the complainant dies before the complaint has been concluded. All recommendations made by the ombudsman are to be considered by the Defence Council, which must decide how to respond. The Bill provides that a recommendation can be rejected, in which event reasons must be given in writing to the ombudsman and to the complainant. Alternatively, the Defence Council must write to them both setting out the action, if any, that it has taken in response to the ombudsman’s findings and to any recommendations that the ombudsman has made. It is open to the Defence Council to decide that a complaint should be reconsidered to whatever extent it considers appropriate, based on those findings and recommendations. A payment of compensation may be the outcome of any of these courses of action and, where that is appropriate, any payment will be made to the complainant’s estate if the complainant has died.
If in taking forward any action in response to the ombudsman’s recommendations it is necessary to have the personal testimony of the now deceased complainant, the chain of command will need to consider carefully what, if any, further action can reasonably be pursued. That will be particularly important if the complainant’s personal testimony is key to the matter proceeding fairly.
There is a need to preserve the independence of the ombudsman, to give our personnel confidence in the ombudsman’s office, and to give the ombudsman the flexibility that it needs to be able to make recommendations that address the varied nature of complaints that can be brought his way. In the light of that, I ask my noble friend to withdraw his amendment.
Lord Thomas of Gresford
I am most grateful to the Minister for his very full explanation and for his confirmation that recommendations can involve the payment of compensation to the estate in appropriate circumstances if the complainant has died. In the light of that, I have pleasure in seeking to withdraw the amendment.
Lord Thomas of Gresford
“( ) accept the findings of the Service Complaints Ombudsman,”
Lord Thomas of Gresford
Amendments 14, 15 and 16 are concerned with the action following receipt of a report by the Defence Council. At Second Reading, I was very concerned to draw a distinction between the findings of the ombudsman and the ombudsman’s recommendations.
New Section 340M(1) deals with the way in which the Defence Council must consider a report and give its response. If it decides to reject a recommendation, it must give reasons in writing for that rejection. What it does not state is that the Defence Council cannot second-guess the findings of fact on the merits of the ombudsman. The purpose of my amendments is to obtain from the Minister an assurance that the Defence Council cannot interfere with the findings of the Service Complaints Ombudsman, although of course it may consider the recommendations. It has full discretion as to what to do, having regard to the finances involved and the justice of the case.
New Section 340M(1)(c) simply says,
“where the Council decide to reject a recommendation, notify the Ombudsman and the complainant, giving reasons in writing for the rejection”.
My view, which I urge on the Minister, is that it should be quite explicit that the Defence Council can modify instead of reject the recommendations. It can decide to accept the recommendations in part, and simply reject a part with which it disagrees. All that can be dealt with by an assurance from the Minister from the Dispatch Box that that is the intention of the legislation. I beg to move.
Lord Rosser
I have one or two comments to make on this group of amendments. Like the noble Lord, Lord Thomas of Gresford, I am waiting to find out whether the Government’s view is that the Bill as it stands gives the Defence Council the right to reject the ombudsman’s findings on maladministration as opposed to the ombudsman’s recommendations. The Bill refers to the Defence Council deciding what action,
“to take in response to the findings”,
of the ombudsman, but it is not quite clear how the Defence Council could decide not to accept the findings without carrying out a separate investigation of its own.
The amendments also refer to rejecting or modifying the recommendations of the ombudsman. We will listen to the Minister’s response with interest, just as I have listened with interest to the arguments that the noble Lord, Lord Thomas of Gresford, put forward. On the one hand, one could say that being able to modify a recommendation might then lead to the Defence Council accepting it rather than rejecting it in totality, which I think is the point that the noble Lord, Lord Thomas of Gresford, has made. On the other hand, I suppose that one could argue that being able to modify a recommendation rather than either accepting or rejecting it, and having to explain why if the latter, could be interpreted as meaning that the Defence Council can effectively write its own recommendations on the findings of the ombudsman. That might be seen as rather weakening the objective of the ombudsman making recommendations and the Defence Council then having to decide yes or no, rather than being able to rewrite bits of them. As I say, we await with interest the Minister’s response on that.
It could mean that the Defence Council could modify only parts of a recommendation that it found, for example, inconvenient, and then announce that it would accept the rest. If the provision is for a straight rejection or acceptance, the Defence Council will know that it has to produce some pretty convincing reasons if it is to reject the recommendations in totality. It will also know that, if it is unable to modify them, it may well have to put up with parts that it simply finds inconvenient. We await with interest the Government’s response, as there are two ways of looking at the amendment and its implications.
The reality is that the Defence Council will have to show itself willing to accept the ombudsman’s recommendations if service personnel are to have confidence in the new arrangements. If the Defence Council starts rejecting recommendations because it does not particularly like some parts of them, it will raise questions about the effectiveness of the new arrangements and could lead to pressure in the future—a pressure that is already there anyway from some quarters—for the ombudsman’s recommendations to be made binding under a future defence Bill.
Lord Astor of Hever
My Lords, Amendment 14 would make the ombudsman’s recommendations binding on the Defence Council and would mean that the Defence Council had no choice but to accept the findings of the ombudsman in all cases. Amendments 15 and 16 aim to clarify the powers of the Defence Council in responding to recommendations from the ombudsman —to make clear that the Defence Council can reject or modify a recommendation.
It is our intention that the findings of the ombudsman in its investigation report will, in effect, be binding on the Defence Council. The Defence Council would be able to judicially review those findings if it considered them to be irrational or otherwise flawed on other public law grounds. However, we do not anticipate that happening, and expect the Defence Council to accept the findings before going on to consider any recommendations that the ombudsman may have made in the case.
There has been recent judicial consideration of the legal status of both findings and recommendations in relation to the local government ombudsman. While that consideration related to a different ombudsman, we anticipate that a court would apply those principles to the legal status of the Service Complaints Ombudsman’s findings. As such, we do not consider that it is necessary to make specific provision for this in the Bill. That is, again, in common with other ombudsman legislation.
While we accept the importance of the point being raised, and agree with it in substance, it is considered unnecessary to make specific provision for it in the Bill. The amendment is resisted for that reason.
Turning to Amendments 15 and 16, it may be helpful if I explain in more detail the role of the Defence Council when considering and responding to the recommendations of the ombudsman. The first, as I explained in my closing speech at Second Reading, argues that the recommendations will clearly have some legal effect. The Defence Council will not be free simply to reject the recommendations because it disagrees with them. It would need to have very good, cogent, written reasons to do so, such as where the implementation of the recommendations in full was simply unworkable or where significant resource implications may be involved. It is right that the Defence Council should be able to reach a final decision on matters covered in any recommendations made by the ombudsman.
Given that starting point, the focus of the Defence Council in most cases where the ombudsman has made recommendations will be to decide precisely how it will respond. That may be simply a matter of implementing the recommendations by, for example, making an appropriate apology to the complainant. It may be that the person or persons who made the final decision in the internal process will be asked to reconsider a particular piece of evidence to see whether that would have affected the outcome of their decision. There may be some cases in which the failings identified by the ombudsman are such that a full reconsideration at the final stage of the complaint process is required. That may involve the appointment of a new person or panel of persons to hear the complaint again or, for example, to hold an oral hearing to test some crucial evidence.
This is all provided for in new Section 340M. The Defence Council will not need to modify the recommendation open to it. It would simply decide to reconsider the complaint in a way that suitably responded to the recommendations after careful consideration. I hope these points I have made answer the questions of my noble friend. As such, the amendments are unnecessary, and I ask my noble friend to withdraw his amendment.
Lord Thomas of Gresford
My Lords, again I am very grateful to the Minister for making clear that which I believe to be the case, and I am happy to withdraw my amendment and not to move the other two.
Lord Rosser
“( ) an assessment of the adequacy of the resources of the Ombudsman’s office to fulfil his or her functions.”
Lord Rosser
My Lords, the purpose of this amendment is to make an addition to page 11 after line 25, which sets out the matters that must be covered in the annual report by the Service Complaints Ombudsman. We are proposing that there should also be a requirement for an assessment of the adequacy of the resources of the ombudsman’s office to fulfil his or her functions. I believe it has already been indicated that there will be an increase in the number of staff that the Service Complaints Ombudsman has—this has been compared with the staff of the Service Complaints Commissioner. If memory serves, I think the figure that has been mentioned is an increase from nine to 20, but I may be wrong on that.
Clearly, a key part of the ability or otherwise of the ombudsman’s office to be able to carry out the duties and responsibilities it is given under the Bill will be the resources available to it. We have already discussed today the issue of whether the ombudsman should be able to undertake thematic reviews—or already can do so under the clauses in the Bill before us. If the ombudsman is able to go down that road of carrying out that kind of review, and if that is to be done effectively, then clearly that has implications for resources. Resources can be both financial and human.
In the context of this amendment about resources, I also raise a point with the Minister that I accept may well need a subsequent response in writing. The Bill sets out the areas that the ombudsman will cover. I am not entirely sure at the moment whether that also covers the Royal Military Police, in respect of complaints both made by the police about its own working environment or whatever other issue it might be and that might be made by service personnel about the activities of the Royal Military Police or how it carried out its role. I am not clear whether those issues are ones that the Service Complaints Ombudsman would be expected to investigate. If they are not, I am then not quite clear on who deals with, for example, issues that service personnel wish to raise about the way they believe the Royal Military Police conducted its affairs in relation to those service personnel. I would be grateful for a response but accept that I may have to wait for a reply in writing.
Put simply, at the moment, the full extent of the role that the ombudsman could have is not entirely clear. Of course, that will also depend on the amount of resources needed, whether financial or human, and on the number of complaints that come in. I do not suggest that suddenly the situation will be such that morale will plummet and everyone will put complaints in. However, if people perceive the Service Complaints Ombudsman to be somebody to whom it is worth making a complaint, that might encourage some people to do so who currently would not make a complaint because they do not think much of the present system. That might have an impact on the workload of the ombudsman.
I rather hope that the response I get back will not be that there is no need for this because it is already covered in the Bill in the previous matters referred to in new Section 340O. I appreciate that that refers to,
“the efficiency, effectiveness and fairness”,
of the system,
“the exercise by the Ombudsman … of the Ombudsman’s functions”,
and,
“such other aspects of the system mentioned in paragraph (a) … as the Ombudsman considers appropriate”.
However, there is then the question of whether the ombudsman believes that the resources are sufficient to carry out that role as effectively as the ombudsman believes it should be. There are a number of uncertainties about what workloads are likely to be. Other issues about what the ombudsman’s report must cover are written into new Section 340O, too, so there cannot be an objection to writing this in. I would have thought that writing into the Bill specifically that it should also cover whether the ombudsman believes the resources are adequate to enable his or her office to fulfil their functions is entirely appropriate. I hope the Minister will agree. I beg to move.
Earl Attlee
My Lords, I urge the Minister to exercise some caution. The noble Lord, Lord Rosser, has made some good points, especially about possibly increasing levels of demand on the ombudsman, especially in the number of complaints. However, the ombudsman will never have completely adequate resources and may well not be able to do everything that they want. Ombudsmen will have to prioritise their activities. I can think of no Defence Minister in the last 22 years of my service in the House of Lords who would deliberately underresource the ombudsman.
Lord Astor of Hever
My Lords, this amendment seeks to make specific reference in new Section 340O to the requirement for the ombudsman to make an assessment in their annual report of the adequacy of the resources available in exercising their functions. This new section in the Bill requires the ombudsman to provide the Secretary of State with an annual report which he must lay before Parliament. The report must comment on the fairness, efficiency and effectiveness with which the system has operated during the preceding calendar year. It must also cover the exercise of the ombudsman’s functions during that period. Additionally, the ombudsman may include in the report any other aspect of either of those elements, as the ombudsman considers appropriate. These are clearly fundamental to any report from the ombudsman and an important product of their oversight role.
The ombudsman’s assessment of the system and the role they play in it can ultimately have a significant impact on the extent to which our personnel and the public at large have confidence in the complaints system and, as a result, are prepared to engage with it to address the concerns they feel. As with other specific areas of the ombudsman’s role, such as their power to conduct investigations, the Bill leaves it to the ombudsman’s discretion about what other issues they feel are pertinent to how the system has operated in the preceding calendar year, and how they have been able to exercise their functions. As in all matters, these will differ from one year to the next and it is right therefore that the ombudsman should be able to judge what is relevant and worth including in their annual report.
The same provisions apply to the current Service Complaints Commissioner. She has varied the issues covered in each of her annual reports, depending on what she has experienced during the report period. Those reports have included comments on the adequacy of the resources that have been made available to her office. My noble friend Lord Thomas and the noble Lord, Lord Dannatt, commented at Second Reading that it was important that the new arrangements provided under the Bill are properly resourced. We set out in the impact assessment that accompanied publication of the Bill that we are working with the Service Complaints Commissioner on the changes that her office needs to enable it to convert to the new task of the ombudsman’s role. That will require additional resources and personnel with different skills. As we made clear in the impact assessment, we anticipate increasing the number of staff from the current nine of the commissioner’s office to 20. I hope that my noble friend will be satisfied with those numbers.
The noble Lord asked me about the Royal Military Police. Two days ago, I wrote a two-page letter to him on this subject, which he may not have received. I think this goes into some detail in answering him.
Lord Rosser
I am aware of it and grateful for the letter. I was rather hoping that the noble Lord would refer to it, so it is on the record in Hansard.
Lord Astor of Hever
The letter is very detailed. Rather than reading out the main points from the Dispatch Box, I would rather refer to the letter. The discretion available to the ombudsman in Section 340O, to include such aspects of the exercise of their function as they deem appropriate, is considered sufficient to cover any eventuality that may arise, without the need to make specific reference to resources, as this amendment proposes. For that reason, I must resist this amendment and ask the noble Lord to withdraw it.
Lord Rosser
My immediate reaction is to say that I want at some stage to have that on the record in Hansard. I appreciate the Minister’s lack of enthusiasm for standing up to read it all out now, so I am not wondering why he is not doing that, but I may have to consider whether to table an amendment on Report to achieve that. We are always extremely grateful—and I mean this—for the letters that the Minister sends and the care that he takes to respond to questions raised. I appreciate his approach and the assistance that he provides, but I think that some letters ought to be on the record in Hansard, so I may table an amendment on Report with the purpose of getting that one on the record.
As for the rest of the amendment, I hinted that under the wording of the Bill the Service Complaints Ombudsman could probably comment if they felt that the resources that they had were inadequate—or even if they were adequate, because an assessment of the adequacy could mean that the ombudsman says that everything is fine. I do not share the view of the noble Earl, Lord Attlee, that an ombudsman would never consider what they had to be adequate—that was what I inferred from what he said. After all, if an ombudsman were to announce that resources were inadequate, they would have to submit some justification in the report, which would be, or be in, a public document. The very fact that they had to write it down and could be questioned on it might make them think very hard whether they were being reasonable in their approach.
I included the provision because I think that there are uncertainties about what the workload will be. There is the issue of the wider-ranging reviews and whether they are already encompassed in the Bill; there is the issue of the number of complaints that may come forward if people have real confidence in the new arrangements. It did not seem to me to be unreasonable to include as a requirement an assessment of the adequacy of the resources. After all, if the ombudsman is entirely happy, it is a one-sentence response: “I consider that my resources are adequate”.
Earl Attlee
My concern is that if the ombudsman feels that there are adequate resources, the ombudsman needs to say nothing, but if the ombudsman cannot meet all the demand and has to report on that, he or she is bound to say, “I cannot meet all the demand”, but he or she may still be an effective ombudsman, although not meeting all the demand.
Lord Rosser
I do not particularly disagree with what the noble Earl says—that you could still be effective without meeting all the demand. I am not sure that that knocks my view that it should be a requirement that the ombudsman makes a comment on the issue of resources within the annual report.
However, I do not seek to turn this into a major issue, as it is clearly not. It has been an interesting discussion and I am grateful to the Minister for his response. I beg leave to withdraw the amendment.
Lord Rosser
“( ) The Secretary of State must publish an annual report on the extent to which the criteria listed in subsection (5) have been met.”
Lord Rosser
We move now to Clause 4, which deals with the issue of financial assistance for benefit of the Armed Forces community. It sets out that the Secretary of State can give financial assistance. Subsection (5) states that financial assistance can be given subject to conditions, which are then set out in paragraphs (a) to (e). We are talking about future funds. Some of what has been given so far has come from the LIBOR fund, which, one assumes, as time goes on, will dry up completely, as it is coming from activities which financial institutions should not be undertaking. One would hope that, in future, that source will dry up for the right reasons.
However, there will still be provision for funds. The documentation that we have had refers to the Ministry of Defence developing proposals to manage the enduring £10 million per year funding for future Armed Forces covenant commitments. It also discusses the process for assessing how money under this particular clause will be distributed and how the decisions will be made. From comments that we have heard, our feeling is that there are those who think that it has not been entirely clear how LIBOR funding has been allocated and spent and therefore how any future funding would be allocated. We have picked up comments that it has not been clear whether those in receipt of LIBOR funds have had to demonstrate their performance, that the criteria for how such funding has been allocated has not been very clear, and that it has also not been clear whether the money allocated has led to some of the intended improvements. That may or may not be the case. The purpose of this amendment is simply to provide that the Secretary of State will publish an annual report on the extent to which the criteria listed in subsection (5) have been met—that is really about what financial assistance has been given and whether the conditions laid down in Clause 4(5) have been met. Those are quite important conditions. They include,
“the purposes for which the assistance may be used”—
and—
“the keeping, and making available for inspection, of accounts and other records”.
That is another important issue and important check on how the money is being used and whether there is proper control and accountability. Bearing in mind that this is going to be in the Bill and that Clause 4(5) sets out some specific conditions, it does not seem unreasonable to say that the Secretary of State should publish an annual report on the extent to which those criteria have been met. We are talking about not inconsiderable sums of money. I hope the Minister will feel able to go down that road.
Baroness Garden of Frognal (LD)
My Lords, Amendment 19, which is in this group, is a probing amendment. It has largely been answered by the helpful background note circulated last week. My amendment is an additional aspect to those raised by the noble Lord, Lord Rosser.
This additional funding is a most welcome contribution to the benefit of the Armed Forces community. To the initial government grant of £30 million has been added, as the noble Lord mentioned, £35 million from LIBOR fines for Armed Forces covenant projects, and a further £40 million from LIBOR fines for a veterans’ accommodation fund. From 2015, there will be the enduring Armed Forces covenant fund of £10 million per annum. Applications are considered regionally, with the funding administered centrally by the MoD. These are very significant amounts and, as with any such funding, it is important that as little resource as possible is spent on administration and as much as possible goes direct to the people or projects to be funded. It is also important to avoid unnecessary duplication.
Baroness Jolly (LD)
My Lords, I thank noble Lords for their comments. I shall try to tease out issues around process and demonstrating effectiveness for the noble Lord, Lord Rosser, and the composition of the panel and what a “person” is for my noble friend Lady Garden.
The proposed amendments would affect Clause 4, which deals with financial payments to charities and other organisations that support the Armed Forces community. As my noble friend the Minister made clear at Second Reading, this Government have made a commitment to all those who serve or have served in the Armed Forces of the Crown and their families. This commitment takes the form of a covenant. The Armed Forces covenant has two key principles: that those who serve in the Armed Forces, whether regular or reserve, those who have served in the past, and their families should face no disadvantage compared to other citizens in the provision of public and commercial services; and that special consideration is appropriate in some cases, especially for those who have given most, such as the injured and the bereaved. This obligation involves the whole of society. It includes voluntary and charitable bodies, private organisations and the actions of individuals in supporting the Armed Forces. Recognising those who have performed military duty unites the country and demonstrates the value of their contribution. This has no greater expression than in upholding this covenant.
Over the past four years, the Government have committed £105 million to deliver on the commitments of the covenant—£55 million has been distributed through the community covenant grant fund, which strengthens ties and understanding between the Armed Forces and the wider community, and through the £35 million LIBOR fund, which backs projects supporting the broader aims of the covenant. A further £10 million of community covenant funding and a final £40 million veterans’ accommodation fund is set to be distributed this year. We are also developing proposals for the management of the future Armed Forces covenant fund, which is set at £10 million per year from 2015 onwards.
Organisations working with the Armed Forces community are based throughout the United Kingdom and we want them to benefit from these funds, wherever they are located. However, the use of covenant funding is currently constrained by two pieces of legislation. Section 31 of the Local Government Act 2003 confines payments to local authorities in England and Wales and Section 70 of the Charities Act 2006 limits financial assistance to charities and other benevolent institutions that provide a direct or indirect benefit to England. We have temporarily navigated around these constraints by making payments under the appropriation Act. However, this is not a long-term solution. Clause 4 therefore enables financial assistance to be given to organisations that support the Armed Forces community, wherever they are based.
The Secretary of State is already required to produce and lay before Parliament an annual Armed Forces covenant report under Sections 343A and 343B of the Armed Forces Act 2006, which I believe satisfies the intent behind the amendment proposed by the noble Lord, Lord Rosser, in respect of the obligation to report publicly. As noble Lords will know, the Armed Forces covenant report is about the effects of membership or former membership of the Armed Forces on service people, specifically in the fields of healthcare, education and housing, and in such other fields as the Secretary of State may determine. Clearly, then, it could and does cover the areas in which we currently provide financial assistance under the community covenant and LIBOR funds and the veterans’ accommodation fund.
Throughout the most recent Armed Forces covenant report, published in December 2013, the Secretary of State provided examples, including figures, of how financial assistance was provided to the Armed Forces community, reflecting the twin principles of the Armed Forces covenant. It is intended that the 2014 report will similarly detail how financial assistance has been provided throughout the year. Further to that covered in the annual report, the financial assistance provided by these three funds is also subject to the usual parliamentary scrutiny of government expenditure.
The National Audit Office has access to annual reports and to date has not expressed any negative views on how Armed Forces covenant funding has been allocated, the propriety of the financial assistance that has been provided or the rigorous scrutiny and governance processes that support it. This is provided by regional panels for community covenant schemes, and a central cross-government panel for the Armed Forces covenant (LIBOR) fund and the veterans’ accommodation fund. The scrutiny and governance processes have been explained in detail to noble Lords in the financial assistance brief that was circulated to all Peers recently. In addition, the management of funding for Armed Forces covenant schemes is also subject to the established governance procedures set out in Managing Public Money, a publicly available Treasury document that provides guidance on all aspects of how to handle public funds.
The enduring £10 million per annum that the Government have approved for Armed Forces covenant commitments will be specifically ring-fenced for these activities only. Work is currently under way to develop plans for the new fund and how it will be managed. Expenditure will be reported on both in the MoD’s annual report and accounts, for which the department’s Permanent Secretary is held personally accountable by Parliament, and in the annual Armed Forces covenant report that the Secretary of State is legally required to produce. The National Audit Office will also scrutinise both documents. In addition to the comprehensive governance framework described above, funding for Armed Forces covenant schemes is also subject to the Freedom of Information Act 2000. Anyone, if they wish, can submit a request to receive information on Armed Forces covenant funding.
A combination of all the activity described will continue to provide the assurance that any financial assistance that is provided under the Armed Forces covenant meets the criteria listed in Clause 4(5) of the Armed Forces (Service Complaints and Financial Assistance) Bill, which we are currently debating.
I shall now address Amendment 19. It is essential that the money allocated to the covenant meets the aims of the Armed Forces covenant. Noble Lords will have seen the briefing note that was circulated recently, which set down proposals for how the community covenant grant scheme, the £35 million LIBOR fund and the veterans’ accommodation fund have managed the allocation of funding.
For each of the previous schemes, it has been essential that applicants meet a tightly defined set of conditions, including a clear demonstration of how they meet the aims of the Armed Forces covenant, a clear demonstration of how a project will benefit the Armed Forces community, a clear demonstration of the need and associated benefits, a clear demonstration of how the project will provide value for money and confirmation that the project will not generate any profit. Even where an application meets these terms, a final decision is subject to the agreement of a board of experts.
Funding for the community covenant grant scheme is administered regionally. This reflects the aim to focus on local initiatives, based on a local assessment of need. Bids are first considered by the local joint civil/military partnership board, or where this is not established, the local authority and military signatories of the community covenant, before being referred to the regional grant panel. The membership of the regional grant panel consists of a chair with a rank equivalent to colonel or brigadier, a member of each service with a rank at least equivalent to major, one or two external members from organisations—the Families Federation, for example—the local authority or charitable partners, and a regional administrator, who is the secretary.
Where bids exceed a set level, currently £70,000, these are referred to a central panel for consideration. This includes a representative from HM Treasury and members of the Ministry of Defence Armed Forces covenant team, representing the Chief of Defence Personnel. Applications to the £35 million LIBOR fund and the veterans’ accommodation fund have been administered centrally by the Chief of Defence Personnel. The board that considers applications to these funds includes representatives of the MoD, which chairs the panel, and the Treasury, representatives of the Covenant Reference Group, including the devolved Administrations and selected service charities, such as the Families Federations and either the Confederation of British Service and Ex-Service Organisations or a cluster lead. There are already in existence boards that oversee and manage the distribution of the financial assistance for the Armed Forces community. A detailed explanation of all of these arrangements is widely available through the gov.uk internet site, but I hope I have demonstrated that there is already in place a rigorous governance process to ensure that funding attributed to the Armed Forces covenant is managed effectively.
With regard to the more recent £10 million LIBOR fund, the MoD is currently developing proposals for how the future fund will be managed. If possible, we will bring additional rigour to the process through the appointment of a professional grant-management organisation. This will ensure professional expertise and independence in the grant-making process. This is very much work in progress but I assure noble Lords that the criteria for applications and the rigorous scrutiny process will be retained, and will include a representative panel of experts who can ensure a continued focus on the principles enshrined in the Armed Forces covenant. The priorities for the future fund will also be agreed each year through the Covenant Reference Group.
Furthermore, as set out earlier, the Armed Forces annual report, which the Secretary of State is required by Parliament to produce, will also explain in a transparent way how financial assistance has been distributed to the Armed Forces community through the year in line with the Armed Forces covenant’s twin principles. Most notably in this regard, it is the right of the independent members of the Covenant Reference Group to express their unexpurgated comments in the report. This in itself will provide significant scrutiny of how the funding is allocated.
Approval of the legislation in Clause 4 will give the MoD the flexibility and agility that it needs to provide financial assistance to the Armed Forces community anywhere in the world. The intention is that the schemes should remain discretionary, as opposed to being placed on a statutory basis, but subject to the established governance procedures set out in the document that I mentioned earlier, Managing Public Money. As we continue to strengthen and improve this process, it is essential that we are able to retain sufficient flexibility over the composition of future decision panels, bringing in expertise and specialists.
My noble friend asked for clarification on matters of governance and I hope that she is satisfied with what I have outlined. She also asked for clarification of what a “person” is. The term is technical. The word “person” relies on the definition of the word used as a general tool of statutory interpretation, provided in Schedule 1 to the Interpretation Act 1978, where a “person” is stated to include,
“a body of persons corporate or incorporate”.
These can be companies and unincorporated associations.
While in theory any individual could apply for financial assistance, they would not meet the criteria for any of the current schemes or the terms laid out in Clause 4. It is also most unlikely that an individual could apply to the Secretary of State for financial assistance simply to benefit themselves. The requirement is for the person to undertake activities which are for a charitable, benevolent or philanthropic purpose, and in such circumstances the individual would not appear to be undertaking any activity other than spending the money for their own personal needs.
Baroness Garden of Frognal
I thank my noble friend for such a comprehensive definition of a person.
Lord Rosser
I, too, thank the Minister for her reply. As I understand it, the response to my amendment is basically that the issues I raised in it are likely to be covered in the annual report on the Armed Forces covenant.
Lord Rosser
Lord Rosser
I think the Minister may have already given part of the reply to this amendment when we were discussing Amendment 7, but if he was—I thought he was—I have to say that he caught me unawares, so I did not really follow, and I will probably be asking for an element of repetition.
As the Minister knows, this amendment was prompted by the report of the Delegated Powers and Regulatory Reform Committee in respect of the Bill. The effect of our amendment, if it has been tabled correctly, is to make sure that the regulations referred to in new Section 340B(5)(c) would require an affirmative resolution. In fact, that does not appear to go as far as the Delegated Powers and Regulatory Reform Committee suggested, if we have read correctly the conclusion it reached, because it refers to the provision in new Section 340B(5), which states:
“For the purposes of subsection (4), a service complaint is not admissible if … (c) the complaint is not admissible on any other ground specified in service complaints regulations”.
The argument of the Delegated Powers and Regulatory Reform Committee is that this is an extremely wide-ranging power under which it would be open to a Secretary of State, now or in future, simply through regulations to decide that things that one might have thought acceptable to be the basis of a complaint would no longer be in that category and would be regarded as inadmissible. In its report the committee says:
“In our view the powers are potentially very significant in that they allow additional restrictions to be imposed on a person’s right to have a complaint dealt with under the new redress procedures. At the same time the powers conferred by section 340B(5)(c) are very wide: they contain no limits on the kinds of matters which might be specified in the regulations as grounds for a service complaint to be inadmissible. Given the importance of the power and its potential to limit the right to bring a service complaint, and the lack of any restrictions on the matters which may be specified under the regulations, we consider the delegation of powers conferred by section 340B(5)(c) to be inappropriate”.
I read into that that the committee would probably not feel that our amendment was sufficient; indeed, it might suggest that what should be proposed should be the complete deletion of new Section 340(5)(c). However, we have tabled the amendment in this form, saying that it should go through the affirmative procedure. Clearly, the committee’s concern was that even if nobody could have any exception to the regulations, when they come out—I hope that I correctly anticipate that nobody will have any great exception to them—nevertheless, the power is there for some Secretary of State to do something in the future which could lead to matters which one might feel should be the subject of complaint being no longer admissible, simply through regulations. That really is a very wide power indeed.
I will wait with interest to hear the Minister’s response in the light of the Delegated Powers and Regulatory Reform Committee’s views on the very wide-ranging powers within the clause. I beg to move.
Lord Astor of Hever
My Lords, some of my answers on Amendment 7 are obviously relevant to this amendment but I shall not repeat what I said earlier. Amendment 20 is aimed at providing a higher level of parliamentary scrutiny of any Defence Council regulations made in respect of inadmissibility grounds. At first glance, it may seem inconsistent to make the Secretary of State’s regulations specifying matters which are excluded from the service complaints system subject to the affirmative procedure, but not the Defence Council’s regulations on grounds of admissibility. There is a distinction to be made between excluded matters and grounds of admissibility, although they are closely linked. Excluded matters, as can be seen from the initial draft of the service complaints miscellaneous provisions regulations, will include, as now, matters which are subject to alternative dispute mechanisms or involve decisions of independent persons, such as judge advocates or the service police.
The two additional grounds of inadmissibility which we are proposing to include in the draft service complaints regulations have emerged during the operation of the current service complaints system over the past six years. They are grounds related firmly to the fair operation of the service complaints system itself, and are, in our view, relatively uncontroversial. There is no current intention to expand on these grounds, but the Government wish to retain some flexibility here to be able to add to the list if other grounds of a similar type emerge which are impacting on the overall effectiveness of the system, without impacting on the rights of complainants to make service complaints.
Given the distinction between excluded matters and grounds of inadmissibility, we are of the view that it is appropriate for them to be dealt with in different sets of regulations and for those regulations to be subject to different parliamentary procedures. The former go to more fundamental matters, carving out small classes of complaints from the system, so it is appropriate for them to be dealt with in regulations made by the Secretary of State, and subject to the affirmative procedure. That is the same as now in respect of the equivalent regulations. As the additional grounds of admissibility relate broadly to procedural grounds for exclusion they should properly be covered in the Defence Council regulations dealing with the internal complaints system, and there is no reason for this aspect alone to be made subject to the affirmative procedure. As was noted by the Delegated Powers and Regulatory Reform Committee, it should be remembered that the current Defence Council regulations are not subject to any parliamentary scrutiny at all. As I have already indicated, we will reflect on this provision before Report.
The noble Lord, Lord Rosser, observed that the power in new Section 340B(5)(c) is very wide ranging. As I mentioned in responding to Amendment 7, I have asked officials to consider what more might be done to limit the scope of the power. In the light of that, I ask the noble Lord to withdraw his amendment.
Lord Rosser
I thank the Minister for his reply. In the light of the fact that he indicated further consideration is being given to this issue, I am very happy to withdraw the amendment.