Grand Committee
(9 years, 9 months ago)
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Arrangement of Business
(9 years, 9 months ago)
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The Deputy Chairman of Committees (Lord Geddes) (Con)
My Lords, it is now 3.30 pm. It will not surprise your Lordships when I start by saying that if there is a Division in the House, the Committee will adjourn for 10 minutes.
Care and Support (Business Failure) Regulations 2014
(9 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I come before the Committee today to introduce the draft affirmative regulations under Part 1 of the Care Act 2014. The regulations before us relate to some of the most important elements of the Care Act, which consolidated 60 years of fragmented legislation into a single modern statute built around the needs and outcomes of a person.
Following Royal Assent for the Care Act in May 2014, the Government published final statutory guidance and laid those regulations subject to the negative procedure before Parliament in October and November, as well as laying these regulations in draft. In keeping with the collaborative approach that we have sought to maintain through the development of these reforms, over the summer the Government conducted an extensive public consultation on the guidance and regulations, including draft versions of the regulations that we will consider today.
The consultation engaged the full spectrum of stakeholders including: people receiving care and support and their carers; social workers and other front-line practitioners; local authority commissioners; social care providers; national representative groups; and NHS bodies. In total, the consultation drew more than 4,000 responses from many different sources. Responses were carefully analysed and, where appropriate, changes were made to regulations.
I will briefly introduce each of the four statutory instruments. I turn first to the Care and Support (Business Failure) Regulations 2014 and the Care and Support (Market Oversight Criteria) Regulations 2014. I will address these together as they form the two pillars of our broader strategy to protect people from provider failure. There is a diverse provider market in adult social care where entry and exit is a regular occurrence. Local authorities are currently able to intervene to meet needs in relatively rare cases where services are closed at short notice and individuals are put at risk—and historically they have done so effectively.
The Care Act places specific duties on local authorities in Wales and England, and their broad equivalents in Northern Ireland, to temporarily step in and meet needs where a provider is no longer able to carry on because of business failure. The business failure regulations set out the meaning of “business failure” generally by reference to different types of insolvency, for example administration and winding up. This approach ensures that people receiving services are protected in the event that their provider enters insolvency, without diluting the core responsibility of providers to deliver care services under normal circumstances.
The social care market includes large care providers, operating across much of England, whose financial failure, were it to happen, would cause local authorities considerable difficulty in carrying out their business failure duties without early warning. One such recent example was in 2011 when Southern Cross, then the largest provider of residential services in England, was threatened with insolvency. Local authorities had no prior warning of its financial position. While few people eventually had to change care home, the Government recognised that the degree of worry for people receiving care and their families was unacceptable.
The Care Act accordingly places new duties on the Care Quality Commission to assess the financial sustainability of certain registered care providers. The CQC will do this by collecting and analysing financial information. The CQC may respond to significant risks identified to the financial sustainability of a provider by requiring it to develop a plan to mitigate any risks identified, or ordering an independent review of the business. Should the CQC be satisfied that a provider is likely to fail, it will provide relevant local authorities with an early warning and the information that they need to prepare adequately to protect the continuity of care for individuals. Where the CQC is not satisfied that the provider is taking all the necessary steps to return to financial health, or it feels that it has not been given the necessary information to assess financial sustainability, it is able to take a range of regulatory actions, up to and including the deregistration of the provider in question.
The Care and Support (Market Oversight Criteria) Regulations set the entry criteria for the CQC’s financial oversight regime. Any provider meeting those criteria will be subject to the CQC’s regulatory activities that I have described. They have been designed to capture those providers that—because they are particularly large, geographically concentrated or operate in a large number of local authority areas—would be “difficult to replace” were they to fail financially. It is important to note that inclusion in the regime is a comment not on the likelihood of failure but rather on the risks that would be posed should the provider get into difficulties.
The Care and Support (Children’s Carers) Regulations 2014 relate to the power in the Act for local authorities to support carers of children in a similar way to that in which they support carers of adults, setting out how the rest of Part 1 of the Act applies in this situation. It is important to note that this power applies only in the limited circumstances where carers of children have received a transition assessment in preparation for beginning to receive support under the adult statute, but the transition has not yet actually taken place.
The broad principle at work will be that adult carers of children are supported under children’s legislation, while adults caring for adults will be supported under the Care Act. This instrument is merely an acknowledgement that some flexibility in this regard may be desirable around the time of transition. The instrument has been carefully drafted to ensure that it does not replicate the support for carers of children under other legislation, so ensuring that there remains a clear division of responsibility. These regulations allow for flexible and personalised approaches to support, without forcing local authorities into unnecessary changes to different, broader policies for carers of children and of adults, which exist for good reasons.
Lastly, the Care and Support (Eligibility Criteria) Regulations 2014 set out the national eligibility criteria for adult care and support and carer support. All local authorities will at a minimum have to meet this threshold and cannot tighten their criteria beyond it, although they will have a power to meet needs that were not considered eligible. The national eligibility threshold has been set at a level where the person’s care and support needs, and their inability to achieve certain outcomes as a result, have or are likely to have a “significant impact on their well-being”. This is intended to have a similar effect to the eligibility level that the vast majority of local authorities operate at present. Together with funding announced in the 2013 spending round, this will allow local authorities to maintain the level of access to care and support when the new system is introduced in April 2015.
Given the critical importance of the eligibility criteria, the Government have been especially careful to ensure that they have taken account of the full views of all relevant stakeholders. The Department of Health carried out an extensive engagement to gather views on an initial version of the regulations from June to December 2013, and engaged the Personal Social Services Research Unit at the London School of Economics to evaluate the draft regulations against current practice. These findings informed the second version of the eligibility regulations that were consulted upon in summer 2014.
Alongside the consultation, the department asked PSSRU to evaluate the second draft of the regulations, working with 27 local authorities to compare the draft regulations with recent cases. We made a number of changes to refine the criteria on the basis of feedback and independent research. We have also worked closely with stakeholders to test the approach. I am confident that the final version before us fulfils the Government’s commitment to replicate the current access to care and support in setting the national criteria.
These regulations are required to meet fully some of the central aims of the Care Act: protecting people from the reality of provider failure and the extreme worry caused by its spectre; providing flexible and appropriate support for carers; and ensuring more consistency in people’s rights to care and support. I commend these statutory instruments to the Committee.
Baroness Wheeler (Lab)
I thank the Minister for his comprehensive introduction to these four important affirmative regulations. As he knows, I also have a take note Motion tabled for next week on the negative regulations on implementing the Care Act. Inevitably, there will be overlaps between today’s debate and next week’s but I hope that we can clear off some of the major issues today. The four SIs cover a number of important issues so, while we were happy to have them taken together to expedite the business of the Committee, I hope that the Committee will bear with me since there are a number of areas to cover in relation to implementation of the Care Act and the individual SIs. I also thank the Minister for the very helpful briefing meetings that he has had with Opposition Front Bench health team members on the regulations. He will know that both the Opposition’s health and local government teams are keeping a close watch on how the Care Act is being implemented, so we were grateful for the time that he took on this.
We believe strongly that this first phase of implementation has to be viewed across both the local government and health departments, and considered in the context of the huge funding pressures on local authorities, with a 40% cut in their funding since this Government took office. The Minister, of course, disputes this figure and others from independent bodies on the scale of local government cuts cross the piece and their devastating knock-on impact on social care. Whether the figures are from the King’s Fund, the Nuffield Trust or Age UK, they all put the scale of cuts to social care budgets in terms of billions of pounds.
Recent figures from the Association of Directors of Adult Social Services, with which the Department of Health has worked closely on the Care Act’s implementation, point to this year being the third year of continuing cash reductions and the fifth of real-terms reductions in spending on social care. It points out that, since 2010, social care spending has fallen by 12% while the number of those looking for support has increased by 14%. Social services departments have been forced to make savings of 26% in their budgets—the equivalent of £3.53 billion over the last four years. Compared to 2009-10, almost 300,000 fewer people over the age of 65 are receiving state-funded care.
On many previous occasions, the Minister has set out the additional funding being made available for Care Act implementation—and, despite the challenges, the recent DH stock-take shows encouraging overall progress in local authorities’ readiness for the phase 1 implementation from April 2015. Like the department, we commend the role of the joint LGA/ADASS/Department of Health programme management office. We fully recognise the scale and extent of the work that has gone into consultation exercises with stakeholders, the drafting of the regulations and guidance and the joint working on implementation with local authorities.
However, the same stock-take also makes clear councils’ continuing concerns about the adequacy of funding in the face of modelling which shows increasing support needs for local authorities around IT, workforce, information advice, carers and market shaping. Workforce capacity is a particular concern. The LGA view is that these aspects of implementation of the 2015-16 reforms may be underfunded by as much as £50 million.
Before moving on to the regulations, perhaps I may refer quickly to the Government’s plans to close down the Independent Living Fund in June 2015. We seek reassurances from the Minister that the funds transferred to local authorities from that fund will continue to be used to provide vital support for the disabled people who currently depend on it to be able to live independently in the community and have the same rights, choices and chances as any other citizen. My understanding is that it will be for individual authorities to make decisions on how the resources from the fund will be applied. Will the Government issue guidance to help protect the thousands of disabled people currently receiving ILF support who are affected by this decision? How will they ensure that the money is not just diverted into helping to fund the Care Act implementation or into general funding support for social care services?
The care and support regulations on the market oversight criteria, the interlinking negative regulation on market oversight information—covered by my take note Motion next week—and the business failure regulations are about trying to prevent the sort of problems witnessed in 2011 with the collapse of Southern Cross Healthcare, as set out by the Minister, by empowering the Care Quality Commission to monitor and obtain financial information from providers to check their financial stability and spot the early warning signs of potential difficulties and failure. The aim is to protect vulnerable people and their families if there is provider failure, to ensure that local councils have both early warning and support to be able to maintain vital continuity of support and to ensure that no one depending on the service will suffer.
Lord Lipsey (Lab)
My Lords, it is a great pleasure to follow my noble friend Lady Wheeler, who has achieved the rare feat of matching the Minister in both her knowledge of the subject and the eloquence with which she expressed it. I shall raise one or two points on just two of today’s regulations. The first is the market oversight criteria regulations—which, in principle, I strongly support. A few alarm bells began to ring in my skull when I saw that the body to be responsible for this is the CQC. My mind drifted back nearly a decade, I suppose, when we were in this Room debating the amalgamation of three regulators, proposed by the then Government, into the CQC. I remember speaking with all the eloquence that I could muster to explain why this was going to be disastrous, and the noble Lord, Lord Darzi, the then Minister, explaining with great eloquence why I was completely wrong. After that, the noble Lord and I would go outside and he would say, “I totally agree with you, David; this is an act of absolute madness”. I am afraid that for years so it proved.
I regard the CQC as on probation. It has new management. David Behan, the chief executive, is a man for whom all of us, I think, have the greatest respect. There are examples in which the CQC is improving its practice but it is still only on probation, which in itself does not provide me with the complete reassurance that I should like. More seriously, it is all very well having market oversight, but you need the resources to do it. I have done a little back-of-the-envelope calculation based on the Explanatory Memorandum, which suggests that the CQC will spend £6,000 per chain monitoring whether it is in financial trouble. Frankly, £6,000 does not buy much of a top accountant’s time. So while I should like to think that the CQC will pick up readily in advance of crises that there are problems, I doubt whether it is resourced to do so. The Minister and the Government should satisfy themselves that this job will be done and is not just a paper exercise so that, if something goes wrong, they can say that they did something about it. In practice, that will not be effective.
It is not entirely accurate to say that the eligibility criteria regulations translate into legislation the present criterion of substantial. Indeed, it has been argued that this is a slightly more liberal definition than the present substantial definition of what creates eligibility. But it is also not wholly inaccurate. I do not have any objection to this. I have read the useful briefing provided by the Care and Support Alliance but I am not convinced that, given the shortage of finance, to which I shall return in a moment, it would make sense to impose a much looser definition of eligibility and substantial, as recommended by Dilnot—particularly in view of the financial situation in social services.
I know that figures get bandied about for ever on this. I chose to take one from the Department of Health’s publication of March 2014 in which it said that spending on adult social services had fallen by 8% in the previous two years. Since the Government say that that is true, it must be true. Incidentally, we are seeing a folly in public finance which deserves to be highlighted. When you ring-fence one bit of public finance or guarantee it in real terms, that leads to more pressure on other forms of public finance. Because healthcare is ring-fenced and maintained in real terms—I am not arguing about whether the numbers are right—social services ends up taking more of the brunt.
Baroness Pitkeathley (Lab)
My Lords, I will speak briefly on two of these regulations: those relating to the eligibility criteria, following on from my noble friend Lord Lipsey, and, first, the children’s carers regulations.
Some noble Lords in the Room will remember, when the Children and Families Bill went through this House, the struggle that we had to get parent carers recognised at all in the legislation. All credit to the Minister for finally recognising that parent carers had rights. However, there is now a serious problem because the regulations that we were promised would be issued along with the regulations under the Care Act have not in fact been issued. We have therefore left local authorities without clarity or direction about how to implement these new rights for parent carers—rights which we won with such difficulty but with eventual recognition from the Minister.
I ask the Minister, as did my noble friend, when the Government intend to publish statutory guidance on the new rights for parent carers under the Children and Families Act, why the statutory guidance was not issued at the same time as the guidance under the Care Act, and what plans they have to support local authorities in implementing the new rights for parent carers and young carers. I also support what my noble friend Lady Wheeler said about those carers who are left high and dry—the carers of disabled children who do not have parental responsibility. They are not covered by either piece of legislation and are left with a rump of rights under the long-outdated Carers (Recognition and Services) Act 1995. We really do need to clear that up.
I turn to the issue of eligibility criteria. As everybody knows, the Care Act creates an equivalent duty on local authorities to meet the care and support needs of adults and carers alike. In doing so, it puts carers of adults on the same legal footing as adults with care needs. This was a hugely significant legal development, giving carers the clearest rights ever to support in their caring role, and it is greatly welcomed. However, the Government’s decision to set the minimum threshold at the level at which local authorities are already providing support is a cause for huge concern. As we heard from my noble friend, the historic underfunding of social care has left thousands of older and disabled people without access to the care that they need, and has heaped pressure on to family carers, who are increasingly stepping in to provide care at great personal, societal and economic cost.
ADASS reports that spending on social care has been reduced by some 26% in the past four years. It is absolutely vital that a sustainable level of funding is put in place for social care, setting the funding mechanisms which will deliver the amount of money that we need to tackle the existing gap between need and supply and to keep pace with growing demand—and the demand is growing. The number of carers who care for 50 hours or more per week is rising faster than the number of the general carer population—Carers UK estimates that there has been an increase of 25% over the past 10 years. Despite the ongoing rise in the number of carers in the UK, the number receiving carers’ assessments and carer services from their local authorities is falling. I fear that that situation will only get worse. Carers are going without food and cutting back on essentials. Those who care for 35 hours or more a week are twice as likely to be in bad health as non-carers, with the knock-on effect that that will have on their own health in the future. Therefore, I believe that we have to look very carefully at the levels of funding and at what the eligibility criteria mean.
So far as carers are concerned, the Care Act is all that I could wish for—and have been working for for almost the last 30 years. It is ironic that it is being implemented at a time when budgets are so tight that the rights of carers may be threatened, not enhanced.
Earl Howe
My Lords, I am grateful to all noble Lords who have spoken for their questions and comments on these regulations. I turn first to the regulations relating to business failure duties and market oversight criteria, and in particular to the question posed by the noble Lord, Lord Lipsey, about why we have chosen the CQC as the regulator in this regard. I say openly to him that it was a finely balanced decision. We were confident that we had a choice between the CQC and Monitor. Either could have performed the role. Last year, the Health Select Committee recommended that the Government should reconsider their decision to choose the CQC rather than Monitor to undertake this regulatory function.
However, as set out in the committee’s report, there is a close correlation between poor quality and poor financial performance. It recognised that for this reason the CQC is well placed to perform the function. The CQC is gearing up to do that. It recognises that it needs additional skills to assess the financial sustainability of providers. It does not yet have these core skills in-house. The CQC has procured external consultants to assist in designing its new regime and the resources needed to operate it, which will comprise a mix of internal and external expertise. That will ensure value for money. It is recruiting a number of highly experienced specialists in accounting and insolvency who will be responsible for undertaking the financial sustainability assessments of providers in the regime on an ongoing basis.
The department will support the CQC to carry out this function by providing additional funding. I hope that that provides the noble Lord with some confidence that the CQC is well capable of undertaking this task. The CQC has published draft proposals on how the market oversight regime should operate. A four-week public consultation began on 29 January. Revised final guidance will be published in early April.
As regards the process of gathering financial information, which was referred to by the noble Baroness, Lady Wheeler, the CQC has the power to require a provider to supply the information specified. The provider cannot refuse without risking enforcement action by CQC. The CQC’s aim is that the information it requests from providers will be the same as the provider’s own board would use to assess how the business is faring. It will be light touch in the sense of not onerous. The CQC has a duty to minimise burdens on businesses. However, its overriding duty is to protect vulnerable people by understanding providers’ finances and sustainability, and giving early warning of any likely failure to local authorities to help them intervene. It will require information in a proportionate way to deliver this duty.
The noble Baroness also referred to the need to support local authorities to carry out their temporary duties when a care provider fails. We recently published statutory guidance outlining local authorities’ roles and responsibilities in the event of business failure to support them in this area. In addition, the department plans to work with the Association of Directors of Adult Social Services to develop further guidance on contingency planning for provider failure, which should be available by the summer of 2015. The department has also commissioned guidance which will help local authorities to assess the financial sustainability of their local care market and individual providers within it that are not subject to the market oversight regime.
As regards the Care and Support (Children’s Carers) Regulations, concerns were raised by the noble Baronesses, Lady Wheeler and Lady Pitkeathley, around children’s carers, and in particular the new right to assessment for carers in the Children and Families Act which covers adults caring for disabled children only when they have parental responsibility. The Government will address this issue through the Care Act 2014 and the Children and Families Act 2014 (Consequential Amendments) Order 2015, which will be laid in draft before Parliament very shortly. The order will effectively save Section 1 of the Carers (Recognition of Services) Act 1995 in so far as it applies to adults caring for disabled children who do not have parental responsibility. This means that such adults will continue to have a specific right to ask for an assessment under the 1995 Act if they are caring for a child being assessed under the Children Act 1989 or the Chronically Sick and Disabled Persons Act 1970. I hope that that is helpful.
As to the specific right of adults caring for children to support to meet eligible needs, care and support for children and their carers takes place in a different context to that covered by the adult statute. Children’s legislation rightly gives primacy to the welfare of the child and this is reflected in the way the legislation works. With that said, of course the Government recognise the enormous contribution of carers of disabled children and the sacrifices they often make in taking on these caring roles. That is why the Children and Families Act includes a specific right to assessment for parent carers of such children and a requirement that in carrying out these assessments local authorities must now have regard to the well-being of a parent carer. This mirrors the definition of well-being in the Care Act, which is of course also the basis for considering the impact on well-being through the eligibility criteria.
Lord Foulkes of Cumnock (Lab)
My Lords, if the Minister is going to correct my noble friend, could he say what the combined effect will be in percentage terms?
Earl Howe
I shall have to take advice before answering, but I will be happy to answer the question as soon as I receive inspiration.
Implementing the Care Act will be a challenge for local government, and takes place in the context of competing policy and financial pressures. However, we have already announced £470 million in total for the cost of the new duties in the Care Act which come into effect in April 2015. We have made substantial revisions to our impact assessment, following work with local authorities, to reflect changed assumptions on costs. This will mean acknowledging greater costs for carers in 2015-16 and beyond. We have recognised that.
In the first year, we will create a new carers grant to target this funding where it is most needed. As a result of this work, we believe that implementation of the Care Act will be affordable to local authorities in 2015-16. We will take further steps with the LGA and ADASS to agree a process for monitoring the costs in-year during 2015-16, to check on our assumptions and to provide evidence for the next spending review. Affordability is not just about the overall funding. We are also investing in a large suite of materials to help councils implement the Act effectively.
As regards the question posed by the noble Lord, Lord Foulkes, I am advised that the calculation that he seeks is not a simple one. I will need to write him a letter. I hope that he will allow me to do that. I shall try to be as explicit as I can in that letter.
Lord Foulkes of Cumnock
It is certainly not a simple calculation, and I think my noble friend was near the mark. Would the Minister send a copy of the letter to all the Members present?
Earl Howe
I will be very happy to do so.
The noble Baroness, Lady Wheeler, referred to the closure of the Independent Living Fund, and asked for the Government to provide guidance in the light of that. In response to the views of stakeholders during the consultation, we have provided guidance on how local authorities should manage the transition to social care for people previously receiving ILF funding. The guidance is included in the Care Act guidance that has now been published.
Both the noble Baroness, Lady Wheeler, and the noble Lord, Lord Lipsey, questioned the words “significant impact on well-being”. In particular, they expressed concern that there might be a variation of interpretation of that phrase. One of the core principles of the Care Act is that the person is central to the new care and support system, and that support is built around their needs and the outcomes they want to achieve. Considering the impact on the person’s well-being in deciding on their eligibility will make the determination personal to them. This recognises that people with similar needs and inabilities to achieve certain outcomes may have different eligibility determinations because the impact on their well-being is different.
It is important that there is consistency in approach in how the eligibility criteria are used. We have commissioned Skills for Care to develop training material and the Social Care Institute for Excellence to develop practice materials to support implementation of the eligibility criteria across authorities. Professional judgment will remain key to decision-making—this should not become a tick-box approach which does not focus on the person. We have never claimed that this will remove disparity. The system is person-focused, so it is inevitable and right that individual decisions will be made.
As regards the concern of the noble Baroness about requiring people to be unable to carry out two or more outcomes, and whether that would restrict access to care, this was an issue that was raised with the consultation version of the regulations, where there was concern that it would be impossible for people with mental health problems to become eligible due to how we described the outcomes that had to be considered. We addressed this in the regulations we are discussing today by converting the two lists of outcomes which were described in the consultation version of the regulations into one list which would capture all groups. We checked this approach with our stakeholder working group, which included members from the Care and Support Alliance and ADASS. The group concluded that it could not identify any groups that would be unintentionally excluded from eligibility due to this approach.
I turn next to the issue of informing the public, so that they have a clear understanding of their rights and the system overall. The noble Baroness will remember that we discussed this extensively during the passage of what is now the Care Act. We are putting in place a full communications campaign to ensure that people receiving services, their carers and families—and the broader population—understand the impact of the Care Act and what it means for them. The campaign will feature a partnership between the local and the national, building on the successful approaches pioneered by previous campaigns such as Change4Life. Local authorities, working with other local partners including the NHS and the voluntary sector, will get messages out directly to their own populations. We have developed a range of campaign materials and guidance to help councils communicate the changes in their local area. That will be supported by wider-reaching national activity—
The Deputy Chairman of Committees
With great respect to the noble Earl, I am afraid that a Division has been called in the Chamber. The Grand Committee stands adjourned until 4.35 pm.
The Deputy Chairman of Committees
My Lords, it is 4.35 pm. I happen to know that the Minister is on his way because I was with him in the corridor. If we could perhaps crave indulgence for just one more minute, I am sure he will appear.
The Deputy Chairman of Committees
The Minister has now rejoined us. I cut him off in mid-flow, so perhaps he would like to continue.
Earl Howe
My Lords, I have only a few more remarks to make. I was explaining the measures that we would take centrally and nationally to inform the public, including door drops to 2.5 million households and articles in the national media, as well as local radio and digital activity. The first phase, which focuses on people already receiving services, began late last year and is planned to continue through to April 2016. Scoping is also under way for a behaviour change campaign to encourage people to prepare for care and support needs as part of their wider financial planning.
The noble Lord, Lord Lipsey, questioned whether the final version of the regulations described the current level of access to care and support in an adequate way. We have commissioned the PSSRU to evaluate the final version of the eligibility regulations so that we can further our understanding of their impact. It will carry out its evaluation during the summer, when the regulations have been in use for six to eight weeks, and will report in August. However, there is no reason why people currently receiving care and support have to lose their access to this because of the introduction of the national eligibility threshold. The Care Act provides people with the assurance that local authorities must meet needs that meet the national threshold and, as I mentioned earlier, authorities can also decide to meet needs that are not eligible—in other words, they can meet needs that are considered moderate. Therefore, there is flexibility for local authorities in that sense.
To the extent that I have not been able to answer questions, I shall of course write to noble Lords. However, I hope that with those comments the Committee will be sufficiently reassured to approve these sets of regulations.
Care and Support (Children’s Carers) Regulations 2014
(9 years, 9 months ago)
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Care and Support (Eligibility Criteria) Regulations 2014
(9 years, 9 months ago)
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Care and Support (Market Oversight Criteria) Regulations 2014
(9 years, 9 months ago)
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Smoke-free (Private Vehicles) Regulations 2015
(9 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, these regulations aim to protect children from the harms of second-hand smoke in private vehicles. In 2007, smoke-free legislation was introduced in England and Wales to protect employees and the public from the harmful effects of second-hand smoke in public places, work premises and vehicles. At that time, the legislation was not intended to extend to private vehicles.
The Children and Families Act 2014 amended the Health Act 2006 to give the Secretary of State regulation-making powers to make private vehicles smoke-free places when carrying children under the age of 18. Second-hand smoke is a serious health hazard, and there is no safe level of exposure. Every time someone breathes in second-hand smoke, they breathe in more than 4,000 chemicals. Many are highly toxic, and more than 50 are known to cause cancer. Second-hand smoke is a real and substantial threat to child health, causing a variety of adverse health effects, including increased susceptibility to lower respiratory tract infections such as pneumonia and bronchitis, the worsening of asthma, middle ear disease, decreased lung function and sudden infant death syndrome. We also know that children are more vulnerable to second-hand smoke exposure in vehicles as they breathe more rapidly and inhale more pollutants than adults.
A significant number of children say that they are exposed to second-hand smoke in private vehicles. In 2012, 26% of 11 to 15 year-olds reported being exposed to second-hand smoke in their family’s car and 30% in someone else’s car. We estimate that approximately 3 million children in England are exposed to second-hand smoke in their family car.
Research shows that smoking in vehicles can result in the build-up of high levels of second-hand smoke, which can persist even when windows are open or the ventilation system is in use. Many children feel unable to ask someone to stop smoking when travelling in a car. Research shows that 34% of children who are exposed to second-hand smoke in vehicles do not feel able to ask the person smoking to stop, because they are frightened or embarrassed.
The Government are committed to protecting children from the harms associated with smoking. Much support has been expressed in this House for ending smoking in vehicles carrying children. I commend all the noble Lords who have campaigned for the introduction of these provisions, particularly my noble friend Lord Ribeiro, who sought to introduce similar measures in his Private Member’s Bill.
The regulations extend the existing smoke-free legislation by setting out the circumstances when private vehicles are smoke-free. Specifically, they amend the current regulations that make public vehicles and work vehicles smoke-free so that all road vehicles that are not already smoke-free will be smoke-free places when they are enclosed and a person under 18 is present in the vehicle. As with the existing smoke-free legislation, the regulations do not apply to ships, hovercraft and aircraft, as they are covered under different legislation, and they do not apply to motor homes, camper vans and caravans when they are being used as a home. This is because the policy aim is for the regulations to apply to vehicles, not homes.
Lord Ribeiro (Con)
My Lords, I thank the Minister for his very kind words. This is a good-news day for children. These regulations and the Bill that went through are about protecting our children in the future. I think that we will send a very powerful message by passing these regulations and I hope that noble Lords will support them.
There is no point in rehearsing all the evidence that the Minister has very kindly given us. However, there is evidence that there has been a significant improvement in children’s health since regulations were introduced. We have only to look to Canada, where there is a ban on smoking in 10 of the 13 provinces. The evidence suggests that since the legislation was brought in, children’s exposure to second-hand smoke has dropped by a third.
The other important thing is the Government’s intention that these regulations should be not just punitive and about fining people but about behavioural change. When there was real reluctance from the Government to see the Bill go through—both when I introduced it as a Private Member’s Bill and early on during its passage—the questions raised were how to police it and how to ensure that people stick to the regulations and the law. The very fact that the emphasis is going to be on prevention, with a focus on health, is good.
Regarding the £50 fine that will be introduced, I am also delighted that the Government have taken the view that there will be a discount of £20 for those who pay within 15 days. That is a very important incentive. I had hoped that we might be able to introduce a learning exercise similar to the one for speeding, where people get some help in understanding the hazards and dangers of speeding. I had hoped that something like that might be brought in under this legislation. None the less, there will be a review five years from now in 2020, and if the general view is that the legislation has been effective, I am sure that it will be possible to devise an educational package so that people do not see the need to smoke in cars with children present. I thank the Minister for taking through these regulations.
Lord Foulkes of Cumnock (Lab)
My Lords, I greatly welcome this legislation. I want to ask two questions, which I hope the Minister will be able to deal with. Before doing so, though, I want to say why I am particularly pleased about this. In the early 1980s I tried to introduce a Bill in the other place to ban smoking in public places. I was almost literally laughed out of the House because everyone thought that it was ridiculous to have a ban on smoking in public places. Of course, it is now accepted as the norm.
I was also vilified, as indeed were all the anti-smoking campaigners, by an organisation called FOREST, the so-called Freedom Organisation for the Right to Enjoy Smoking Tobacco. I do not know how anyone can enjoy it—they just have to do it because they become addicted—but there we are. The organisation, which was funded by the tobacco companies, twisted all the figures. It was not a very pleasant experience. I know that my friends who worked in Action on Smoking and Health at the time, as well as other people, were subject to the same kind of criticism and attacks. I am very pleased that things have moved on since then and I commend the Government for pursuing this matter.
However, I have two questions. One relates to enforcement. The ban on smoking in public places has been effectively self-enforcing because the penalties and the problems that would be created by people smoking, particularly for publicans, shopkeepers and people responsible for public places, would be substantial, not just in terms of the fines that they might be subjected to but in terms of losing licences and other problems. Therefore, as I said, the ban has been effectively self-enforcing, with all but 100% compliance, I am pleased to say.
However, the legislation concerning the use of mobile phones in cars has not been so effective. I have seen a lot of people continuing to use mobile phones in cars while driving but I understand that there have been relatively few prosecutions of this extremely dangerous habit. I get the impression that the police are not particularly good at making sure that people are pursued in relation to that offence, and I am a little concerned that the offence of smoking in a car with children present will be more akin to using a mobile phone while driving than smoking in public places such as pubs, shops and so on. I would be grateful if the Minister could deal with that and give an assurance that enforcement and compliance will be more effective.
Secondly, unlike the noble Lord, Lord Ribeiro—who I commend for the way in which he has pursued this issue—I am not sure that £50 is a sufficient penalty. I understand that it is similar to the penalty for parking in an inappropriate or illegal place, a much less grave offence than one that causes danger and harm to children. Many people will take the risk of smoking in a car with children present, particularly as, with no disrespect, a £50 fine to Ferrari drivers and drivers of large, expensive cars will not mean very much in terms of their regular expenditure. I wonder whether this is an appropriate penalty for the offence. The Minister mentioned a review; perhaps this matter could be looked at in that review.
Those are my only two reservations, neither of which takes away from my warm welcome to the Government for these regulations. As the Minister knows, I do not regularly welcome the things that this Government do, but on this occasion I am pleased to do so.
Baroness Finlay of Llandaff (CB)
My Lords, I welcome these regulations and congratulate the noble Lord, Lord Ribeiro, on his work to achieve this position. Children themselves have asked for this measure. In the 2011 British Lung Foundation survey, 86% of children between the ages of eight and 15 said that they wanted protection. It is worth noting that the Welsh Fresh Start campaign, which was aimed at cutting down smoking in cars when children were present, did not have as great a success as one would have hoped, but these regulations send an important message that will change behaviour. Quite apart from encouragement to change behaviour, there needs to be a clear message out there.
The data from Wales have shown that 4% of children reported being in a car when someone was smoking almost every day, and 23% reported that they were sometimes in a car when someone was smoking. Where a parent smoked, one in five children reported that smoking was allowed in the family car. These regulations are welcome and will have a major part to play in bringing about behaviour change. Of course the fact that there are provisions for a fine is important, but behaviour change will be most sustainable in the long term.
I am grateful to the Minister for his comment that he will keep a watching brief on e-cigarettes and that that consultation will continue. I worry that we are at the beginning of an explosion of a highly addictive substance.
Baroness Tyler of Enfield (LD)
My Lords, I, too, welcome these regulations and congratulate my noble friend Lord Ribeiro on his unstinting efforts in this area. I stress that this new law and these regulations are not designed to turn smokers into criminals or to demonise them; they are about protecting children from the avoidable dangers that tobacco smoke presents to their health and welfare. For me, that is what it is all about. Right through these discussions, I always saw this legislation primarily as a matter of child protection. If noble Lords will excuse the terrible pun, it was about putting children in the driving seat.
When we had those early debates, I was very taken with the number of children who said that they felt that they had no control over the situation and that they were either too embarrassed or too scared to ask adults to stop smoking. The survey mentioned by the noble Baroness, Lady Finlay, referred to how children really want this legislation. In my professional life, we often talk about the voice of the child being at the centre of what we do. Based on that survey, we have a clear mandate from children and young people to take these regulations forward.
The Minister said that the start date will be October. In an ideal world I would have liked to have seen it earlier, but I accept the reasons that he gave. It will be incredibly important legislation in addressing health inequalities, and will go some way at least towards protecting children from the most disadvantaged backgrounds from smoke and enable them to have a healthier start in life. As others have said, this is very much about behaviour change. Certainly, the experience that we have seen on similar issues, such as public smoking and compulsory seat belts, suggests that educational campaigns, which are important, are most effective in changing behaviour when accompanied by appropriate legislation. For the effect of legislation on the proportion of people wearing seat belts, I have a figure that shows an increase from 25% to 91%, which seems extraordinarily large. Just imagine how many children’s lives will be improved if this legislation has even half that success.
The Minister referred to success being measured in terms of positive behaviour change rather than the number of fines handed out. I am sure that that is right, and I approve of that approach, but will he confirm precisely how that behaviour change will be measured?
There are very high levels of public support for the law. In previous debates, as one would expect, we heard that parents were very much in favour of this legislation. However, we also heard about recent surveys and the number of adults, including adult smokers, in favour of this legislation and the number of car drivers who support it. There is a real and growing consensus that these regulations are a good thing and should be introduced without delay.
I very much hope that, without much further delay, we will very soon debate the regulations on standardised packaging.
Viscount Simon (Lab)
My Lords, the Minister knows—I suppose I should declare it as an interest—that in January 1995 I developed severe brittle asthma. On a motorway with my car windows closed, I probably will have an asthma attack if someone is smoking a cigar in another car. Children are particularly vulnerable to second-hand smoke as they have smaller lungs and breathe faster, and their immune system is not as developed as that of adults. This leaves them more open to ear and lung conditions triggered by passive smoking.
It has not been mentioned this afternoon and it is not generally known or acknowledged, but the concentration of tobacco smoke in a car with the windows half down is much higher than the amount of smoke that there used to be in pubs in the old days, and it increases to 11 times more in a stationary car with the windows closed. If parents knew of this, I suspect that they would stop smoking in their cars, but they do not know. We therefore have these regulations before us today. The Minister has given us an excellent description of how the regulations will work, and I support them.
Lord Hunt of Kings Heath (Lab)
My Lords, I, too, welcome the regulations. They follow on from my amendment at Report to the Children and Families Bill, which was agreed by 222 votes to 197, to ban smoking in cars when children are present. I am very proud of that amendment and I express my thanks to organisations such as ASH, the British Lung Foundation, the BMA and others who lent their support to it. I echo the tributes to the noble Lord, Lord Ribeiro, and to other noble Lords who have been campaigning on this matter for some years, including the noble Baroness, Lady Finlay, my noble friend Lord Faulkner, and the noble Baroness, Lady Tyler. My noble friend Lord Simon persuasively and eloquently illustrated the issues that we are dealing with. I am confident that these regulations, if they come to be successfully implemented, will do a lot on those issues.
My noble friend Lord Foulkes was very brave, a long time ago, to pioneer the proposal. What he had to say about the tactics and activities of the tobacco companies was a point very well taken. I welcome the Government’s decision to go ahead with standardised packaging regulations but we know that many of those companies will do their best, through representative bodies, to sabotage them—as I think they have attempted to do in Australia. We must be ever watchful about that.
I agree with the noble Baroness, Lady Tyler, that it is interesting how much public support there is for this measure. She may well have seen the work by the British Lung Foundation which has shown, in survey after survey, that a huge majority of children wanted action to be taken. We have also had the ASH poll conducted last March by YouGov, which showed that 77% of all adults—including 64% of smokers—agreed that action should be taken. Does the noble Earl agree that that shows that there is public support for measures such as this, particularly when it comes to the protection of children? I wonder whether he shares our ambition on this side of the Committee to reduce smoking prevalence to 10% by 2025 and, over the longer term, our goal that all children born in 2015 and beyond will become the first smoke-free generation in hundreds of years.
I noted that the regulations come into force on 1 October 2015. The noble Earl explained why 1 April is not appropriate but I wonder whether 1 July could not have been chosen instead. The noble Baroness, Lady Finlay, raised the experience in Wales. Is the noble Earl confident that the provisions for Wales will come in at the same time as those for England? Could he say a little more about the public marketing plan being developed by Public Health England? That very much relates to the questions asked by my noble friend Lord Foulkes about enforceability, which is so important. I am confident that a great majority of the members of the public will in fact respect the change in the law. The evidence is pretty strong on that. None the less, we need an effective public health campaign and the support of the police in being prepared to take action against those who transgress the law.
Earl Howe
My Lords, I am very grateful to all noble Lords who have spoken and I am grateful for their universal welcome for these regulations. I begin by referring to the remarks of my noble friends Lady Tyler and Lord Ribeiro and the noble Viscount, Lord Simon, all of whom reminded us why we are doing this—the noble Viscount from a very personal perspective. Three million children are exposed to second-hand smoke every year and we want to protect them. Existing smoke-free legislation is popular, as has been said, and has a very high rate of compliance. Personally, I credit the public with more willingness to follow the law and therefore protect their children from second-hand smoke, rather than thinking of elaborate ways to break the law.
The noble Lord, Lord Hunt, asked about public attitudes in relation to these regulations. We know from the responses to the consultation that there is widespread support for protecting children from the harms of second-hand smoke. I do not expect people to go to great lengths to carry on smoking in cars when they know that it is an offence to do so. As has been said, legislation can be instrumental in driving behavioural and cultural change. That has certainly been true in other areas of regulation in the past. Of course, we have to inform the public in a reasonable way before these regulations come into force.
More generally, we agree that education is essential in informing people of the harms of second-hand smoke, particularly to children, and we recognise the importance of social marketing campaigns. The department and Public Health England will continue to protect children from the harms of exposure to second-hand smoke by encouraging voluntary action through social marketing. Previous campaign results illustrate that such campaigns have been effective both in changing behaviour and in driving quit attempts. Of course, I agree with the noble Lord, Lord Hunt, that our ambition as a nation should be to drive down the prevalence of smoking to the maximum extent that we can. We are going to monitor progress in respect of these regulations by assessing the reduction in the number of children who are exposed to second-hand smoke in cars from the current level of 26%, and it is possible to do that.
As I said, I agree with my noble friend Lord Ribeiro about the importance of building public awareness of these health harms. Once again, I pay tribute to all his efforts in this sphere of activity. I also add my thanks to the noble Lord, Lord Foulkes, for his welcome for these regulations, and I acknowledge his far-sightedness in this context, even if he felt like a voice in the wilderness for a number of years. He expressed concern about the enforcement of the regulations—in particular, in view of his perception that the police do not go to great lengths to enforce the mobile phone laws. In fact, my advice is that the police assure us that they endeavour to enforce mobile phone legislation, as they would any law. In fact, in 2012 more than 90,000 fixed penalty notices were issued for mobile phone offences. We estimate that considerably fewer fixed penalty notices will be issued for smoking in private vehicles—possibly around or slightly above 2,000 each year.
The noble Lord, Lord Foulkes, also questioned whether the £50 figure was sufficient. The regulations were drafted following discussions with the police and others to provide for effective enforcement. As I said, the police have confirmed that they will enforce these regulations in the same way as they enforce other laws, such as those relating to seat belts and the use of mobile phones. It is for individual police forces to decide how enforcement will be carried out locally. They have advised that this can be taken forward by local police officers in conjunction with their wider functions on road safety. For example, when running an operation to check compliance with the laws on seat belts or child car seats, the police would also check for anyone smoking or discuss the offences with the driver if there was tobacco in the car. A fine of £50 is consistent with the existing smoke-free legislation, but that level of fine could certainly be subject to review when the regulations as a whole are reviewed.
Lord Foulkes of Cumnock
Was any consideration given to putting points on licences? That would be a much greater deterrent. My understanding is that people feel very worried about having any points added to their licence because of the effect: once it tots up, they could lose their licence. I understand that this is being dealt with as a public health matter but in my view smoking while driving creates a bit of a danger, just as mobile phone use while driving does. I wondered whether that was considered as likely to be a more effective deterrent.
Lord Ribeiro
My Lords, before the Minister replies, when I phrased the initial Private Member’s Bill, I put in a fine of £60 rather than £50. One of the things that I was conscious of was that the people who would be driving very young children, those strapped into the back of the car, are mothers. We do not want to introduce punitive measures that would cut across trying to change their behaviour. That is why the fine was set at that level. If we were thinking of someone driving a Ferrari or a Maserati, that would be a completely different ball game—and they would probably have a chauffeur. That is why that figure is there. The emphasis should be on re-education rather than punishment.
Earl Howe
I am grateful to both noble Lords. In answer to the noble Lord, Lord Foulkes, on the question of points on the driving licence, this avenue was considered but rejected because it would be inconsistent with current legislation. However, I take the point about road safety. As he will be aware, if police judge that a driver is driving unsafely, they have powers to take action under different legislation.
With regard to the position in Wales, smoke-free legislation is a devolved matter, as the noble Lord, Lord Hunt, is aware. I am advised that the Welsh Government have consulted on similar provisions, and we are working with them to co-ordinate our approach where possible.
Lord Foulkes of Cumnock
I am sorry to come in again. Will the Minister confirm whether that is also the case in Scotland?
Earl Howe
My Lords, I am aware that there is legislation before the Scottish Parliament that seems to seek to introduce similar provisions, but I am not aware of the proposed timing that the Scottish Government envisage.
I was asked about the implementation date by the noble Lord, Lord Hunt. He put forward the suggestion that 1 July might have been a better date than October. We chose the common commencement date of 1 October because we judged that we would need that length of time to achieve a sufficient level of public awareness, and indeed for the police to be adequately prepared for their enforcement role.
Armed Forces Pension (Consequential Provisions) Regulations 2015
(9 years, 9 months ago)
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Lord Newby
That the Grand Committee do consider the Armed Forces Pension (Consequential Provisions) Regulations 2015.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments
Lord Newby (LD)
My Lords, the regulations we are debating today make consequential modifications to the Pension Schemes Act 1993 and to the Finance Act 2004 to make sure that the major public pension schemes created under the Public Service Pensions Act 2013 work as intended.
They make some small and technical modifications to the law governing the new teachers’, NHS, civil service, police, firefighters’ and Armed Forces pension schemes. The consequential modifications relating to the Judicial Pension Scheme are being debated as part of its main regulations.
It might be helpful if I set out some of the context and background to the wider reforms to public service pension schemes. People are living longer and the cost of providing public service pensions is increasing. Following recommendations made by the noble Lord, Lord Hutton of Furness, and adopted by this Government, new pension schemes are being established under the Public Service Pensions Act 2013 for civil servants, the judiciary, local government workers, teachers, health service workers, fire and rescue workers, members of police forces and the Armed Forces.
These reforms were needed to balance the legitimate concerns of taxpayers about the cost of public service pensions with the need to ensure decent levels of retirement income for millions of people who have devoted their working lives to the service of the public. I am pleased to say that these reforms received cross-party support when they were debated in your Lordships’ House.
The design of the new schemes has now been settled, and the schemes will take effect from 1 April this year. The statutory instruments before us today are simply the means of ensuring that the scheme designs work properly within the wider framework of pensions and tax law. They will make sure that the members of these schemes get the pensions that they expect and that they do not lose out as a result of any glitches between the scheme design and the wider pensions law.
Two sets of modifications are being made to the Pension Schemes Act 1993, the first of which is needed to ensure that members moving from their existing schemes to the new schemes are not inappropriately treated as deferred members of their existing schemes. The purpose is to ensure a seamless transition between the old and new schemes.
The modifications are, first, to ensure that the benefits they have accrued in their existing schemes are not revalued as if they were deferred members; secondly, that their right to a cash equivalent transfer value, to a refund of contributions or to a cash transfer sum applies only when they leave the new scheme; and, thirdly, that anti-franking provisions do not apply as if they were deferred members on 1 April 2015. The modifications we are making mean that for these purposes such individuals do not cease to be active members of their existing scheme until they also leave their new scheme.
Lord Newby
As I was saying, the modifications that we are making mean that for these purposes such individuals do not cease to be active members of their existing scheme until they leave their new scheme.
We are also making modifications to the regulations that govern contracting out, specifically those dictating the process that a scheme must follow to be contracted out. For the new public service pension schemes we have simplified the process, ensuring that the new schemes, and therefore their members, continue to be contracted out of the additional state pension until the end of contracting out in April 2016.
The second set of modifications that we are making to the Pension Schemes Act 1993 concern only the police, firefighters’ and Armed Forces pension schemes. These are needed to ensure that the 1993 Act is in line with the 2013 Act, which requires active and deferred members in these three schemes to have different pension ages. To give a little context, the 1993 Act says that schemes cannot calculate the pensions of deferred members differently from those of active members, while the 2013 Act explicitly requires the uniformed schemes to assign a different pension age to active and deferred members. That difference in pension age makes a difference in pensions calculation inevitable.
In recognition of the unique nature of these occupations, and following recommendations made by the noble Lord, Lord Hutton, the Government are implementing a normal pension age of 60 in these three schemes, while members of other schemes will have a normal pension age well above this, set equal to state pension age, which for the majority of members will be 68. The Government have also decided to implement the noble Lord’s recommendation for deferred members of the police, firefighters’ and Armed Forces pension schemes to have a deferred pension age equal to the state pension age as the need for early retirement does not apply once a member has left these services and is no longer performing that unique and physically demanding role. The modifications before us today enable this split pension age in the police, firefighters’ and Armed Forces pension schemes to operate in harmony with wider legislation on short-service benefits.
The third set of modifications that we are making today relate to the Finance Act 2004 and ensure that members with service in both a new and an existing pension scheme who retire with an ill-health pension do not face unintended tax consequences. Specifically, they ensure that parts of the ill-health pensions available to members who fall ill are not measured twice for annual allowance and lifetime allowance limits simply because of the transitional mechanics for payment of ill-health benefits. Put simply, the modifications ensure that the tax regime will apply in the way intended by the Government to those members who move into the new scheme and then retire because of illness.
These are very technical modifications to wider pensions legislation that seek to ensure that civil servants, teachers, NHS staff, firefighters, police officers and military personnel can get the pensions that they expect without any unexpected effects as a result of tensions with the wider law. I therefore commend these modifications to the Committee.
Lord Tunnicliffe (Lab)
My Lords, the noble Lord, Lord Newby, and I seem fated to address technical and lengthy statutory instruments in front of a packed Committee, with the general public watching on with bated breath.
In representing Her Majesty’s Opposition in these circumstances, there seem to me to be two options: the one-hour option and the 100-hour option. The 100-hour option would mean tracing through all six documents and referring to, but not excluding, other laws and regulations made in 1992, 1993, 2004, 2006 and 2013 and sundry other modifications. Amazingly enough, I have not chosen the 100-hour option.
The one-hour option, of course, is to look at the Explanatory Memorandum and to see whether it is consistent and relevant, makes sense and so on. I have done that and I am pleased to advise the Committee that, in line with normal tradition, we will not be voting against these regulations when they come forward into the Chamber in a day or two’s time.
However, I felt a need to look behind the regulations. The way I did that was to look at the consultation. I felt that if the regulations were straightforward and fairly sensible and everyone involved with them also said that, then everyone would be happy. I looked into the consultation and it is fair to say that the consultees are content with five out of six of the sets of regulations. I shall therefore speak only to the one where the consultee—the Fire Brigades Union—is not content.
In response to the invitation to consult, it provided a letter dated 14 November from Sean Starbuck, its national officer. As I understand it, the union has three areas of concern. The first is that the benefits or value in its 1992 scheme could not be, as it were, crystallised and then imputed into the 2015 scheme. I am sure that there is a series of good pension words to more precisely express what I have said but we are all familiar with the system of pensions where you have a pension in one scheme moved to another scheme with a separate employer; there is then a calculation about the value of your accrued benefit, a calculation about the accrued benefits in the new scheme, money changes hands between the schemes and everyone is happy. As I understand the 2015 scheme, if you had worked in another firm or business, the state or—surprisingly in this case—the military, that is exactly what would happen. There would be a transfer of scheme value from, say, a military pension into the 2015 pension.
However, for firemen that is not possible. For firemen, as I understand it, one scheme ends and its value is deferred—I am sure that I have got the words wrong—until the point at which it is earned, and the service then starts in the 2015 scheme. The Fire Brigades Union took the view that it would be a good thing if that option was available to firefighters. Its view was that this should not be a problem because the very essence of these kinds of transfers is by definition cost-neutral. The money is calculated and moves over.
The union is particularly seized of that because, as I understand it—I confess I have not read the parent legislation—there is envisaged in the 2015 scheme a capability for partial retirement, which I gather everyone thinks is a good idea. That involves drawing some proportion of the pension but continuing to work on a part-time basis. It contends that the provisions that fall out of the various Acts and these regulations would make the partial retirement provision non-viable. Lastly, it contends that that does not honour assurances given by Ministers. It quotes in particular a Written Ministerial Statement of 28 October that states:
“Where firefighters are transferring to the 2015 scheme, they can be reassured that the pension they have built up in their existing schemes will be fully protected, and they can still choose to retire at the age they currently expect (which could be from age 50)”.
The Fire Brigades Union has had no formal direct response to its concerns, which seems to me to be of singular concern. In a sense, the union has had a partial response through the response in the Explanatory Memorandum. I mean “partial” in two ways: first, the response is incomplete, and, secondly, it affirms rather than proves that there is some cost. As the Minister said, the Opposition have more or less gone along with these regulations consensually because we recognise the financial problems and we are not seeking to burden the Government with more of them. However, the response affirms that it will be costly rather than arguing it through.
Lord Newby
My Lords, I am grateful to the noble Lord for his welcome of the regulations as a whole. Perhaps I may deal with the consultation and the Fire Brigades Union. The Department for Communities and Local Government undertook a short technical consultation on the draft regulations that we are discussing.
Lord Tunnicliffe
I noticed the word “technical”. I do not see suggested anywhere in the regulations the idea of technical. Obviously I have not read the Public Service Pensions Act cover to cover. It talks about consultation and I am not sure what is meant by the word technical in that context.
Lord Newby
My Lords, a key difference between these regulations and the main regulations being established under the Public Service Pensions Act is that these consultations cover only these technical regulations. The regulations we are talking about today are not the main scheme regulations. They are simply a series of regulations that enable the transition from the earlier scheme to the new scheme to go smoothly, without people being taxed twice or not taxed enough, and to make sure that, from the Government’s, the employer’s and the individual pension holder’s point of view, things move forward in terms of their entitlement, almost as though no new schemes were being introduced. That is why I used the word technical. Perhaps I should have said that they undertook a short consultation on the draft technical regulations, which would have been clearer English. As the noble Lord pointed out, the FBU submitted responses to that consultation.
As is always the case with these types of consultations, the department did not provide an individual response; it provided a response that covered them all. As the noble Lord said, it published its formal response in the draft Explanatory Memorandum which accompanied the draft regulations. Yesterday, a committee paper was circulated to members of the Firefighters’ Pension Committee notifying them of the outcome of that technical consultation. The noble Lord is right that that committee is coming to an end, but it is being subsumed into the scheme advisory board, which will be a body on which the FBU is represented and the purpose of which is to advise the department on the operation of the new scheme going forward.
Lord Tunnicliffe
My Lords, if it is technically possible, perhaps I could receive a copy of that circulated paper electronically so that I might have it in my in-tray by tomorrow morning.
Lord Newby
The noble Lord certainly can have a copy of the response sent to the committee. I am happy to give that assurance. That is what has happened. In terms of the FBU’s concern, its response proposed that these regulations should permit former scheme members who joined the new firefighters’ pension scheme to transfer 2006 scheme benefits into the 2015 scheme and allow 1992 scheme members to take their pension without having to retire or face a tax charge. The former would increase scheme costs and the latter would substantially increase costs, as 1992 scheme pension benefits will come into payment earlier and will be unfunded. It was open to representative bodies to put forward alternative scheme designs during the discussions leading up to the publication of the proposed final agreement to ensure that any increased costs were taken into account when setting the accrual rate in the 2015 scheme.
The department concluded that it was not appropriate to use these regulations, which are of a technical nature, to provide unfunded improvements to existing scheme benefits, as requested in the consultation. There is a process point about which regs would be the appropriate ones to deal with that issue. The department and the Government’s contention is that, as these are very technical regulations, they are not the appropriate regulations to do that. The main scheme regulations, if it were to be done, would be the way to do it. However, the Government are not convinced that it should be done. No doubt these issues will be raised again in ongoing discussions via the scheme advisory board between the FBU, the department and other stakeholders.
Firefighters’ Pension Scheme (England) (Consequential Provisions) Regulations 2015
(9 years, 9 months ago)
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Lord Newby
That the Grand Committee do consider the Firefighters’ Pension Scheme (England) (Consequential Provisions) Regulations 2015.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments
Police Pensions (Consequential Provisions) Regulations 2015
(9 years, 9 months ago)
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Lord Newby
That the Grand Committee do consider the Police Pensions (Consequential Provisions) Regulations 2015.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments
Public Service (Civil Servants and Others) Pensions (Consequential and Amendment) Regulations 2015
(9 years, 9 months ago)
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Lord Newby
That the Grand Committee do consider the Public Service (Civil Servants and Others) Pensions (Consequential and Amendment) Regulations 2015.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments
National Health Service Pension Scheme (Consequential Provisions) Regulations 2015
(9 years, 9 months ago)
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Lord Newby
That the Grand Committee do consider the National Health Service Pension Scheme (Consequential Provisions) Regulations 2015.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments
Teachers’ Pension Scheme (Consequential Provisions) Regulations 2015
(9 years, 9 months ago)
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Lord Newby
That the Grand Committee do consider the Teachers’ Pension Scheme (Consequential Provisions) Regulations 2015.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments
House of Lords
Philippines: Typhoon Haiyan
Lord McConnell of Glenscorrodale
To ask Her Majesty’s Government what assessment they have made of the international recovery effort following Typhoon Haiyan in the Philippines and the United Kingdom’s contribution to that effort.
Lord Bourne of Aberystwyth (Con)
My Lords, the United Kingdom was the largest bilateral donor, contributing £77 million in response to Typhoon Haiyan. The Independent Commission for Aid Impact found the United Kingdom’s response to the crisis to be exemplary. While some longer-term needs remain, the Government of the Philippines are of course leading the recovery effort with international support, including more than £8 million from the United Kingdom. That support is helping to increase communities’ capacity to manage extreme weather events.
Lord McConnell of Glenscorrodale (Lab)
I thank the Minister for his Answer and the Government for their strong support for the Philippines. I look forward to seeing the results of some of that support when I return there as a parliamentary volunteer during the February Recess. The sustainable development goals drafted by the United Nations for post-2015 include goal 11, on the important issue of resilience to natural disasters and extreme weather events. Will the UK Government be arguing strongly for natural disasters and resilience to extreme weather events to feature prominently in the final goals agreed in September?
Lord Bourne of Aberystwyth
I pay tribute, first of all, to what the noble Lord has already been doing in the Philippines; as he has just said, he is going there again, and he has made a significant difference. On the sustainable efforts that he mentioned in relation to millennium goals and continuing development, the United Kingdom is committed to ensuring that climate is fully referenced post-2015 and that natural resource management is up front. Everything that we have been doing with our assistance has been towards supporting continual, sustainable development.
Lord Avebury (LD)
My Lords, I understand that less than a third of the $788 million needed by the Office for the Coordination of Humanitarian Affairs programme for the recovery of the Philippines has been received. Has the Disasters Emergency Committee in the UK yet activated the pledge it made of £88 million, and will we encourage other rich states to come up to the plate and contribute, too?
Lord Bourne of Aberystwyth
As I said, the United Kingdom has been the largest single donor, eclipsing even the United States—which, of course, is a far richer country and has far stronger ties with the Philippines. We are committed to ensuring that all the aid that we have contributed is spent on ensuring that this dreadful disaster is met and on trying to provide resilience against future disasters.
Baroness Hayman (CB)
My Lords, I declare an interest as a trustee of the Disasters Emergency Committee. Following on from the point of the noble Lord, Lord Avebury, does the Minister agree that, in addition to the Government’s response, the British public responded to the appeal with enormous generosity and that the independent assessment of the results of that generosity has shown that UK aid and humanitarian agencies have provided highly effective and timely help on the ground?
Lord Bourne of Aberystwyth
I join the noble Baroness in paying tribute to what the charitable sector has done. It always responds magnificently in the United Kingdom, and it certainly did in relation to this disaster. Of course, the United Kingdom has also given through the EU, so we have actually given in addition to the sums that we have given as the single largest donor.
Lord Collins of Highbury (Lab)
My Lords, it is a sad fact that the vulnerable poor cluster in areas where climate change has a disproportionate effect. Last March, DfID declared that investment in the Philippines would be focused on building back better and longer-term climate resilience. Has the aid focused on protecting the poorest and most vulnerable?
Lord Bourne of Aberystwyth
Clearly, the area affected has been extremely poor, even by Philippine standards—the Philippines being a relatively poor country. We have sought to use the aid to meet the immediate need but also to provide resilience against future events of this nature. Indeed, all the housing that was put up in response to Haiyan withstood the more recent, dreadful typhoon, Hagupit, at the end of last year. In addition, money is being spent on ensuring that there is insurance and on getting better advice on meteorological events. As I said, we are very keen that climate change features in the 2015 millennium development goals.
Lord Hylton (CB)
My Lords, there have been reports of moneys that had been made available standing idle in bank accounts. Will the Government ensure that what is available is spent promptly and effectively and that there are proper safeguards against corruption?
Lord Bourne of Aberystwyth
It remains very much at the forefront of the thinking of the Secretary of State and the department to ensure that the money is got out and used very quickly, and that is happening. I come back to the independent assessment of ICAI, which gave us green lights on all but one factor—which was in relation to medium-term goals, and we have sought to assess that—so our response has been exemplary, not least in making sure that the money is usefully spent.
Baroness Manzoor (LD)
My Lords, what is being done regarding the immunisation programme for children? Are we giving aid to that area?
Lord Bourne of Aberystwyth
Yes, that is also happening. We recognise the danger of water-borne disease, so immunisation and healthcare are very much at the forefront of ensuring that money is well spent, as is being done on shelter as well. These are priority areas.
The Earl of Sandwich (CB)
Does the noble Lord agree that these additional priorities in the Philippines, the Middle East and so on have brought the United Kingdom’s share up to and past the 0.7% figure? This must be enshrined in law and noble Lords must support that.
Lord Bourne of Aberystwyth
I personally strongly support the party-political broadcast that the noble Earl has just given. This is important. We have a very good record on international aid and I hope very much that the figure is enshrined in law.
Lord West of Spithead (Lab)
My Lords, does the Minister agree that the new aircraft carriers are amazingly well configured for disaster relief, and that if they are used for that in future there ought to be a better mechanism for transferring money across from DfID funding to defence when they are used in that way?
Lord Bourne of Aberystwyth
Talking of party-political broadcasts, I very much congratulate the noble Lord on his contribution. He will be aware that both the RAF and the Royal Navy were part of the response to Typhoon Haiyan. The Ministry of Defence was accredited with the spending that they both incurred.
Smoking: E-Cigarettes
(9 years, 9 months ago)
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Viscount Ridley
To ask Her Majesty’s Government whether they will consider encouraging rather than discouraging the spread of vaping, in the light of the Cochrane review of e-cigarettes published on 17 December 2014 which found that e-cigarettes were more effective as an aid to quitting smoking than any other method.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, we recognise that e-cigarettes are being used by some smokers to help them cut down, or quit, tobacco. That is why the Government are already working towards a regulatory framework that ensures that they meet basic quality standards and are accompanied by sufficient information to enable informed choices. However, we would not wish to see children taking up vaping, as nicotine is a highly addictive substance. That is why we are also introducing a minimum age of sale for these products.
Viscount Ridley (Con)
I thank my noble friend for that encouraging Answer, but I hope that I can lure him into going just a little bit further. Given that 2 million people are vaping in this country, including a number of Members of your Lordships’ House, that 99% of them are smokers or ex-smokers and that the NHS says that vaping is 1,000 times safer than smoking and probably no more dangerous or addictive than coffee, does he therefore agree with me that it might be worth asking the Chief Medical Officer to look into how we can encourage this technology, given that it has a chance to do what patches, bans, health warnings and taxes have failed to do over decades, which is at last to consign the cigarette to the ashtray of history?
Earl Howe
My Lords, e-cigarettes are undoubtedly helpful to some people in enabling them to cut down on, or quit, smoking. The evidence is encouraging and we would not want to stop smokers trying out e-cigarettes as an alternative, particularly if other remedies have failed. Equally, we need to be cautious as regards the long-term health effects of using e-cigarettes. That is why the Chief Medical Officer is currently not able to recommend their use.
Lord Hunt of Kings Heath (Lab)
My Lords, does the noble Earl agree that the noble Viscount is perhaps guilty of a little bit of journalistic licence on this issue? The Cochrane review undoubtedly produces encouraging results, but its research contains a big “but”, in that it cautions that only two studies, covering just over 600 smokers, were reflected in the review. The Cochrane review says that we should await the outcome of further studies. Does the noble Earl agree, and can he inform the House when we are likely to see the outcome of those further studies?
Earl Howe
My Lords, the noble Lord is correct. The Cochrane review concluded that the quality of the evidence overall is low because it is based on only a small number of studies. The National Institute for Health Research has recently commissioned a large randomised control trial to examine the efficacy of e-cigarettes compared with nicotine replacement therapy when used within the UK’s stop smoking services. That project is due to end in 2018 and will certainly improve our current understanding.
Lord Rennard (LD)
My Lords, does my noble friend agree that we need a public health education campaign to persuade people that there are absolutely no health benefits whatever, or indeed any merit, in becoming addicted to nicotine, and that the promotion of devices such as e-cigarettes should be purely for the purposes of encouraging people to be weaned off their addiction to tobacco with nicotine, as tobacco is still killing nearly 300 people every day in this country?
Earl Howe
My noble friend is absolutely right. I hope that message will come through loud and clear from the measures the Government are taking to ban smoking in private cars when children are present, to introduce standardised tobacco packaging and to prohibit proxy purchasing of tobacco.
Lord Cunningham of Felling (Lab)
My Lords, is the noble Earl satisfied that e-cigarettes are tamper-proof and that what they contain cannot be substituted for other more dangerous substances?
Earl Howe
The noble Lord makes an extremely important point. It is one that is addressed in the tobacco products directive, which is due to come into force next year. The EU Commission is clear that any e-cigarettes sold need to be tamper-proof, particularly as regards children interfering with the contents.
Lord Patel (CB)
My Lords, it is good to know that the National Institute for Health Research would support a larger randomised study, but what the noble Viscount, Lord Ridley, said is true. The current evidence from the Cochrane analysis—the most robust method we know of analysing whether a product, device or a drug is effective against the desired outcome—is that, although the studies were small, 14 observational studies and two randomised trials show that e-cigarettes are more effective than nicotine patches or a placebo. Would the Minister agree that the industry should now also address a standard dosage of nicotine and ensure that the quality of the nicotine used in e-cigarettes is standardised across the industry to avoid subsequent risks?
Earl Howe
The noble Lord makes some important points. He has highlighted the fact that many products on sale are of, shall we say, variable quality. There are risks around the extent to which the dose of nicotine delivered varies; the quality of the ingredients can be suspect; and there is a question mark over the electrical safety of some products. We cannot make a general statement about products that are currently on sale. Nevertheless, it is right that the European Union has taken this matter in hand. From May 2016, only licensed e-cigarettes will be able to contain nicotine in strengths greater than 20 milligrams per millilitre. That will introduce some standardisation.
Earl Cathcart (Con)
My Lords, I started smoking before I was a teenager and in recent years smoked up to 50 cigarettes a day—not good for me. I started vaping in July and I have not had or wanted a puff of tobacco since. In spite of trying to give up on countless occasions, only these vaping e-cigarettes have actually helped me kick the habit. Surely that has to be a good thing. Should we not encourage it to help not just me, but the hundreds of thousands or millions of people who want to give up smoking?
Earl Howe
May I congratulate my noble friend on his achievement? As I have indicated, the advice given by the NHS is that, particularly where other remedies have failed, e-cigarettes may have a place where the person wants to quit. It is true that, while levels of toxicants are present in electronic cigarette liquids and vapour, they are very much lower than those found in conventional cigarette smoke. They are not considered to pose any significant passive inhalation risk.
Credit Unions
(9 years, 9 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government when they plan further reform of the law regarding Credit Unions.
Lord Kennedy of Southwark (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as director of London Mutual Credit Union.
Lord Newby (LD)
My Lords, on 31 December 2014 the Government published a response to the call for evidence on credit unions. In this response, the Government committed to consider, in the next Parliament, potential changes to credit union legislation.
Lord Kennedy of Southwark
My Lords, it is important for credit unions to be able to grow on a solid base to deliver for their members. Whichever party or parties are in government after the general election, would the noble Lord agree that two of the most important areas for reform are reform of the 2 million cap on potential members—maybe change that to actual members—and removal of the legal barriers to enable credit unions to give other financial products to their members?
Lord Newby
Yes, I agree with the noble Lord that those are both important issues. In the response to the call for evidence, the Government have committed to considering changes to the common bond legislation. The noble Lord will be aware that credit unions maintain their exemption from the consumer credit directive only if they have a restricted potential market. It is important that we do not expand the definition of the common bond in ways that could jeopardise that exemption.
Lord Hunt of Wirral (Con)
In declaring my interest as chair of the Credit Union Expansion Project, I point out to my noble friend the Minister how much I welcome the measures that this Government have taken to reform credit union legislation and the recent commitment made to produce proposals for further reforms in the next Parliament. I join the noble Lord, Lord Kennedy of Southwark, in welcoming that. I hope that it will receive support from all sides of the House. Will the Minister agree that legislation is only part of the answer? Helping credit unions to co-operate and to become more competitive and attractive will be key to growing this sector sustainably.
Lord Newby
Absolutely, my Lords, and I commend the noble Lord for his work in this area. Increased collaboration is vital if the sector is to become more competitive and grow. The Credit Union Expansion Project, to which the noble Lord referred and which the DWP is funding to the tune of £38 million, is aimed at doing exactly that—for example, by providing shared back-office services to cut costs. However, the sector would also be strengthened if it were able to speak with one voice, which requires a reduction in the number of trade associations currently operating in the sector.
Lord McFall of Alcluith (Lab)
My Lords, our ambitions for the growth of credit unions on a national scale have a long way to go. Given that banks and building societies have extensive networks and operational systems, is there now a case for the Government to consider establishing a community reinvestment Act, as in the United States, as a solution to the problem of providing affordable finance for all individuals?
Lord Newby
My Lords, there is scope to look at a whole raft of new initiatives, to make sure that there is access to finance for people on more modest incomes. One development in recent weeks has been agreement with the banks on fee-free basic bank accounts, which will be a good improvement for many people who are currently denied even the most basic bank accounts.
Lord German (LD)
My Lords, the Credit Union Expansion Project was designed to enable people on lower incomes to have access to modern banking methods. One of the problems for people in this category is that they have not been able to get cheaper electricity and gas bills because they have been unable to pay by direct debit. Can my noble friend say what progress has been made by both credit unions and the Post Office card account to enable people to access those cheaper bills through the direct debit mechanism?
Lord Newby
As my noble friend says, this is a very important issue for people on low incomes. A number of the largest credit unions already offer current accounts that have a direct debit facility. However, they are still a small minority. This is an area where the Credit Union Expansion Project is very important, as it will allow more of them to offer such services.
More generally, the Government’s announcement in December about basic bank accounts means that people who open such accounts will have access to a range of normal personal current account facilities, including direct debits.
The Lord Bishop of St Albans
My Lords, I imagine many of us are concerned about the culture of debt that seems to be normative in many parts of our society. In the light of this, can the Minister tell us whether the Government have any plans, first, to encourage all schools to consider working closely with credit unions, as in the case of the credit union in St Albans, where I come from and, secondly, to further roll out and encourage payroll savings schemes as part of a wider initiative to encourage saving and financial responsibility across society?
Lord Newby
My Lords, the Government support both those concepts. The right reverend Prelate will be aware that the Government have been working with the Archbishop of Canterbury’s task force on affordable credit and savings to institute the LifeSavers project, under which primary schools are working with credit unions to encourage young children into good savings habits and raise awareness of credit unions.
Lord Davies of Oldham (Lab)
My Lords, the House will have noticed just how vague the Government’s commitment is when they say that after the election—yet another commitment for “after the election”—they will introduce additional legislation. Does the Minister recognise that what the next Labour Government will do is to increase the levy on payday lenders in order to help the development of credit unions?
Lord Newby
My Lords, the Government have legislated several times to modernise the law in respect of credit unions. The proposals of the Labour Party are based on an assumption that payday lenders represent a large stock of cash. The way in which the payday lending industry is going suggests that there simply will not be that amount of resource available from the sector.
Lord Clarke of Hampstead (Lab)
My Lords, when this subject was discussed on a previous occasion, I asked the Minister if he would liaise with the Department for Education to see if some sort of campaign could be set up to get children at school learning about the benefits of credit unions. St Albans credit union, of which I am a member, has links with a number of schools. This helps children get into the habit of understanding the need to save before they borrow. Did any talks ever take place between the two departments, and if not, will they go ahead and do so now?
Lord Newby
My Lords, as I have said, the Government are working with the Archbishop of Canterbury’s task force to get credit unions into schools, initially in Lewisham, Bradford and Nottingham, but with a view to rolling the project out in the near future to 100 schools and involving 30,000 children. Also, for the first time last autumn, we instituted financial literacy as a compulsory part of the national curriculum.
Greece: New Government
(9 years, 9 months ago)
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Lord Clinton-Davis
To ask Her Majesty’s Government what are their priorities in establishing a relationship with the new government of Greece.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, the Government’s first priority is to establish a strong working relationship with Greece’s new Government. Last week, the Prime Minister called Prime Minister Alexis Tsipras on the telephone to congratulate him, and yesterday the Chancellor met the new Finance Minister, Yanis Varoufakis. The UK remains committed to working closely with the new Government on the full range of bilateral, EU, NATO and wider international issues.
Lord Clinton-Davis (Lab)
My Lords, are not the poor and many middle-class people in Greece enduring unbelievable hardship? What are the United Kingdom Government able to do to mitigate this disaster? Are the people of Greece able to look forward in any way? It is hardly surprising that they are resorting to radical measures. What can the Government do, given that Britain is a member of the European Union, to alleviate their plight?
Baroness Anelay of St Johns
My Lords, we are indeed a member of the EU, but we are not a member of the eurozone; so I would gently say to the noble Lord that we are not directly involved in Greece’s debt repayment negotiations, and nor indeed should we be. Of course, we are open to the discussions with the Greek Government, as I explained in my first Answer. The discussions yesterday were cordial and constructive, and that was the interpretation of both the Greek Finance Minister and the Chancellor of the Exchequer. As I say, we are open to discussions, but since we are not a member of the eurozone we are not the country that will take the decision about how the Greek Government may decide to present their plans—which possibly will be next week. I know that they are working hard to achieve that.
Lord Pearson of Rannoch (UKIP)
My Lords, given the euro’s catastrophic effect on jobs and prosperity, should not our top priority be to encourage Greece, and indeed the other euro member states, to abandon it? If that led to the collapse of the whole project of European integration, would that not be hugely beneficial to us all? Just in case the Minister does not agree with me, can she tell noble Lords what is now the point of the European Union and its wretched euro?
Baroness Anelay of St Johns
My Lords, it is clear that the stand-off between Greece and the eurozone is fast becoming the biggest risk to the global economy and is a rising threat to our economy at home. I say that, and indeed the Chancellor of the Exchequer said it yesterday after his meeting with the Greek Finance Minister. It is up to Europe to come to a conclusion which means that Greece can remain part of the euro, that the European Union can prosper, and that jobs and growth can continue. That is the way forward for success in Europe and for the success of this country in Europe.
Baroness Ludford (LD)
Does my noble friend agree that if, as we all hope, the eurozone is to get more jobs and growth, then in communicating with the Greek Government, we must urge structural reforms, including eliminating cronyism and corruption; that those are essential if we are to get, in the words of the new Finance Minister, a reformed, not a deformed, Greece; that fiscal responsibility and sustainability are essential; that spending more money without knowing where it is coming from—a fault not unknown in some parties in this country—is inadvisable; and that the UK can also offer the Greek Government the benefits of the progress that has been made in this country in tackling tax evasion in the last five years?
Baroness Anelay of St Johns
My Lords, I agree with every word that my noble friend said.
Baroness Hooper (Con)
My Lords, can my noble friend reassure us and confirm that the relationship between Greece and the UK has been greatly reinforced by the educational exchanges that have taken place over the years, especially in the field of medicine? Will she therefore reassure us that the existing educational initiatives will be reinforced?
Baroness Anelay of St Johns
My Lords, I entirely agree with my noble friend on the importance of those educational exchanges. Work is done throughout various government departments and the FCO always looks very carefully at how we can give advice on such matters, too.
Lord Tomlinson (Lab)
Does the Minister agree that it is a little bit too simplistic just to say, “We are not members of the eurozone”, and therefore almost wash her hands of it? There are loans from the International Monetary Fund and we have an interest in those loans being properly managed. Can she tell us what the Government’s intention in that regard is?
Baroness Anelay of St Johns
My Lords, we would never wash our hands of discussions with our colleagues within the European Union. I think that I have made it clear that both the Prime Minister and the Chancellor of the Exchequer have already had discussions. Indeed, my right honourable friend the Prime Minister telephoned Mr Tsipras on the very day that the Greek Prime Minister took his position. Discussions are ongoing and there will, of course, be meetings next week at the European summit. As regards the IMF, we are indeed part of the system that backs it up. The IMF’s status as preferred creditor means that it is repaid first. What is important is that we do not get to the point of a Greek default. The new Greek Government are working on that and it is important for them to be able to discuss what kind of package they can put together, as they work around their colleagues in the eurozone this week.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, as the noble Lord rose before we had got to half an hour, we will take a final question; and as we have not heard from the Cross Benches on this Question, it will be for them to ask it.
Lord Kilclooney
My Lords, when the Chancellor of the Exchequer met the Greek Minister yesterday, did he point out to him the advantages the United Kingdom had by not being a member of the eurozone?
Baroness Anelay of St Johns
My Lords, he pointed out the advantages of having a Government who put competence over chaos.
Hereditary Peers By-Election
Renewable Heat Incentive Scheme (Amendment) Regulations 2015
Baroness Verma
That the draft regulations laid before the House on 10 and 15 December 2014 be approved.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 27 January.
National Employment Savings Trust (Amendment) Order 2015
Lord Bourne of Aberystwyth
That the draft orders laid before the House on 8 and 16 December 2014 be approved.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 29 January.
Misuse of Drugs Act 1971 (Amendment) Order 2015
Baroness Williams of Trafford
That the draft order laid before the House on 17 December 2014 be approved.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 29 January.
Deregulation Bill
(9 years, 9 months ago)
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16:25 - Division on Amendment 3 - Ayes: 190 / Noes: 259 - Amendment 3 disagreed.
17:22 - Division on Amendment 4 - Ayes: 191 / Noes: 235 - Amendment 4 disagreed.
Lord McKenzie of Luton
“(2) After subsection (2) (which imposes a general duty with respect to health and safety on self-employed persons) insert—
“(2A) Nothing in subsection (2) shall preclude the Secretary of State from making regulations exempting self-employed persons carrying out certain activities from the provisions of subsection (2) or from specified regulations thereunder where it can be shown that their work activities pose no potential risk of harm to others.””
Lord McKenzie of Luton (Lab)
My Lords, in moving Amendment 1, I shall speak also to Amendment 2. The purpose of these amendments is to ensure that any changes to health and safety legislation affecting the self-employed do not stray more widely than those recommended by Professor Löfstedt and that the prescribed description approach currently in the Bill is removed. They further seek to ensure that the process for constructing and implementing regulations is fit for purpose and require them to meet certain criteria, something which has eluded government attempts so far.
In his report, Reclaiming Health and Safety for All, Professor Löfstedt recommended that those self-employed whose activities posed no potential risk of harm to others should be exempt from the general duties of the Health and Safety at Work etc. Act 1974. This is notwithstanding that it is generally acknowledged, including by the professor himself, that the current duties do not overburden the self-employed and that any requirements in such situations would be minimal in terms of time, cost and enforcement effort by the HSE and local authorities. But the Government accepted this recommendation, asserting that Europe adopted a more proportionate response on such matters and that it would remove unnecessary concerns over the perception of heavy-handed enforcement. Given the minimal benefits which would flow from implementing the recommendation, and the risk of confusion which any legislative change could engender, we and many others have argued for making no change—for the status quo—and this remains our preferred position. Nevertheless, we have to accept for the time being at least that this is not the position adopted by noble Lords in Committee.
The task as we see it now is to constrain the primary legislation and require a robust process for secondary legislation to see that the professor’s recommendation can be accommodated without the prospect of wider exemptions from health and safety legislation being adopted by default, mistake or otherwise—in other words, as the CBI recommends, going back to square one.
Baroness Donaghy (Lab)
My Lords, it is important to place on the record and clarify some of the misunderstandings that took place in Committee. At the beginning of the discussions on the Bill, the Government prayed in aid, with a great deal of enthusiasm, the recommendations of Professor Löfstedt, who is professor of risk management at King’s College London. That enthusiasm became less and less as Members of the Committee challenged some of the statements contained in the proposals. Certainly, my noble friend Lord McKenzie challenged them on a number of occasions.
In Committee on 21 October, the noble Lord, Lord Curry of Kirkharle, said:
“I was in contact with Professor Löfstedt in the past week. He has seen the wording of the Bill and appears to be very content with it”.—[Official Report, 21/10/14; col. 568.]
It is important that we set the record straight: Professor Löfstedt is not in the least bit happy. My noble friend has already quoted from his letter. To save time, I will quote a small additional bit. He says that,
“the proposed Government list may increase injury and death in the workplace something that I never intended with my original recommendation”.
It is very serious that there has been a misunderstanding about the authoritative recommendations that were claimed to be behind this proposal. I agree with my noble friend: it will increase confusion; it will add complexity to the Health and Safety at Work etc. Act; it will add burdens to the conscientious self-employed who want clarification about their obligations; and it is a charter for cowboys. I urge the House to support the amendment.
Lord Lea of Crondall (Lab)
My Lords, it is very noticeable that when people such as those from the Federation of Small Businesses are asked, “Where is the evidence that more people ought to be excluded?”, they say, “It is not a question of particular evidence; it is a question of perception”. Something rings a bell in my mind when somebody says, “It is not the evidence; it is a question of perception”. As somebody once said, what about changing the perception? I think that is where we are at the moment. Indeed, that is where the Government and the employers do not want us to be—to look at the evidence.
Instead, there are lots of crocodile tears and lots of red herrings dragged across the trail. One red herring is, “They do it in Germany”. Well, they do lots of things in Germany. In the one minute I have available, I say to the Government that if they would like to start citing Germany and give us the whole employment package that they have in Germany, we on this side will vote for it. I put that proposal; perhaps the Government would like to agree to it.
Finally, there is a trend in Britain today, whether or not it is being deliberately promulgated—that makes it sound like some sort of conspiracy theory, but I do not go in for conspiracy theories because we are often at the receiving end of them. But if there has been an increase in self-employment, it is hard to reconcile with the idea that it is very difficult to be self-employed now because of all the red tape. Anyway, on one side there has been a vast increase in self-employment, if we can get our brains around that. On the other side, there are a number of people who do not have contracts of employment. That is partly a question of whether, ex hypothesi, in a static labour market there are a greater number of people in work. But on the employed side of the labour market, which is the vast majority, the quality of the contracts of employment is being reduced bit by bit.
One of the great advances since the war has been to improve the quality and content of the contract of employment. If you were to interview a random group of self-employed people and a random group of people with good contracts of employment, a lot of people who are self-employed would turn out to have some sort of relation to the employed but with a subcontract in the middle whereby they are not really self-employed—they are on something which does not give them a contract of employment with four weeks paid holiday and all the rest of it. Will the Minister therefore comment on the fact that it is very desirable that the good-quality contract of employment terms are a benchmark for the self-employed, and that this is not a further means of endeavouring gradually to wear away a benchmark on which we in this country have always been able to rely?
Lord Jordan (Lab)
My Lords, the Health and Safety at Work etc. Act 1974 transformed the safety landscape for all people at work. For the first time, it told everyone at work, “You are responsible for safety”. The Government’s proposals concerning the self-employed are a step backwards, telling some people, “Don’t worry, you are not responsible if someone gets hurt”.
Those who know the world of work are telling the Government that they have got it wrong. The Government have told them that the cost of regulation will be reduced, but they know that the cost of regulation pales into insignificance against the cost of accidents. The CBI and the EEF know it and, as my noble friend Lord McKenzie said, have both told the Government that the self-employed exemption in its current form is not fit for purpose.
What will be the cost of ignoring the significant warning of Professor Löfstedt? He is worth quoting, because he has analysed the possibilities. He has said:
“The danger with the proposed list is that self-employed individuals who are not on it will be exempt even if the jobs that these individuals do are in actual fact rather dangerous and unsafe. In other words the proposed Government list may increase injury and death in the workplace”.
The Government proposals, in their present form, will carry a cost: not in money, but in lives. This amendment will help to prevent that.
The Earl of Lindsay (Con)
My Lords, I should declare an interest as being the chairman of the United Kingdom Accreditation Service, because it is from that perspective that I want to speak to the noble Lord’s amendment. It is by virtue of that role that I am familiar with the intentions of Professor Löfstedt when he compiled his report and with the concerns that lie behind the amendment. Equally, I am familiar also with the thinking that has gone into the way in which the Bill, and particularly this clause, are drafted.
I firmly believe that accredited certification of occupational health and safety management systems could support almost every scenario. It could certainly support and benefit the status quo; it could certainly support and benefit the approach that Professor Löfstedt has proposed, which is one of positive exclusions. Equally, and probably importantly in terms of the House’s consideration of this amendment, it could also support and benefit the clause in terms of positive inclusions.
Accredited certification can provide the regulator with an authoritative assurance that the businesses concerned have good health and safety policies, procedures and controls in place. It allows organisations to earn recognition for their efforts to manage their own health and safety obligations. Accredited certification could act as a safety net for those industries, businesses and professions which may be excluded from the Act. In other words, if in doubt whether a business, profession or an industry should be within the ambit of the Act, one can safely err on the side of deregulation by putting in place a system of voluntary or mandatory accredited certification to underpin safety standards.
The accredited certification would be carried out against the recognised standard for occupational health and safety management—that is, BS OHSAS 18001—which is soon to become more formally recognised by the international standards organisation through its adoption as ISO 45001. The certification bodies would need to be accredited by the United Kingdom Accreditation Service, ensuring their competence to carry out the certification.
There may be concerns that a management system approach may not be suitable for very small businesses. However, the standard is flexible enough to be adopted by all sizes of organisation. Alternatively, size limits could be introduced whereby all businesses in a sector above a certain threshold would be required to comply.
Certification to BS OHSAS 18001 is now widely available in the United Kingdom. Some 40 certification bodies are accredited by the United Kingdom Accreditation Service to offer certification to the standard. It is estimated that more than 10,000 businesses are now certified as complying with the standard, and that figure is growing.
BS OHSAS 18001 was developed by a range of organisations specialising in health and safety management, certification and end-user businesses. It was co-ordinated by the British Standards Institution, the national standards body for the UK. The standard would bring immediate benefit in workplace safety to the status quo. It would bring benefit to the approach that Professor Löfstedt proposed. Most importantly, it would certainly benefit and support Clause 1.
Lord Wallace of Saltaire (LD)
My Lords, this clause has emerged out of a series of consultations during the past four years. As the noble Lord, Lord McKenzie, remarked in his very detailed and constructive speech, the first consultation took place in 2012 on the principle that there should be a list of undertakings prescribed in regulations that are excluded from health and safety law. That did not find large favour in the consultation. The most recent consultation has not found very large favour for the Government’s current proposals. We are finding it difficult to satisfy all those concerned. I note that the noble Lord did not quote the Federation of Small Businesses’ response to the current consultation, which is a good deal more favourable that those that he did quote. On the question of the current consultation, it took a certain amount of time; we had a lot of responses to the consultation and we had to put them all together. It has now been published and the Government will, of course, consult and consider what their response should be. We very much hope that we will have time to consult further and return to this issue before we get to Third Reading.
The Health and Safety Executive has, of course, been actively engaged in this entire process over the last four years; I stress that it is very much part of the process of policy-making. We all share the underlying purpose, which is as it should be, as the noble Lord, Lord McKenzie, suggested in his speech, a lessening of health and safety burdens on those self-employed who are not at risk and are highly unlikely to put others at risk from their activities. That is what Professor Löfstedt suggested in his earlier report; it is part of the German system. To the noble Lord, Lord Lea, I say in passing that there are many parts of the German system of employment, training and employment protection that we would very much like to take on board. I am happy that this Government have indeed taken us a good deal further down the road towards apprenticeship training than their predecessors. There are other aspects—including some aspects of the Meister system, now that I have begun to understand that—which are clearly restrictions on trade and which we do not wish to follow. However, one cannot ever take an entire model from one country and put it into another.
There are other areas over which I have spent some time arguing with German policymakers over the years; the idea that, just because a system has worked since the 14th century, one should maintain it at all costs, is not always an idea that one wishes to promote. I was one of those involved in the British side of the argument over the Reinheitsgebot, which the noble Lord might remember. It was to do with the purity of beer and was passed in about 1351. However, we will leave the German dimension aside and return to the current issue. We apologise that the consultation document has only just appeared. The Government will respond as soon as we are ready and we hope that we will have more to say on this before we reach Third Reading.
The issue at stake is which side one takes in reducing the burden, and whether to make a list of those, as this proposal suggests, whose activities are at greater risk of putting others in harm’s way from the way they are conducted—those involved in construction or a range of other activities that involve interaction with others. Professor Löfstedt prefers a system in which there is only a prescribed list of those activities that are exempted from the current health and safety regulations. The argument that we have been having through two series of consultation has been about how one defines “low risk” and “high risk”. This is an area, after all, on which one can spend a great deal of time, having a large number of consultations without meeting consensus. I regret that we have not yet reached an entire consensus.
The noble Lord’s first proposed amendment reverses the effect of Clause 1, so that all self-employed persons continue to owe a duty under Section 3(2) of the Health and Safety at Work etc. Act unless regulations are made to exempt them from that law, whereas the Government’s proposals exempt them unless they are on another prescribed list. This approach, we argue, would increase confusion for the self-employed because there are a plethora of low-risk activities that would need to be captured to ensure that the regulations were as extensive as possible. Furthermore, each of these activities would need to be appropriately and carefully defined. This could create further uncertainty in the law and make it unwieldy for the self-employed to comply with. This is part of what the Federation of Small Business was saying in its response to the current consultation.
The noble Lord’s second amendment seeks to impose various conditions upon the making of regulations before self-employed persons can be exempt from Section 3(2) of the Health and Safety at Work etc. Act 1974. The amendment would require an independent review to be conducted and considered by both Houses before the regulations can be brought into force. We do not consider this necessary. The Government amended Clause 1 in Committee so that regulations made under the power that it creates are subject to the affirmative resolution procedure before they come into force. This provides Parliament with an adequate opportunity to scrutinise and debate the list of prescribed activities to ensure they are fit for purpose.
The conditions which the noble Lord seeks to impose on the regulations can already be considered by both Houses as part of the affirmative resolution procedure if, indeed, Parliament considers those factors to be relevant. Additionally, the proposed prescribing regulations contain a commitment for their review and for a report to be published after five years of making them. That report will seek to assess the extent to which the intended objectives of the proposed change have been met. Given the safeguards already in place, the Government do not consider that a further independent review of this alternative proposal would be of any benefit.
It is imperative that self-employed persons, especially those involved in conducting high-risk activities, understand when health and safety law will continue to apply to them after this legislative amendment is made. For the reasons I have already given, we do not consider the noble Lord’s amendments to be the best way of achieving that. They are unnecessary and overly burdensome. After all, the purpose of the Bill is to reduce unnecessary burdens. The clearest and simplest way to achieve this change is by having a list of prescribed high-risk undertakings together with guidance produced by the Health and Safety Executive which will make it clear and unambiguous to those who continue to owe a duty under the Health and Safety at Work etc. Act.
I repeat: the Government are currently considering the comments just received following the 2014 consultation on the draft regulations already produced. These raise a number of important issues which the Government will consider further before Third Reading. In that context, I hope the noble Lord will feel able to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank noble Lords who contributed to this short debate. My noble friend Lady Donaghy put the matter straight about Professor Löfstedt’s views. My noble friend Lord Lea spoke about the danger of building proposals on perceptions rather than proper evidence. I thank my noble friend Lord Jordan for providing the historical context of health and safety, and the cost when it goes wrong. The noble Earl, Lord Lindsay, broadened the debate a bit around the accreditation processes. I am sure we would have scope for a fuller debate around that issue. As I understand it, he argued that its application could be to an inclusive, exclusive or status quo proposition.
I understand that the Government are finding it difficult to get this right. That is why two rounds of consultation have not succeeded in doing that. We argue, given the complexities and difficulties in trying to get it right, that leaving it as it is would be the far better option.
Lord Wallace of Saltaire
I should point out that the first consultation did not provide much support for the noble Lord’s amendment. The second consultation criticised the Government. I merely remark that we are struggling in this area. That is, of course, why we are considering it further.
Lord McKenzie of Luton
I am not sure that the noble Lord’s assertion about the first consultation not supporting our position is right. It does not necessarily depend upon a prescribed list of any sort. The key point about our amendments is that they are linked to clear criteria that have to be satisfied before any change could be introduced. There are criteria around not increasing burdens and bureaucracy, representing demonstrable improvement on existing legislative requirements, and clarity and precision as to whom they apply. The two amendments sit together. The consultation that has just been gone through proves how difficult it is to have a list of high-risk activities. I struggle to understand what changes the Government could make to that process or outcome to make it fit for purpose. That is not just my view; it is the view of a raft of people who know health and safety and business far better than I do, the CBI included.
Lord Wallace of Saltaire
I only had a chance to read the consultation document on Friday and we are at a very early stage on that so it is very difficult to say precisely what we will conclude. I merely wish to say in the most constructive way possible that we are considering our response. We have three weeks before Third Reading and that gives us some time to consider further.
Lord McKenzie of Luton
I am grateful for that—and I meant Third Reading, of course, not Report. Is the noble Lord saying that we will have a chance possibly for some discussions in the interim and, if not, a chance to consider this further when we get to Third Reading? It is quite important that we have that commitment from the Government on the record, whichever stage it reaches.
Lord Wallace of Saltaire
My Lords, of course I am very happy to discuss this between now and Third Reading. I am not in a position to say what the Government will conclude from their consideration of the current consultation document because we are at a very early stage, but I am very happy to promise to consult further.
Lord McKenzie of Luton
My Lords, I am not quite sure why the Government are so pressed on this matter because that consultation finished some five months ago. I note that the Minister has been less than clear on whether, if we are not satisfied with what happens in the interim, we would be able to return with amendments at Third Reading. It would be helpful if the Minister could give me an assurance that he would facilitate that; if he cannot, we have another decision to make.
Lord Wallace of Saltaire
I recognise what the noble Lord is asking me to do. At this stage, I am afraid I cannot give him the absolute assurance he requires, but I am certainly willing to have further consultations, and the Government will be very happy to carry on on that basis.
Lord McKenzie of Luton
The Minister is not making it easy. I know it is not his job to make it easy. We are trying to see a way forward to avoid voting prematurely, in a sense, if the issue has not been completed. If the Minister is saying that he would be happy for us to come back at Third Reading with a proposition, if we need it, depending on what the Government do in the mean time, that would be helpful. If he is saying that he thinks that the processes in the Companion would preclude that, then we have another decision to make.
Lord Wallace of Saltaire
My Lords, the clerks are nodding. That suggests it would entirely open after consultation for the Opposition to come back again on this issue.
Lord McKenzie of Luton
I am grateful to the Minister and to the clerks for nodding, in which case I beg leave to withdraw the amendment—but with notice that we look to return to it at Third Reading.
Lord Low of Dalston
Lord Low of Dalston (CB)
My Lords, I shall move Amendment 3—which is in my name and the names of the noble Lords, Lord Lester and Lord Hunt, and the noble Baroness, Lady Thornton—in the absence and at the request of the noble Lord, Lord Lester, who is currently recovering from heart surgery. I am glad to be able to report that he is doing well, but there would be no better “Get well soon” message that we could send him than to accept his amendment today.
Clause 2 amends Section 124 of the Equality Act 2010 to remove the power of employment tribunals to make recommendations to employers in cases where there has been a finding of unlawful discrimination, harassment or victimisation but the claimant no longer works for the employer. These are commonly referred to as “wider recommendations”. Its effect will be that, in future, an employment tribunal will be able to make a recommendation aimed at preventing or reducing the adverse effect of the discrimination on only the claimant in the particular case. In 2013, a BIS survey of employment tribunal applications found that only 16% of claimants in discrimination claims were still working for the employer against which they made their claim. This means that the effect of Clause 2 will be that in 84% of discrimination cases the employment tribunal will no longer have power to make recommendations to employers to take steps to improve their practices to avoid discriminating against other employees. This will be a significant reduction in the powers of employment tribunals.
Amendment 3 would remove the provision in the Bill which takes this power away from tribunals, thus preserving employment tribunals’ current power to make wider recommendations following a finding of unlawful discrimination. The power to make wider recommendations is of strategic importance for employees and employers. So far as employees are concerned, even when, as in the great majority of discrimination cases, the employment relationship has broken down and the employee has left the employer’s employment, they can help prevent or reduce future discrimination and are an effective way of tackling systemic issues and practices. So far as employers are concerned, recommendations are an important way of helping employers who have discriminated to improve their practice. An employment tribunal hears evidence about the circumstances in which the unlawful discrimination occurred and is thus well placed to identify steps the employer can take to rectify any discriminatory practices. Recommendations also offer an important means by which employers can learn from their mistakes and help avoid future discrimination claims.
The power to make wider recommendations is criticised on four grounds: first, that they impose a burden on employers; secondly, that the power is little used; thirdly, that there is no evidence that wider recommendations are effective in changing employers’ practices; and, fourthly, that there is no means of enforcing wider recommendations.
As regards burden, the impact analysis attached to the Government’s consultation on reform of enforcement provisions in discrimination cases suggested that this provision, when operating as expected, will affect only between 0% and 3% of employment tribunal cases, which, it suggests, is likely to result in 17 cases a year. It is hard to maintain that this will constitute an undue burden on employers and business. Moreover, by limiting the cases in which wider recommendations could be made to those where the discrimination, harassment or victimisation has a serious adverse effect on persons other than the person bringing the claim, Amendment 3 addresses criticisms that the wider recommendations power imposes a disproportionate burden on business.
On the point that the power is little used, perhaps it is too early to tell, as it has existed only since 2010. However, on the basis of a review of over 400 employment tribunal judgments issued between December 2012 and September 2014, the Equality and Human Rights Commission concluded:
“Given the benefits to employers and employees which can result from wider recommendations, concerns that the power is little used should be addressed by encouraging employment tribunals to actively consider whether a wider recommendation should be made … not by removing the power”,
entirely.
As regards effectiveness, recommendations mainly concern the provision of training for managers and a review of policies or procedures. I might draw attention to a number of cases, but in order not to detain your Lordships too long I will mention just a couple. One case concerned where a disabled woman was denied a reasonable adjustment that should have been made for her. The employment tribunal ordered that within six months,
“line managers and human resources are to receive adequate training on understanding and implementing the Respondent’s disability leave policy and to ensure that the policy is properly communicated to employees as is appropriate in the circumstances”.
In another case, the Ministry of Defence was found liable for both direct and indirect discrimination in its handling of the promotion prospects of an RAF group captain. The employment tribunal commented that it was shocked that senior personnel were not fully competent in, nor apparently had they been trained on, codes of practice in respect of the Equality Act or the predecessor legislation. The tribunal made a number of recommendations including: first, that all personnel involved in promotion and recruitment should have training in equality and diversity as set out in the Equality Act and the code of practice; secondly, that decisions of the appointments and promotions board should be recorded in writing, with reasons clearly explained and these should be retained for at least 12 months; and, thirdly, that the resolution of the service complaints procedure should not be unilaterally suspended pending the outcome of an employment tribunal complaint. I submit that those are not inappropriate recommendations for an employment tribunal to make with a view to improving the employment practice of the employers with whom it is concerned, and that the effectiveness of its decision would be substantially diminished if it did not have the power to make such recommendations.
On enforcement, it is perfectly true that the employment tribunal does not have power directly to enforce the carrying out of wider recommendations. However, the Equality and Human Rights Commission reviews all employment tribunal cases where there have been findings against employers, prioritises cases where there have been wider recommendations and works with employers to secure the implementation of such recommendations.
Finally, it must be said that the Government’s approach on these matters is not entirely consistent. From 1 October 2014, the Equality Act 2010 (Equal Pay Audits) Regulations 2014 require an employment tribunal to order an employer who loses an equal pay claim to carry out an equal pay audit unless specified exemptions apply. These audits require, among other things, that employers develop an action plan, with a view to ensuring that they do not fall foul of equal pay policies in the future. I submit that this is the better approach, the right approach and the approach that should be similarly followed with regard to wider recommendations. Precisely the same considerations apply, and it is hard to see why tribunals should not have the sort of powers in relation to the making of wider recommendations that they have in relation to the ordering of equal pay audits.
This matter was considered in Committee when an amendment to delete Clause 2 entirely was judged an amendment too far and was rejected. However, I submit that the more surgically crafted amendment of the noble Lord, Lord Lester, deals with the issue that we are considering in a more proportionate way and, as such, is deserving of your Lordships’ approval. I beg to move.
Lord Hunt of Wirral (Con)
My Lords, I declare my interest as vice-chair of the All-Party Parliamentary Group on Equalities and the other interests recorded in the register. I am sure that the whole House will join the noble Lord, Lord Low of Dalston, in sending our very best wishes to my noble friend Lord Lester of Herne Hill as he recovers from surgery. My thanks are redoubled because my participation in this debate was demanded by my noble friend, who pointed out to me what I had said in the debate on the Equality Bill in 2010. Some of your Lordships may wish that their words were not so remembered, but the encyclopaedic mind of my noble friend Lord Lester suddenly pointed out to me—in these words, I think—that, “Our Government are doing something the opposite of which you argued so forcefully in 2010”. He reminded me that I had urged then that,
“not only should due regard be paid to eliminating discrimination but that there should be a much more proactive element”.—[Official Report, 27/1/10; col. 1492.]
I spoke on what is now section 124 of the Equality Act 2010, when, as shadow Chancellor of the Duchy of Lancaster, I pointed out the deficiencies in the then clause.
In many ways, the noble Lord, Lord Low of Dalston, has just repeated what I felt was a brilliant summary of the criticism of Clause 124, expressed by both government and business representatives. He gave four telling points. Against that background, I can well understand why my noble friend wishes to remove the power of employment tribunals to make recommendations to employers and other respondents in cases where there has been a finding of unlawful discrimination, harassment or victimisation but where the claimant no longer works for the employer.
There is a better way, which I tried to suggest at the time to the Labour Government, but, sadly, they refused to listen on that occasion; I hope that the Opposition are listening carefully now. We need to retain but clarify the power in Section 124. I very much hope that noble Lords will agree that there is a need for reform rather than abolition. Those are the circumstances in which I put my name to the amendment tabled by my noble friend Lord Lester of Herne Hill.
There are, however, problems. Undoubtedly, this was discovered by the then Labour Government. I think that the noble Baroness, Lady Royall, dealt with the matter from the Government Benches at that stage. As the equality and diversity commission has pointed out, this amendment could lead to a tribunal having to hear additional evidence and argument in order to decide whether the adverse effect of the discrimination on those other than the employee bringing the case was serious. I have no wish to cause such complications.
My noble friend has already proved himself to be so amenable that I think that the noble Lord, Lord McKenzie, has gone away to recover, as I cannot see him in the Chamber. My noble friend, assisted by the clerks—who I hope might assist us once again—bent over backwards in trying to find out how Section 124 could be further improved, particularly to avoid the risk I mentioned and to address the criticisms—those four key issues—which have been so clearly set out. The noble Lord, Lord Low of Dalston, sought to deal with them, but the criticisms remain. They concern the way in which the wider recommendations power has been used to date and its effect on businesses. One way to tackle the issue would be to limit the power of the tribunal so that it cannot recommend a respondent to take steps which are disproportionate. The commission has suggested that that might be a way forward. It also recommends that Section 124 be improved by making a failure to comply without reasonable excuse an unlawful act for the purposes of the Equality Act 2006.
In previous debates, I have urged that a clear enforcement mechanism should be introduced. I repeat what I said in the Chamber on a previous occasion, as these words were repeated to me by the noble Lord, Lord Lester. Speaking from the Conservative Benches, I said:
“Of course we believe that the provisions must be enforceable. If an organisation has been acting illegally and subverting the equality provisions, it should have to obey the recommendations”.—[Official Report, 27/1/2010; col. 1470.]
Of course, the Government did not pay attention. The noble Baroness, Lady Royall, said that it would be inappropriate to introduce enforcement powers. However, we have to think about introducing to or leaving on the statute book a power with no enforcement mechanism at all. I hope, therefore, that my noble friend will come forward with the answer. I can hardly wait to hear his speech.
Lord Beecham (Lab)
My Lords, first, I endorse very warmly the amendment moved by the noble Lord, Lord Low, and supported by the noble Lord, Lord Hunt. They make a powerful case. I hope that, after also hearing from my noble friend Lady Thornton, the Minister will be persuaded to give some ground, as what they say is very compelling indeed. However, this may be a little academic given the fact that there has been an 80% reduction in the number of cases brought to employment tribunals since the charges were imposed by the Government last year. It seems to me that we are seeing the whole system being rather rapidly eroded. I hope that the Minister, in reporting back to his colleagues about the outcome of this debate, whatever it may be, will invite them to look again at the status of employment tribunals, and the great reduction in cases being brought, to see whether they intend to allow this nearly 50 year-old provision to wither on the vine, because that is the impression that is being widely—and, I think, rightly—inferred from the history of what has happened over the past year or 18 months.
Baroness Thornton (Lab)
My Lords, it is very nice to be back discussing equalities matters opposite the noble Lord, Lord Hunt. He did a brilliant job helping to put the Equality Act 2010 on the statute book. We were very pleased to work with him at that time. I join the noble Lords, Lord Low and Lord Hunt, in wishing the noble Lord, Lord Lester, better and well for the future.
The noble Lords, Lord Low and Lord Hunt, have explained perfectly well what the issue is: in future an employment tribunal would only be able to make a recommendation aimed at preventing or reducing the adverse effect of the discrimination on the claimant in the case. That would mean that the potential to reduce discrimination against the employer’s wider workforce would be lost in the majority of cases. The EHRC has powers of enforcement on employment tribunal decisions. It was very clear on this in its evidence to the Joint Committee scrutinising the Bill. It said that it strongly disagreed,
“with the proposal to remove employment tribunals’ wider recommendation making powers”.
It said that,
“it is too early to judge the effectiveness of the power which has been in force only over the last three years. The available evidence suggests that the power has been used proportionately, and that there are important clear benefits for all concerned (including employers and employees) in exercising the power to clarify necessary remedial action, and this helps to prevent further discrimination and to reduce litigation”.
This power has not been in place long enough for evidence to suggest that it is either a burden on business or not effective enough. Those are both arguments that the Minister has used in the course of these discussions.
On these Benches, we regard these amendments as very important. We believe that we have to continue to address the concern that the law should be effective not only in providing redress for victims of unlawful discrimination, harassment and victimisation, but in preventing those unlawful acts from occurring, and in helping employers to comply with their duties. I will give one example that illustrates very well the importance of this law. Last year, the Metropolitan Police had to pay a female firearms officer who featured in Scotland Yard’s Olympic poster campaign damages of £37,000. Those damages were levied by an employment tribunal after she was bullied and victimised for being black. The tribunal branded Scotland Yard as “malicious” and “vindictive” in its treatment of Ms Howard and told the Met to review all internal complaints of discrimination made since 2009. I stress that. I have no idea whether the Met has carried out and complied with that recommendation. I hope that it has and that it is taking remedial action, because it was heavily criticised at the time.
The point is that the tribunal’s power to make these wider recommendations is under threat from the Deregulation Bill. If the Minister wants to take this amendment away and come back that is fine with us. But this is very important and I think that it is the right thing to do.
Lord Wallace of Saltaire
My Lords, the Minister is not going to take this amendment away and come back. It is a very kind offer to make. We had an extensive discussion on this clause in Committee. The Committee voted by quite a substantial majority to retain it. What we have here is an amendment that is offered as a compromise but which seems to the Government to make the situation a good deal more complicated.
What we have in Clause 2 at the moment is a straightforward repeal of the requirement on tribunals to offer non-enforceable recommendations on wider issues. It does not reduce or abolish the right of tribunals to offer comments on particular cases and it certainly does not lower what they can do in this overall area. It does, however, simplify the position. By contrast, the amendment offered by the noble Lords, Lord Lester and Lord Hunt, would lead, we argue, to a more complicated system for tribunal recommendations. It would reduce the protection for claimants and set up more complex arrangements for tribunals. It would allow a tribunal to make a recommendation if it thought that it would completely obviate—not just reduce—the adverse effects evident from the case. That is a much higher standard of proof for the complainant than we require under the present system or that would be required following the repeal.
I will comment briefly on the general issue from the Equality Act. This was intended by the Government to be a light-touch element in the very large number of tribunal cases. I understand that there have been around 1 million employment tribunal cases in total, of which around 10%—100,000—were discrimination cases. Some 3,000 of these discrimination cases were successful and in 40 of them there were recommendations. Therefore, we are talking about a very small number. The range of recommendations includes the question of equal pay where there is a requirement for equal pay audits, which is enforceable. An equal pay audit ordered by an employment tribunal is a precise and mandatory requirement with sanctions for non-compliance to advance equal pay in the small number of organisations where a breach of equal pay law has been found and it is also a direct transparency measure as it has to be published.
By contrast, wider recommendations in discrimination cases are effectively discretionary for employers and do not have to be made where an employer loses a discrimination case. Wider recommendations are generally broad-brush proposals; for example, a recommendation that human resources staff undergo equalities awareness training. These are non-enforceable recommendations about training, company culture or a range of other areas that are made by tribunals that may not themselves be very closely aware of the culture of the companies concerned. They are recommendations from the outside.
The noble Lord, Lord Hunt, suggested that, although the amendment is in some ways defective, he would like the Government to take it away and improve it. The amendment, even if modified as the noble Lord proposes, would, in our opinion, result in a quite complex and heavy set of requirements. These could mean, for example, that tribunals might be required to consider wider recommendations in a very large number of cases while quite minor omissions by employers, such as failing to train a manager or to update a diversity statement, could become unlawful acts under equality law. I regret, therefore, that the Government have to decline the invitation to take this away and improve the quality of the amendment.
Our repeal will not prevent tribunals from making non-binding observations on employers’ practices. These could reasonably include the type of points mentioned by the noble Lord, Lord Low, in specific cases. For all employers, losing a tribunal case and having to pay compensation, which our repeal will not affect, itself concentrates employers’ minds and persuades them to learn from their mistakes. The lack of enforcement already there means that they have to take them into account.
The noble Lord, Lord Hunt of Wirral, also talked about introducing the word “proportionate” into the legislation. As someone who struggled in the EU balance of competences review to define “proportionate”, I am conscious that it opens a large door to lawyers and that it is very difficult to discover precisely what proportionality means.
The noble Lord, Lord Beecham, raised the question of the introduction of fees and I recognise that that is of course a serious point. He will in turn recognise that the Government are struggling to contain public expenditure. It is important to emphasise that the Government have been careful to ensure that fee waivers are available for people of limited means in order that they are not excluded from seeking redress in tribunals. The Government have committed to reviewing the introduction of fees, although of course it will be for the Government after the next election to take on that review. We are considering the scope and timing of the review and will bring forward our plans in due course.
I hope that that provides sufficient information to persuade the noble Lord, Lord Low, to withdraw the amendment. The House did support the Government’s repeal proposal at Committee stage last autumn and I stress that we proposed a straightforward repeal of an unenforceable power that creates a perception of burden and unfairness.
Lord Low of Dalston
My Lords, I am grateful to the Minister for his reply and I am grateful to all those who have spoken, especially to the noble Lord, Lord Hunt of Wirral, who I thought went out of his way to suggest ways in which there might be a meeting of minds between the proposers of the amendment and the Government. I am sorry that the Minister is not prepared to respond more flexibly to the invitation from the noble Lord, Lord Hunt, to be flexible, which I am afraid does not give us a lot of room for flexibility on our part, although we might well have shown it had the Minister agreed to accede to the suggestion made by the noble Lord to make time for a further look at the amendment.
The Minister said that this is intended to be only a light-touch measure. I cannot see how more light touch it could possibly be. He gave us the statistics showing that there were 1 million tribunal cases over the period he referred to, of which 100,000 were discrimination cases. Some 3,000 of those cases were successful, and in only 40 cases were wider recommendations made. It is hard to see how this could be more light touch than that. You cannot say that the tribunals have been abusing this power.
The Minister went on to suggest that there is no need for such a power by dismissing as immaterial or unimportant the sort of cases in which it has been used. He said that it had been used in minor cases such as the failure of a company to train a manager. Well, I am not sure how much less minor it is possible to be than failing to train your managers properly. He also suggested that our amendment would make the situation worse. I cannot see that because it seeks simply to reinstate the position as arrived at in the Equality Act. It does not seek to be more draconian than that or more burdensome on employers. I think I showed in moving the amendment that it is hard to argue how the use of this power, as it has been used, constitutes a burden on business and employers.
No one in the House or even in the country is more expert on these matters than the noble Lord, Lord Lester, and I am sure that we are all extremely sorry that he is not able to be present today to give us the benefit of his wisdom. However, I am perfectly sure that he would not be moving an amendment of this kind if he did not think that it was a useful component of discrimination law and the light-touch enforcement thereof. In crafting it, the noble Lord sought to be compromising and to move a less drastic amendment than the complete removal of the clause as was attempted in Committee. This is a different approach. It is perfectly open to the House to support the amendment. It is not constrained in that matter by the discussions that took place in Committee. For all these reasons, I want to test the opinion of the House.
Baroness Thornton
“(e) the person who made the booking has consented to their booking being sub-contracted to a second operator.(1A) A licensing authority may exercise all its powers over a vehicle licensed as a private hire vehicle or taxi if it is operating in their area, even if the licence was issued by another licensing authority.”
Baroness Thornton
My Lords, these two amendments are both modest and simple. They concern consumer rights and customer safety. The right is that of the person booking a cab to know who will be turning up, whether it is the person whom they expect or someone else, that it is done with their knowledge and permission, and that if there is subcontracting, there is an audit trail of it. I would be grateful if the Minister could explain how many subcontracts might take place in one order for a cab and how that might be recorded.
The amendments seek to mitigate the risk of subcontracting by requiring the consent of the hirer before a booking can be passed on. They also propose allowing a licensing authority to exercise its powers over a licensed private hire vehicle or taxi operating in its area, even if the licence was issued by another licensing authority.
We would have preferred the Government not to have proceeded at all with these clauses. There is still time for them to withdraw them, do the sensible thing and wait until the Law Commission’s full report can be taken forward instead of the pick and mix approach, which we believe is not based on what is safe and what is best for customers. We believe that customer safety could be undermined as, currently, only the licensing officers from the licensing authority where a vehicle and driver are registered have the power to take enforcement action.
In Committee, the Minister suggested that these Benches were against reform. That is not so. We are very much in favour of accessibility. More taxis being available for everybody is a good thing, particularly for those who are disabled. It is about how that is done. We on these Benches are not alone in our worries. Indeed, the Secretary of State for Transport said on the radio over the weekend:
“One of the things the Government has done is ask the Law Commission to look at the whole issue of licensing taxis and it is something that they have reported to us on and the Government are due to respond shortly. It will probably need, will need, almost certainly need primary legislation”.
The Minister for Transport, Claire Perry MP, held a seminar on increasing safety for women on public transport on 20 January. She said:
“The Department for Transport makes personal safety considerations a part of”—
in this case—
“all future rail franchise awards”.
We agree with her and, indeed, the Secretary of State.
Can the Minister assure the House that the same test of personal safety has been applied to these deregulatory reforms for taxis? If she cannot, I hope that she will consider accepting the amendments or bringing forward some of her own that do so. If she again prays in aid, as she did in Committee, that this is a similar regime to that which operates in London, I will ask her to consider that there were more than 111 rapes and sexual assaults between October 2011 and April 2013 where the indicated offender was a taxi or private hire driver in London. The Brighton and Hove taxi companies wrote to us and were vociferous in their opposition to this proposal. They say:
“Please can we move away from the pious, myth-making NONSENSE that the London Taxi system is the best in the world”,
and point out that it is as much in need of the reforms proposed by the Law Commission as the rest of the country. They also point out that there were three assaults in the same period in the whole of Sussex.
The Law Commission has recommended that licensing authorities have the power to enforce standards in respect of out-of-area vehicles, which would be crucial for safety. The public, particularly vulnerable passengers such as women or disabled people, may call specific operators because they feel that that operator is both reliable and safe to travel with. This reform means that the public will lose the right to choose which operator they travel with, if someone calls operator A—their preferred choice—and operator B turns up. Amendment 4 stipulates that an operator must have the consent of the person making the booking before their booking is subcontracted and that there will be cross-border reinforcement. Indeed, in a letter from the Minister in December 2014 to Bryan Roland of the National Private Hire Association, she suggested that the Government were already thinking about this matter. I do not know the outcome of that thinking, but I sincerely hope that we are pushing at an open door here.
Noble Lords may have received a brief, as I did, from the Licensed Private Hire Association, which states:
“The Suzy Lamplugh Trust, (The Safety Charity who campaigned for Licensing in London alongside the LPHCA) agreed that restrictions on the ability to subcontract were inappropriate”.
It goes on to state:
“This was agreed by Sir George Young, Minister Glenda Jackson and Dr Jenny Tonge from the main parties”.
Leaving aside the promotion of my honourable friend Glenda Jackson MP, I asked the Suzy Lamplugh Trust for its view on this matter. This is what it said to me today:
“As a trust we have no objection to the principle behind the aims of this clause”—
I agree with that—
“often a risk to the public’s personal safety is a lack of safe transport, and any measure introduced to alleviate that is welcome”.
That is absolutely right. It continues:
“However under current regulation a licensing authority does not have the enforcement powers of vehicles and drivers operating outside their licensed area. The Law Commission’s report, published after these clauses were added to the Deregulation Bill, proposed extending the enforcement powers of all licensing authorities to deal with vehicles and drivers licensed in different areas. The proposals made under Clause 12 have not been made in conjunction with the Law Commission’s recommendations and therefore do not make adequate provision to allow licensing authorities to ensure the safety and practice of their drivers. Until there is a proposal to extend these powers and to introduce and enforce a robust audit trail to ensure the ability to trace bookings and their journeys we will be unable to support the proposal”.
Lord Deben (Con)
My Lords, it is in the knowledge of this House that I very often find myself on the same side as the noble Baroness, but on this occasion I suggest that she is wrong, because she is unbelievably out of date. A good deal in this Bill is out of date as far as what is happening to the private hire and taxi business. One would have thought, from these amendments, that modern technology had not ever entered into the world. If you travel by certain companies, which shall be nameless, you are safer than you have ever been before, because they know exactly who you are, exactly who the driver is and exactly what the route is, and they can check these things. That makes people much safer. They do that without any regulation at all, without any local authority and without any of the people who know best entering into the discussion.
It is called the market. It works extremely well and it is much safer. I just hope that my noble friend will not be moved from the current situation, except perhaps to remind those who wrote this part of the Bill that it is already out of date because the technology has moved on. That does not mean that I am not entirely supportive of it, because it is better than what went before. But these are old fashioned proposals that have been put down as amendments. They will not achieve what they suggest, and it would be good if we could be a bit more digitally savvy when we come to find a way through the clear issue that the noble Baroness has put forward, which is the real desire to protect passengers—women in particular, but not just women—from the dangers that arise. I just wish that we did not sound a bit as if we did not know what was happening in the world outside.
Baroness Howarth of Breckland (CB)
My Lords, I do not think that the noble Lord lives in the same world that I do, where many people are not digitally savvy. In some rural places in the north, they travel in taxis which appear out of the blue and feel extremely unsafe. I say that before saying to the noble Baroness that I hope this is not a matter of political process. I hope it is something where we think about those things which matter to this Government, which are safety and choice. I know that choice means that you have a range of options—I think that the noble Lord was indicating that we are moving towards that—but should we not wait for the Law Commission’s report, so that issues such as changes in digital technology can be taken on board and that we might recognise that the situation is not the same right across the country?
In many of my roles, I travel all over the UK in taxis. When I choose to travel by a taxi, as a consumer I expect that what I telephone for will turn up. Having worked in the vulnerable adult and child protection area for many years, I know that alternatives might turn up in which I or the child whom I want to be transported might well not be safe. We want to be absolutely sure when we make such a choice—as simple consumers, we have a right—that what we have asked for turns up at the door or we know that it is an alternative so that we can make an alternative choice.
Equally high on the agenda is safety, particularly as we have had so many situations up and down the country, and we await reviews and more inquiries about the protection of children and vulnerable adults. This is a measure where you could really make a difference and listen and look again at these issues, rather than looking at it simply as a deregulation issue.
The Minister said earlier that this legislation is about getting rid of unnecessary burdens. I absolutely agree, having worked in a number of fields where there are such unnecessary burdens, but I do not think that this proposal is either unnecessary or burdensome. It is quite straightforward that if people want to provide a service they should be licensed.
The noble Baroness mentioned the situation in Rotherham, the report on which highlighted significant concerns in relation to taxis. That is quite recent—so the world out there is not safe. We have also had reports that many disabled and elderly people find it very difficult to deal with digital technology. Where I come from, in a large rural area, the only way of travel for some disabled and elderly people to their hospital appointment or somewhere else is by taxi because the bus comes twice a week. It is not a luxury; it is an essential way of travelling. They want to know that the taxi that turns up at their door is a taxi in which they will feel safe. Even if the contractor is safe, we know the anxieties that elderly, disabled and sick people have in terms of looking after themselves. Therefore, they have to be absolutely safe.
I only hope that if we have another child abuse inquiry, or an inquiry where something has happened to a vulnerable adult—God forbid, but that is the world out there—the Government will not find themselves in difficulty because they failed to take note of these voices of caution. It is only caution, because there are ways of thinking through this matter so that we do not reduce the capacity for business but we ensure that people are safe.
Lord Skelmersdale (Con)
My Lords, I regret that the noble Baroness, Lady Thornton, has not split this amendment into two parts, which it is quite possible to do, because I am fairly certain that a person who has made a booking would not on average ask the taxi company where the taxi was coming from. It may be that they envisage—rather like, I suspect, my noble friend Lord Deben—that, when they book a taxi online, they will get a questionnaire, one of the questions in which will be whether they consent to the taxi coming from another local authority area. That is all very well, but I live in Taunton—not Yorkshire, like the noble Baroness over there.
Lord Skelmersdale
Breckland, I apologise: the west, shall we say.
On occasions, I use taxis. I ring up—sometimes from a train, sometimes from London—and the taxi company says, “Yes, you will have a taxi arriving at 5.03, or whatever the time is, to meet your train”. Even when I get into that taxi, I do not know whether it comes from, say, Exeter, or rather closer in Devon, which is another local authority area. Quite honestly, I do not care. However, I care about the second part of the noble Baroness’s amendment, which says:
“A licensing authority may exercise all its powers over a vehicle licensed”,
in another area. In other words, I want my taxi to be safe: I do not want the wheel to fall off, the bumper to fall off or whatever it happens to be. To that extent, I go along with proposed new subsection (1A) in Amendment 4, but I cannot go along with proposed new subsection (1)(e).
Lord Harris of Haringey (Lab)
My Lords, the noble Lord, Lord Deben, in his stirring defence of the market and its role as a solution to all of the problems that occur, makes a compelling point. However, he also went on to talk about the changes that have happened because of new technology, suggesting that we therefore were safe as a consequence. We are only safer if the company holding and using that information is reputable and operates in a reputable fashion. In fact, you are opening up an enormous area of vulnerability because if somebody, for example, uses a particular firm where all this is electronically recorded, the precise movements are therefore on the record. If that firm is not responsible or, for example, does not maintain proper security, the vulnerable person is made even more vulnerable by that information being available. The noble Lord is of course right, under circumstances in which the company is reputable. There are enormous additional safeguards, because the precise route, the nature of the driver and everything else is on record; perhaps as a consumer, the person concerned has those data. However, that presupposes in the first instance that the company is reputable and has gone through an appropriate process.
Lord Deben
I entirely agree with the noble Lord. The point I am trying to make is that the very issue he is raising is covered neither by the Bill itself, nor by the amendment. It just makes us sound as if we are out of touch with what is actually happening. We ought, perhaps, to think again—not now, but in the future—about how to bring this into line with modern technology.
Lord Harris of Haringey
My Lords, the noble Lord, in his intervention, has made precisely the point I wanted to go into—that is, because these issues are not adequately addressed, the Government therefore need to think again. There is an opportunity to think again, because the Law Commission is looking at precisely this issue at the moment, but the Government, for reasons best known to themselves, have brought forward these proposals in advance of that Law Commission consideration. Surely the sensible thing, therefore, is for the Government to withdraw all these clauses so that we can wait for the Law Commission to come forward with clauses that would no doubt meet both the free market and the technological expectations that the noble Lord, Lord Deben, has.
At the moment, we are faced with a position where the Government are actually weakening the safeguards and are not recognising the context in which private hire firms are now operating. That is neither sensible nor acceptable, particularly if, by waiting for the Law Commission, we could have a more comprehensive and suitable solution.
The whole point about the subcontracting issue is that individuals assume—maybe they are naive to do so—that they are dealing with the firm whose number they know and are related to. They do not realise that that business could be passed on to somebody else. That might meet the needs of somebody getting off a train at 5.03, but it does not necessarily meet the needs of everybody. You at least should have the right to know that that has happened or the process that has taken place. That is why these amendments are important. Actually, the best thing of all would be for the Minister, when she replies, to say that the Government understand these issues and that perhaps what they are trying to do is not quite workable, then withdraw the clauses in their entirety at Third Reading—I do not suppose she could do that today—so that we can wait for the Law Commission to look at all these issues in the round.
Viscount Ridley (Con)
My Lords, I have great sympathy with what the noble Baroness, Lady Thornton, said about the need for people to feel safe in taxis, and with what the noble Lord, Lord Harris of Haringey, just said. However, I do not believe that the clauses weaken these aspects of the Bill. Clause 10 does not water down enforcement, policing or the responsibilities of local authorities. Local authorities can and do check the suitability of drivers. There is nothing to stop them sharing information with police. They do so already and they still will be able to do so. There is no change in the frequency of disclosure checks, for example.
As I said in Committee, it is worth bearing in mind that Clause 11 allows huge benefits from subcontracting for provincial taxi operators that are not available at the moment to taxis—except those in London. It allows better response times, reductions in dead mileage, subcontracting to trusted subcontractors when there is a sudden problem—in the event of a breakdown, for example—and more efficient deployment of vehicles. I gave examples in Committee of operators who must currently travel 50 miles to pick up someone to go two miles and then come all the way back again, and of vehicles that return empty from airports and hospitals, or that have to leave passengers in the lurch when there is a breakdown or accident outside their area.
All the subcontracting made possible in this clause is already possible for London. Operators are allowed to subcontract there. I do not see why it is not possible to make a level playing field. No one, not even the Suzy Lamplugh Trust or the Local Government Association, has suggested that there are peculiar problems arising in London as a result of subcontracting. Sure, there are problems in London, as elsewhere, but operators are still required to keep records so that there is an audit trail. Quite simply, it is already an offence to subcontract to an unlicensed operator. It is clear that there is an issue to be dealt with, but it is not dealt with by interfering with Clauses 10 and 11.
Lord Sutherland of Houndwood (CB)
My Lords, I understand the good sense of legislation taking account of the modern digital world in which we live. However, in the present context, relying on that for safety and security has two major problems. One has already been mentioned, that many older people—who are among the most vulnerable—are not particularly good at this. That is a generational thing that will change but it is the reality now. Secondly, we are talking, significantly, about areas of the countryside where—we are reminded once again today—there is not adequate digital provision. To assume that every house isolated in the countryside has a proper online service so that it can book taxis in this way rather than by the old, traditional method of telephone is simply a mistake—at the moment.
The Minister of State, Department for Transport (Baroness Kramer) (LD)
For a moment, I thought your Lordships would have a very enjoyable debate with no opportunity for me to speak. Let me start by responding to the issue of why we are moving clauses ahead of our response to the Law Commission and—undoubtedly, some time in the next Parliament—primary legislation dealing with the much broader issues of the changing world of private hire and taxis. That is a huge area and there is significant work yet to be done.
There are two reasons for going early with these clauses. The first is safety. I point out to the noble Baroness, Lady Thornton, that subcontracting within a licensing district is permitted for everybody and has been for years and we know of no issues arising from it. In London 10 years ago this place and the other place agreed to subcontracting across districts to help deal with the problem of unlicensed cab drivers behaving in a criminal way and putting the public at risk. The noble Baroness, Lady Thornton, gave some numbers for sexual assaults in London but the category she described included unlicensed drivers as well as taxi drivers and licensed private hire drivers. Unlicensed drivers have been the real problem within London. Permitting subcontracting so that someone calling up a company can be assured that a car will come and get them instead of being told, “Sorry all our cars are taken”, makes them far less tempted to get into an unlicensed cab crawling along the street attempting to get their business. That was the driver behind subcontracting in London and those who talk to people with experience of this in London will recognise that it has indeed been helpful in increasing safety. However, one sexual assault is always too many: we have to be vigilant and there is a great deal more to do.
One of the reasons I support moving ahead with this is my own experience of being out in more provincial areas, calling every number I could find for local taxi firms and finding not a single car available. This happened to me when I was going to visit a friend in a nursing home in a country area. I was very glad that it was not dark, that I was not standing there with several small children and that it was not pouring with rain because I think that had an unlicensed cab come by and offered me a lift I might well have been desperate enough to take it. That is not a situation we want. This measure is largely designed to make sure that there is a car available when someone calls a reputable licensed operator.
The other thing I want to clarify—I think there is real confusion over it—is subcontracting from an operator in one district to one in another district. Each operator has to be licensed in their own district and each of them can give the job only to a driver and a vehicle that are both licensed in their same area. So if you call an operator in District A and they give the job directly to a driver, both the driver and the vehicle have to be licensed within that area as well as the operator. If Operator A were to subcontract to an operator in District B, as would be permitted under this change in legislation, then Operator B could give the job only to a driver who is also licensed in District B with a vehicle licensed in District B, so the chain of accountability remains. I want to make that clear because it seems there has been incredible confusion.
Baroness Howarth of Breckland
Can I just ask the Minister an honest question of clarification? In this age of technology, why can the person who has called the taxi not be told—because that is all that is being asked—that there is a different company coming and make the choice at that point that that is what they want to happen?
Baroness Kramer
Let me move on to exactly that issue because it refers to the first part of Amendment 4. We looked at this very seriously because consent is attractive. First, we looked at the existing situation. As I said, subcontracting across districts in London has been going on for a decade. We have never heard—and we genuinely asked around as much as we could—of anyone complaining that a car came to get them which was not from the firm that they called. You call the Yellow cab company in your area, and a cab from Sun arrives to pick you up. We have never found any complaints that people were not asked for their consent before that happened. So the question arises: is there a problem? Again, within individual districts, subcontracting has been permitted for as long as anyone can remember. We have not had any complaints and cannot find anybody saying “I wasn’t asked before the subcontracting happened within this licensing district”.
Then we looked at the practical application. The big companies—my noble friend Lord Deben underscored this—could probably handle it quite easily. For people who go to a website or an app to book a cab, some additional lines somewhere in the terms and conditions would probably cover the consent issue—not that I have ever met anyone who has ever read the terms and conditions. The burden will fall on small companies which rely on the telephone. When we first started to look at this, I was quite hopeful that a casual question such as, “Do you mind if we need to bring in a cab from another area?”, would do, but in this day and age, to be legally secure, in effect the operator would have to read out something very like those six or seven lines you would find in the terms and conditions. I suggest that would drive everybody batty. Small companies do not have legal staff on hand and creating that and having to say that routinely every time would be an imposition, particularly when we can identify no problem.
We want to make sure that small companies have flexibility. This brings me to the second reason why we have adopted these clauses because it is particularly important. It is that these are changing times. Small players will be able to create collaborations with other companies in another district to be sure that they will have a larger pool of companies. Their reputation is on the line and the original operator is always on the line for the booking. Having that greater reach of cars gives them the ability to compete against the big boys who, I suspect, would like to see many of them out of business. I am grateful to my noble friend Lord Ridley for enumerating the many other business benefits—not running empty cars et cetera. It is particularly important for small players to have that flexibility, and it is another rationale for bringing this forward ahead of the Law Commission.
I have covered some of the reasons why we are concerned about the consent language. It appears attractive on the surface, but when we looked at it, it was becoming an impossible burden, particularly on small players. The enforcement clause raised more questions. First, it is only with regard to a vehicle. We currently have that chain of accountability—operator, licensed vehicle licence, driver licence—within the same enforcement authority, which is important. This clause deals only with the vehicle licence. It also fails to recognise the reality on the ground—I am sorry; I have forgotten which noble Lord made this point. Local authorities can delegate enforcement powers on this issue to other local authorities. With increased subcontracting, which will primarily be across the borders of neighbouring districts, we would not be at all surprised if various local authorities decide to collaborate or to delegate enforcement powers. That has some economies for them and will streamline enforcement.
At the moment, cars constantly cross district lines. It is quite possible that the car you get into is taking you shopping in another licensing district or to see Aunt Sally in another licensing district, so local authorities are very used to having to deal with the fact that cars are coming from other licensing districts and to communicating with the licensing district for enforcement purposes. Therefore they have experience in this area and deal with it on a regular basis. I therefore suggest that we do not have a particular problem here, and that what has been presented is a rather clear and narrow power that, frankly, would not contribute very much to effective enforcement.
Baroness Thornton
The noble Baroness keeps saying that there is no problem here. Why then, for example, do the student unions all say that their agreements with local taxi companies will be undermined and that they have problems? Those campus universities have huge problems with taxi companies going from one district to another and with the accountability of those companies. The noble Baroness knows that, because she will have received the same information that I did from Warwick, Coventry and Huddersfield.
Baroness Kramer
I point out to the noble Baroness that she is describing a situation that exists today. I cannot answer to the individual situations, but it may well be that with a subcontracting arrangement in place it would be possible to have more secure arrangements for these various universities, which presently go to operators that cannot do the subcontracting that I have just described. However, there are many misconceptions about the relatively small changes that we are making and the benefits that they offer.
Baroness Thornton
These student unions are concerned about the safety of their students—that is their issue. The noble Baroness is dismissing those concerns and the safety issues that noble Lords have been asking her about. She needs to address the issues around safety here.
Baroness Kramer
I absolutely accept that safety has to be the primary issue. I make the argument that you could see these measures as only enhancing safety by making licensed vehicles or drivers more available to a wider range of people, through subcontracting from one operator to another. This system was adopted in London because it added to the safety of the travelling public. We have not allowed the rest of the country to have that benefit, and it is time we did. Having read much of the material that has come to me, I agree that there are many misconceptions around the clauses we have brought forward. However, it is important for us to look at the reality and make sure that we make these relatively small changes. Eventually there will be a major piece of primary legislation, so it is important that we do not pursue the amendments that the noble Baroness has brought forward and that we understand the benefits that will come from the clauses that have been proposed to provide for subcontracting across districts in the private hire industry.
Lord Harris of Haringey
Before the noble Baroness sits down, can she just explain to the House clearly why the Government are pressing forward with these changes rather than waiting for the report from the Law Commission? If her argument is that that will be long delayed, can she tell us for how long it will be delayed?
Baroness Kramer
I thought that I had explained that, but I will repeat it very quickly. Obviously, we are working on our response to the Law Commission. I have listened to this House today, and this will be a complex piece of legislation in the very much changing world of private hire and taxis, so it seems wrong to deny the public the benefits of simple changes that could be passed now. As I say, they both enhance safety and give flexibility and opportunity, particularly to the small players, who must live day to day. I see no reason not to take advantage of that possibility.
Lord Harris of Haringey
So the Government have the Law Commission’s report at this stage?
Baroness Kramer
I am sorry, but I feel as if I am constantly bobbing up and down. Yes—we are preparing our response to the Law Commission.
Baroness Thornton
I thank noble Lords for this debate and for all their contributions. I agree with the noble Lord, Lord Deben, that technology has moved on—he is absolutely correct. However, the principle of safeguarding people is one that you would want to operate whatever the technology or lack of technology that is being used to order your taxi, whether you do that online or not. I thank the noble Baroness, Lady Howarth, for her contributions.
I need to be quite clear with the Minister that I have not said that we are opposed to flexibility. The Minister keeps putting this sally up, that we are opposed to the availability of more taxis. That is not the case; I have now said it twice on the record. In these amendments, we seek to ensure that people have a choice. The Minister dismisses the idea of consent in a very cavalier fashion; she says, in effect, “Consent is attractive, but we have looked at it and it is too complicated, so we are not going to go down that road”. Well, frankly, I do not think that is good enough. It is very important that people give consent as to whose cab they get into and when.
The Minister is right that local taxi companies will combine and provide a better service, and we want them to do so, but we need to ensure that it is done with the safeguarding of the travelling public in mind. That is what these very small and very modest amendments seek to do. I say to the noble Viscount, Lord Ridley, that we are not seeking to oppose these clauses. In fact, we are silent about Clause 10. We are seeking to make modest amendments to Clause 11 that address the issues of customer choice and the travelling public’s safety.
The Minister said that there were a lot of misconceptions out there. Well, frankly, if people are worried and have misconceptions, it is the Government’s job to put those to rest, and the Government have failed to do that. They have failed to make the student unions believe that their students will be safe with this legislation and failed to convince the Suzy Lamplugh Trust that this deregulation will make women safer. At the moment, the only things before the House are my amendments, which seek to do those things. I wish to test the opinion of the House.
Baroness Hayter of Kentish Town (Lab)
My Lords, the Government’s new partial authorisation for insolvency practitioners would split the existing regulation of this quite tiny profession—some 1,350 who take appointments, according to the noble and learned Lord the Minister—into three. There would be company-only and individual-only insolvency practitioners, and some of course doing both. On the basis of no evidence, the Government have decided to dilute this very small but specialist profession. Amendment 6 would preclude the development of corporate-only licences.
The Government admitted to the insolvency practitioners’ professional body, R3, that Clause 17 was not being introduced to “fix a problem”. Indeed, the Government cited no evidence of undercapacity in the market, nor of complaints about the current system. Virtually all the insolvency practitioners consulted, and their major representatives, said that the proposal was a bad idea. The ICAEW’s consultation evidenced no support for the partial qualification. Indeed, the only body cited as being in support, the IPA, found that 61% of its respondents were against—they did not think that the proposals were a good idea.
According to the Government, it was only some of the IPA’s non-practitioner members who were in favour. More than that, having finally seen the IPA’s survey last week, I discovered that its questionnaire did not distinguish between individual insolvency-only licences, which we support, and corporate-only licences, about which we have grave reservations. So the IPA has no idea whether any of its respondents support the idea of practitioners undertaking corporate insolvencies without also being qualified in individual insolvency. Furthermore, despite finding that a majority of its respondents did not think it was a good idea, the IPA dismissed these views as being those only “of current licence holders”. Surely those are exactly the people who know what they are talking about.
Without Amendment 6, Clause 17 would allow insolvency practitioners to undertake corporate bankruptcies, which almost always also affect the financial status of individuals, with no qualification as to the latter’s needs. Indeed, insolvency practitioners often do not know at the outset of a case, particularly with micro-businesses, whether they are dealing with a corporate or personal insolvency—or, indeed, with both, given the involvement of personal guarantees and the nature of creditors.
It is strange that this Deregulation Bill will create three types of licence—rather than the current one—with new exams, oversight and monitoring. The assertion has been made, but with no evidence, that it will attract new entrants; the assertion has been made by the Government that IP fees will be reduced, without any evidence; and the assertion has been made that training costs will be reduced. Again, no evidence was supplied. This whole shake-up is on the basis, by the Government’s own estimates, that there will be only about 100 partial licences.
Furthermore, it is likely to be the large insolvency firms that train corporate-only practitioners at the expense of smaller insolvency firms, of which two-thirds do both corporate and personal insolvencies. More than 80% of smaller firms do not believe that they would get much benefit from lower training costs. Indeed, 90% said that they would not train a partial licence holder. Smaller firms are least likely to specialise and are therefore least likely to benefit from the change. So there is no help to smaller firms—just when the Small Business, Enterprise and Employment Bill is aimed at trying to help small firms.
Why have the Government dreamt up this clause? There is no evidence of a waiting group of would-be IPs dying to enter the market if only they could train simply in corporate insolvencies. Indeed, a number of firms have been reducing their workforce. The Insolvency Lawyers’ Association questioned the logistics of operating a two-tier mixed system, while R3 has serious concerns about the change. It considers that partial licences will have a negative impact on businesses and individuals seeking financial advice, and on the quality and competitiveness of the UK’s insolvency regime, which is currently rated one of the world’s best by the World Bank. Meanwhile the Institute of Chartered Accountants of England and Wales, the largest authorised body regulating insolvency practitioners—regulating, I think, about half the profession—opposes this partial insolvency licence system. It set out its reasoning to the Government a year ago. The Government, however, ignored that, despite the reputation and expertise of the ICAEW. The institute sees no need for partial licensing; it is unaware of any demand for it; and it does not consider that regulatory costs would be lower.
The ICAEW is also concerned that an insolvency practitioner with partial authorisation would not acquire the broad range of knowledge and expertise necessary to provide appropriate advice in a corporate insolvency. We also fear that the proposal would lower standards, given that Jenny Willott MP, the Minister in the Commons, said that the partial licence would,
“reduce a little the high bar on entry to the profession”.
As the ICAEW retorted:
“Reducing the breadth of knowledge required of IPs could be regarded as a lowering of standards”.
We are talking about people’s futures: whether jobs are to be saved or a company liquidated; whether individuals will be made bankrupt; whether creditors will get their money back; whether a company will be sold to someone who can retain at least some of the business.
The Institute of Chartered Accountants of England and Wales, which operates under a royal charter, works in the public interest. Given the potential impact on standards of practice that partial authorisation might have, it does not believe that the proposed reform would be beneficial to the public. The proposal to allow corporate bankruptcies to be handled by people who are unqualified in personal insolvency is misguided, unnecessary, criticised by the profession and other stakeholders and based on unsubstantiated claims. Apart from that, it seems a very good idea.
I urge the Government—even at this late stage—to think again, to listen to R3, the ICAEW and other specialists, and to accept Amendment 6. I beg to move.
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, I am grateful to the noble Baroness for tabling this amendment. We have debated this matter in Committee and I met her and representatives of R3 a few weeks ago to discuss it. The amendment seeks to limit partial authorisation to personal insolvency. This debate allows the Government to set out why we believe that allowing specialised authorisation for insolvency practitioners for both personal and corporate insolvency is the right thing to do.
I recognise that this is a matter of considerable interest to those in the insolvency profession. However, there is a wider impact. The purpose of generally requiring insolvency practitioners to have certain qualifications and experience is that they are given significant powers by statute and it is important that there is confidence that they will use such powers appropriately. It is not to protect insolvency practitioners as a profession as such. It is important, therefore, that the barriers this places on entry—there is quite properly a barrier because of the statutory responsibilities and powers—are no higher than needed for the purpose. I think this was the context in which my right honourable friend Jenny Willott was speaking. The noble Baroness has not provided any evidence whatever that having separate authorisations for personal and corporate insolvency would in any way lower the standards in each of these disciplines.
Most insolvency practitioners are already qualified, usually as accountants, sometimes as lawyers. What we are discussing is what specific training and qualifications they need in order to act as insolvency practitioners. The amendment would allow specialised authorisation in personal insolvency but not corporate, so I will focus on why we believe that it would be helpful to allow specialised authorisation for corporate insolvency.
Opponents have said—as the noble Baroness herself did in moving her amendment—that there is no evidence of the need for change. However, there have been reports on the insolvency profession that have raised concerns about the level of competition in this profession. Two independent reports have noted failings in the current regime that result in fees being higher than they should be. We believe that partial authorisation will increase competition and place downward pressure on fees, which in turn could benefit creditors in the form of higher dividends.
Baroness Hayter of Kentish Town
I thank the noble and learned Lord for that response and for the meeting with representatives of R3. I do not mind the Government not listening to me, but they do not listen to R3, to the Institute of Chartered Accountants in England and Wales, or to all those who are practising in this area. I will say only two things.
The first is a point on fees and the idea that this is simply a matter of bringing more people in. I hae ma doots about that; it is about the big ones charging high fees. Indeed, in the Small Business, Enterprise and Employment Bill, the Government are going to abolish creditors’ meetings, which is the one point at which creditors can negotiate over those. Perhaps that might have been a better way of helping creditors achieve a better fee rate.
The only other point to make is this. I refer to the noble and learned Lord’s own profession of the law. As with doctors and accountants, everyone does general training before moving on to specialise. This is an important and fundamental way of understanding the environment, and it is strange to separate one profession away from it. I do not think that the barrier to entry should be lowered, which is what I fear this will be. As I say, the Government have failed to listen to those who know this industry, and they are clearly not going to change their mind tonight. On that basis, I beg leave to withdraw the amendment.
Baroness Byford
“Applications for public path extinguishment of diversion orders: review
(1) Within two years of the coming into force of the rights of way provisions in this Act, the Secretary of State shall lay before both Houses of Parliament a report containing an assessment by Natural England’s Stakeholder Working Group on Unrecorded Rights of Way of how effective the right to apply provisions and the accompanying guidance have proved in getting local authorities to respond positively to applications for public path extinguishment or diversion orders.
(2) As well as looking at the overall effectiveness of the legislation and the accompanying guidance, the report shall include an assessment of any notable disparities between the various local authorities.”
Baroness Byford (Con)
My Lords, I should remind noble Lords of my farming interests, that I am a member of the CLA, and of the other interests that are set out in the register. Clauses 20 to 27 cover the “Use of land” where, thanks to the excellent work of the stakeholder working group on unrecorded rights of way established by Natural England, improvements have been made to the legislation before us. However, there are still some outstanding areas of concern. Amendment 7, which is supported by my noble friend Lord Skelmersdale, proposes that there should be a review within two years of:
“Applications for public path extinguishment of diversion orders”.
I moved an amendment in Committee that such a review should be carried out within one year, but on reflection I do not believe that that would have allowed adequate time to assess whether the proposed changes in the Bill had been successful or not. In Committee I was very grateful for the contributions made from around the Chamber by the noble Lords, Lord Rooker and Lord Cameron of Dillington, and the noble Earl, Lord Lytton, and by my noble friends Lord Cathcart and Lord Plumb, to name just a few. We debated the whole question of wider access for the public to farmland and, in some cases, through people’s gardens and close to their houses. I accept that philosophical differences were reflected in those contributions, but I have to tell noble Lords that for those families who are affected by such intrusions, this has proved to be distressing, to say the least.
I am grateful to the Minister, my noble friend Lord De Mauley, for arranging a meeting at Defra for myself and my noble friend Lord Skelmersdale at which we were able to debate this issue further. However, I understand that following a recent meeting of the stakeholder working group, the CLA has raised three further issues with the Minister to which it has not received a response. Is he in a position to clarify these matters as they reinforce my belief that an earlier review is needed? Perhaps I may quote the association:
“CLA remain concerned that the ‘right to apply’ does not provide a presumption that paths will be diverted away from gardens, houses and business, nor does the right to apply ensure a different outcome for the landowner.
“The legislation does not provide a means by which a farmer, for example, who wishes to put a gate on his drive to make his farm less susceptible to theft, or wants to put bollards to prevent illegal vehicles, can do this. He cannot apply to the authority for such a structure, and the authority, even if it is sympathetic would have to be extremely creative with current legislation, to satisfy such a request. Structures can only be requested if required for the control of livestock. The SWG recommendation that a clause be inserted allowing authorities to consider structures in a wide variety of circumstances was a pragmatic, deregulatory solution to a currently very regulated and constricted practice.
“There is also the issue of right to access in extremely intrusive areas such as through private gardens and yards based on memory of a path rather than hard evidence. It can only be right that any access or right of way should have to be based upon objective evidence rather than subjective opinion and memory. This is especially important given that there is no time limit within which claims can be made—thus claims can be made about very detailed routes which people claim to have walked 30, 40, 50 years ago.
“The Deregulation Bill presents an opportunity to ensure clear guidance for users, landowners and local authorities in what can be the very emotive issue of rights of way”.
In Committee, my noble friend Lord De Mauley quoted figures from research undertaken by the Ramblers which recorded that of the 1,200 diversion orders applied for, some 94% were granted without any objections, which is good. Of the remaining 6%, only 1% were not confirmed by the Secretary of State. But some of those were affected, and I have received evidence citing many examples from different counties around the country where great distress has resulted. In one case, an owner was subjected to an onslaught by the council, and it was feared that all that worry was one of the contributing factors to his later suicide. When speaking to his own amendment in Committee, my noble friend Lord Skelmersdale said that:
“The stress and the financial hardship involved in employing specialist lawyers, only to learn that one has virtually no legal rights, have led to illness, mental breakdowns and at least two suicides”.—[Official Report, 28/10/14; col. GC401.]
Noble Lords may be wondering why I am quoting these remarks. It is to reinforce my view that we need to bring the review forward, particularly if we are not going to see further changes to the Bill to address the three outstanding issues. Given that, waiting three years for a review is three years too long, but if the Government did not like my suggestion of one year, I hope that the halfway house of two years might be considered.
This is an important debate and again I thank the Minister for his courtesy in talking about these issues through the amendments we tabled in Committee. I beg to move.
Lord Skelmersdale
My Lords, as my noble friend Lady Byford said, my Amendment 12 has been grouped with her Amendment 7. Not surprisingly, the scene has moved on in the long period since Committee, when there was a surprising amount of support for the series of amendments in my name which had the effect of a presumption in favour of a diversion or stopping up of a footpath that passes through the curtilage of a residential building, including the gardens and driveways of premises. In other words, those amendments were somewhat more restrictive than that in the name of my noble friend, which I supported at the time and, as noble Lords can see from the Marshalled List, still do.
Since then, strange things have happened and I have had reports of odd decisions made by footpath officers in local authorities, the worst of which was the refusal to annul a recent order dedicating a footpath through someone’s dining room. The council in question refused point blank to change its decision. It may be—I am sure my noble friend could tell me—that the officers are not allowed to do this under current legislation but they most certainly are under this Bill. That is one good reason for the Bill. Another local authority insisted that footpaths going through a farmyard barn, which has been in existence since well before footpaths were regulated, should be shown on the definitive map. It is not unlikely, in the modern age, for barns to be converted into housing, with the full agreement of the local planning inspector. Nobody seems to check whether a footpath goes through the old farmyard and thus becomes, potentially, a major inconvenience to the owner of the barn conversion. There is something wrong, somewhere.
It was for these reasons that I moved my amendments in Committee. Because it was a Grand Committee I could not press them, although at the time I was sure I would have been justified in doing so, such was the support from all around the Committee. My noble friend Lord De Mauley was far from keen on my approach and wished to stick to the formula in the Bill—namely, the right for the householder to apply to the local authority and, if necessary, appeal to the Secretary of State. This was backed up by a meeting which he kindly hosted shortly after Christmas, to which my noble friend Lady Byford has already referred. At that meeting, it was explained that the scheme in the Bill would take time to bed down among local authorities and the rank and file green lobby. The department wanted time for this to happen, for the curious reason that the consultation on the agreement of the footpaths working group had not gone wide enough. One rather wonders why the working group existed in the first place, but it did and it agreed changes to the Bill which the Government have been so reluctant to approve that they just have not done it.
I hope that I am not taking my noble friend Lady Byford’s name in vain when I say that both she and I are suspicious as to whether the scheme in the Bill, backed up by guidance to local authorities, simply will not work, however thorough the consultation is. Amendment 7, to which I have put my name, asks, as my noble friend said, for the department to produce a report on whether the scheme has actually worked or not after two years. I have to say that I consider the amendment to be very mild, even though it presumes that legislation will follow if the report is negative, although it does not say so. That, of course, means primary legislation, and it will be some time before that becomes law, even if it gets approval from the business managers.
Amendment 12 allows the Secretary of State a fall-back position, whereby, if the proposals in the Bill are not followed by local authorities, the Secretary of State can lay regulations to make rules according to which a local authority shall make decisions regarding the scheme. This will have two distinct advantages. First, it will reduce the number of appeals, which are likely to be much higher than the department currently envisages, because I suspect that most aggrieved applicants will appeal against the local authority decision on the basis that the latter has not followed the guidance. At the same time, it will cut out vexatious appeals because everyone will know what the rules are. In the event that this amendment finds favour with your Lordships, it would be necessary to have a further one at Third Reading specifying that the regulations will be by affirmative instrument.
Returning to my basic point, it is quite wrong for footpaths to oppress home owners by taking away the enjoyment of their close property and, to that extent, the Bill, imperfect as it is, may help.
Earl Cathcart (Con)
My Lords, I spoke in Committee in support of the amendments in the name of my noble friend and I will do so again today.
I have three points. First, if you have a public right of way through your garden, you have lost your security, safety and privacy. Anyone can walk through your garden at any time of day or night. Their dogs may run loose, frightening your children, fouling your garden, chasing your pets and even killing your chickens or cats, but there is little or nothing you can do about it. You may be subject to theft or vandalism. Secondly, it costs several thousand pounds to divert a path, but it costs absolutely nothing to object to it. This increases the cost to the applicant dramatically, often beyond their reach. We should be trying to make it easier for the applicant. Thirdly, as my noble friend Lady Byford mentioned, the law as it currently stands does not allow home owners to apply for permission for gates or stiles. Without these, you cannot allow your pets to be left, or allow your children to play, unattended in your garden. This needs changing.
My honourable friend Tom Brake, speaking for the Government at Third Reading of this Bill, said:
“The Government acknowledge that for householders, farmers and others, an intrusive footpath can have a substantial impact on their quality of life or on their ability to run a business. We understand that while this is not a widespread problem, where it occurs it can cause severe difficulties, and in a significant number of cases people have been put through years of considerable inconvenience and stress”.—[Official Report, Commons, 23/6/14; col. 77.]
I could not agree more. I understand that, when the Bill was going through the other place, the Government were going to propose an amendment to rectify this but for some reason they did not. This House has a perfect opportunity to put that right.
My noble friend Lady Byford has also mentioned the concern that there is no presumption that the paths will be diverted away from gardens, houses and businesses. There should be. The Government say that there is guidance on this, but it is only guidance. Some councils comply with it, but too many do not. The answer is for the Government to put something in the Bill, and I hope that my noble friend will.
Lord Grantchester (Lab)
My Lords, legislation on public rights of way is complex, often archaic and certainly plentiful. I declare an interest as an owner of farmland in Cheshire over which there are a number of uncontentious footpaths.
In Committee, many of the issues behind the proposals in the Bill were examined. One of these was the question of procedures and costs involved in addressing the complexities highlighted by footpaths going through gardens and farmyards and alongside private homes, with the consequential privacy and safety concerns. I agree with the noble Lords that this is an important issue and the stakeholder group did address it. However, the measures in the relevant passage of the Bill should alleviate most of the problems. This is not to deny that there may be the further concerns to which the noble Baroness, Lady Byford, has drawn our attention.
In Committee, we were concerned that these measures and others should be subject to follow-up through a report to Parliament. They are, as I have said, very important measures and progress must be made. From the debate in Committee, it is clear that there are several channels of communication through which progress can be monitored and outcomes highlighted, and I am not sure whether there is a need for this proposed new clause to be in the Bill. The Minister at the time may find that a Written Statement would be entirely sufficient and satisfactory as a method of addressing this, but there may be others. The stakeholder working group can issue reports for deliberation. However, if progress is not forthcoming, then we shall certainly return to the issue.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, like my noble friend Lady Byford and the noble Lord, Lord Grantchester, I declare an interest as the owner of a farm across which there are public rights of way and, indeed, as a user of public rights of way myself.
We have considerable sympathy for those people, mentioned by my noble friend Lady Byford, who face problems with a public right of way that passes through their farm or garden and who feel that the system has let them down or conspired against them. Where these cases occur, people may indeed experience acute problems, but they are comparatively few and we should ensure that any changes we make to legislation are proportionate to the extent of the problem.
Rather unconventionally, I will go in reverse order, and turn first to Amendment 12, in the name of my noble friend Lord Skelmersdale. I understand that the intention behind the regulation it proposes is to enable the creation of rules prescribing how local authorities must make decisions on applications to divert or extinguish rights of way. We believe that the combined effect of our existing measures, which have cross-party support in both Houses, will make a significant difference and that we should not legislate further before seeing how these measures work out in practice. I will explain why that is.
There is clear agreement among stakeholders on the working group that the major difficulty for landowners is in getting local authorities to make a diversion or extinguishment order in the first place. Our plans to implement the right to apply for such orders are designed to overcome this. The right to apply will enable a landowner to make a formal application for the diversion or extinguishment of a public right of way. With that will come the right to appeal to the Secretary of State if the authority rejects the application or fails to act on it. Therefore, local authorities will no longer be able to ignore requests or dismiss them out of hand; they will be obliged either to make an order or to be prepared to justify their reasons for not doing so on appeal to the Secretary of State.
The right to apply will be extended to land-use types other than those for agriculture, forestry and the keeping of horses—for example, to private residential gardens. The right to apply will be supplemented by guidance that will effectively act as a presumption to divert or extinguish public rights of way that pass through the gardens of family homes, working farmyards or commercial premises where privacy, safety or security are a problem. I suggest that guidance such as this, which has been introduced though agreement among stakeholders, is far more likely to prove successful in practice, regardless of whether it has statutory backing.
I realise that there is the further hurdle of getting an order confirmed. However, my noble friend Lady Byford quoted my words in Committee to the effect that, according to Ramblers, which keeps accurate records of these matters, of the 1,257 diversion orders which have reached a conclusion in the last three years, 94% did not attract any objections. Of the 6% that did, less than 1% were not confirmed following submission to the Secretary of State.
In addition, the guidance will give authorities more scope to confirm orders made in the interests of the landowner in circumstances where a right of way may cause hardship because it goes through the garden of a family home, a working farmyard or other commercial premises where privacy, safety and security are a problem. In light of the guidance, authorities would have to put forward compelling reasons for not confirming an order in such circumstances.
We appreciate, and my noble friend will be the first to point out, that the numbers of orders confirmed without objections may fall under the right to apply. Each case will depend on the merits of the proposal. However, given the statistics I have outlined, we believe that the combination of the right to apply and the guidance will have the desired effect and that we should not rush to legislate before giving these measures a chance to work in practice.
Lord Spicer (Con)
I thank the Minister for giving way. The problem with this is that we have been hearing it for 40 years. I was chairman of something called the Spicer committee 40 years ago, which comprised the National Farmers’ Union, the Government and a whole lot of other bodies. We came up then with what we thought were solutions to try to make it easier for the applicant. Forty years later, we are still in the same position and still being told roughly the same stuff by the Government. This is why it is so difficult to believe what is coming out now.
Lord De Mauley
I understand my noble friend’s point, but I hope he would be prepared to give the provisions in the Bill a chance. They are actually quite far reaching. With great respect to my noble friends, who have raised some important points, we are talking here about points which, in their eyes, would make yet further improvements. I think my noble friends acknowledged in their speeches today that there are already some good, positive changes in this Bill. I hope my noble friend would accept that.
Moreover, under the right to apply provisions, the Secretary of State will be the confirming authority for all disputed orders. The Government will therefore be in a prime position to promote implementation of the revised policy set out in the guidance by setting a clear precedent with any cases that come before the Secretary of State. In addition, the Government will work with rights of way officers, through their professional organisations, actively to promote to local authorities the existing guidance on diversion or extinguishment of rights of way which pass through gardens, farmyards or commercial premises.
To return to the amendment, the existing legislation on extinguishments and diversions, in Sections 118 and 119 of the Highways Act 1980, already sets out rules, which Parliament has debated and agreed, under which local authorities make decisions on applications to divert or extinguish rights of way. My noble friend’s proposed regulation-making power would, in effect, be a power to make new rules by delegated legislation and therefore without full parliamentary scrutiny. I suggest that it is highly unlikely that we would get stakeholder agreement to such a measure, knowing that this was the purpose behind the amendment.
Lord Skelmersdale
Will my noble friend give way? I thought, or at least I hoped, that I had made it quite clear that, if my noble friend accepted my amendment—which, clearly, he is not going to—it would be necessary to have a Third Reading amendment to make these regulations by affirmative order. In that case, of course, they would have parliamentary scrutiny.
Lord De Mauley
My noble friend makes a fair point.
It has been clear throughout the Bill’s passage that Parliament agrees with our view that that the consensus should be supported by keeping the rights of way package as it stands. I spoke to the stakeholder working group at its latest meeting and learnt at first hand that its overriding aim is to get the package implemented intact. We are determined that the consensus should not be put at risk by adding measures that have not been discussed with stakeholders and, of course, not consulted on.
Amendment 7, tabled by my noble friend Lady Byford, is intended to ensure that the Government review the success or otherwise of these measures after their implementation. That is an absolutely laudable aim and one that, in any event, would be a matter of good practice. However, although we agree with the aim of evaluating the effectiveness of the right to apply and associated guidance, I hope that my noble friend will agree that it would not be appropriate to use a deregulatory Bill to impose on the Government the statutory burden of making a formal report. That would run contrary to the aims of the Bill.
In the other place, the Government have already put on record that the stakeholder working group’s advice will be sought on the constitution of a review panel to advise on how well the reforms are working and whether any further measures need to be taken before the cut-off date. I am happy to put on record now that we will ensure that any arrangements to review the rights of way reforms will include an assessment, within two years of implementation of the reforms package, of how effective the right to apply provisions and the accompanying guidance have proved in getting local authorities to respond positively to applications for public path extinguishment or diversion orders.
The proposed assessment will include an opportunity for people to provide evidence to the stakeholder working group either through wider consultation outside the group or a call for evidence. The assessment will send a message to authorities that the Government are determined that the new policy should work and that if guidance does not bring about sufficient change, we will consider introducing further measures.
My noble friend Lady Byford returned to the issue that we discussed in Committee about the authorisation of gates. We recognise that an amendment to extend the powers to authorise gates and similar structures could be helpful to people with a right of way going through their premises or garden. The stakeholder working group discussed this at some length. While there was agreement about the proposal in principle, the group has not yet arrived at a formulation on which it could agree. Those measures have not, unlike the rest of the package, been widely consulted on and are therefore not necessarily agreed by wider stakeholders, whose views we also have to consider.
Concerns have been expressed by users of rights of way about the possible proliferation of gates and other structures across rights of way. Particular concern has been raised with me by equestrian groups in the stakeholder working group that I attended. They are worried about riders with disabilities who may not be able to dismount or who have difficulties in opening and closing gates without risk of injury to themselves or their horse. Since the House of Lords Committee stage of the Bill I have received correspondence expressing concern about the suggestion that the powers of local authorities to authorise gates should be further extended beyond those changes already being introduced by Clause 24.
My noble friend also raised the point about the right to apply not providing a presumption that paths will be diverted away from gardens, houses and businesses. We have covered that quite extensively. The guidance agreed by the stakeholder working group introduces a presumption that paths will be diverted away from houses and businesses. We believe that the guidance, combined with the right to apply, will have the desired effect. My noble friend also asked whether there should not be a time limit on making claims based on long use. The stakeholder working group has not been able to reach an agreement on that, but it will continue to keep it under review.
On that basis, I hope that my noble friend will withdraw her amendment.
Baroness Byford
My Lords, although I am grateful to my noble friend for his full response to my Amendment 7 and for his acceptance that the review should take place two years after the Bill becomes enacted rather than after three years, as was originally proposed, I will read Hansard carefully—but this is indeed welcome.
I still have some concerns about the important ongoing work by the stakeholder working group. We get such few opportunities of such legislation coming before us in Parliament, when we have a chance to try to make sure that practicalities are overcome if they possibly can be—although that is not always possible. I hope that the stakeholder working group will continue to work closely together to try to resolve some of these issues. They are not impossible to resolve. My noble friend Lord Cathcart said that it is costly to apply for diversions. I gather that unopposed diversions cost about £2,000, but those that are opposed cost more than £8,000 and can be dearer. We need to keep that in the back of our minds when we are talking in fairly general terms about something that was a problem 40 years ago, to which my noble friend Lord Spicer referred.
Although there are improvements in this Bill, which I have publicly acknowledged, there are still things that need addressing. If that cannot be done within the Bill, I hope that the words that my noble friend the Minister has given me today will fill me with confidence rather than suggesting that he thinks that I have got it wrong.
We have another stage. Other Peers have taken part in this short debate: my noble friends Lord Skelmersdale, Lord Cathcart and Lord Spicer, as well as the noble Lord, Lord Grantchester. The noble Lord has, as I do, footpaths across his land and we are happy to have them. Ours are not contentious, but there are people—and 1% is 1% too many—who are having a rough time, because the various interested bodies cannot get together to try to reach a proper outcome to something that I hope is not an insurmountable problem. It may seem a huge problem to those who want the right of way; and those who say that if they were to divert it, that would be of benefit to everybody. Perhaps the working group could attach a little more vigour to some of the outstanding issues.
I thank my noble friend and other noble Lords who have taken part in this debate, and, with my noble friend’s words saying that within two years there will be a review panel rather than a report, I beg leave to withdraw the amendment.
Lord De Mauley
Lord De Mauley
My Lords, government Amendments 8, 9, 10, 11, 13, 14 and 15 in this group are minor and technical in nature and do not make any substantive change to the policy of Clause 25 or Schedule 7. They make in fact the following changes.
One is a correction to new Section 54C(3) of the Wildlife and Countryside Act 1981, which is concerned with modification consent orders, to make any path or way resulting from such an order “maintainable at public expense” instead of making the surveying authority responsible for its maintenance. This small change in terminology makes the provision consistent with existing rights of way provisions and avoids creating any uncertainty among practitioners. There are extant provisions that enable diversion and extinguishment orders to be severed, where only part of an order is subject to a valid objection. Another change in terminology substitutes “parts” for “modifications” in these provisions. That is because “modifications” has a very particular meaning in relation to definitive map modification orders and is best confined to that context.
The final change is to enable the Secretary of State to decide which procedure to use in deciding appeals and objections on rights of way diversion and extinguishment orders. This will make the procedure consistent with that for recording rights of way. It will enable the Secretary of State to opt for the exchange of written representations rather than a hearing or public inquiry and avoid unnecessary and costly public inquiries where there is no justification for them.
My noble friends Lord Greaves and Lord Bradshaw have amendments in this group, but it is appropriate that they introduce them before I respond. I beg to move.
Lord Bradshaw (LD)
My Lords, the problem we are trying to deal with is the unauthorised use of green lanes by 4x4 vehicles and trail motorbikes. This problem is getting worse, making many rights of way impassable and creating an intrusive noise nuisance. Present legislation is entirely inadequate for dealing with this problem. Local authorities which are short of resources are unable or unwilling to commit to dealing with an outdated and burdensome situation.
When the Peak District National Park and other national parks were formed, the use of rights of way by 4x4 vehicles and trail motorbikes for recreational purposes was not foreseen. At present there is no simple way of dealing with this obstructive and noisy nuisance and some fresh way must be found to deal with a problem that prevents walkers and riders enjoying the countryside. The purpose of any new legislation would be to create a right of appeal where a highway authority fails to make a traffic regulation order that excludes motor vehicles from a byway open to all traffic, and other green lanes, where there is evidence that such an action is necessary. At present, local communities have no redress if their highway authority refuses to act.
Lord Cameron of Dillington (CB)
My Lords, I have added my name to Amendment 17. I declare an interest as a farmer in Somerset with rights of way on my land. Like the Minister, I am a great enjoyer of our rights of way across the country.
I will not repeat all I said in Committee about this being a deregulatory amendment, but it does have the potential dramatically to reduce the administrative work of the local highway authority while greatly simplifying the law and the lives of others. It also has the potential to reduce the onerous duty to repair the surfaces of all highways on the part of local highways authorities, which we know are extremely strapped for cash at the moment. The fact that most local highway authorities pay virtually no attention at all to their duty of repair on anything less than an adopted highway is no excuse for us not to try to minimise their responsibilities.
Anyone who has seen pictures of green lanes from all around the country, particularly the pictures of green lanes in the Lake District National Park that have been circulated recently, will be in no doubt that regular motorised traffic on those green lanes is not compatible with fair enjoyment of the countryside by walkers, bicyclists and riders. Something has to be done and the wrongful assumption that motorised vehicles automatically have rights on all those green lanes needs to be rejected. If they have rights, I and others believe that it is their responsibility to prove them.
I recognise that the Minister proposes the setting up of a motor vehicle working group in response to the amendment. I am sure that is not a way of pushing the whole issue into the long grass. I have every expectation that he will respond favourably to the amendment or at least its intent. I also realise that we have to tread softly, softly on this matter. All I would say is that this long-lasting sore on the face of responsible access to the countryside has to be firmly gripped, and soon; or, as the noble Lord, Lord Bradshaw, said, come 2026, which is just 11 years away, we will still find ourselves floundering around in the mud, both literally and metaphorically—literally on the ground and metaphorically, administratively in county halls—with no greater clarity than today. Defra has already acknowledged that the 2026 cut-off date cannot be met under the current circumstances—it is 11 years off and it cannot be met—due to the number of green lanes and the lengthy processes involved. We have to find a better way forward and this amendment, or something like it, is a very reasonable way of achieving that.
Lord Skelmersdale
My Lords, I understand the rationale behind what the two noble Lords have said on the amendment but I would add a slightly cautionary note. Although we all enjoy walking on footpaths and we get irritated by bicycles, quad bikes, Land Rovers, et cetera, on paths that are not BOATs, there are those, such as disabled people, who are able to enjoy such footpaths only through the use of some sort of propelled vehicle. Although I readily understand that there is a need for control, I do not believe that it should be absolute and I look forward very much to listening to what my noble friend the Minister has to say on the working group that is proposed.
Lord Judd (Lab)
My Lords, I very strongly support Amendment 17. I thank the noble Lord, Lord Bradshaw, for putting it forward. It is constructive, public-spirited, responsible and sensible—just like the old Bradshaw’s timetables.
There is one caveat I want to make. There is an issue that we all have to face. Those of us who are able to enjoy remote and attractive areas must remember that there are very many people for whom this is not a practical possibility because of their physical condition. We all need to get our minds round the issue of how we can improve access for such people so that they are able to share in something that we all regard as precious. Of course, that has to be done by consultation and, if necessary, appropriate legislation and regulations, but it should be done in a sensible way, with the full co-operation and backing of the authorities that are responsible for a particular piece of land.
Having said that, the noble Lord put it in very moderate language but what he revealed is actually a nightmare. At times it can be described only as vandalism—if it were to happen in an urban area, there would be an outcry—despoiling and ruining decent, attractive countryside and making a hell for some people who are trying to enjoy that countryside in a quiet and peaceful way. In fact it can be quite a frightening experience for those who may be able—I count myself among those now—to just about make those areas, but who may have certain disabilities and so on which make them feel vulnerable. That is not least the case for those with loss of hearing, for whom the sudden noise and disturbance of these vehicles can be an unpleasant experience.
The issue is mainly about what is being done to places of special significance, scenically and in other ways. It is also about this “couldn’t care less” attitude—that it is left to somebody else to deal with and clear up, which is utterly selfish as well as being vandalism. We should all recognise that, and wish godspeed to the noble Lord’s amendment, because it is vital. I should of course declare an interest as patron and former president of Friends of the Lake District, and as vice-president of the Campaign for National Parks, but I assure you that the remarks I have made this evening come from the heart in terms of being a resident of one of the areas that has quite a number of beautiful things that can so easily be ruined and destroyed.
Baroness Byford (Con)
My Lords, I will add a few words on this amendment, because it is at the very heart of enjoyment of the countryside, and the contributions we have heard from around the Chamber tonight rather reflect the challenges that we place on our countryside. From the perspective of disability access, which my noble friend mentioned, it is hugely important that people who are not able to walk freely, or cannot get around in the way they used to be able to, have access to the countryside. But due to the sort of damage to the green lanes that my noble friend Lord Bradshaw was talking about, they would not be able to get through those anyway. In many cases the countryside is being ruined as the green lanes have become bogs, and the people that do it have very little regard for the enjoyment and pleasure of anybody else.
There are also landowners who are quite willing to open up areas of their own land and make it available to those who wish to follow the sport of 4x4s, who get a thrill from that sort of activity where it is well organised. But it is the result of the devastation that is caused to some of our most beautiful areas that we are trying to address within this amendment. I had not looked to speak in this debate, but I am moved to do so because if we are going to have another working group looking at it, there are clear aspects that need to be taken into account. It is not just a question of saying to people who enjoy the sport of 4x4s, “You can’t do it”, but that they can and that there should be areas in which they can do it; nor saying to people who are disabled who need to have motorised access to the countryside, “You can’t get through because we are going to ban everything”. There is a balance to be found in the way that this is looked at.
I do not know what the Minister’s response will be to this amendment, but I hope that he is able to give some words of encouragement to the setting up of the working group and that it specifically looks at separate issues, because it is all too easy to say, “That will cover the whole”, when it clearly will not. I will again listen with interest to what the Minister has to say on this, but I hope we clearly recognise the needs of those who would like to access countryside but cannot, and those who would like to use 4x4s in a particular manner.
One further thing to add to this debate is the whole question of the countryside and of our wildlife. Not too much takes place on that; I suspect that these issues have been driven aside. Another aside to add is that those of us involved in stewardship and single farm payments know very well where we have got the six-metre strips or whatever it might be. One is very careful as to what motorised vehicle goes over that at all because of the damage to the wildlife and its sustainability. I am delighted that this amendment has been raised, and I look with interest to the response we get from the Minister.
Lord Skelmersdale
My Lords, would my noble friend accept another thought? As she said, she is a farmer but not a farmer on—for example—the Quantocks, or Exmoor, or further north in Cumbria like the noble Lord, Lord Judd, although I believe he is not a farmer; none the less he is a resident. They have to get around their land on some sort of vehicle, whether it is a tractor or a quad bike.
Baroness Byford
Indeed. I am so sorry I did not include quad bikes; they are a normal sort of motor vehicle that is essential to farming in many areas. We do not happen to have one on our farm, but we do not have the sort of access being debated this afternoon. My noble friend is quite right to reflect on how important that access is.
Lord Grantchester
My Lords, the stakeholder working group is to be commended on finding and building consensus around the main interested groups to recommend the changes to the Bill as a package, to streamline the process, and to make quicker progress with less contention and confrontation, even though there may appear to be plenty of time until 2026, the cut-off date under the CROW Act 2000. We agree with the measures in the Bill as a balanced approach to speed up the process. We wish to retain the consensus and build on it. I am grateful to the Government for listening to our views and those of many others, reflecting on the proposals and coming forward with these further technical clarifications. We agree that the stakeholder working group must be retained following this excellent report, and its remit extended to experience more contentious, protracted issues. Indeed, in the other place, the Minister agreed to set this up.
The problem raised through Amendment 17 is one that needs addressing, but not in the context of this Bill. This is not to deny that there are issues, costs and damage created by the use of off-road all-terrain vehicles. However, they must be addressed in the context that 62% of byway traffic is due to land management and dwelling access, with the remaining 38% due to recreation. The damage done by this 38% cannot be denied, and the noble Lords, Lord Bradshaw and Lord Cameron, and my noble friend Lord Judd have highlighted this tonight. But 70% of byways are without drainage, and much damage can be done by farm vehicles, water erosion and poor maintenance. The stakeholder working group must be allowed to examine the issue to find solutions first, to be arrived at through dialogue, a process more likely to result in less conflict, more compromise and thus acceptance, reducing the need for enforcement. Ministers could then make better informed decisions. These measures relating to public rights of way will bring benefit to all interests—land owners, local authorities and the public, even with their competing interests.
Lord De Mauley
My Lords, in what is an understandably contentious debate about the recreational use of motor vehicles on unsurfaced routes in the countryside, and particularly inside national parks, we are addressing similar issues to a debate we had in Committee. We sympathise with genuine concerns about the problems that can arise from the recreational use of motor vehicles on unsealed roads, encapsulated in Amendment 17 by my noble friend Lord Bradshaw. I have seen some of the pictures that the noble Lord, Lord Cameron, referred to. We agree that this is an issue which needs to be tackled and some means of resolution found. The Government’s published response to the Joint Committee’s report of pre-legislative scrutiny on the Deregulation Bill said as much, but also recognised that this Bill is not the right mechanism for doing so. The issue of recreational off-road motor vehicle use is an emotive and contentious one, where one person’s pleasurable pastime is anathema to another. The noble Lord, Lord Grantchester, said that by no means all damage to unsealed roads and tracks is by the recreational use of motor vehicles, and I broadly confirm the figures that he mentioned.
We believe that the best way to review policy on the recreational off-road use of motor vehicles is for it to be based on the stakeholder working group model. I am grateful to noble Lords who echoed those sentiments. That approach has proved to be successful, as demonstrated by the stakeholder consensus on the rights of way reforms package, of which the clauses in this Bill form the major part. This has resulted in mutually beneficial solutions being arrived at through dialogue and negotiation.
The Government plan to set up such a motor vehicle working group, with an independent chairman, as soon as possible after the Deregulation Bill has completed its passage. My department will work with Natural England to organise a secretariat, and it will invite stakeholders with the relevant experience and expertise to join the group. We propose to invite interested organisations to put forward their suggestions for suitable members. In response to my noble friend Lord Bradshaw’s specific question, I say that a key principle is that the group should contain a balance of interests across all sectors. We plan to have members who can represent the interests of national parks, areas of outstanding natural beauty, national trails as well as all the different types of users of rights of way.
Within such a group, recognised professionals can explore all the viable possibilities and their likely consequences. Resolutions arrived at in this way, based on agreement and mutual interest, are likely to result in less conflict and reduce the need for enforcement. Solutions will work best if based on compromise, and I have been assured by those representing the anti-vehicle groups that it is not their intention to change the legislation in relation to allowing motor vehicle trials and competitions. I welcome this approach, as I do the points made by my noble friend Lord Skelmersdale and the noble Lord, Lord Judd.
My noble friend Lord Skelmersdale raised a point about access for disabled people to the countryside. This is a complex issue with many different aspects, which is why it needs to be considered carefully by a working group and fully consulted on.
My noble friend Lord Bradshaw asked about timing. I have said that the stakeholder working group will start its work upon completion of the passage of the Bill. We will set a target time for the group to report. The original stakeholder working group took 18 months to report and I believe that a similar timeframe is realistic for this group to work to. I can confirm that a public consultation will follow the report.
While the group needs to have a clear remit, it will be invited to come up with its own terms of reference. I expect that it will look at all the issues in the round and include assessments of any economic and social benefits of the current recreational use of unsealed roads as well as an assessment of the costs and burdens. On that basis, I hope that my noble friend Lord Bradshaw will be prepared not to press his amendment.
Lord Bradshaw
I thank the Minister for what he has said, but what was missing was the question of what happens—
Lord Gardiner of Kimble (Con)
My Lords, it is my noble friend Lord De Mauley’s amendment that leads this group, so I rather think that my noble friend Lord Bradshaw is not in a position to make the speech that he is proposing to make.
Lord De Mauley
“(3) Where a modification consent order takes effect, any path or way, or any part of a path or way, which is shown in a definitive map and statement in consequence of the order or any special order combined with it under section 54B(5) is maintainable at the public expense”
Lord De Mauley
Lord De Mauley
“( ) In that paragraph, after sub-paragraph (4) (as inserted by sub-paragraph (4) of this paragraph) insert—
“(5) In the case of an order relating to England, the Secretary of State may, instead of affording a person an opportunity of being heard as mentioned in sub-paragraph (2)(b), (2A)(b) or (3)(b), afford the person an opportunity of making representations (or further representations) to a person appointed by him for the purpose.“(6) Where the Secretary of State acts under sub-paragraph (5) by affording a person an opportunity of making representations (or further representations) instead of an opportunity of being heard as mentioned in sub-paragraph (2)(b) or (3)(b), the reference in sub-paragraph (2) or (as the case may be) (3)(c) to the report of the person appointed to hear representations or objections is to be read as a reference to the report of the person appointed under sub-paragraph (5).””
Baroness Hanham
Baroness Hanham (Con)
My Lords, I shall speak also to Amendment 19 and in doing so remind the House that I am co-president of London Councils. It is on behalf of London that I shall speak this evening.
Clause 44 changes the penalties on a national basis for waste collection. It amends provisions in the Environmental Protection Act 1990 on waste collection and waste receptacles. It changes the system from one which was subject to a fixed penalty notice regime—that is, a system based on the criminal law—to one based on the civil processes of a penalty charge notice system. This change seems wholly proportionate and sensible, and I have no disagreement with it.
However, to make this a national system, two provisions have had to be put in the legislation to bring London into the whole pot; namely Clause 44(6) and Schedule 12. Both of those have had to be inserted into this part of the legislation to ensure that it is a national scheme. The reason is that London is already running such a scheme, based on the amended Environmental Protection Act and under the London Local Authorities Act 2007.
This system has been running perfectly happily. It is a decriminalised penalty notice system based on the normal penalty notice way of doing things. It has an appeals system. It is managed by a joint committee of London Councils. It has been the forerunner of what the Government are now trying to do. The system is now recognised by everybody who lives in London. I do not know whether people who are not involved in local authorities realise that it is not always easy either to identify somebody who is causing an infringement of the law or to make sure that they cough up when they are charged or recognised as having done so. As the system has been running perfectly successfully, London wants to stay that way.
My first reason for not wanting to see London included in the processes set out in the Bill, therefore, is that its system has been running perfectly well. The second is the bureaucracy that surrounds the Government’s proposals. There are four pages of legislation to tell enforcement officers how to issue a penalty charge notice. This is meant to be a Deregulation Bill, not a “pile it on high” Bill. With a penalty charge notice—as we all know, because we all get them from time—you receive it, you sigh deeply, you think about throwing it in the bin but, largely, you pay it because it tells you that if you pay up in two weeks you can do it more cheaply than if you wait for four weeks. If you feel really brassed off about it, you appeal. The process is neither very long nor very complicated, but there are four pages of legislation to introduce this new national system.
Lord Tope (LD)
My Lords, I support my noble friend Lady Hanham very strongly and very warmly. I have no particular London interest to declare now, other than that as a resident of London for many years. I was until last May, when I took voluntary retirement, a London borough councillor for 40 years and leader of the council for 13 of those years. If I learned anything from that experience, it was not to mess around with the waste collection system unless it really needed it.
The very simple question to the Minister is: why do the Government feel that London’s system—which, as far as I am aware, has worked extremely well for the last six or seven years and meets all the Government’s requirements in this Bill—is so in need of change that it requires what is in effect eight pages of primary legislation, if you include what is in the Bill and in the schedule, to correct it? What is so wrong with it? The current system is decriminalised and has an appeals system. In fact, it is working so well that there has never actually been an appeal on waste, but the system works well because it is the same or a similar system to that used for parking appeals. There have been just a few parking appeals over the years, so we can say that the system works well and would work well should there ever be an appeal within the waste system.
The other purpose may be to bring London into line with the rest of the country. Why is that necessary? As my noble friend said, there are many issues—two of which we will be discussing next week—on which London has different and separate legislation and provisions to those of the rest of the country. This is one that has existed since the 2007 Act. As we have said, it has worked well and I am not aware of any difficulties, although perhaps we might be about to hear them, so why not leave well alone? This is a system that is tried and tested, is working well and is hugely less cumbersome, time consuming and cost consuming than that proposed in the Bill.
If the Minister is not in a position to agree to these amendments tonight, may I echo the request from my noble friend that he at least agree to meet with us, try to understand our concerns and see whether we can, at least, reach a sensible solution that does not bring such lengthy, cumbersome and unnecessary burdens on London, which already has a much better system that is working? This is not deregulation; it is excessive regulation and does not belong in a Deregulation Bill.
Lord Harris of Haringey
My Lords, like the noble Lord, Lord Tope, I do not have any current London government interests to declare, although I was the founding chair of the artist currently known as London Councils, which was then called the Association of London Government, for five years. I was a London borough leader for a number of years and an elected representative in London for 26 years, and for two—or perhaps four—years I was chair of a London organisation called London Waste Action.
I find Clause 44(6) to be quite bizarre, particularly in a Deregulation Bill. What I understand has happened is that the Government looked for a model of deregulating some of the complexities outside London, found that London had a system that worked and decided to replicate something like it for the rest of the country. However, because of some natural desire in the relevant government department to make things more rather than less complex, which this Bill is supposed to stop from happening, they produced a system that is more complicated than the London one. Then, for ease of simplicity and universality—quite against the principles of localism and devolution, which we understood the Government were in favour of—they decided to impose this more complicated system on London, even though London has a system that works perfectly well.
I frankly do not understand the logic of this. The model that exists in London has emerged through a London Local Authorities Bill, which was passed into legislation by Parliament; it is a locally determined scheme that decriminalises the system and provides a system of appeals which, as the two noble Lords who have spoken have indicated, has worked well since it was introduced. The Bill before us would sweep it away and replace it with a more complicated system, which would necessarily introduce a degree of delay. The process that the noble Baroness, Lady Hanham, has described—of forming an intent, telling someone that you might have an intent, then telling them that you have had an intent and giving them an opportunity to make representations and an appeal at each stage—is unnecessarily cumbersome.
The reality is that we are talking about people who are dumping waste. They do so—I have watched it happen, taken photographs and tried to get something done about it. They turn up late at night with a van and they dump a pile of waste somewhere, on the assumption that local authorities will sort it out. The reality is that this is not a process where you need this incredibly complicated system to deal with it. You simply need to pursue those who are offending. What we will create as a result of the Bill is something that will be more bureaucratic and slower, will cost more and will go against the principles of devolution, because it was a system developed by London local authorities in the first instance.
Waste is a big matter—as the noble Lord, Lord Tope, said, “Never go against issues of waste”—and is the third-largest item of expenditure within local authorities. It is a massive part of the business of local government. Here we have a scheme that was developed by London local authorities and that is working well. Now the Government want to come in heavy-handed and against the principles of deregulation and devolution, and impose a complicated, overly bureaucratic and expensive system.
I am sure that the Minister will recognise that Clause 44(6) has crept in by accident, along with its accompanying Schedule 12, and agree to the amendment of the noble Baroness, Lady Hanham, and simply take them out of the Bill so that we can allow the current arrangements to continue. However, if he does not have the authority to agree that tonight, I hope that he will meet with the noble Baroness, myself and others who might be interested, along with London Councils, so that there can be a proper discussion about this before we get to Third Reading. It can then be remedied at that stage, either by the Government or perhaps by the noble Baroness, Lady Hanham, introducing a similar amendment and putting it to the vote.
Lord McKenzie of Luton
My Lords, I can be brief because of the powerful arguments made this evening by the noble Baroness, Lady Hanham, the noble Lord, Lord Tope, and my noble friend Lord Harris. The points they made were extremely telling. It is incumbent now upon the Government and the Minister to try and answer why an approach that is non-localist and bureaucratic should proceed rather than the current arrangements under the London Local Authorities Act 2007. What is the problem with London that this seeks to solve? It is incumbent on the Government to say.
The Government’s focus on this area is all very well, but is it the right priority at the moment? The Minister will be aware of current figures for recycling rates that show that for England household recycling has pretty much flatlined, with a very small increase in the last figures that I have seen. There are real concerns that recycling rates could potentially decline. I would have thought that the Government should be more worried about that than tying up these bureaucratic arrangements that have been so roundly challenged tonight. I hope the Minister will be able to explain very clearly why the Government are where they are on this.
Lord De Mauley
My Lords, I believe that there is broad political consensus that Clause 44 is needed to introduce a fair system of penalties related to household waste collection in England. This new system will treat individuals more fairly than hitherto and deal effectively with those whose behaviour has a negative impact on residents’ local neighbourhoods, such as leaving bin bags on the street for days on end.
The clause removes the current criminal sanctions available under the Environmental Protection Act 1990. The system we propose means that fixed penalties of between £60 and £80 will be available if a person does not present household waste as required and this causes a nuisance or is detrimental to the locality. The clause introduces a “harm to local amenity” test. Civil sanctions will be available to deal with behaviour such as putting waste out in a way that causes obstruction to neighbours, attracts pests, unreasonably impedes access to pavements or is an eyesore.
In Amendments 18 and 19, my noble friend proposes to retain a parallel system in London. We want to change the law so that only people causing real problems for their community will get punished—for example, people leaving bin bags on the street for days on end. The new test of causing harm to local amenity is designed to ensure this. My noble friend’s amendment would enable London boroughs to bypass this important safeguard. That would mean that if a London resident happened to leave a bin lid open or if someone threw the wrong rubbish into someone else’s recycling bin then the householder—that is, someone else—could be punished, in London.
We do not think it appropriate for people to be penalised for a first-time mistake or someone else’s careless action. They should be told what they have done wrong and have the opportunity to rectify their errors. Clause 44 introduces these changes to the Environmental Protection Act 1990. I am confident that this will not add significant burdens compared to how the current arrangements operate in practice. We know that many authorities already communicate well with their residents and seek to educate them if they have difficulties with collection requirements.
Lord Harris of Haringey
Can the Minister tell us how many instances of the cases he has described have led to action under the London local authorities scheme?
Lord De Mauley
I am quite happy to do that. If I cannot do so during this debate, I will let the noble Lord know whatever information I can find for him.
Clause 44 would ensure that this best practice is adopted and that additional safeguards for the individual are available across all boroughs.
I understand that my noble friend is concerned that the process of issuing penalties will take too long. We need to get the balance right between protecting individuals’ civil liberties and dealing with behaviours which damage local neighbourhoods. We intend that this is reflected in legislation. Since the Deregulation Bill was first published in draft, we have amended Clause 44 so that local authorities will not have to issue multiple warnings to people who repeat the same behaviour of causing harm to the local amenity within a year.
We also believe in a fair and measured approach to penalties. A shoplifter committing a first offence may be issued with a £90 penalty notice for disorder. My noble friend’s amendment would levy penalties of £110 for mistakes and carelessness with Londoners’ bins. Clause 44 allows us to set the level of penalties at between £60 and £80 because we do not believe such mistakes and carelessness should be penalised more heavily than shoplifting. I understand my noble friend’s focus on London and know she would like the city to be treated as a special case. However, other cities in England have, for example, high-density housing, transient populations and student populations. I am sure she would accept that a proportionate, fair approach should apply throughout England.
My noble friend asked why the clause needed to be so wordy. We appreciate that the clause and the schedule are long and look complicated. There are two reasons for that. First, we want to be clear about the process that local authorities must go through as we do not want householders to be penalised for a first-time, inadvertent mistake. Secondly, we are looking to align two different systems, set out in the Environmental Protection Act 1990 and the London Local Authorities Act 2007.
To summarise, this clause as it stands will introduce the protection that a household needs from being punished for a simple mistake or for people throwing the wrong rubbish into someone else’s bin. It will align all of England with a sensible approach that keeps residents informed and levels of penalties proportionate.
My noble friend Lord Tope asked whether I would be prepared to meet him about this, and the noble Lord, Lord Harris, asked the same question. Of course I would be prepared to do that, but I would not want to raise any expectation that the Government will change their position on this. I ask my noble friend to withdraw her amendment.
Lord Tope
Is the Minister able to answer the question that the noble Lord, Lord Harris, put to him about the number of prosecutions? As I understand it, he does not have that information to hand. The fact is that in the six or seven years of operating the scheme there has not been one single appeal against the issue of penalty charge notices. Would he conclude, as I do, that that suggests there have been very few issued and even fewer judged to have been unfairly issued?
Baroness Hanham
My Lords, I originally put the question to my noble friend of whether he would be prepared to meet us. He said he will and I thank him for that. I will take up his offer as soon as we can so that we can try and get some sense into this before Third Reading.
I have stood in the same position as the noble Lord, Lord De Mauley, and I have at times thought that the brief in front of me was absolute rubbish. I have to say that I think that this falls into that category. This is not about one person putting a bit of rubbish into somebody else’s recycling bag. This is about bringing into the whole country a decriminalised system of enforcement of waste in relation to receptacles, dustbins and whether or not you put your rubbish out in plain bags. If the five pages plus five pages of schedule on this legislation are intended to amend the problem of one unknown person putting one bit of rubbish into another bag, I think deregulation has lost its meaning.
I will not say any more. I am extremely disappointed with the noble Lord’s response. London has its own legislation on many fronts and it always acts responsibly. It has led the way with the decriminalisation of waste collection and changes to the Environmental Protection Act. It is not just being unfriendly and prosecuting people unnecessarily. The whole nature of what I was concerned about in the noble Lord’s briefing has been misunderstood. I hope that that was what it was. I look forward to meeting him and we will make sure that that happens. In the mean time I will withdraw my amendment.
Baroness Thornton
“Nursery schools: inclusion in schools trusts
In section 18 of the Education and Inspections Act 2006 (alterations that may be made under section 19), omit subsection (4)(f).”
Baroness Thornton
My Lords, as we know, with this Bill we move from waste to education to farms to taxis and now to schools and nurseries. Amendment 20 would enable nursery schools to become full members of trusts and Amendment 21 would ensure that co-operative schools could establish an industrial provident society, should it be desirable, so bringing co-operative schools into line with other kinds of co-operative organisations.
By way of background, I should say that the first co-operative trust school was established just over five years ago. Few would have anticipated the extent of their growth: there are now around 700 co-operative trust schools and that figure is expected to rise to 1,000 by the end of 2015. In other words, more than 250,000 pupils in England now attend co-operative schools. The values of co-operative schools are drawn from the global statement on co-operative identity, which is recognised by the United Nations and forms the basis of co-operative law throughout the world. The co-operative values of self-help, self-responsibility, equality, equity and solidarity, together with the ethical values of honesty, openness, social responsibility and caring for others, have been seen by governing bodies to resonate powerfully with their schools.
Moving to a co-operative model provides a framework in which everybody with a stake in the school’s success—parents, teachers, support staff, local community organisations and pupils—have the opportunity to be involved in running it. There is a growing recognition that working co-operatively helps to avoid duplication and distraction, allows school leaders better to focus on the effective leadership of teaching and learning and raises standards. The value of this kind of collaboration and partnership working between schools was recently examined by the Education Select Committee, whose report highlighted the benefits that collaboration between schools brings, in particular where it is on the basis of mutual benefit.
Examples of these trusts can be seen in Cornwall, where over 100 schools have become co-operatives and are part of 13 trusts. Most of these are geographically based clusters, enabling small village primary schools to be part of a learning community with a secondary school that most of their young people will move to. In Leeds, a significant proportion of the city’s schools are already in co-operative trusts and others are in the consultation process.
The remarkable growth in co-operative schools has happened despite, not as a result of, current government policy. This demonstrates that the models developed under the pathfinder scheme programme following the 2006 Act under the last Labour Administration are enormously attractive to schools.
The reason why these amendments have been put down and I proposed them in Committee is that there is scope within the Bill’s intention—to,
“Make provision for the reduction of burdens resulting from legislation for businesses or other organisations or for individuals”—
to correct two specific burdens on the development of co-operative schools and co-operative school trusts. The first amendment concerns nursery schools. Many co-operative networks and co-operative trusts are based on strong geographically based clusters. They have an all-through vision of education, raising achievement by supporting young people throughout their journey through the education system. Yet the 2006 Act excludes nursery schools from becoming parts of trusts. The amendment would correct this and, in effect, amend the 2006 Act.
Nursery schools are in many ways the most co-operative part of the sector, in relation to both their engagement with parents and carers and their pedagogy, as is reflected in the early years foundation stage. Enabling nursery schools to become full members of trusts or, indeed, academies would provide a vehicle for that parental and family engagement in early years to enthuse the trust to further develop the all-through vision of education essential for sustainable changes in achievement.
The second amendment seeks to amend the School Organisation (Requirements as to Foundations) (England) Regulations 2007 to ensure that schools are able to establish themselves as an industrial provident society, should it be desirable. Despite an all-party commitment to co-operatives and mutuals in the public sector, co-operative schools have had to work around existing legislation, as no provision is made in the relevant education Acts for schools to be established formally as co-operative societies as defined in the 2014 consolidation Act. The new clause seeks to amend this, ensuring that any future legislation provides a level playing field and a more understandable legal framework for co-operative schools—in other words, using the co-operative legislation that exists.
There is a question of the Government’s commitment to co-operatives, mutuals and social enterprises in this area. In a real way, they are disadvantaged because they cannot use the legal form that exists for co-operatives. This issue was first raised in the Commons during the first part of the discussion about the Bill. The amendments were withdrawn then on the basis that there would be discussions with the Department for Education. While Michael Gove was the Secretary of State, he was personally supportive of the proposals but said that the department lacked the expertise and resources to adopt the changes. Since his departure, there has been what you might call a decided lack of enthusiasm about the issue in the department. We are told that the department would like to work with co-operative schools to help with these proposals, but that has yet to happen. I am not hopeful that the Government will accept the amendments now, but I would like to see some sign that progress can be made in this important matter. I beg to move.
Lord Wallace of Saltaire
My Lords, the Government have been, and continue to be, supportive of the broad aims of partnership, collaboration and co-operation in education, as in other fields. I have been a long-standing supporter of the Co-operative movement and I was sorry to see its decline in the north of England over the last 30 or 40 years, just as I am glad to see that in many ways it is now reviving. I am a member and a regular user of the excellent Co-op shop in Saltaire and I was on the point of considering moving to the Co-operative Bank before its recent sad problems.
We all recognise that mutuals are model forms of enterprise that we need to extend across a whole range of fields. As I deal with elderly relatives, I think that we all need to work much more actively to develop mutual models for care homes. As far as schools are concerned, we know that partnerships between schools can be a powerful tool in raising standards and improving educational achievements for all pupils and we place great value on that.
The academies programme continues to deliver examples of schools working together in multi-academy trusts, which help to ensure success for everybody in those partnerships. These trusts pull together schools across both phases of education to work effectively as a family of schools. There are currently 260 multi-academy trusts which have both primary and secondary provision, so it is not simply primary schools working with primary schools and secondary schools working with secondary schools. We are promoting collaboration across the sector and we see the benefits across the educational landscape.
Baroness Thornton
Why does adding provident societies to the sort of business forms that schools can have in legislation make anything more complex? It is not a complex question. It is a simple question; it is straightforward. We are just asking that co-operative schools can have the legal form that co-operatives have. That is all.
Lord Wallace of Saltaire
My Lords, we have been open to discussion and we are still open to continuing discussion on what precise forms are needed, but we want to be persuaded of the educational advantages of the changes that have been proposed and we would want to be assured of the advantages for schools before we were to support these very specific amendments. In line with the Government’s undertaking given in the other House to investigate the proposals—
Baroness Thornton
Would the Minister like to tell me exactly where in the legislation creating academies it says that companies limited by guarantee bring better educational results?
Lord Wallace of Saltaire
My Lords, I take the point that the legislation does not specifically say that. I was in the process of saying that we are open to discussion. We offered to investigate the proposals further and my noble friend the Parliamentary Under-Secretary of State for Schools met interested parties to discuss their concerns last year. He also wrote to the noble Baroness in November last year, inviting her to provide evidence about the problems that these amendments would address and to meet to discuss the issue further. We regret that that meeting has not been held and we are still open to further discussions, but, in consequence, the position has not changed and he remains unconvinced of the educational benefits of the noble Baroness’s case.
The Government are determined to continue to remove the barriers and obstacles that prevent schools delivering the best education possible for their pupils and to promote flexible and collaborative ways of working such as the amendments are intended to promote. So far, more than 700 co-operative schools have been established and, as the noble Baroness said, there will be 1,000 by the end of 2015. We firmly believe that there are sufficient alternative options already available without needing to introduce these additional legislative changes, but we are open to continuing discussions about the obstacles that the noble Baroness and others clearly think still exist. In the mean time, and in openness to further discussions, I urge the noble Baroness to withdraw her amendment.
Baroness Thornton
I thank the Minister. I know that he is sympathetic. Indeed, we shop at the same Co-operative store in Saltaire—and a very good shop it is, too. I have been a member of the Co-operative society in Bradford since I was 16 years old. I am grateful for the offer of further discussions and my Co-operative colleagues from the Commons and this House will certainly take the noble Lord up on that offer, because there are issues to do with equity, a fair playing field and recognition of different business types. I think that we would all agree that plurality in those issues is important. In the mean time, I beg leave to withdraw the amendment.
Small Businesses
Lord Risby
To ask Her Majesty’s Government what steps they are taking to encourage the growth of small businesses in the United Kingdom.
Lord Risby (Con)
My Lords, the statistics regarding small businesses are truly remarkable. Small businesses account for 33% of turnover in the private sector and employ 12 million people. Of our country’s 5.2 million private sector businesses, those with fewer than 50 people account for 99.3% of the total number.
For many years I have been deputy chairman of the Small Business Bureau. In November, a number of our directors produced an SME manifesto called “Liberating the Entrepreneur” under the Genesis Initiative. I pay tribute to the many parliamentarians of all parties in both Houses of Parliament who have highlighted the needs and potential of our small businesses over the years.
I most warmly welcome the Small Business, Enterprise and Employment Bill, which deals with key areas, such as access to finance, regulation, public sector procurement and filing requirements. This, of course, builds on the Government’s publication, Small Businesses: GREAT Ambition of December 2013.
The increase of over 40% in the overall business population since 2000 has been driven by SMEs. In turn, that figure was driven largely by the increase in the number of businesses without employees—for example, sole proprietorships, run by one self-employed person, or ordinary partnerships, run by two or more self-employed people. Most of the growth in non-employing businesses comes from unregistered businesses. The smaller ones not registered for VAT has increased by 83% since 2000. This trend arises from the possibilities offered by modern technology and communications.
The Government have plans, which I applaud, to extend superfast broadband, but it is a question not only of cover but of the quality of the cover. A note that I received from the City of London Corporation indicated this to me. Many SMEs in and around the City do not have access to the superfast broadband required to boost their growth and, while larger businesses are able to afford dedicated fibre optic broadband, the needs of SMEs have been overlooked by the large telecoms companies. As a result, average speeds for SMEs in the City are half that of the London average. Given that, and considering the particular impact on small and microbusinesses of broadband, I would be grateful if my noble friend could indicate what percentage of the UK will be covered by at least one of the four main networks and by when, and how we deal with areas where broadband infrastructure may not be commercially viable.
Inevitably, following the financial crisis and a change to the regulatory framework, lending institutions became very cautious. Over the years, we had seen the growth of a concentrated banking structure in this country. In 2007, at the peak of business lending, there were perhaps only 100 lenders to business; that number then halved, but today there are at least 300. I greatly welcome the vast number of government schemes and assistance under the umbrella of “providing finance and support for your business”. However, many feel that all that can be confusing and time-consuming for a small business owner. Therefore, the issue is not only the availability of funding but awareness and access; a recent survey indicated that only 6% of SMEs are fully aware of the whole array of borrowing possibilities. Is my noble friend confident that the now vast range of funding available for business is being made available on a clear, easy to access basis, and does he envisage some further improvements in enhancing access and clarity of information?
While it is true that interest rates remain very low, and general corporate profitability has much improved, the issue of late payment remains a continuing burden. The FSB has indicated that some half of the invoices of its members are paid late, persistently. Additionally, of course, suppliers remain nervous about pursuing larger businesses, for very obvious reasons. It is good to have a new reporting regime to help small business to identify best payment practices, with attendant benchmarking. However, it is very daunting for a small business to deal with the might of a major purchaser. Is my noble friend satisfied that, by giving smaller businesses more rights to challenge unfair terms, that problem will be reduced? While I greatly welcome the strengthening of the prompt payment code, would it not be advantageous and very reassuring for SMEs to have a small business conciliation service to resolve those disputes?
With their Red Tape Challenge, the Government have sought to address needless regulatory pressures. It is gratifying that the World Bank’s Doing Business 2015 report showed us as eighth out of 189 economies—up two places—as domestic regulation has been reduced. However, given the considerable impact of EU legislation on businesses, can my noble friend confirm that the Government are pressing for an annual statement of the true cost of EU regulation and legislation? That would certainly be advantageous to all EU members in a generally static European economic environment, which of course impacts on us, too.
I salute the substantial increase in direct lending finance by UK Export Finance and the package of support for first-time exporters. As somebody who is involved with UKTI, I find the new and functionally improved emphasis on highlighting what is available to support SME business activity abroad most encouraging.
In 2014, the House of Commons BIS Select Committee identified business rates as the main threat to the survival of existing retail businesses on the high street, and the biggest obstacle to entrepreneurial new retail businesses starting up. Business rates on the retail sector account for 25% of taxes on domestic property, and many small businesses pay more in business rates than they do in rent. The introduction of the 2% cap in 2013 certainly recognised that. The next revaluation is due in 2017. There have been suggestions that property revaluations should be more frequent. Perhaps my noble friend can comment on whether there are any thoughts in place for a long-term reform of business rates, particularly for small companies.
SMEs feel better supported today than at any time—which is absolutely excellent news. As I know from personal experience, starting a business is very daunting, and to grow that business requires confidence in both economic environments and growth, and a pro-business atmosphere. It is significant that this country has been such a magnet for many young people from neighbouring countries where youth unemployment is shockingly high, and where in some instances anti-business sentiment and policies apply. Tech City is a brilliant example of attracting business-minded young people from all parts of the United Kingdom and abroad.
Of course there have been differences, but essentially a message has gone out from this Government and from the previous Government that Britain is open for business, and that spirit has prevailed in debates about current business legislation and in the export debate last week. Recently, however—I feel compelled to say this—some senior political figures have taken to attacking business and successful businesspeople. Those comments have been ill judged, and I hope will cease on sensible reflection, because they undermine the vitally necessary pro-business message in this country and, quite frankly, they are profoundly counterproductive.
Lord Cavendish of Furness (Con)
My Lords, the House is indebted to my noble friend Lord Risby for introducing this short debate. As he said, the contribution that small business makes to our national life is now, finally, well understood and appreciated. As the Federation of Small Businesses points out, 99% of our nearly 5 million businesses are small or micro—another point my noble friend made.
In contributing briefly this evening I declare an interest. I recently relinquished the chairmanship of a group of small businesses based in south Cumbria, details of which can be found in the register. Perhaps more importantly, I will not disguise from your Lordships the fact that these family ventures will be seeking strenuously to participate in the very considerable investment that is being directed towards the Furness peninsula, where I live. It is anticipated that over the next decade some £40 billion will be spent in the area, including civil nuclear, biopharmaceuticals and energy projects, and providing national security in the shape of the next generation of attack and deterrent submarines.
The question is: will small—or indeed medium-sized—businesses benefit from those large investments? That is not an idle question; in the past, very little indeed has trickled down, and there has been a pitifully small number of consequential start-ups. Part of the problem is cultural: big corporate businesses feel naturally more comfortable dealing with organisations of comparable size and structure. We must all seek to change that. There is also an ugly element, which can be found especially, in my experience, among what I might term the large private monopolies. They dread small, agile competitors muscling in on their territory, and resort to sometimes quite ruthless measures to see them off.
Local participation is reliant on the agencies set up for the purpose of promoting growth in the local economy being in good shape. South Cumbria has had the benefit of such grants. Most recently, I thank my noble friend Lord Popat for his role in supporting Furness Enterprise’s bid for money from the Coastal Communities Fund. That has been crucial in allowing that simply excellent organisation to continue with the work it does for small businesses.
In one area especially, it is my contention that there is scope for government to influence procurement policy and help the local economy. BAE Systems in Barrow has made some encouraging statements in respect of local involvement and has been extremely approachable. However, once the tendering process gets under way and outside contractors become involved, my fear is that the interests of the local economy become diluted. In the case of the expanding and modernising of the shipbuilding facility, I understand that the Ministry of Defence has a substantial direct investment. Therefore, will my noble friend ask his colleagues in the Ministry of Defence to ensure that their own guidelines in respect of local procurement are followed?
The benefits of these policies were described very well by my noble friend Lord Shipley, who I see is in his place, in a compelling contribution that he made on 23 October last year, when he pointed out that,
“profits accrue locally, training is provided locally and local labour is recruited—there is a local legacy”.
He went on to ask,
“whether the Government are content with the current operation of framework agreements”.—[Official Report, 23/10/14; col. 784.]
I hope that I have not pre-empted too much but I think that that very important point bears repetition and I hope that my noble friend will press the point.
Good practice in the matter of procurement really can deliver enduring benefits to an area and provide strength and resilience against the ebbs and flows of global economic conditions.
Lord Shipley (LD)
My Lords, I welcome this opportunity to say something about the importance of small businesses to our economy and to growth, and I shall be saying some things very similar to what was said by my noble friends Lord Risby and Lord Cavendish of Furness. I want to address in particular issues around business rates, public procurement policies and problems caused by late payment, all of which can be barriers to local growth. I declare my vice-presidency of the Local Government Association.
On business rates, I think that we would all agree on the vital role that small businesses play in their local economies. It is clear that some small firms and businesses feel penalised by business rates in their current form, not least in the retail sector, where they can face enormous competition from the internet. Retail businesses trading from premises rather than online can be unfairly penalised by business rates, particularly at their current levels.
I noted the announcement in the Autumn Statement of a review of the future structure of business rates, which is most certainly needed. I hope that we will get a much more flexible system that would allow councils greater discretion to support the economic growth of small businesses.
On procurement policy, I agree entirely with what my noble friend Lord Cavendish of Furness said, and I hope that the Government do not plan to use powers in the Small Business, Enterprise and Employment Bil1 simply to centralise procurement more and introduce a one-size-fits-all approach. That would not help local government's support for local small businesses and voluntary organisations. We should note that half of local government’s total procurement spend is with SMEs, compared with around 15% for central government. We have already seen the impact of centralised procurement in some areas, such as construction, which can advantage national companies rather than regional or more local companies, which employ and train a long-term local workforce.
I share particularly the concerns of my noble friend Lord Risby about late payment. I know that the Small Business, Enterprise and Employment Bill currently being considered in this House is attempting to address some of the problems of late payment, which can impact on the viability of small businesses and in turn on their growth potential. I note that there will be a requirement for companies to report payment practices towards their business suppliers. I am pleased, therefore, that the Department for Business, Innovation and Skills is now developing a better understanding of the payment practices across different industrial and commercial sectors and is assessing whether to take action sector by sector to encourage better payment practices. At this point, I welcome the work of the construction industry in its fair payment commitments, with its clear plan for delivery of reduced payment timescales over the next 10 years. I wish them well. This is not a matter just for central government; it is the responsibility of everyone. In some cases, the pressure placed on the finances of businesses can be so great that it can result in bankruptcy.
I would like to draw attention, at this point, to the valuable role of the North East Institute of Business Ethics, which was established in May 2013 as an independent regional resource to encourage responsible business behaviour. It encourages regional firms to adopt a fair and ethical approach towards their supply chains. I welcome strongly the Pay Fair campaign; through the Journal newspaper, the local press is encouraging north-east companies of all sizes to take a responsible and ethical approach to paying firms within their supply chain. The problem is that, in a contract with 30-day terms, some will inevitably pay late. In the UK, the average payment was 15 days late. The Federation of Small Businesses says that, on average, its members in the north-east of England are owed around £40,000 and are waiting eight working weeks to get paid. It also tells us that it costs in the region of £100 million a year for small businesses to chase payments. Clearly, if more companies paid on time, it would really help other companies and the economy more generally.
Baroness Byford (Con)
My Lords, I thank my noble friend Lord Risby for securing this Question for Short Debate. I will not repeat the figures that he gave at the beginning but I agree with him that Britain is open for business. I have a farming business in Suffolk, which would be considered small; as my noble friend will know, more than 50% of small businesses are based in rural areas.
The Government should be congratulated on the way in which they have encouraged small business. The Autumn Statement announced some £400 million through the venture capital funds investment and some £500 million through new bank lending and through the enterprise and financial guarantee scheme, which required 75% of bank loan, with the lenders having to put up 25%. I could go on but I will not.
I turn quickly to apprentices, because the growth of small businesses can be enhanced by young people. Again, the Government have put an allocation of £170 million aside for youngsters between the ages of 14 to 16 and between the ages of 16 and 24. That encourages youngsters to get involved in business and to go on from there and, it is hoped, to become involved in small businesses in their own right. In hindsight, nearly 100 years ago, my father-in-law, who was a farmer’s youngest son, set up in Leicester, with two machines and two men, employed in the sock business; he eventually employed just under 2,000 and exported some 50% of all the socks he made. Exports are hugely important to this country and, indeed, to small businesses. Although others have not touched on it, I hope it is something that the Minister will be able to reflect on.
Secondly, as has been referred to by others, the Government, through legislation, are looking at deregulating as much as they can, thus freeing up small and medium-sized businesses to be able to get established in a much sounder way. With that, obviously, comes the question of late payment, which still needs to be addressed. Where breakdowns occur—such as in the farming and food industries—we have the groceries adjudicator. It is a very sad reflection on business that that is actually needed, but a wise move. What we need are powers to fine.
Finally, on the general side, I turn to businesses in rural areas. Many of them start up as one-man businesses and then grow a little, but what is key to all of them is broadband, as has been mentioned. In some areas, it is not a question just of broadband quality; it is actually getting broadband access in the first place. Linked to that is the question of enabling local companies to put in for public procurement tenders, where they will have a chance locally. I think that some opportunity is being missed. On the other hand, there are some very good examples of what is actually being done. The important thing is that people are encouraged.
I congratulate the Government on what they have done. There is still much to do: let us not forget exports—they are the lifeline for us in this country, in the past and in the future.
The Lord Bishop of St Albans
My Lords, there is no doubt that we need to create a culture in which entrepreneurial skill is encouraged and supported. Small businesses form a vital part of our national landscape and are integral to the flourishing of our society. The social capital that we all seek depends on strong partnerships: partnerships between manufacturing, finance and chambers of commerce; between new entrepreneurs and established businesses; and between local and national government and the universities, as well as the voluntary and faith sectors.
Last evening, I was at a social function and found myself talking to Peter Goodman, the president of the St Albans District Chamber of Commerce. It was too good an opportunity to miss so I asked him what he thought about small businesses. In particular, we ended up discussing start-ups. He identified three main problems that small business start-ups were facing in St Albans. First, he said, there was insufficient advice for small business in the early stages. I therefore ask the Minister whether Her Majesty’s Government can help with better signposting of the business advice that is already available, and whether additional specialist resources could make a significant contribution, especially in emerging areas such as the high-tech industry.
Secondly, Paul Goodman said that it is hard to recruit staff with the appropriate qualifications and, thirdly, that there is a dearth of appropriate premises for small businesses and a need for many more “easy in, easy out” licences. These are areas that I hope Her Majesty’s Government will review carefully as we want to support new business start-ups.
Allied to these challenges is the clear need to improve access to start-up capital for small businesses. With the diversification of financial services, social investment has the potential to provide an alternative way forward for many would-be entrepreneurs. Community development finance institutions are among the social finance options available. They provide loans and credit to, among other groups, businesses and entrepreneurs, especially in disadvantaged communities, which are unable to secure finance from mainstream commercial institutions such as banks. Community finance seeks to bring about a range of economic and social benefits and is not limited to a concern with profit margins.
While this is a fast-growing sector, current levels of community finance provision leave a huge gap in capacity, skills, expertise and availability of capital. The Community Development Finance Association’s recent report Mind the Finance Gap highlighted the extent of the disparity between demand and provision.
As well as the DCLG’s work in encouraging social impact investment, have the Government given any consideration to supporting the growth of the community finance sector? In particular, are there ways in which Her Majesty’s Government can further assist in bringing together the banking, public and independent sectors to work more closely with each other in providing funding for small businesses?
Lord Leigh of Hurley (Con)
I congratulate my noble friend Lord Risby on securing this debate. As we have heard, small businesses are the lifeblood of our economy. Small businesses are often worthy of our praise, just as they are deserving of policy support from government. I declare my interests as recorded in the register of interests.
The register shows that I have started a small business which, 26 years later, remains a small business, sadly, but, none the less has a modicum of success and is not to be confused with my noble friend Lord Cavendish, despite the similarity of name. So when I heard the leader of the Opposition suggest scrapping our proposed reduction of corporation tax for large businesses to support a rate cut for small businesses, I realised that the right honourable gentleman had missed the point entirely and had misunderstood the mentality of the entrepreneur and the small businessman. The point is that many small businesses do not want to stay small. They want to grow, open new sites and stores, invest in new products and hire new staff. As anyone who is concerned with the state of the public finances—we on these Benches certainly are—will know, larger businesses pay more tax. I am pleased to say that this Government have recognised this point and introduced a succession of targeted measures throughout this Parliament to assist SMEs. We have seen entrepreneurs’ relief increase dramatically from £2 million a year to £10 million a year in tax-free lifetime gains—or tax at 10% for lifetime gains—meaning that founders and entrepreneurs can keep more of the wealth they have created by taking a risk and starting a new business.
As has been mentioned, the start-up loans scheme has helped thousands of individuals start their own businesses, often moving people away from welfare and into their very first new business. So far it has made 25,000 loans worth some £130 million. As the Federation of Small Businesses has said, this Government have made it easier not just to start a small business but to run one. In particular, the changes in the laws on employment tribunals and extending the qualifying period for unfair dismissal will help individuals by giving them more opportunities to enter the labour market, and mean that employers such as me will take a chance and employ an extra person. We in Britain now benefit from one of the most liberal labour markets in the developed world and one of the world’s most competitive tax systems. The Government have abolished Labour’s jobs tax, cutting employer NI by £2,000, meaning that 450,000 small businesses—that is nearly one-third of all employers—pay no jobs tax in the current financial year.
As has been mentioned, the Government are committed to helping further through their powerful procurement footprint, securing 25% of all spend going to SMEs. But there is still more to be done. I would welcome the Minister’s comment on the recent study by the Association of Accounting Technicians, which has found that the UK’s complex tax system is costing SMEs £9.9 billion a year in compliance, whereas it costs larger firms only £100 million. I note the work of the Office of Tax Simplification—it is looking to simplify our tax code to make it easier—and only encourage it to look particularly at aspects affecting small businesses.
As we encourage people to found and work in small businesses and make them cheaper to operate, we must help them grow by encouraging more investment and, of course, exports. It is pleasing to see the Prime Minister take a personal interest in that in promoting SMEs on all his trade trips. The enterprise investment scheme has been expanded to offer tax reliefs of 30% for the investor— up from 20%—and the aggregate limit to which a single company can take such investment has increased from £2 million to £5 million. Likewise, for companies using money from venture capital trusts, the individual company limit has increased to £5 million, as opposed to £2 million previously, and the maximum number of employees for eligible companies has increased from 50 to 250.
We have incentives and encouragement to start a business, help in bearing down on costs and policies to help businesses grow. This represents a joined-up approach to business policy, one that understands the complete business ecosystem and, in particular, the challenges and opportunities of running a small business that wants to grow and one day become a large one. It is no wonder that businesses are lining up to point out how disastrous a change of government could be for SMEs, the economy and the country.
Lord Empey (UUP)
My Lords, I, too, congratulate my noble friend Lord Risby on securing this debate.
I want to focus on trade issues and the contribution SMEs can make to our economy. A recent statement from the European Commission forecast that the UK is on course to record the worst trade deficit in the industrial world in 2014. Howard Archer, chief UK economist at IHS, said that trade was unlikely to be a major driver for UK growth in the near term.
Even a superficial examination of our trade statistics illustrates that, even with our exports to partners in the European Union, we are achieving a monthly deficit of up to £3 billion, £4 billion or £5 billion a month. This has gone on since the 1980s, which was the last time that we had a trade surplus in this country. If the same statistics were coming out of the health service or our education service, there would be a revolution in this place. We are sleepwalking our way through the fact that we are living and paying our bills by doing two things. First, we are selling our assets. Secondly, we are borrowing. That, added to what we do sell, is how we pay our bills. How long can that go on? SMEs are where the solution lies, because we have proved conclusively that reliance on the large corporations is no solution.
I have asked my next question on a number of occasions but never had a clear answer to it. I hope that the Minister will tell us whether we as a country have any policy on import substitution. If there is one, I would like to know what it is. I have never heard it. We are ignoring something vital. It is not that we support the production of articles that are completely unprofitable but we can do things in this country on the land, in manufacturing and in our services that are done elsewhere that I believe we could do just as well here.
The second thing is really a training issue. We say that we are committed to exports and that we want to see small companies and others take the leap and start to export. But do we? For instance, we train our dentists and doctors. Would you send a car to a garage that had no trained mechanics? However, we are perfectly happy to try to see exports grow in companies where there is no training for people to export. I am a vice-president of the Institute of Export, an educational charity providing training for people in business so that they understand what exports are, how they do them and the pitfalls. Surely it would be possible for government to give an incentive, even through a capital allowance, for people to be trained in export qualifications, so that the small companies at least are encouraged, and so that we send a signal as a Government and a country that we are serious about trade.
These figures, which have now been going for 30 years, indicate that we are not serious about trade. We are prepared to run huge deficits almost indefinitely and pass on a huge burden of debt to the next generation. I hope that the Minister can address those issues in his response.
Lord Freeman (Con)
My Lords, I, too, congratulate my noble friend Lord Risby on securing this debate. He is a former colleague of mine with a long and distinguished record for East Anglia in the other place. I think your Lordships owe him a debt of gratitude for the time to discuss this very important issue. I want to concentrate on advisory support for high-technology companies, particularly small technology companies, for which the failure rate in this country is far too high. It is not about the absence of finance, but about experience and knowledge being passed on, in particular from government. That is the burden of my brief comments.
My experiences in high-tech small companies stem from my chairmanship of Cambridge University’s technology transfer office and my chairmanship of the Security Innovation and Technology Consortium, which has more than 100 members of small firms in the high-technology field. I am pleading on behalf of that small but important proportion of small high-tech companies that fail because of a lack not of finance but of guidance and help concerning their ambitions and the direction of travel that they have chosen. In some cases it may be correct—it may result in substantial benefit to the United Kingdom—but in others it can be misguided.
The burden of my comments is that we need better to capitalise on the tremendous wealth of experience and knowledge of some of our smaller high-technology companies and make sure that they do not end up in a blind alley. I have great admiration for the American Research and Development Corporation in Massachusetts, which over the years has nursed and encouraged smaller firms which have grown to very large entities in the United States. It has a very good track record.
My plea to the Minister is: can he please communicate with the Department for Business, Innovation and Skills and suggest that it might create and sponsor a group of technology experts drawn from many industries, but those that particularly depend on high technologies, to act as advisers and guardians of the technology—not of the wealth of those individuals? They could provide a bit of sober advice to say, “Have you thought about this technology, which might now proceed at a pace in Japan, the United States or on the continent?”. Some of these small companies, which might have a tremendous future in front of them, might fail and fail badly, simply because of that lack of advice. We should emulate not only the United States but Germany, which has the right institutions to cover the point I made: not only financing but the intelligence network of experience in particular fields. We have the brains in this country, but in this case we need a few wise uncles—some from the Department for Business, Innovation and Skills, I hope.
Lord Borwick (Con)
My Lords, I thank my noble friend for raising an important debate. I declare my interests in several small companies. I have run several businesses. I have always found it quite thrilling: the chase after a new customer, a new product or a profit—that is real fun. The best thing that government could do to encourage business is to show that government understands business by running government the way a businessman would. The best thing to inspire business is to get the background of the country right, with low taxes and certainly with underspending, but also with respect for business and enterprise; a supply of smart, numerate school leavers who can read and write; and a culture that applauds success and encourages failures to try again.
The general health of the UK economy is improving, with good figures on growth and jobs. It is interesting, however, to find out exactly where that growth and job creation is coming from. Last year, a report by the Centre for Economics and Business Research, commissioned by Octopus Investments, found that 68% of employment growth and 36% of economic growth was created by just 1% of UK businesses. These businesses are all high-growth small businesses with an annual turnover of between £1 million and £20 million. It is quite remarkable: small businesses really are driving the economic recovery.
The Octopus Investments report suggests several ways in which we can further support the sector. One of those is allowing corporation tax deferral in order to provide more capital investment to support growth, along with other tax breaks. The report also suggests an overhaul of regional funding. I think that low, simple and predictable tax rates for all businesses are preferable to tax breaks and funding through grants.
We could also do more on business rates, which are often higher than rents, and employers’ national insurance, which stops firms hiring more people. Some good things have been done. If, however, we are to implement tax breaks, they should be targeted at high-growth small businesses.
Overall, when I read reports like that of the CEBR and take part in debates like this, I am heartened to be reminded just how entrepreneurial this country is. I want that to continue. A big part of it will be inspiring young people about the world of business. There are great examples of organisations looking to engage young people and interest them in business. Indeed, every year 180,000 young people in England and Wales take on a real business challenge with Young Enterprise, an educational charity that I support. Mentored by a member of the local business community, they find out first hand what running a business involves and how much fun it can be. I have had the pleasure of meeting many of the wonderful young people who have done well in their competitions, and I hope that they all go on to start a high-growth small business. Young Enterprise plans to be in 50% of secondary schools this year. It should be in all of them.
Lord Mendelsohn (Lab)
My Lords, I draw attention to my entry in the register of interests, which includes my current involvement in small businesses.
I congratulate the noble Lord, Lord Risby, on securing this debate, and on his excellent speech. I commend also the excellent comments across your Lordships’ House on a range of issues, including payments, finance and procurement. This has been a very interesting debate and raised important issues.
It is incredible that for a long time we have not had a much greater focus on small businesses. If the past is any guide to the future, in the next decade small firms will create most of our country's new jobs. Research has shown that over the past 20 years small businesses have created the majority of new jobs, and that has really been in businesses with fewer than 50 employees. Small firms have increased their share of total employment, too: their share of jobs was three times that of 1998.
We also need to understand that small businesses are not all turbocharged start-ups ready to explode with growth in the right circumstances and a bit of luck. Of new firms, 75% that start small stay small. As MORI has pointed out, however, some worrying trends are emerging. Surveys have shown that entrepreneurs with high growth ambitions have declined in Britain since 1999. This is very worrying. While the internet has provided for a huge proliferation of commercial activity, it appears that entrepreneurs are worried that the UK is not an easy place to scale from.
To make sure that we meet the requirements for supporting growth companies, we need more attention on access to finance, whether it is start-up capital, growth capital or working capital. We have an unusually low level and small amount of early-stage venture capital and a still sub-par banking sector. We need to use regulation to level the playing field for small businesses that operate in markets with power, economic and informational imbalances and asymmetries. We need a more aggressive use of public sector procurement to trigger the benefits of using small businesses and to support their access to export markets.
We need to look at particular sectors and how they are developing, and to see what we can do. I commend the excellent work of the Creative Industries Council, which has brought forward a very impressive strategy, involving government and industry, to develop the creative economy, which is dominated by small businesses. Of the UK's total workforce, 2.6 million—that is 8.5%—are employed in the creative economy. On average, employment in the creative economy grew over three times faster than in the UK overall. Growth stands at 10%, more than three times that of the UK economy as a whole, and higher than any other industry.
However, initiatives to open employment opportunities to young people are as important—and probably more important—as engines of employment growth. We are very impressed with the Apprenticeship Ambassadors Network and the work of its chair, David Meller, who has helped to make apprenticeships more accessible to small businesses.
Government should not be afraid to be a market catalyst, to provide an economic and political framework of stability and pro-business character. We must not, however, make the mistake of believing either that one size fits all or that we can intervene in every market. Public policy must make sure that local businesses with more modest ambitions and dynamic start-ups both get the sort of bespoke and customised attention that they require.
The Labour Party's adoption of a more assertive and aspirational role for public policy in supporting small business is really the legacy of Nigel Doughty, who led the Small Business Taskforce, established in 2011. Nigel tragically passed away nearly two years ago today, on 4 February. He was one of the most accomplished and visionary businessmen this country has ever had, and his tragic passing has robbed this country of someone who would have made an extraordinary and even greater contribution. His report remains required reading. It also shows how far we have drifted behind key international competitors in responding to current challenges and the type of agencies that would make government more effective.
We all welcome the Government’s small business Bill. The discussions we have had on that have shown that we all agree that it is a good start. However, I hope that the Minister takes this discussion as encouragement, as we move to Report, to strengthen its provisions in some key areas.
Lord Popat (Con)
My Lords, I am grateful to my noble friend Lord Risby for initiating this important and timely debate. He speaks from great experience and I commend his interest in small businesses. It is an honour and a privilege for me to respond to a debate on my favourite subject and I commend organisations such as the Federation of Small Businesses and the British Chambers of Commerce for the work that they do.
Perhaps noble Lords will permit me a moment of self-indulgence. For some 30 years before joining your Lordships’ House, I was a small businessman and I am the third generation of my family to start and grow a small business. My grandfather, Haridas Hemraj, was a jute trader. My father, Amarshi Haridas, was a shop owner with a sub-post office. I initially followed in my father’s footsteps as a sub-postmaster before a career in accountancy, specialising in business and corporate finance, so business is very much in my DNA.
It is one of life’s great satisfactions to start and run a business and I am proud to have been a member of a Government who have done so much to support small businesses. This Government recognise the importance of small businesses, which are the engine of our economy. The UK economy is recovering from the biggest financial crisis in generations and I would like to share what we have done so far and what we are doing to help small and medium-sized enterprises, which I will refer to as small businesses from here on.
Let me talk first about the fiscal incentives. We have cut corporation tax from 28% to 21% and announced a further cut to 20% by 2015, the joint lowest rate in the G20. For small employers, there is a £2,000 cut in national insurance bills with the employment allowance. We have extended the small business rate relief for a further year from April 2015. Small businesses that are starting up or relocating to an enterprise zone will qualify for enterprise zone relief. They can get up to 100% business rate relief for five years, up to a maximum of £275,000. In the last Budget, the Chancellor doubled the capital allowance from £250,000 to £500,000 until December 2015.
Moving to banking, a number of noble Lords mentioned concerns over finance for small businesses. For too long there has been an overreliance on our four biggest banks, which between them account for 85% of business current accounts. We have introduced many measures to help small firms to have access to finance. We have increased competition in the banking sector, we have increased the availability of credit through the Funding for Lending scheme, and we have finally established the British Business Bank. On competition, two new banks are being spun from Lloyds Bank and RBS, while other challenger banks such as Metro Bank, Aldermore and Cambridge & Counties are also growing. There are a further 20 applications for new banking licences in the pipeline, so it is hoped that with more competition, our SMEs will be able to access finance more easily than they are able to do at the moment.
The Financial Services (Banking Reform) Act has created a payment systems regulator to ensure that the UK has a payment infrastructure that supports a competitive banking sector. The Government are also taking very practical steps to help small businesses to access alternative sources of finance. The Autumn Statement announced an upgrade to the seven-day current account switching service to include 99% of all small businesses. Provisions in the Small Business, Enterprise and Employment Bill will require the banks to refer small business customers who have been declined a loan to alternative lenders via designated platforms. So far, the overall lending picture is encouraging. Gross lending to small businesses in the year to the end of 2014 was up by 25% on the equivalent period in 2013. Some 66% of new finance applications from small businesses are now successful, from a low of 33% in the first quarter of 2013.
We have also launched the British Business Bank, which has facilitated a total of more than £890 million of new lending and investment to over 21,000 small businesses in the year to the end of September 2014. Last month the Prime Minister announced the 25,000th start up loan, which means that more than £129 million has been lent to people of all ages who have made the leap to start their own business.
As the noble Lord, Lord Empey, has just said, one of our long-standing economic weaknesses is our record on exports. We do not export enough to pay for our imports. I can recall that in 1971, when I was a 17 year- old, Harold Wilson wanted Edward Heath to resign because we had a deficit of £14 million. I am glad to have shared over dinners and discussed in corridors what more we can do to help in the export effort. Currently, one in five SMEs exports, but if we can change that to one in four, we will be able to clear our trade deficit.
When I came to your Lordships’ House, one of the first things I did was set up an ad hoc committee, chaired by my noble friend Lord Cope, to see what more the Government could do to help SMEs export more. The committee, of which the noble Lord, Lord Empey, was a member, took evidence from all over the country, and went to Brussels. The committee published a report in 2013, to which the Government responded positively and they have since launched a number of initiatives. In the last Autumn Statement, the Chancellor announced further financial support for UKTI. In 2013-14, around 48,000 businesses were helped by UK Trade & Investment trade support services; nearly 90% were small businesses. This support helped generate additional sales of more than £49 billion and created or safeguarded more than 220,000 jobs. The Government have also provided a further £20 million to help companies export for the first time. UK Export Finance also continues to support exporters with a network of regionally based export finance advisers who help businesses with risk and trade finance issues. UKEF’s trade finance and insurance solutions products have provided more than £1 billion of support to UK exporters of all sizes.
The Small Business, Enterprise and Employment Bill, which I have enjoyed debating with the noble Lords, Lord Mendelsohn and Lord Stevenson, and on which I have had the pleasure of working closely with my noble friend Lady Neville-Rolfe during its progress through this House, contains measures that will open up new opportunities for small businesses. More specifically, the Bill will support small business in a number of areas including improving companies’ payment practices and helping to tackle the issue of late payments. The noble Lord, Lord Shipley, had strong views on this. I am pleased to confirm that a summit was held this morning at Downing Street attended by the Federation of Small Businesses and the CBI. The Bill will also improve access to finance. It will assist small business expansion overseas and streamline public procurement to help small businesses gain fair access to the £230 billion public procurement market, which my noble friend Lord Cavendish mentioned. It will cut down on red tape and will also help to support home businesses and streamline small company filing requirements. The Bill will reduce the barriers that can hamper the ability of small businesses to grow and compete and will pave the way for Government to be more supportive of, and less burdensome to, small business in the UK. I look forward to the support of the Opposition when the Bill has its Report stage.
Infrastructure investment will help small businesses, which need to be able to operate in an environment that allows them to flourish. The Government are trebling investment in major roads schemes by 2020-21, the biggest investment in roads since the 1970s. Under way is the largest programme of investment in the railways since Victorian times. Crossrail, electrification, HS2 and HS3 all show our commitment to secure a step change in Britain’s connectivity.
My noble friend Lord Risby remarked on broadband in relation to SMEs and micro-businesses. The Government are working hard to put the UK at the forefront of the digital revolution and are committed to 95% of UK premises having access to superfast broadband by 2017. Five community projects are currently being funded to help improve connections to remote locations. My noble friend Lord Freeman mentioned commercialising ideas in Cambridge. I will write to him on the points he raised. Many ideas in the technology sector in Cambridge are supported by venture capital, which was mentioned by my noble friend Lord Leigh. Angel networks play a particularly important role in providing finance and guidance to small businesses in some of our fastest growing industries.
In summary, there were a record 5.2 million private sector businesses at the start of 2014. That is an increase of 760,000 compared with the start of 2010. At the start of 2014, small businesses employed 15.2 million people, 60% of total UK private sector employment. The Government have worked hard to support small businesses. Time has prevented me from mentioning many other initiatives, such as local enterprise partnerships, but we know there is more to do. The Government are committed to fostering and assisting the entrepreneurial spirit that thrives in the UK. We have continued to lead the way in our support of small businesses because we want to make Britain the best place in the world to start and grow a business.
I have covered a few of the questions that were raised, although not every one. My noble friend Lord Risby asked whether the Government will review the structure of business rates. We will report by Budget 2016 and the Government will publish terms of reference in due course. We will certainly review it. My noble friend was right that in some cases the rates exceed the rent. My noble friend also raised the issue of prompt payment. We are improving public sector payment practices through the Small Business, Enterprise and Employment Bill.
Once again I thank my noble friend Lord Risby for initiating this debate and all noble Lords who took part in it.
Deregulation Bill
(9 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Clement-Jones
“( ) After subsection (4) insert—
“(5) Governing bodies of schools seeking to make changes to dates of term and holiday times will so far as practicable consult local tourism organisations prior to determination.””
Lord Clement-Jones (LD)
My Lords, I will not recap at length the points I made in Committee. Suffice it to say that tourism contributes 9% of all UK GDP and 9% of all jobs: 3 million people rely on it for work. Domestic tourism spending is a significant portion of this—79% of tourism spending across the UK. I made the point in Committee that domestic changes in school term times have a potentially massive knock-on effect for the UK tourism industry as a whole. In the US, there are numerous examples of states changing term times and the huge effect that has had, costing state economies hundreds of millions of dollars annually.
DCMS has admitted that there has been no evaluation of the policy’s effect on tourism. Tourism is heavily reliant on the weather, and it is not uncommon for summer trading to be ruined, for example, by two weeks of bad weather. Decreasing the length of the summer holiday to, say, four weeks would be far more devastating than a simple one-third reduction of the peak period. Diversifying the dates of holidays does not lengthen the peak period but simply spreads out the same trade while increasing operating costs.
Assurances have been given to the British Association of Leisure Parks, Piers and Attractions—BALPPA—by the Department for Education, and indeed by my noble friend in Committee on 6 November, that the needs of businesses will be considered. However, does this actually amount to an assurance that consultation will take place before changes are made? Surely, at the very least, the duty to do so should be contained in guidance or, much better, enshrined in the Bill.
By their nature, tourism attractions bring people in from beyond the immediate locality. Often, they attract people into towns from the region and beyond. Changing school times throughout the whole of Manchester would, for example, affect attractions across the north-west, including those in Blackpool and Liverpool. There is concern that when schools want to use these powers, they will not have the concerns of local businesses in mind. We need to give the tourism industry more confidence in this legislation, which is viewed with a great deal of concern at the moment. The effect of changes to school terms and holidays is potentially huge for the industry. We should therefore make sure that school governing bodies consult when they propose to make any such changes. I urge my noble friend to accept the principle of this amendment and I beg to move.
Lord Stevenson of Balmacara (Lab)
My Lords, I have a great deal of sympathy for what the noble Lord has just said. Indeed, we discussed this at some length in Committee. I have only one point and when the Minister responds I would be grateful if he could expand on the comments that he made in Committee. He said:
“I am happy to assure the noble Lord that the Government have agreed that their advice to schools will make clear that: schools should be considerate of the needs of parents and impacts on others by working with each other and the local authority to co-ordinate term dates as far as possible; and that all schools must act reasonably when setting term dates, including considering the impact of changes to term dates on small businesses that rely on tourism from families with school-age children”.—[Official Report, 6/11/2014; col. GC771.]
That is a very targeted comment and seems in many ways to answer everything that the noble Lord was saying, but I wonder what force this advice will have? Will it be in the form of a circular of some type? Can he expand on that? Will there be any sanctions for those who do not behave to the letter of the law, as so well expressed by the noble Lord the last time round? Particularly, would Ofsted be inspecting such offers made by schools?
Lord Wallace of Saltaire (LD)
I thank the noble Lord for those splendid comments. It is wonderfully nostalgic to read some of the material around this amendment. The British Association of Leisure Parks, Piers and Attractions has sent me something that particularly mentioned Skegness, Hunstanton and Cromer. Those of us who, like, me can remember swimming off Skegness as a boy, will also remember trying to pretend that it was not as bitterly cold as it was. My children later gave me the LNER poster that used to hang in my room when I was an academic, saying “Skegness is so bracing”. That took me back to what as children we used to have as holidays, before the foreign holiday idea began to creep up on British families and affluence took us further away.
The Government believe as far as possible in devolution and autonomy, and we are providing advice to schools. This is not something that Ofsted is imposing on them, let alone is it an English Parliament deciding that English schools must each have the same holiday.
Lord Stevenson of Balmacara
I cannot resist. Is the Minister saying that it is now Government policy to have an English Parliament?
Lord Wallace of Saltaire
No, I was perhaps making an after-dinner remark that was a little outside my brief.
Those of us who live in the north of England are well aware that different local authorities have had different holiday periods for a long time. Blackpool would not have had the prosperity that it had if wakes weeks had not been staggered across Lancashire and Yorkshire in the 19th century. There was a degree of adaptability among different local authorities that worked extremely well. It is no longer necessary.
In arguing that the proposed amendment to Part 3 of Schedule 15 is unnecessary, I should therefore say that schools and local authorities have had a considerable degree of autonomy to change their holiday times in recent years. Very few have wished to do so, because there are powerful arguments for the existing system. School leaders are best placed to decide the structure of the school year in the interests of their pupils’ education and local circumstances. Schedule 16 therefore gives all schools responsibility to set their own term dates from this September.
Thousands of schools, educating more than half of all registered pupils, are already responsible for their term dates. Three-quarters of secondary schools and more than a third of primary schools are already responsible for their school year. There is a school in every local authority in England with this freedom, but without the proposed specific requirement, suggested by the noble Lord, to consult tourism businesses in place. This has not resulted in significant problems for the tourist industry. In practice, the majority of schools continue to follow their existing term dates, with a small number making changes where there is a compelling reason to do so. Where they make changes, schools take into account the needs of the local community. As noble Lords will be well aware, the needs of the local community in cities such as Bradford or Manchester often include the different patterns of different religious and ethnic communities.
Turning to the concern at the heart of the amendment, all schools must already act reasonably, fairly and transparently when determining term dates. This will include considering the impact on those likely to be affected by their decisions, including pupils, parents, staff, the local authority and businesses.
Lord Clement-Jones
I am sorry to interrupt my noble friend, but these are very important details. Can he give me chapter and verse as to where these obligations to act reasonably, fairly, et cetera, arise?
Lord Wallace of Saltaire
My Lords, it may be somewhere deep in my brief. I am sure it is somewhere deep in the Box. If I go on for a short period, I am sure that the answer will magically appear for me. I am fairly sure it is in briefing and guidance. It is not something that is enforced upon schools because that does not seem necessary. When my children were in primary school in the early years of a Labour Government, I recall the head teacher of the primary school commenting that he received volumes and volumes of instructions each year on how to behave. We rather think we should try to avoid quite such a deliberate effort if we can.
The Government understand the noble Lord’s concern that it may not be immediately obvious to a school that its decision to change term dates could affect local tourism businesses. The Government have discussed this point with BALPA and agreed to assurances in the form of advice to schools. It is a general principle of law, I am assured, that is provided in guidance to schools, but we will write to the noble Lord with the exact chapter, verse and places where this guidance is set out.
I am pleased to reiterate that the Government have agreed that their advice to schools will be clear. Schools should be considerate of the needs of parents and the impacts on others by working with each other and the local authority to co-ordinate term dates as far as possible, and all schools must act reasonably when setting term dates; “reasonably” includes the impact of term dates on small businesses that rely on tourism. I will write to the noble Lord with the exact details of where the guidance is provided and the experience so far. I reiterate that the freedom that schools have had so far to alter term dates has not led to a huge revolution because the pattern of terms and holidays suits most parents, staff, businesses and others much better than any alternatives. With that assurance and my repetition that we are conscious of the way in which the short British summer and the needs of British tourist institutions interact with schools and school holidays, I hope the noble Lord will be able to withdraw his amendment.
Lord Clement-Jones
My Lords, as I am sure my noble friend is very well aware, Groundhog Day was celebrated yesterday in the United States. I felt that perhaps we were beginning to celebrate Groundhog Day here in the House today. Until the very last point of my noble friend’s response, I felt that the response he gave me was pretty undercooked, quite honestly, as if the Department for Education had disinterred something from two months ago which was more or less in the same form. It did not have the detail that one might require on Report to an amendment that is much more specific than the one that was put forward in Committee. I really feel that it has not been given the seriousness that it should have been, and that the Department for Education, for which in this context my noble friend is speaking, is not really taking the concerns of the tourism industry seriously.
I fully understand the case that my noble friend is making, that to date we have not seen a great impact on local attractions and so on, but that is not the issue. The issue is the potential impact, and it is only by addressing the concerns of local tourism interest, by consulting with them and so on, that one is really going to be able to understand that.
Lord Wallace of Saltaire
My Lords, we have not so far seen any problem, and if the noble Lord’s criticism may be that the DfE is not paying enough attention to this problem, that is partly because it is not a problem.
Lord Clement-Jones
My Lords, as I said, my noble friend has made the case that there is no existing problem, but the industry is extremely concerned that it could be a problem in future, because this will mean that the full range of schools—as opposed to a number of schools—will be able to change their term times by the decision of governing bodies. What the industry is quite reasonably asking is that the duty on school governing bodies to consult should be enshrined in law. My noble friend says, “It’ll be all right on the night, because they have a duty to act reasonably and fairly”, under something or other—whether it is guidance, advice or some other sort of way, no doubt, of communicating between the Department for Education and schools, I know not what. I look forward to my noble friend’s specific reply, which will be extremely helpful.
Lord Wallace of Saltaire
My Lords, just to add, in a Deregulation Bill, the Government are a little hesitant about imposing a new national regulation unless there is a good rationale for it. We have not yet seen the rationale.
Lord Clement-Jones
My Lords, my noble friend was talking about an existing set of guidance advice, not something happening in future. Therefore, it would be extremely useful to know whether this is an umbrella set of guidance, which means that the concerns of BALPA and others should be entirely satisfied by a duty to act fairly and reasonably—then I shall be extremely happy. But no specifics have been given. I look forward to hearing about them.
I am rather disappointed by my noble friend’s reply, I think that something more specific could have been given, but in the mean time I look forward to the letter and beg leave to withdraw the amendment.
“(5A) The alcohol must be sold for no less than fifty pence per unit.”
Lord Brooke of Alverthorpe (Lab)
My Lords, I shall speak also to Amendments 24, 25 and 26. I start by expressing my gratitude to a range of people and organisations who have been in touch with me since I spoke to a series of amendments in Committee, and my thanks to those who have put their name to these amendments today, particularly the noble Baroness, Lady Finlay, who managed to fly here from abroad to speak in this debate. The people who put their names down represent a substantial concerned body of health interests who are convinced that MUP—minimum unit pricing—is needed in England as well as Scotland, where people are trying to press it through. We also hear that the Welsh Government are now embracing and seeking to implement it. Its aim is to minimise alcohol harm to people’s health and harm to the NHS by reducing NHS costs, to cut public disturbances and the cost to the criminal justice system, to reduce domestic violence, to reduce accidents at work and on the roads, and to reduce—this is an important point—the hidden sugar in alcohol, which is quite a big contributor to the major health problem facing us, the growth of obesity in this country, a growth which has taken place significantly under this Government.
The argument for this change was made by the Government in a well produced alcohol strategy that they issued in 2012. Regrettably, when it came to the crunch, the Government ran away from the tough decision. They talk about taking tough decisions, but they have run away from this one, even though there is mounting evidence and support for it on a very wide front. I am particularly pleased that the Church of England is in favour in principle, and I am grateful to the right reverend Prelate the Bishop of Carlisle, who regrettably cannot be with us because of a prior engagement but wished to speak strongly in favour, from the position of one of those who would be affected by this change in legislation.
On the new licensing regime that will cover community and ancillary businesses, I should express a word of gratitude to the Government. Following our debates in Committee, they ran a public consultation—there had not been one previously. In a sense, that was in recognition that this was not a deregulatory change, as I had argued, but a matter for new legislation. I think that this led them to recognise the need for a public consultation in November and December. Had there been a bit more time for that consultation, some of us would have been happy to give the Government some suggestions on how it might have been better run than was the case, but none the less they did it and it would be churlish if I did not express my gratitude to them for it.
One area that some of us—I have in mind other groups here—would have focused on would be establishing a basis for enforcing the scheme. Local government would have liked to have had proper powers to police it and ensure that it is effectively put in place. While the Government have suggested that a certain maximum number of units should be consumed by people participating in such events around the country, quite frankly, as we all know, there is no way in which one could enforce that if they exceed it or even supervise what is happening.
Minimum unit pricing at such events, which would put the cost of a unit of alcohol at a higher level than perhaps would normally be charged, could be seen as a restraining factor to try to limit the amount of drinking taking place—they could be events in communities, charities or in church affairs and so on. I should advise the Government that, if they were prepared to embrace this change, they would be well supported by a number of councils around the country. All 12 councils in the north-east of England want MUP introducing because of the problems which they encounter. They have written to me giving support to the amendments that I am proposing. They range from the councils in Newcastle, Middlesbrough and Durham—the big ones—to which then can be added, moving across to the other side of the country, all the councils in Greater Manchester, Lancashire Council and Leeds Council. Coming further south, Birmingham Council, too, is now pressing for MUP to be introduced because of the problems which it faces in the health service and with disturbances related to the criminal justice system. I understand from the Local Government Association, which has been giving me advice on this matter, that while many other authorities in other parts of the country have not as yet come out in favour of the principle of MUP, they are privately in favour of it and in due course will go on record as saying that they need it soon. These issues need to be taken into account in the context of what I am pressing for tonight.
I have also heard from numerous charities, which will qualify under the CANs for this form of licensing, saying that they would be very happy to be running minimum unit pricing. So we have a group that ranges over local authorities with their links, charities and the Church of England. I have also had conversations with the National Federation of Women’s Institutes, which was much quoted in debates in the Commons on where it stood. It does not have an official policy on MUP, but I guess that in the light of some of the arguments now being advanced by people of like mind on a wide front—the people who were prayed in aid so much in the Commons—the women’s institutes may come on board, too.
As well as upholding the principle of containing the amount of drink that people consume, all such groups see that there would be a benefit for them in having a higher yield from applying minimum unit pricing than perhaps they have had hitherto. They buy cheaper from the supermarkets and then sell at the higher rate there. It is a win-win situation as far as many of them see it, and one of the reasons why—as they are financial beneficiaries as well—they would be glad to see this come into practice.
Baroness Finlay of Llandaff (CB)
My Lords, I am grateful to the noble Lord, Lord Brooke of Alverthorpe, for introducing this group of amendments so clearly. They are amendments to which I wanted to add my name because alcohol is putting an intolerable strain on the NHS. There is no getting away from that.
We have 1 million hospital admissions a year related to alcohol. We all know that there are peak times in A&E departments when alcohol problems swamp departments. It is not at all times of the day but we also know that other parts of the NHS are put under chronic and severe strain because they have to deal with alcohol-related diseases. In fact, there are about 60 different medical conditions where excessive consumption significantly causes morbidity and premature death in the UK.
I declare that I am president of the BMA. At a recent BMA meeting a breast surgeon came up and begged me—I do not exaggerate—to do something about excessive alcohol consumption because he has seen more and more middle-aged women who have chronically high levels of alcohol consumption and then develop obesity and breast cancer. He said it is reaching epidemic proportions and that he has seen a significant change over recent times.
I return to the topic of the amendments. As well as the strain on the NHS the cost to the whole country is significant. The cost to the NHS has been estimated to be almost £4 billion a year, which equates to about £120 a year per taxpayer. The overall cost to the country is nearer £26 billion a year, which is between fivefold and sixfold, so I have estimated that this is probably about £750 per taxpayer, because we do not have a really comprehensive and effective alcohol policy at the moment.
The ban on selling alcohol below cost price, which came into force last May, is not, as far as we have been able to see, significantly reducing drinkers’ mean annual consumption. It is not really surprising. It was calculated that mean annual consumption would decrease by less than 1% overall. Minimum unit pricing has been shown in different models to have an effect and it stops higher alcohol-content drink being sold disproportionately cheaply and you get a more balanced spread of the way drinks are purchased and taken. The relative underselling of cider against beer, where cider has a higher alcohol content, becomes balanced out and the high consumption of spirits in particular, which have a very high unit content, then becomes spread across the spectrum of price.
It has been suggested that minimum unit price would unfairly impact responsible drinkers. There does not seem to be any strong evidence for that at all, but it will impact on irresponsible drinkers. It has been estimated that a minimum unit price of 50p would have major benefits. For example, it has been estimated that there would be more than 97,000 fewer hospital admissions a year, more than 42,000 fewer crimes, nearly 30,000 fewer cases of unemployment and more than 442,000 fewer episodes of absenteeism from work, which is frequently an alcohol-related problem. As we all know, it tends to occur on the days after high days, holidays and weekends. The saving on healthcare costs alone has been estimated to be £1,591 million a year. That is a significant amount of healthcare funding that can then be diverted to meet the needs of others.
There has also been evidence that increasing the price of alcohol reduces the rate of alcohol-related harms including violence and crime, deaths from liver cirrhosis, other drug use, sexually transmitted infections and risky sexual behaviour, as well as drink-driving deaths.
The impact of drinking is not only on the individual, of course, but also on all those who are bereaved, such as children who lose parents at a premature age. It also affects those who are on the receiving end of abuse and of violence and high alcohol consumption is also associated with high rates of suicide.
As a doctor, I fail to see why any Government have not grasped what would seem to be a fairly straightforward solution to a major social problem by implementing minimum unit pricing so that responsible drinkers could buy their drinks as they do now but those who want to buy to binge—and who then end up in A&E incurring large costs or damaging others through their irresponsible behaviour—would be deterred from being able to do so. The chronic overconsumption we are seeing in today’s world would also be affected because if you make alcohol a bit too expensive you build in a deterrent to drinking too much.
Baroness Hayter of Kentish Town (Lab)
My Lords, it is perhaps fair to say that four years ago this amendment would have been tabled by the Government, as David Cameron was at that point in favour of minimum unit pricing, not necessarily at 50p but perhaps at 60p or some other figure. Given the Government’s change of heart on that, we have instead the amendments tabled by some of the country’s greatest experts on the damage caused by alcohol: two eminent doctors, a bishop who sees the problems caused to families as well as to the health of heavy drinkers themselves, and my noble friend Lord Brooke of Alverthorpe, who has campaigned for so many years on this issue.
We debate this on the day that Professor Neil Greenberg, the lead on military health at the Royal College of Psychiatrists has said that the Government’s strategy for combating alcohol abuse in the Armed Forces is ineffective. As he says,
“we know that alcohol education doesn’t really work at all, and the evidence from the civilian population is that it’s a terribly ineffective way of stopping people from drinking”.
His words echo those of the Commons Defence Select Committee that the Government’s strategy has not made any noticeable impact on the high levels of excessive drinking in the Armed Forces. Critics argue that the problem is made worse by prices of less than £2 a pint in some military bars. That is, of course, £1 per unit for regular beer, but this amendment seeks a minimum of only half that amount.
Price by itself is, of course, not the answer, as my noble friend Lord Brooke said, and Labour has a wider vision for reducing alcohol-related harm. We want communities to be able to stop their high streets being overrun with new bars and a licensing system which enhances the voice of local communities in licensing decisions. We should look at whether councils should have more power to strengthen conditions on licensed premises and, importantly, we want to make public health a mandatory factor to be taken into account in all licensing. However, this was rejected by the Government when we proposed making public health a licensing condition in 2011.
Although at present local authorities can take account of the prevention of crime or nuisance, public safety and child protection in deciding on licence applications, they cannot consider public health consequences. Labour would make public health a licensing objective and include the director of public health as a key consultee in the creation of a licensing statement. We want public health engrained throughout the licensing system so that measures promoting health, which could include action against high-strength, low-cost products, are included in the licensing statement, and we want to tackle the public health problems associated with drinking by children, some of whom will be at the very functions at which the clause allows alcohol to be sold.
I look forward, as ever, to hearing the Minister trying to wriggle his way out of David Cameron’s decision to drop his commitment to minimum unit pricing. While he is on his feet, perhaps he could also explain why the Chief Medical Officer’s review of safe drinking levels, which was promised in the summer, has yet to appear. Perhaps that is another ducking of the issue. Most of all, I would welcome his assurance that, with hindsight, the Government accept the case for public health being a licensing consideration and his support for that objective.
Lord Wallace of Saltaire
My Lords, as I was having my supper, with my glass of water, it occurred to me that when I first joined the House of Lords, we often had the phenomenon of the after-dinner speech in which someone, very often from the Conservative side of the House, would deliver an extremely florid speech with high rhetorical flourishes. This Chamber has improved quite considerably over the past 15 years in its attitude to alcohol.
I am sorry to have to tell the noble Lord, Lord Brooke of Alverthorpe, that my noble friend Lord Gardiner tells me that President Putin has just announced that he is lowering the duty on alcohol in Russia, presumably for the reason that alcohol is what people wish to take refuge in when they are miserable for all sorts of reasons, and there are a lot of reasons why people in Russia are miserable at present.
Baroness Hayter of Kentish Town
Or perhaps elections are coming, as they are in this country.
Lord Wallace of Saltaire
I was not aware that the Government were thinking about lowering the duty.
The Government recognise that the whole issue of alcohol abuse is a very serious one for this country and that it feeds into public order, public health and a whole range of other issues. I travel into Leeds on Saturday nights, and there are many other cities in Yorkshire where, of a Saturday evening, I often wonder whether the younger generation will die of alcohol abuse or hypothermia first, since they wear almost nothing when they go out on to the streets. I do not know how on earth they manage to get drunk and not break their ankles when their shoes are so impractical. That is the sort of problem we face. I recognise, as the noble Baroness, Lady Finlay, remarked, that we have a growing middle-age—or even over-middle-age—problem, but that binge-drinking among the young is one of the problems we have, and it feeds directly into A&E late on Saturday evening. I spent an afternoon with Leeds city police during which all that was made very firmly clear to me.
On the question of selling liquor below cost price, I think we are all aware that supermarkets are the biggest single part of the problem, as they sell loss leaders and cheap alcohol, be that cheap wine or cider below cost price. My answer on this set of amendments to this Bill is that, while I recognise the argument which we all need to have about how best to pursue further the Government’s alcohol strategy, and how we move towards minimum unit pricing, this is not the place to do it. Here, we propose relaxation in two specific small areas. The first is that of small hotels and bed and breakfast accommodation, where we are talking about a nightcap in the evening, which would probably be included in the overall bill—so at that point the question of the price is hard to get at. Then there are events of the sort which I occasionally go to in village barns or community centres, which usually have licences that allow them to sell alcohol only 12 to 15 times a year, when there is a community event. Therefore we are dealing specifically with ancillary sellers and community groups. That is not where alcohol problems come from.
In the part of Yorkshire in which I spend my weekends, there is a great revival of brewing, but of good-quality beer, which is not the sort of thing people get wildly drunk on. On a very cold Saturday last weekend, I asked whether the pub I had gone into had any “winter warmer”—which has a rather higher level of alcohol one can get at this time of year. However, they said, “No, we don’t brew that any longer”, but then offered me a great variety of extremely tasty local 3.5% beers, of which my wife and I consumed a certain amount. That is light years away from the problems that we have with large-scale alcohol abuse. Of course, the third element of alcohol abuse is abuse by those who are mentally disturbed or depressed, which is the Buckie or cheap cider end of the market.
I stress that the Government have not abandoned their alcohol strategy; minimum unit price was only ever part of that strategy. The noble Lord is right to say that the Government are watching the appeal in Scotland and waiting until that has been settled before we move further on minimum unit pricing within England. The Scots Government are themselves awaiting the outcome of the ECJ appeal. As an interim measure, the Government have introduced a ban on selling alcohol again in supermarkets—the biggest single part of the problem—below the cost of duty and VAT combined. Some were selling it as a loss leader below that level. The University of Sheffield has estimated that, in the first year of the ban on sales below duty plus VAT, there will be 100 fewer alcohol-related hospital admissions per year—and, as it got under way, 500 fewer per year, 14 fewer alcohol-related deaths per year, and so on. That is small beer—if noble Lords will excuse me—and a small achievement compared with what minimum alcohol pricing may offer, but it is a small step in what I hope noble Lords will recognise is the right direction.
Alcohol abuse is a real problem for this country. The question of alcohol pricing—in particular of loss-leader pricing—is one which we are much concerned about. This is not a matter for bed and breakfast and community events. It is a matter for city centre clubs at the weekend. It is a very serious matter for supermarkets. That is the direction in which the Government are looking. Therefore, on this particular issue, I cannot give the noble Lord much comfort, because we are dealing here with social drinking of a moderate level. The case where we need to look at minimum unit pricing and alcohol abuse is in a much broader context and in a different context from the average bed and breakfast in Upper Airedale or Upper Wharfedale, which is what we are talking about here—let alone the village barn in Cotterstock, or wherever it may be. For that reason, I am unable to satisfy the noble Lord on this issue.
Nevertheless, I recognise the deep concerns the noble Lord has about the alcohol issue as a whole. I would love to talk further with him about the development of alcoholic sorbets—which, I have to say, I have never yet seen, let alone tasted—and how those are being promoted. As we know, there are also some very serious concerns about the combination of sugar and alcohol in pop drinks for young people, which combines alcohol abuse and the making people obese at the same time. Let us continue to discuss those issues further. Those are the areas on which an alcohol abuse strategy needs to focus—not, I suggest, bed and breakfasts or community barns.
Lord Brooke of Alverthorpe
I am grateful to my noble friend Lady Hayter for her helpful words in the debate, and to the noble Baroness, Lady Finlay, who, as ever, is standing up and fighting the just battle that needs to continue to be fought. The Minister, in some respects, talked about movement and shifts towards a change in policy, which is gratifying. He made reference to what some of the Conservative speeches were like in the old days. It is quite interesting that when the Government have a Prime Minister who wants to do an about-turn, both in the Commons and in the Lords they put up Lib Dem Ministers to defend the position. They should reflect on that, given the association of the Lib Dem party with so many of those councils that I mentioned, which are now pressing for this change. But, as noble Lords would expect, I am not surprised that the Minister has declined to accept what I think is a civilised and reasonable offer for them to make a start. The real problem with this change is making the start. I freely concede that it is a precise area in which it would operate, and it may not be the major problem that we would face with alcohol.
The alcohol problems are not solely about Saturday evenings in city centres. They are increasingly prevalent right across the board, particularly with middle-aged people upwards, who are precisely some of the people who go to these community events—that is, recently retired people in their 50s and 60s. These people are now of increasing concern in terms of health issues, as the noble Baroness, Lady Finlay, will confirm. There is a hidden growth in the incidence of diabetes linked to alcohol consumption because nobody knows the amount of sugar contained in the alcohol these people are drinking. No calorie or sugar content is shown on the labels. So far the drinks industry, which this Government support, has managed to avoid having to display that on its labels, yet we have a major obesity problem arising linked to the sugar content of alcohol.
I thought that I made the Minister an offer that was too good to turn down given that a group of people is willing to make a start on tackling this issue. Indeed, they are the kind of people who the Government normally worry about penalising when they decide to do an about-turn. They are the people running these organisations, particularly the community events—not so much bed and breakfast—who were prepared to embrace this change and see whether they could make it work. They would be happy to support it in principle and would benefit from it. I am sorry that the Government have not recognised the benefit of making a start on this issue. I will reflect on the Minister’s comments in Hansard and, following consultation with others, we will decide how we proceed at the next stage. I beg leave to withdraw the amendment.