House of Lords
Introduction: Lord O’Shaughnessy
Introduction: Baroness Stroud
HS2
(9 years, 1 month ago)
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Baroness Seccombe
To ask Her Majesty’s Government what assessment they have made of the effect of the construction of HS2 on the running of existing rail services.
The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)
My Lords, as part of the hybrid Bill and subsequent additional provisions, HS2 Ltd is required to assess the impact of the construction works on the operational railway. These assessments have been undertaken and are documented in the environmental statement and supplementary environmental statements. Our assessment also includes close working with the relevant train operators, and we will continue to work with them to minimise disruption throughout the development of the overall project.
Baroness Seccombe (Con)
My Lords, on Monday of this week I travelled by train from Banbury to London and was dismayed to see that some people were unable to get a seat and stood for the whole of the journey, which is around 60 minutes. HS2 will cost tens of billions of pounds and the cost is obviously still rising. Surely it would be better, and provide greater benefit to the comfort and well-being of thousands of people, if the money were spent instead on other lines up and down the country and, indeed, across the country. That would mean that we could have longer trains, longer carriages and, if necessary, longer platforms, but the important thing is that people should travel in comfort.
Lord Ahmad of Wimbledon
My Lords, I assure my noble friend that, as I am sure she is aware, HS2 will be getting underway, and we look forward to it beginning in 2017. I give her the added assurance that HS2 will also give the potential to deliver much better train services to large numbers of towns and cities. I am acutely aware of the challenges she has raised about there not being enough capacity for people, but part of what HS2 will do is deliver extra capacity to places such as Coventry, Rugby and Milton Keynes.
Lord Berkeley (Lab)
My Lords, I have read AP3—the latest additional provision from HS2, which he mentioned to the noble Baroness—and I can see nothing in it about the effects of construction, particularly the disruption which will be caused, around Euston and many other sites up the line, by construction lorries. I understand that, for three years during construction, there will be about 720 trucks a day leaving the Camden area with spoil. I declare an interest as chairman of the Rail Freight Group, but surely HS2 should look at moving as many materials as possible by rail.
Lord Ahmad of Wimbledon
The noble Lord raises a quite valid point. We are looking at the issue of disruption from HS2. Again, there are lessons to be learned from places such as London Bridge, Blackfriars, Reading and Birmingham and they are being applied in the development of Euston to ensure that we mitigate whatever disruption there may be, not just to the rail and Tube networks, but to the surrounding local communities as well.
Viscount Ridley (Con)
My Lords, could my noble friend confirm that the economic case for HS2, as published by HS2 Ltd in 2013, includes £8.3 billion of benefits that are actually cuts to existing services, under the phrase “released capacity”?
Baroness Randerson (LD)
My Lords, undoubtedly the work on Euston station will be disruptive for existing passengers and, in my view, unnecessarily expensive. Will the Minister agree at least to investigate the alternative proposals put forward by the Euston Express group and to look at a more intensive use of Old Oak Common, which would act as a useful route into London, on a large scale, once Crossrail has links with it?
Lord Ahmad of Wimbledon
The noble Baroness raises the issue of Old Oak Common, which has been part of the consideration for HS2. Let me assure her, and indeed the whole House, that once we have completed the works for HS2 at Euston its capacity, as I am sure she is aware, will go from 18 platforms to 22. These enhancements will help not only with access into London but also across London.
Lord Grocott (Lab)
Can the Minister confirm the uncanny resemblance of the objections to HS2 being voiced in this House now to the objections voiced in the 1830s to the building of the original London to Birmingham railway? Does he rejoice, as I do, that the objectors lost that battle eventually? I commend the Government for their persistence in building what is a hugely important infrastructure project for Britain today. Will the Minister also confirm that, should it not be built, the effect on the existing west coast main line of continued and growing overcapacity would be endless delays, weekend occupation of the line and all the problems associated with the construction of a railway while it is still attempting to run?
Lord Ahmad of Wimbledon
I do agree with the noble Lord, although I am a bit perturbed by his suggestion that I was around in the 1830s—perhaps he is suggesting I have aged at the Dispatch Box. Nevertheless, there is a valid case to be made here. The primary case for HS2 is establishing links throughout the whole country but it is also important, as the noble Lord said, to address the capacity challenges we currently face on our rail network.
Lord Foulkes of Cumnock (Lab)
Does the Minister agree that the real economic case for HS2 depends on its extension to Edinburgh and Glasgow? Since there are no objections to it in the north of England and Scotland, would it not be sensible to start building now, as quickly as possible, in the north of England and Scotland? That would also provide a market for British steel.
Lord Ahmad of Wimbledon
I commend the noble Lord—he is a great champion for Scotland and for the United Kingdom. The investment we are making in our rail network across the board, not just in HS2, underlines our commitment to ensuring that the whole country is connected. As the noble Lord will be aware, we have laid plans: we are moving forward with the first stage of HS2 in 2017, and great investment is being made in transport for the north and connectivity across Scotland. He makes a very valid point about connectivity across the country, and it is certainly a principle that I support.
Lord Mawhinney (Con)
My Lords, my noble friend just talked about enhancing HS2 links across the country—links which are much needed, and the sooner the better. Can he tell your Lordships’ House how he intends to strengthen the links between HS2 and HS1?
Lord Ahmad of Wimbledon
Across the network, with HS1 and HS2 and, as my noble friend will be aware, the plans we have for transport for the north, overall we are investing more than £38 billion in the rail network, which will strengthen links not only with the existing network but with HS2, HS1 and, through Transport for the North, HS3.
House of Lords: Appointments
(9 years, 1 month ago)
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Lord Forsyth of Drumlean
To ask Her Majesty’s Government whether they will require the appointments commission to vet political nominations to the House of Lords using the same criteria as currently applied to crossbench Peers and thus consider suitability as well as propriety.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, the House of Lords Appointments Commission was established to make recommendations for non-party peerages, using an established set of criteria, and to vet all those nominated as life Peers for propriety. It remains for the leaders of political parties to account for their nominations.
Baroness Stowell of Beeston
I like my noble friend’s style this morning. Because it is for the leaders of political parties to come forward with their own nominations, mindful of the needs of this House, and to ensure that the people they put forward will make a contribution to this House and that this House will perform its responsibilities effectively. But it is not appropriate for the House of Lords Appointments Commission to look at the suitability of those nominations. We should not underestimate the role of the House of Lords Appointments Commission in looking at propriety. One of the things it considers is past conduct of nominees and it would certainly look at whether there was anything there that might bring the House of Lords into disrepute. So its role in this matter is actually quite extensive.
Baroness Boothroyd (CB)
Is the noble Baroness aware that the Prime Minister has created more Peers in five years than Margaret Thatcher did in 11, and that the escalating size of this House has rightly shocked public opinion? Will she urge Mr Cameron to stem this inflow before we enter the Guinness book of records as the largest assembly in the world? Will she advise the Prime Minister to concentrate on the expertise and proven commitment to public service of his appointments? Finally, will she assure him that we shall continue to scrutinise the legislation before us as closely as ever, despite his evident disregard for the efficient workings of our bicameral Parliament?
Baroness Stowell of Beeston
The noble Baroness is absolutely right to highlight the importance of all Members of your Lordships’ House conducting themselves in a way that contributes to the very serious role we all have. I know that all noble Lords in this House take their responsibilities very seriously, and all those new Peers joining us at this time are very mindful of those responsibilities—as is the Prime Minister, in terms of the role of this House in scrutinising legislation. That is something that we feel very strongly about.
Baroness Smith of Basildon (Lab)
My Lords, if the press reports are to be believed, the House of Commons Appointments Commission will be very busy. As the Minister knows, we have totally opposed the Government’s plans on tax credits and the noble Baroness, Lady Hollis, will be asking this House not to support government proposals until they include changes that address the concerns that have been raised across this House, including by members of her own party. As the Minister also knows, the amendment tabled by the noble Baroness, Lady Hollis, is entirely reasonable and—as confirmed by the House authorities—is in accordance with the conventions and role of our House. The Government are now threatening to either suspend your Lordships’ House or to create 150 new Conservative Peers to ensure that they never lose again. Does she consider this to be an appropriate, statesmanlike response or a gross and irresponsible overreaction, particularly since government estimates indicate the cost to the public purse will be around half a billion pounds? Would that money not be better spent on mitigating these awful cuts?
Baroness Stowell of Beeston
My Lords, I know that all noble Lords are always sceptical about what they read in the newspapers. I refer the House to what my right honourable friend the Prime Minister said yesterday when he was in the other place. He was very clear then about the role of this House. About Monday, the primacy of the House of Commons on financial matters has been respected by this House for over 400 years, as my right honourable friend the Prime Minister alluded to yesterday when he was responding to a question. The noble Baroness makes reference to one of the amendments that have been tabled for Monday. If any of those amendments is passed on Monday, the statutory instrument will not have been approved and that will be in direct contrast to the House of Commons already approving that statutory instrument and reaffirming its view only this week when asked to consider it again.
Lord Tyler (LD)
My Lords, the exchanges have already touched on the constitutional role of your Lordships’ House. Has the noble Baroness read the article which appeared in the Huffington Post on Tuesday, which is clearly the result of a briefing from the Treasury, headed “Tories Threaten To Suspend House of Lords” and which says that:
“One option is to simply suspend the Lords’ entire business, and process bills purely through the Commons”?
Maybe she would care to explain how that could be achieved. Could she take the opportunity to have a quiet word with the Chancellor of the Exchequer, say that perhaps he is spending too much time with the Chinese, and remind him that the last person who attempted to shut down a House of Parliament was King Charles I? What happened to him?
Baroness Stowell of Beeston
My Lords, as far as the Government are concerned, this House has a very important role in scrutinising the Government’s legislation and I am very confident that all Members of this House want to do that effectively. I want to provide the opportunity for this House to discharge its very important responsibilities in a way which is consistent with its role and which respects the primacy of the House of Commons on matters financial, and I am confident that on Monday that is what Members of your Lordships’ House will want to do.
Financial Services: Competition
Lord Holmes of Richmond
To ask Her Majesty’s Government, in the light of the Competition and Markets Authority’s investigation into personal current accounts and banking services for small and medium-sized enterprises, whether they intend to support further the financial technology sector in providing greater competition across financial services.
Lord Ashton of Hyde (Con)
My Lords, the Government are committed to improving competition in financial services and welcome technological innovation that incentivises firms to provide the best products and services to customers. The UK is already a global hub for financial technology—fin-tech—and our ambition is to make the UK the global hub for fin-tech. We have already taken a number of steps to achieve this and we continue to look at ways to support this exciting sector.
Lord Holmes of Richmond (Con)
My Lords, alternative finance is, indeed, a great British success story. We have a real opportunity to close the finance gap which has held back small and medium-sized enterprises for decades. I congratulate the Government on what they have done so far in this area, and ask my noble friend what more they will do to ensure that small and medium-sized enterprises are aware of the full breadth of finance options available to them.
Lord Ashton of Hyde
My Lords, to support the development of diverse finance markets for smaller businesses, the Government have established the British Business Bank, which brings together new and existing schemes into a single, commercially minded institution. The Chancellor also announced the launch of the Business Banking Insight survey. This will help the UK’s SMEs to understand their options, make decisions about who they should bank with and plan how they will finance their growth. Lastly, the Federation of Small Businesses survey found that more SMEs reported that credit was affordable and available than at any time since 2012.
Baroness Kramer (LD)
My Lords, the phenomenal and brilliant success of peer-to-peer lending is a vindication of this House, which in 2012 effectively strong-armed the Treasury into recognising that the industry both wanted and needed regulation in order to grow. Now, with UK-based peer-to-peers expanding across the European Union and new peer-to-peers springing up there, will the Government commit to work with Governments of other EU countries and the Commission to avoid what is turning into regulatory chaos, so that this is a single market from the beginning?
Lord Ashton of Hyde
My Lords, the Government are certainly anxious to have a proper regulatory system and will of course do whatever they can to make sure that we do not have regulatory chaos.
Lord Davies of Oldham (Lab)
But, my Lords, the Government’s efforts to improve competition in the banking industry are lamentable. Two years ago, they introduced measures to encourage banks to offer more information to account customers, and the result is that only 3% of customers change their accounts in any year. It is quite clear that something more significant needs to be done and the Government need to take action to improve competition against a background where 77% of current accounts and 85% of SMEs are with the big four banks. I remind the House that two of those banks were bailed out only a few years ago.
Lord Ashton of Hyde
My Lords, the switching service which the Government introduced has enabled 2.1 million customers to switch. We agree that that should be increased, but the noble Lord omitted to mention that the CMA report out this morning stated that the switching service is functioning reasonably well. Of course, we understand that switching accounts can only improve competition. We fully support the CMA’s provisional report and await its final report next spring, when we hope that it will have some sensible and useful recommendations.
Lord Cashman (Lab)
My Lords, will the Minister ask the department to investigate the current barriers placed in the way of new charities trying to open bank accounts with the major banks? They face difficulties and refusals based primarily on money-laundering directives. This is inhibiting the charitable sector, particularly the small charities.
Lord Ashton of Hyde
I agree that anything that inhibits charities’ proper functioning is to be deprecated. On the other hand, we have to ensure that money-laundering regulations are applied; they are very important. Of course, money laundering hurts the beneficiaries of charities as well and must be taken seriously, but we are trying to make a more proportionate regulatory response, and the FCA and the PRA are working on that at the moment.
Syria and Iraq: Airspace
(9 years, 1 month ago)
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Lord West of Spithead
To ask Her Majesty’s Government what discussions they have had with Russia about co-ordinating the use of airspace over Syria and Iraq.
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, before I respond to the noble Lord, I am sure that the whole House would wish to join me in paying tribute to Flight Lieutenant Alan Scott of 33 Squadron and Flight Lieutenant Geraint Roberts of 230 Squadron, of RAF Benson in Oxfordshire, whose Puma helicopter crashed on approach to land at NATO’s Resolute Support mission headquarters in Kabul, Afghanistan, on 11 October. Our thoughts are with their families and friends at this very difficult time. Our thoughts are also with the families of the two US service personnel and one French civilian who lost their lives, and with the five other NATO personnel who were injured.
The UK has had no conversations with Russia about this issue. The United States, on behalf of the global coalition to counter ISIL, of which the UK is a member, has had discussions with Russia on the safe separation of aircraft and air safety, resulting in a memorandum of understanding on the prevention of flight safety incidents.
Lord West of Spithead (Lab)
My Lords, I thank the Minister for his response and I am delighted to see that he is wearing a red poppy. I am slightly disappointed by his Answer, because I would have liked to have thought that the UK was involved in these discussions. It goes more broadly: I think that there is a lack of willingness to understand the truth of what is happening on the ground, and that is a recipe for losing wars. Unless we start to discuss and talk with Russia, Iran and—I am afraid—the butcher Assad, and all the coalition, we are not going to be able to put together a package that will enable us to destroy ISIL, which is the group that we have to destroy because it is the greatest threat. I urge the noble Earl to encourage the Foreign Office and our Government to get involved in these discussions and perhaps to get some form of contact group going so that we can move forward and destroy this very real threat.
Earl Howe
The noble Lord makes a series of important points. There are two issues here: one is air safety over Syria and the other is the end to the conflict. On air safety, the memorandum of understanding provides a considerable degree of assurance on the matter of Syrian airspace. He is quite right, however, that ultimately, the only way that we can end the conflict satisfactorily is to have a political solution, which will demand the buy-in of the major powers and regional states.
Lord Elton (Con)
My Lords, will these discussions include one on the separation of pilotless guided missiles, which at present intersect horizontally with the civilian flight paths that lie between the point of launch and the point of intended contact?
Earl Howe
My Lords, the United States is not making the MoU public, so I cannot go into a huge amount of detail on its content, other than what the US has publicly released, which is that the MoU is aimed at minimising the risk of in-flight incidents between coalition and Russian aircraft and includes specific safety protocols for aircrews to follow. The US and Russia will be forming a working group to discuss any implementation issues, which will no doubt include those raised by my noble friend.
Baroness Jolly (LD)
My Lords, what evidence do the Government have to allow them to be confident about the safety of our missions into Syria and Iraq, given the proliferation of armed and surveillance drones over these territories? Will the Minister also tell the House what discussions the coalition has had about this particular issue?
Earl Howe
I have already referred to the memorandum of understanding, which, as I have said, is a major step forward in terms of avoiding unwanted incidents over Syrian airspace. The protocols to which I referred include maintaining professional airmanship at all times, the use of specific communication frequencies, and the establishment of a communication line on the ground. But it is worth noting that, by and large, the reconnaissance effort that the coalition is putting in is directed to the east of Syria, whereas the Russian action is largely in the west of that country.
Lord Reid of Cardowan (Lab)
My Lords, I join with the condolences that the Minister extended to the families and the loved ones of those who have died in our services and others.
Some three months ago, when I asked the Minister whether the Government considered ISIL or Assad the greatest threat, he unhesitatingly responded that the greatest threat was ISIL—a view with which I agree. Does it not make sense to shoot the wolf nearest the sledge first? In other words, whatever the controversy of wider discussions with Russia and Iran and whatever our differences with them, will he bear in mind when considering this question the wise words of Winston Churchill when criticised for a working alliance with Josef Stalin and the Soviet Union: “I dare say that if Herr Hitler invaded hell, I would have a good word to say for the devil”? In other words, can we maximise those forces that share our view about the greatest threat being ISIL?
Earl Howe
My Lords, in considering that question we need to remember that Assad is a man who has barrel-bombed his own civilians and caused untold suffering among the Syrian population. He cannot form part of any eventual permanent solution to the conflict, and for that reason we cannot countenance taking any action which might serve to strengthen the current Syrian regime.
Lord Howell of Guildford (Con)
My Lords, following the comments of the noble Lord, Lord West, which I broadly support, can my noble friend say what steps we or the coalition are taking to reinforce the efforts of Jordan to establish two buffer zones north of Jordan in areas presently held by ISIL and establish a safe haven area or two? Is this not a very important first step towards meeting the challenge of the source of the problem: namely, the poisonous ISIL movement itself, from which all our problems stem?
Earl Howe
My Lords, this idea has obvious immediate appeal. But when one drills down into the practicalities one soon realises that there are serious obstacles to creating so-called safe havens or buffer zones in any part of Syria. Those zones would need to be policed and reinforced. If they were not, we would see a repeat of what we had in Bosnia with the Srebrenica massacre, and the sheer effort of putting men on the ground to ensure that those safe areas really were safe would be enormous.
Lord Dannatt (CB)
My Lords, I agree wholeheartedly with what the noble Lord, Lord Reid, just said about shooting the wolf closest to the sledge, and I have heard that the memorandum is beginning to increase co-operation between air forces operating in the Iraq-Syria airspace. Can the noble Earl say when this House and the other House will be consulted on the extension of Royal Air Force operations of an offensive nature over Syrian airspace so that we can slay that wolf that is nearest to the sledge as soon as possible?
Earl Howe
My Lords, my right honourable friend the Prime Minister has made very clear that ISIL needs to be destroyed in Syria as well as Iraq. He was clear when he said that that there is a strong case for us to do more in Syria. But, as he also said, it would be better if there were a consensus supporting such action in the House of Commons. His views on that have not changed, but what has changed is the growing evidence that ISIL poses an increasing threat to us here in this country. I cannot give the noble Lord a date on which such a vote might take place, but before that we would clearly need to be sure that that political consensus was there.
Enterprise Bill [HL]
Lord Gardiner of Kimble
That it be an instruction to the Grand Committee to which the Enterprise Bill [HL] has been committed that they consider the bill in the following order:
Clause 1, Schedule 1, Clauses 2 to 13, Schedule 2, Clauses 14 to 17, Schedule 3, Clauses 18 to 26, Schedule 4, Clauses 27 to 31, Title.
Private Ownership
Lord Howell of Guildford
That this House takes note of the case for private ownership of industries and institutions in the United Kingdom.
Lord Howell of Guildford (Con)
My Lords, as this is my first proper opportunity, I wish at the outset to pay my personal tribute to the late Lord Howe of Aberavon, who was my friend, mentor and inspiration for many years. His role in our nation is not unrelated to the subject that we are debating in this Motion, since he brought sense and moderation to the great issue of unravelling Britain’s overcentralised and socialised industrial structure and saw the future in strictly practical, rather than ideological, terms. Speaking of balance and moderation, I very greatly look forward to the maiden speech of my noble friend Lord Young, whose almost proverbial balance of common sense and moderation will undoubtedly be a great asset to this House in dealing with this kind of subject and many others.
I suppose that, if I was a die-hard, last-ditch, put-the-clock-back, old-school Tory I would be on the side of Mr Corbyn, the leader of the Labour Party, who clearly wants to return to the past and is, I understand, firmly committed to the renationalisation of the railways and, as far as I know, maybe much else as well—I am not quite sure about that. However, as I belong to neither that wing of the Tory party nor, needless to say, Mr Corbyn’s circle either, I will be taking a different view, and one that I hope that, in this House at least, is fairly uncontroversial. After all, at about the last dinner and discussion I had with the late Baroness Thatcher while she was still well, she repeatedly warned me that life would be difficult for us as Conservatives because Mr Blair had pinched all her best policies, notably her commitment to privatisation of large swathes of British industry. She thought he had carried on with and taken one of her best ideas.
Of course, the seeds of privatisation go back long before that, and were really planted back in 1970 under the Heath Government, when we attempted to bring in for the first time systematic questioning of whether every programme and function of central government should be in the public sector at all or organised in different ways. However, 1997 was one of the defining moments in the privatisation story, because it was the recognition that a modern social-democratic, forward-looking party, as Labour then was, could live with, and actually carry forward and develop, the privatisation programme idea. My theme in my comments will be that the continuing privatisation trend of the last 30 years or so, both here and around the world, including incidentally in Russia and China, has been basically technological and the inseparable child of the digital age and the information revolution, rather than ideological.
There may have been instances where it has gone too far and too fast, or where the results have been disappointing. I do not disguise that I wanted a different pattern of railway privatisation from the one that was actually adopted, and if I am told once more on the telephone when trying to contact a privatised energy utility that my call is important to them and to hang on for 20 minutes and then be told I have five choices, none of which works, I shall go berserk. None the less, I believe that going back to the alternative of state ownership of the main utility industries would be a much bigger disaster, if indeed it could nowadays be done at all.
For me, the apogee of the old lumbering, non-innovative, hopelessly overcentralised state ownership—so called public ownership, but of course the public and the customer had virtually no say at all—came when I assumed responsibility for the then Department of Energy in 1979. There I realised that I was entering a colossal and overloaded ministry, the department at the centre of just about everything, covering more than 20% of British industry and the most vital parts at that. It was the department of oil shocks, the Shah having just fallen; the department of militant miners, with Arthur Scargill itching to have a go at the new Tory Government; the department of colossal investment programmes in mammoth nationalised industries; the department of booming North Sea oil, with a state oil company owning and trading one of the largest volumes of oil on the planet; the department that had to keep alongside rising OPEC power; the department of nuclear energy; the department of the vast British Gas empire, under its formidable boss, Sir Denis Rooke; the department of the Central Electricity Generating Board and all its 12 or 13 area electricity companies; the department of the National Coal Board; the department that had relations with all the international oil companies; the department that owned 51% of BP; the department of global energy turmoil, soaring oil and gas prices, and threatened oil shortages, which were rocking the whole world’s economy. In short, it was a department of Soviet proportions, supposedly presiding over a huge socialised sector employing millions of people, a consumer of billions of pounds, in a world that was, in fact, coming to the end of its time.
Looking back, I can see that we were poised on the pivoting moment of the 20th century, as state mega-ownership and centralisation was finally choking itself to death and the digital era of decentralisation, denationalisation, privatisation and the rising market state was about to begin. Nothing like that immense departmental empire, with the fate of the whole government and economy on its plate and almost with its own foreign policy, would or should ever exist again. It was unmanageable, uncontrollable, impossible and fascinating.
That brings me to my first point, about why and how privatisation took off: it was the realisation that state ownership was not only hopelessly overcentralised but was not even a good means of control. On the contrary, private ownership with proper regulation stood a far better chance. Nationalised industries had their own empires, far removed from the accountability that the world wanted, the pressures of the market and, indeed, the pressures of the customer. That was our first motive.
Our second motive was embodied by the word “innovation”. We could see that, because no competition with nationalised industries was allowed—that was by law, and so we had to change the law—the incentive to innovate was minimal. That was the case for a whole chunk of British industry, and that had to change.
Our third motive was that the public sector just could not deliver the capital that these industries needed to modernise. The investment needs of these vast industries was constantly being undermined by short-term budget needs, which were eating away at their programmes.
Finally, and in my case primarily, some of us wanted a bit of genuine public ownership—not the bogus sort, where a few Whitehall bosses ruled the roost, but the truly public and widespread ownership of a capital-owning democracy turning earners into owners. We thought that privatisation was the road to that. That is what the Chancellor was talking about the other day, with his plans to build a share-owning democracy and sell Lloyds Bank shares to retail investors. Actually, in those days, we were going to go even further, and I still think we should, and build a society in which as many as possible, at all levels, have some form of ownership of capital or property or other form of savings—a really widespread stake in the capitalist process, giving security and dignity to as many people as possible rather than total wage dependence.
Employee share ownership was also part of that story. In fact, one of the most successful privatisations of the early days, which I personally presided over and which was initiated by my noble friend Lord Fowler with great foresight when he was Transport Secretary before me, was the National Freight Corporation sale, which enormously benefited all its staff and employees.
So what are the lessons for today from this initial wave of privatisation and its continuation through the whole decade under a Labour Government, as well as in many countries around the world, regardless of their types of government?
First, as I have suggested, the public interest, in the sense of defeating monopoly tendencies and protecting the customer and consumer, often stands a better chance through the good regulation of private industry rather than old-style state ownership and control. I could not help laughing when, the other day, I heard a union leader saying that the nationalised industries would be run,
“in the interests of passengers and the taxpayers”.
He clearly had a very short memory.
Secondly, there was that famous phrase about privatisation from Harold Macmillan—that we were selling off “the family silver”. It always seemed a funny kind of silver if it was costing £2.5 billion a year, as it was in 1979, to hold on to and upkeep. Yet, 10 years later, it was paying back £60 billion to the Exchequer in taxes alone. That does not make sense of the silver analogy; I think the great Harold Macmillan was wrong there.
Thirdly, one ought not to be too dogmatic about different types of privatisation, including models where the state retains a degree of ownership. There have been some very interesting post-privatisation models around the world. When I was working as a banker, I was asked to advise a country, which will remain nameless, on privatising its gas industry. I thought I had got the message over to Ministers in that country but, when I went back a month later to see how they were getting on, the Minister told me proudly that he had put his brother in charge of the industry. So it was privatised and that was all right, was it not? I did not succeed there. On another occasion, when I was visiting Václav Havel at Hradcany Castle, the lady who took the coats called me aside urgently. She said she had heard that I was an expert on privatisation, and could I get her father’s pub back from the communists who had stolen it? She was dissatisfied when I said that I could not do much more than mention it to Mr Havel. I do not know whether she ever got it back or not.
I also declare an interest as an adviser to by far the most efficient, safest and advanced railway system in the world—the Central Japan Railway Company’s Shinkansen system. This is a private company with a large, residual government shareholding. Incidentally, its safety record is much better than the more recent Chinese high-speed system. Japan seems to be a country which, with their current Chinese enthusiasm, our Government have temporarily forgotten. We depend just as much on Japan for our economic strength, especially for a successful nuclear future, as ever we will on China.
It has to be accepted as well that a privatised electricity industry, which we now have, was never going to be able to build nuclear power stations on the scale of the giants being constructed 30 years ago in the 1970s and 1980s. We are still, of course, constructing one of these giants—at Hinkley Point C. It should come as no surprise that it needs a French state company, a Chinese state-owned company and the British Government, plus eye-watering price penalties on all industries and households for years to come, as well as endless government guarantees of risk-free returns to the investors, to keep a project of this size and design going forward. I suspect that this will be the last of its kind in the line.
Although the debate about privatisation has regrettably now become polarised, I have concluded that the benefits have definitely outweighed the failures. More importantly, forces were at work from about two-thirds of the way through the 20th century which made privatisation inevitable. Asking whether privatisation is good or bad is rather like asking whether evolution is a good thing. It happened and was bound to happen.
Technology is marching on. The digital age is on the march. The nature and role of the state are changing. With immense people empowerment, a huge impulse to localisation and entirely new relations in many industries between the consumer and the producer, I believe that the modern information revolution will take this process forward far faster than most people realise, breaking down whole monopolies, both public and private. If we are going to see the transformation of the world’s energy mix, as many desire, this will depend on the flexibility and openness of our former energy and utility companies. Freezing them back into state monoliths is the very last way to help that process.
We need not a return to ideology—on the railways or anywhere else—but an advance to continuing innovation of every kind. That is what privatisation has enabled and it is what the market and the private sector, harnessed by skilled regulation, can and will provide. Nationalisation belongs to yesterday. I fear, too, although it will be resisted, that the great Labour Party in its present state belongs to yesterday. It is all rather sad and not a little dangerous. I beg to move.
Lord Wrigglesworth (LD)
My Lords, the noble Lord has done the House a service in raising this issue at the present time, although I hope that we shall not see the polarisation and ideological nature of the debate that we had in decades gone by. I take a very pragmatic approach to this issue and will rehearse the arguments for it in a moment, but before doing so I want to join the noble Lord in welcoming the maiden speech of the noble Lord, Lord Young. He and I worked in the Post Office together before we were both elected to the other place in 1974. Just as when I was making my maiden speech here I looked back to see what I had said in my maiden speech in the other place, I looked at the noble Lord’s maiden speech, which was made seven days before mine. I see that he spoke on this very issue of nationalised industries, and we look forward to the contribution he will make to this debate and those he will undoubtedly make to the benefit of the House in the future.
Having had a vote of no confidence from my constituents in the other place after nearly 14 years, I have had the benefit of some experience in different types of business. As I mentioned, I worked in the Post Office when it was a nationalised public corporation before going into the other place. I was director of a major consumer co-op for a number of years and the research officer for the then quite substantial Co-operative Party, which was the political arm of the co-operative movement, so I had a lot of experience of different types of co-operatives in that capacity.
When I came out of the other place, I joined a partner in establishing a commercial and industrial property development company which became the biggest investment and development company in the north-east and is still doing that work today, probably creating more jobs than I ever did as a Member of Parliament in the other place or indeed probably here. That was a great success and I still have an interest in industrial and commercial property in the north-east. In addition, before coming here I was on a number of plc boards and chairman of the Port of Tyne, one of our biggest deep sea ports, for seven years. That ran in a very commercial way as a statutory corporation. So I hope that I can bring those experiences to the House in discussing the Motion before us.
It is unhelpful to business and to industry to have the uncertainty of a raging public debate, as we did in decades gone by, on an ideological basis over the issue of privatisation or nationalisation. As the noble Lord, Lord Howell, said, we should take a technical, not an ideological, view of this. There are very good examples of public sector organisations that prosper and serve the country well and do not suffer the maladies that the noble Lord outlined, but I regret that the Pandora’s box of this debate has been opened again by the new leader of the Labour Party. As a frequent user of the rail services up to the north-east, the idea of them going back into state ownership fills me with horror. I do not know why the privatised railway companies have not sold the success that they have had over the past decade and more to much better effect. Those who want to go back to the old British Rail must be looking at our stations with rose-tinted spectacles. The stations, and the services on our trains, are infinitely better than they were in those days. Memories seem to be very short. There has been a long-standing campaign, funded and organised by the trade unions from that sector, to try to get them nationalised again and the new leader of the Labour Party has obviously bought that.
In the Library’s briefing for this debate there is a piece by the Professor of Political Economy at Glasgow University. I can see where he is coming from ideologically. He talks about public ownership serving,
“social needs and environmental concerns over private gain”.
He talks about,
“democratic accountability and public engagement in the economy”.
What does he mean? He should remember some of the things the noble Lord mentioned. The nationalised industries used to be run with constant interference by civil servants and government departments, making it impossible for them to manage their businesses as they would if they were proper commercial organisations, or serve the consumers as they were supposed to. The idea of going back to that sort of arrangement fills me with horror.
No matter who the owners are, the trick is getting the relationship right between the shareholders, or stakeholders, and the management. Then management can manage on a proper commercial basis, to achieve the objectives that have been laid down by the shareholders or stakeholders. I think not only of our Port of Tyne, but of the very successful port of Dover, which is a statutory corporation. When it was suggested that it be privatised, the campaign against this was led by the Conservative Member for Dover because it is a perfectly good organisation, doing a good job. As was said many years ago, “If it ain’t broke, don’t fix it”. The Port of Tyne is the same: it made over £10 million last year being run on a commercial basis and there is no reason to disturb an arrangement like that. Channel 4 is in public ownership, and it does a good job but it has not been constantly interfered with by government. The noble Lord made a fundamental point: if a public sector organisation like that needs capital, one may have to go to the market and privatise to enable the business to succeed. If you do not, any debt that it builds up will, inevitably, be on the PSBR and the Treasury will take an interest in everything it is doing, and that leads to stop-go investment in the business.
There are cases where it is right for a body in the public sector to be moved into the private sector, but there are also cases for doing the opposite. The Conservative Government to which the noble Lord referred nationalised Rolls-Royce in the public interest. At the moment there is a case for the Government paying the costs of mothballing the steel plant in Redcar which is being closed. That plant is as big as St Paul’s Cathedral and has the second biggest blast furnace in Europe. The furnace, the coke ovens that go with it and all the surrounding deep berths for importing iron ore and taking the steel out, would need a massive investment of billions of pounds. The chances of that facility being revived are very slim indeed but, strategically, the Government should seriously consider having it available, for the relatively cheap cost of mothballing it for some years. However, I have not seen any serious consideration of that. That is what I mean about taking a pragmatic approach. Do not take an ideological approach, but ask what is best in the circumstances and behave in accordance with that.
The French seem to be much better at getting this right with the public sector. French Governments manage to sustain businesses right across the board in the public sector—or those with considerable public sector interests in them—without the sort of interference the noble Lord talked about. That is why the relationship between the ownership, the shareholders and the management is fundamental. If that is wrong, everything goes wrong. One can see plenty of examples of the dangers of the way it has been done in this country at any time. Look at the demands from Members of the other place, and even some in this place, regarding the way the Government should run the banks in which they have a shareholding. You cannot run an organisation if people externally are telling you what salaries should be paid to the management, what organisation they should have or what services they should provide. You cannot chop and change from time to time according to a political timetable and political demands, rather than taking a strategic, long-term approach, and be giving the management the job of doing it. Frankly, if the management does not do the job, it may have to be removed, which I have had to do at times, in order to ensure that the objectives that have been laid down are achieved.
I hope the ideological debate that raged in the past does not come back—I think the noble Lord would agree on this point—and that the settled position we have reached as a country is maintained. The blind doctrinal faith and ideology of a minority, which thinks that by putting things in public ownership you are somehow serving the consumer and the public interest, is completely wrong. It need not look in the crystal ball; it can look to history to find the truth of that case. From these Benches, I am advocating a pragmatic and non-ideological approach. If we do that, consumers, the people working in those businesses and the whole country will benefit.
Lord Young of Cookham (Con) (Maiden Speech)
My Lords, it is a particular pleasure to follow the noble Lord, Lord Wrigglesworth, because, as he said, we both worked for the same nationalised industry over 40 years ago before we embarked on our respective political careers. I am delighted that our paths have converged once again in your Lordships’ House. I am grateful to him and to my noble friend for their very kind words about me. It is an honour and a privilege to make one’s maiden speech in your Lordships’ House. My arrival here has obliged the tabloid press to rebrand me from the “bicycling Baronet” to the “pedalling Peer”, but there are worse things to be called by today’s media.
Having read your Lordships’ debate about the size of this House last month, I was worried about the welcome I might receive because reference was made to an article describing the new intake, of which I am part, as the,
“extraordinary ennoblement of failed and discredited politicians”.
But there has been no trace of that ungenerous remark in my welcome to this House. Your Lordships could not have been kinder to the new boy. My sponsors, Black Rod, the Whips and the staff of the House have so far kept me out of serious trouble. As a bonus, the induction tour took me to a part of the building I had never been to in 41 years—the Sports and Social Club.
I understand all the sensitivities in this House about those who arrive here from down the corridor. But given that this House has as its mission the scrutinising of legislation and holding Ministers to account, I hope that those who have served an apprenticeship elsewhere might be able to add value to the proceedings in your Lordships’ House. It is also helpful to include those who have held office and can from first-hand experience spot the Achilles heel in a ministerial defence.
For my part, I think that I have the unique record of having been sacked by two Prime Ministers and then brought back by both of them, leaving unresolved the question of my ministerial merits. I have joined the Government more often than the noble Lord, Lord Mandelson. I think that I am the 8th former Government Chief Whip to join your Lordships’ House. In that capacity, I noticed that the Government lost more votes in one day last week than I did in two years. However, that is in part because the residents here are free range, as opposed to battery farmed.
I have always taken an interest in your Lordships’ House. With the noble Baroness, Lady Hayman, I co-piloted the House of Lords (Expulsion and Suspension) Bill in the last days of the last Parliament, which landed safely before dissolution. It enables your Lordships’ House to deal appropriately with,
“noblemen who have gone wrong”,
in the words of Sir William Gilbert in “The Pirates of Penzance”. It has a part to play in upholding the reputation of this House, and I hope I never activate its provisions.
I also understand the fear that the rarefied atmosphere of your Lordships’ House might be contaminated if we bring with us the emissions from the other place. I will not be doing that, having been equipped with the appropriate software. However, as one of the less partisan Members of the Commons, I welcome the calmer atmosphere here. What would be acrimonious exchanges on the green carpet become civilised discussions on the red one. I was only rebuked once for my behaviour in the House of Commons, and that was in the 1970s, with George Thomas—later the Viscount Tonypandy—in the Chair. We were debating the state retirement pension; I opened my remarks by congratulating the Speaker on his 65th birthday and expressing the view that he might like to take a particular interest in the debate. I was rebuked for my insolence, but he then excised the exchange from Hansard.
I would like to make a brief contribution to this debate, so ably introduced by my noble friend. Before joining the other place, I was economic adviser to a nationalised industry—the Post Office Corporation, which embraced both BT and Royal Mail. As with other nationalised industries at the time—the noble Lord made this point—there was political temptation to freeze the prices before an election and then increase them afterwards, which played havoc with demand. The investment programmes were constrained by and caught up with the fluctuating fortunes of the government finances and were sometimes directed towards marginal seats. That was no way to plan for and run major infrastructure companies where stable, long-term investment was crucial.
To pick up on a point made by my noble friend who introduced this debate, after BT was privatised, I went back to the staff canteen to meet my former colleagues. On the notice board was one piece of paper: a chart of the BT share price. To me that symbolised one of the benefits of privatisation: the identification by the employees of a company with its success, in a way that was simply never possible under public ownership. Privatisation of BT brought choice in handsets and providers and got rid of the waiting lists; it would be absurd to renationalise it.
Twenty years ago, when I followed in the footsteps of my noble friend who introduced this debate and became Secretary of State for Transport, I completed the privatisation of the railways. Some noble Lords may regard that as a spent conviction, but I am unrepentant. Instead of a British Rail monopoly, we have now created a vibrant railway operating industry, using the skills of the airlines, the bus companies and overseas operators. They bid competitively for the franchises in the interests of both taxpayers and passengers. If British Rail failed, no one else could run the railways, but now we have a range of competent providers. Instead of an industry which looked inwards towards the Minister for funds, we have train operating companies looking outwards to the market—to their customers—to generate more revenue.
I remember the public expenditure rounds in the last Conservative Government. I would appear before the Star Chamber, which was populated with colleagues with whom I have now been reunited, and tell them of my requirements. They would say, “George, we are really excited by your new train set, but health, education, defence and the police have got the money”, and so not enough was left for the railways. Now, however, the train operators and the roscos—the rolling stock companies—are not inhibited in the same way and investment has soared. We may not have got absolutely everything right—it was done against the clock, at times without a majority in the other place and with an Opposition threatening to renationalise—but the basic structure has remained unchanged and passenger numbers have doubled.
At the moment, the Treasury is conducting probably one of the most difficult public expenditure rounds since the war, with the outcome due to be announced next month. I ask your Lordships how much more difficult that exercise would be if in addition to the demands of health, education, the police and defence were added the investment requirements of the nationalised industries. In my view, freeing these companies from the constraints of the PSBR was the most significant and welcome consequence of privatisation.
Over the last 20 years, a broad consensus has emerged that the wealth-creating infrastructure companies are best located in the private sector. There is a legitimate debate about the process, the price and the appropriate method of regulation, but I hope that we have left behind the arguments of the 1970s and 1980s. There are grave risks in breaking that consensus, such as a threat to the investment programmes of the industries concerned. Why should they risk capital if they are about to be taken over? It would be a serious diversion of management effort to see off the threat of nationalisation. That is the last thing that these important industries need at this stage of our recovery. I very much hope that the debate, so ably introduced by my noble friend, will help to ensure that common sense will prevail and that the consensus holds.
Lord Cavendish of Furness (Con)
My Lords, what a tremendous pleasure it is to follow my noble friend Lord Young of Cookham and to hear his outstanding maiden speech, on which I congratulate him. As has been said, he had a distinguished career in another place. I have seen the way he has been greeted in your Lordships’ House by former colleagues. He is obviously incredibly well respected and incredibly well liked.
Not having served in another place myself, I always find myself speculating how those distinguished people from another place will fare in your Lordships’ House. It is uneven, to say the least. Some fare better than others. Some sulk and say that it is not the same; others really get into it and make a career in your Lordships’ House. My noble friend is a true parliamentarian. We can look forward to a very distinguished contribution and we welcome him warmly.
I thank my noble friend Lord Howell and congratulate him on introducing this important debate. His speech was a reminder of his long and distinguished career, full of wisdom. It was also timely, as old arguments are resurfacing.
I declare an interest. In all my adult life I have been engaged with industry and commerce. I refer noble Lords to the register of interests. A debate on the possible merits of public ownership is once more possible only because the present generation of young adults cannot remember what the nationalised industries were really like, as the noble Lord, Lord Wrigglesworth, described. They cannot remember how it took more than six months to get a telephone connection, or the endless industrial action generated by a powerful and politically driven trade union movement. They cannot remember the general feeling of squalor that usually surrounded public sector enterprises.
I remember also a sentimental attachment even to the worst of these nationalised services. I remember sensing that people felt that the state, having brought us through horrible, damaging and tragic conflicts to victory, could also contribute to the peace that ensued. In the British mind there was and probably still exists a strong feeling as to what should and should not be done for profit. I do not dismiss those perceptions, but I do not think that that feeling stands up to argument. When a doctor or a social worker goes home with a pay packet and then deducts the expenses of living, what is left is surely, by some description, profit. Sometimes I think of the argument in reverse. Imagine if by tradition the undertaking business had, since the dawn of time, been the preserve of the state. Think of the outrage when somebody suggested it should suddenly become privatised—making money out of death.
While I conclude that the case for private ownership of industry is overwhelming, it does not follow that I am uncritical of some aspects. We in the private sector do ourselves no service by ignoring the shortcomings we see around us.
My starting point is that 95% of the British economy is driven by small and medium-sized businesses. The head of affairs of such an enterprise experiences things that no head of a tier 1 company, a multinational or a quango experiences. He or she is at personal risk every hour of every day. There is the commercial risk of the market changing unexpectedly, or commodities changing; there is the financial risk, including the strangely capricious attitude of banking nowadays; and there is the regulatory risk. Imagine being in charge of a small business, and the reams of paper that come at you every week. There is also the legal risk: employment law is complex, and although it has improved, all of us in the private sector know what it is to deal with vexatious claims. There are also the huge decisions we all have to make on capital investment.
That exposure to the harshness of the real world shapes the character and mettle of these people. They are the real heroes of the British economy, and it always saddens me to think how little their voice is heard. The CBI always claims to speak for all of us—but it certainly does not speak for me. How could it? It has never asked me what I think.
Public ownership, by contrast, is unavoidably inefficient, as I think has been pointed out already. I am not attempting to disparage those who attempt to manage it, but everything is stacked against them. Government is simply not designed to run business. The story of PFIs surely provides the best example: again and again we have seen how all the rewards go to private sector investors and all the risks are borne by the taxpayer.
All of us in manufacturing industry understand the importance of capital investment: it is the lifeblood of our business. My own experience of many years is that when properly equipped, a business produces happy surprises, but if we have had to stall investment—for cash-flow reasons, say—it is full of unhappy surprises. Yet even in this year of grace the Treasury is still, I feel, unable to distinguish between revenue and capital.
When I was in local government, in Cumbria County Council, we had very sharp political divides but we came together to save money to build a new school. The old school was bad for education, expensive to maintain and bad for morale. It really had had its day, and all of us in local government joined forces to get a new one. The Treasury told us that we could not have a new school because it was “inflationary”—a bizarre idea, which revealed a completely different understanding of the workings of capital. I regard the Treasury as being innumerate from the point of view of a private sector business.
I also regard the public mechanism for controlling expenditure as bizarre, to put it mildly. Parliament decrees that something should be done, or bought, or a service provided, and then the Treasury does its damnedest either to stop it or to delay it. No one in the private sector would survive a week with that sort of system of control. When a Government sit there buying and spending, as Governments have to do, their power and financial muscle are such that what they do will have a strong gravitational effect. To avoid centralisation, the Government have to be proactive in preventing it. It is a credit to the present Government that they do just that.
It was a tragic historical set of circumstances that allowed our local government structure to be undermined and become a shadow of what it once was. In effect, it fell prey to centralising forces. The extremely sophisticated local government finance teams that used to be found up and down the country were one particular casualty of that development. We need to recover the financial skill that characterised the best of our local authorities. They really did understand the distinction between revenue and capital.
I shall now touch on something that I spoke about in last week’s debate on the Second Reading of the European Union Referendum Bill; I make no apology for repeating it. You will find no greater admirer of the free market than me, but I seriously worry about the fast-growing phenomenon of corporatism. It leads to greed, to a failure of accountability and transparency, to a diminution of competition, and, in the end, as we have seen internationally, to corruption.
The effect of corporatism can be illustrated thus—I am thinking of a particular set of circumstances with which I am familiar. The Government wish to place a contract. Understandably, they like to deal with a tier 1 company. They ask for, and probably receive, assurances that the local supply chain will receive a share, and a framework agreement is set in place. The business is shared out among other tier 1 companies. The supply chain issues then become rather vaguer and at one remove, and are finally often ignored.
There are two reasons why tier 1 companies like dealing with companies of similar size. The first is cultural. I well understand that. It is very easy for a tier 1 company to deal with its opposite number of similar size, and, often, with its links to Whitehall. The second is more sinister. Many of these companies are fat and monopolistic and often not as efficient as they should be. The inefficiencies are sometimes disguised by making up ground through screwing down their suppliers. The approach of some supermarkets to dairy farmers is a case in point. I see in Cumbria the tragic results of that and the suffering of some dairy farmers. The one thing that terrifies these companies is that fleet-of-foot small companies will muscle into their territory. A timber contractor operating nationwide regularly approaches the regulator to try to toughen up the regulatory framework for his business. This is not because he is interested in health and safety but because he cannot bear the idea of the numerous two-man operations operating successfully, and he wants to put them out of business.
We have also seen how great infrastructure projects come and go without local companies enjoying any benefit whatever. At least the Government set out with honourable intentions; I would be less confident saying that about many of their quangos. Worse even than the quangos are the private monopolies, especially exemplified by some of the utility companies which become so utterly remote from the customers they should be there to serve. One of the best antidotes to this is the growing number of LEPs we are seeing developing around the country. When they are good, they really help the SME sector.
This is also the age of partnership. Given the huge investment coming into my local town of Barrow-in-Furness, a number of us are trying to get together with very small operators who normally would not be able to compete so that we can come together and add a little muscle to our operation. Huge size tends to lead to corporatism. Might not the public be served by fiscal incentives either to split up large companies or not grow them beyond what is in the public interest?
The question of institutions raised by my noble friend is more subtle—but, again, gravitational force is at work. I carried out some local research into why individuals were not being attracted to school governorship, local government or parish councils, or leaving early. In the case of school governors, the story was always the same: they said that they were always being sent for retraining, so time burdens were continually being added. So you are getting committee-type persons going for these things and independent-minded persons staying away. Similarly, parish councillors are being made less and less welcome because of the regulations coming down. The modern world has discouraged local leadership; somehow it has to be retrieved.
I have always thought that about half of my own working life ought to be devoted to public service. I realise that that is too much for many people. It is said that Cumbria is overgoverned and underled. I think that government has a role in making public service more attractive—or at least less unattractive. A happy nation needs leadership and the participation of all if it is to prosper.
Lord Stoneham of Droxford (LD)
My Lords, I, too, congratulate the noble Lord, Lord Young, on his maiden speech and welcome him to the House. I was not aware of his role in the final throes of rail privatisation but, as somebody who always prioritises rail in my business travel, I thank him and congratulate him on at least making my life more amenable over the years since that time.
When I first noted that this debate had been tabled, I was not sure whether it would be a trip down memory lane to highlight the merits of privatisation or a partisan clarion call to try to highlight the “back to the 1970s” views of the new Labour leader. Inevitably, it has turned out to be a combination of both. But I hope we can, as I will try to do in this speech, learn the lessons of the past to improve on what we do in the future.
I remind the House of the huge damage done to the British economy by the ideological debates of the 1950s, 1960s and 1970s over the issue of private and state ownership. I happened to walk into the House this morning with the noble Lord, Lord Brookman, who has spent a lifetime in the steel industry. I reflected that I thought it was a sad time for him, with the current problems in that industry. He reminded me that when he started work in in the 1950s there were 270,000 people working in the steel sector; that was when he started at Richard Thomas and Baldwins in Ebbw Vale. When I started as a graduate management trainee in the Coal Board in 1974, there were 250,000 working in the mining industry. One of the consequences of the last few decades is that whole communities have been turned upside down. It is sad to reflect that nothing has really replaced the optimism, confidence, prosperity, spirit and skills of those communities.
I am not sure whether those industries were going to survive, but I am absolutely convinced that the lack of investment over the years has destroyed steel-making. We might be talking about the liquefaction of coal, rather than putting all our hopes into fracking, if we still had some remnants of a coal industry. I am absolutely convinced that lack of investment in rail and nuclear energy has seriously retarded services in those sectors. It has also retarded our capacity to ourselves improve and invest in them.
The consequences of that lack of investment are now being felt. We can see huge problems in the rail sector huge because of the lack of experience in building new capacity; there is just no knowledge or skills. There is poor project management because there is no experience of actually doing it. It is not surprising that the Great Western electrification in the course of the last two years has spiralled out of controlled. This is before we start HS2, which is so essential to improving our rail capacity.
Today, of all days, it is slightly ironic that the decline of our nuclear energy industry has left us resorting to a French, state-controlled company, EDF, in partnership with the Chinese state’s China General Nuclear Power Corporation, to build a design which is already massively delayed in other countries at an astronomic energy price. I noted in the Guardian today a quote from the noble Lord, Lord Howell, saying this is,
“one of the worst deals ever”.
I hope that he might take the opportunity when summing up either to deny that quote, or to explain himself to his son-in-law. Managing and project-managing this sort of investment—which will not be completed until everyone who has signed it is long gone—has to be a problem. You have to be a great optimist not to believe that this complex deal is a recipe for contractual disaster.
There were both successes and problems with privatisation and we are still experiencing some of its consequences. Three things need to be said about it. Often, deals were hurried to get political payback, meaning that initially in some sectors there was inadequate competition or faulty structures which were not sustainable —too often, quick wins rather than sustainable futures were achieved. There was not enough experience in franchising or regulation to manage these in the first instance. We are still having problems with that and in making sure that the consumer gets the best deal. We need to ensure, over time, that franchise deals are longer term, so that they encourage more investment.
The third problem is that too many of our infrastructure utilities have drifted into foreign ownership, in areas such as power generation, airports and water. That inevitably means that we will end up with very complex deals for investment, requiring expensive government guarantees, and contracts that are likely to be fraught with difficulty. We want an open economy but I cannot believe that the French, Germans or Americans would have allowed to happen what has happened here.
There have been successes. The debate has emphasised that British Rail is not something that we would want to go back to, unless we were acting simply out of emotional nostalgia. Franchising has had its problems but, happily, investment is happening; customers are more centre-stage; reliability has risen, certainly on all the lines that I use; and monopolies are being challenged. There are also the great success stories of privatisation: Rolls-Royce rescued and then privatised, a company at the pinnacle of our engineering skills in this country; I talk also of Airbus and British Aerospace, where now in civil aviation we challenge the Americans, which was undreamed of 20 or 30 years ago. But there have also been some disasters and that was often because those industries and sectors were denuded of skills and investment before privatisation.
I am a social democrat and less concerned about ownership than about the best means to improve the country’s competitiveness and prosperity. I am sure that is better done through ensuring that there is always choice and competition because they are the main drivers of change; otherwise, monopoly breeds complacency and uncompetitive practices. I have worked in the state sector and the private sector and for social enterprises so I have seen all forms of ownership.
I will make a few comments about how private enterprise now has to deliver in the economic situation that we face. There are some shortcomings that the Government need to address. One is that there is still too much emphasis in our stock market and our companies on short-term profit maximisation and results to get the share price up. We have also allowed too much of our talent in this country not to go into real industry but to drift into the City and the finance sector as a whole. One of the disadvantages of the affinity that we have with the City is that it encourages a trading mentality, which encourages too many acquisitions and mergers rather than the development of real businesses. We should always seek to improve competition and should be very wary of allowing companies to be taken over by overseas owners. The UK has been seen as a bit of an easy touch and we underestimate the consequences for our industry if we allow too much ownership to be in overseas hands.
One of the most significant problems in industry is that there has been simply too little business investment, particularly in R&D. I have said before in this House that Volkswagen commits €12 billion to R&D research each year. I know it has problems but I suspect that, because it has made that investment in its products and in its customer loyalty, despite all its problems it will see through the current crisis because basically people like its products. In this country our management incentives are aimed too much at the short term and not at the long-term achievements that companies need to make.
During the coalition Vince Cable commissioned a report from John Kay to review UK equity markets and encourage long-term decision-making. Action has been delayed while the Law Commission considers the whole legal concept of fiduciary duties, but will the Minister confirm that the Government remain a strong supporter of the stewardship code, that they want to see investor forums in companies to facilitate collective engagement by investors in UK companies, and that they want management incentive schemes to focus much more on the longer-term results rather than the short term? I also hope that the Government remain sceptical of excessive merger activity and are keeping under review the power of regulators and the competitive authorities to counter this.
The Government are right to get the economy in balance and they are right to promote a climate to encourage business investment in all its forms, but I do not believe we should concentrate simply on the issue of ownership. We must emphasise that managers need to improve their sectors and concentrate on the long term. There remain major problems in our balance of payments, productivity and skills and those major challenges can be resolved so that we can compete globally and raise companies’ prosperity only if we give attention to the long term.
Lord Stevenson of Balmacara (Lab)
My Lords, I would like to thank the noble Lord, Lord Howell, for securing this debate. Like a number of other speakers, when I saw the title I felt slightly at a disadvantage, as I was not quite sure where he was going to come from. Your Lordships will not need me to remind them that I am in a slightly trickier situation in responding to this debate since, to take a cricketing metaphor, the pitch is rather sticky and I am not entirely sure that I have got all the messages that are coming out from the other end in the right order, but I will certainly try to do justice to where the party that he criticised so strongly in his comments believes it stands on the matters that he raised.
I would also like to congratulate the pedalling Peer on his maiden speech. I think everybody who heard that and those who will read about it will recognise that we have a rare talent joining us here. He is steeped in the traditions of Parliament and has quickly understood the way in which we operate, so he will fit in very well. I am sure I am more of a battery rather than free-range person myself, but if he is going to find the Achilles heel in Ministerial Statements, well done—I like this; this is going to be fun. I look forward to many of those occasions.
In preparing for this debate, I looked at the interesting brief prepared by the Library which was good to have, although somewhat gnomic, possibly because the Library was also not quite clear where we were going to go on this topic, which meant that you had to read quite a lot of stuff in order to understand where one might go with it. I am going to take one or two points from that, because my response here is going to be partly theoretical and partly practical. I am not going to be quite as pragmatic as one of our earlier speakers but I am hoping to see where the intellectual case lies and then perhaps articulate what that means in terms of policy. I will also be drawing on a speech given by the then Chancellor of the Exchequer, Gordon Brown, in 2003 to the Social Market Foundation which dealt extensively with what a modern, progressive democratic party should do in relation to ownership questions about strategic industries.
My first point is a slight criticism of where the noble Lord, Lord Howell, came from on his journey. I thought his reflections on his experiences were interesting but there was an underlying teleological approach that there is a march of progress and it is inevitable that anything that starts off in state ownership will eventually end up in private ownership and that, really, those who call for nationalisation are misguided bigots—all would be perfect if Mrs Thatcher’s founding themes were taken forward and allowed to flourish, because then the state could withdraw from most things and everything would be right as roses. I am not sure about that. I think the problem with this argument is that it is mainly based around cost issues and ignores value. The issues are much wider than that. Government will always have a role in every aspect of human endeavour and must not lose that role because it is an expression of the will of the people, and it needs to be in all aspects of our society.
After all, this starts with Adam Smith. I am a bit surprised that nobody has quoted the great thinker, but every modern generation since Adam Smith put the question about the relationship between the invisible hand of the market and the helping hand of government has had to think about how to interpret that tension for their times. What are the respective spheres of individuals, markets and communities in achieving opportunity and security for their citizens? If you address the problem from that perspective, you cannot ignore the role of the state. It is true that direct state involvement in industry was pretty much a rarity in the 18th and 19th centuries following Adam Smith, but the experiences that we have been talking about today are not the only ones that one can draw on. We ignore at our peril the New Deal of the 1930s in America and the way in which that combination of state intervention, state borrowing and state investment enabled the world to come out of a recession which could otherwise have been much, much worse.
There are obvious resonances with the situation in 2006 to 2008, brought on by the behaviour of the banks. At that time, public ownership was one tool used by the UK Government, nationalising three of the UK’s largest high street banks: Northern Rock, HBOS and the Royal Bank of Scotland and Lloyds. At the height of that crisis, a sum of what I understand to be £1.162 trillion of public money had been committed to provide loans, share purchases and guarantees to the banking sector. At that stage, I think that all sides in Parliament were on the same page: we were all saying that that had to happen in order to secure the economic future of our country. We did not say, “Oh no, we don’t invest in private assets”. We took those steps because they were the right thing to do, although it is fair to say that the then Chancellor of the Exchequer, Alistair Darling, said at the time:
“It is better for the Government to hold on to Northern Rock for a temporary period and as and when market conditions improve the value of Northern Rock will grow and therefore the taxpayer will gain. … The long-term ownership of this bank must lie in the private sector”.
So my first point is to recognise that, although there is a long and complex story involving ownership of assets which are now in private hands, there are occasions when this will still be an issue, and the fundamental questions behind that, raised originally by Adam Smith, still need to be addressed. There must be a debate about whether an economy can be left in private vested interests, except when it is necessary to instigate a short-term palliative for market failure of that type.
Let us not forget that three decades of privatisation and marketisation in the UK have not only increased social inequality but resulted in economic decision-making being captured and concentrated in far fewer hands. The opening up of very large parts of the public sector to private capital has created a situation in which the UK is shifting towards a rentier economy, dominated by financial interests and shareholder values, as was mentioned by the noble Lord, Lord Stoneham. There is obviously a good and a bad side to that, but the assumption one makes is that the economy, although it is working for private vested interests, might also have a conception of public good, and I think that that is a bit of a stretch at times. Although it is true that the private sector has brought in investment, we are still an economy dogged by bad productivity. Although there are hot spots and the economy is beginning to grow again, it is still not the balanced, wider-ranging economy that I think that all sides want. My point here is that, if possible, we should avoid a simplistic approach to questions of who owns the assets that we are talking about.
I take it, and will argue, that a sound macroeconomic framework is a necessary but not sufficient condition to achieve for Britain a society dominated by opportunity and security for all, but I shall mention three areas of this debate where there are questions to which we will want to return. The first, the health service, which, since it was first introduced after the Second World War, has always been in public ownership, is dogged by expense, new technology and rising expectations. The question has to be whether patients will benefit through a public healthcare system or whether, by bringing the market in, you could get a better route to advancing the public interest. Higher education is another example. Universities are very much operating in the global marketplace, with their excellence depending on drawing in a wide pool of talent. The question, again, is whether universities should really become sellers setting a price for their services and prospective graduates becoming buyers of higher education at the going rate. What does that mean in practice for the economy and how growth will be supported? Then there is industrial policy. When global competition is challenging every industry, the state has options to replace market forces when they fail—the example of the steel industry was mentioned today—but is it right always to have an ideological assumption that the state will refuse to intervene at any stage? Those are complicated questions. They are really about whether or not the public interest is best served by a particular model or approach to that thinking.
The noble Lord, Lord Howell, in introducing his remarks, tried to pitch himself as a one-nation Tory—I think that that would be an appropriate way of explaining it; certainly not, he says. He certainly had some very harsh words to say about those with views on the matter on the very far right of his party. I think that he would accept that there has been a divide over the years about whether the market solution or a public ownership solution was the right one, and I do not dissent from him. Within that divide, there has also been an agreement that there are certain areas of public activity and the economy in particular where we have accepted, without going into it in any great detail, that things like family, faith and civic society are not transactions that could be marketised.
In his book The Dignity of Difference, the former Chief Rabbi, the noble Lord, Lord Sacks, says that he accepts—as I do, too—that there are areas where the market is legitimate and there are areas where to impose market transactions in human relations is to go beyond the bounds of what is acceptable and corrodes the very virtues that markets rely upon for success. He says that markets may be the best way of constructing exchanges and providing many goods and services efficiently, but they are not good ways of structuring human relationships. This point was picked up by Michael Sandel in his Reith lectures a few years ago, when he talked about something he called “the moral limits of markets”.
Therefore, we need to be a bit nuanced about how we talk about the economy in terms of markets. The debate about left and right need no longer be a debate about whether there should be a market-based economy, because it is absolutely right to say that markets work very well for the distribution of services, and for most of the time we want to make sure that they continue. I do not accept that the public interest requires us to regulate the impact and scope of the market by having greater public ownership, regulation or state intervention. On the other hand, I hope that those who are on the right of this argument would agree that it is not always the case that the markets are going to provide that combination of liberty, equality, efficiency and prosperity that every state would wish to look for.
Given those points about the areas where the market is not appropriate, we can only agree that, on some occasions, the market is the right approach, and on some occasions there are areas where it is not. We need to get beyond the constant debate about that. I recognise that progressive democratic governments seeking strong economies should not only support, but possibly enhance, markets and make sure that they are working effectively and efficiently. We accept, however, that there are limits to the markets, and that there are some areas—particularly in moral matters—where there should not be markets, but we should always have a concern for productivity and efficiency in these areas.
That is the theory behind my views, but I would like to make a couple of points about how it might apply in practice. First, we need to look much wider than we have in this debate so far about what the Government are responsible for and what they can contribute. The economy is supposed to be British based; it is supposed to create jobs, invest, innovate and export. It should have high productivity, and be highly skilled and should have innovation. These are all points made by various speakers. We need a balanced, resilient economy, succeeding in the world, creating good jobs and opportunities, and offering people a ladder up and the chance to make the most of their potential. In that, there are things we need to accept would be done better by, or initiated by, the state.
The first of these would be to make sure that we can, as a Government and as a country, liberate the talents of all. We cannot hope to succeed as a nation if we are not giving everyone in every part of Britain a platform to succeed as individuals. The economy has to be built on the contribution of all, and we must extend opportunity and remove barriers to success. This is about good primary and secondary schooling; training and higher educational opportunities on a lifelong basis; fixing broken markets, intensifying competition and reducing barriers to market entry for new businesses, and supporting entrepreneurship. That is the area where the Government have a legitimate and important role and most people involved in industry would accept that, in partnership with what their interests are.
The second pillar to consider is innovation. We have to recognise that, in a previous period, there was a lot of blue-sky research funded and operated through the Government and the nationalised industries. The noble Lord, Lord Stoneham, might remember that. Even the Post Office or GPO had its research branch areas as well. That has all gone in the wake of privatisation, which is to be regretted, but we have other ways that that could be taken forward. In particular, the role of the research council system, which is under threat because of possible further cuts to public spending, must be looked at. The science budget, which was given a 10-year focus under the last Labour Government and was supported during the coalition Government, needs to be protected as we go forward.
An active Government should invest in the long term; the short-termism has already been mentioned. What does that mean in practice? It means issues like infrastructure on a long-term, consistent basis. We look forward to the emerging thinking of the present Government on what I take to be an extension of Sir John Armitt’s recommendation of a National Infrastructure Commission under the noble Lord, Lord Adonis. We also need an industry strategy: not in the sense of direction, but making sure that all the facilities that are available in many other countries for their successful winners get the chance to come forward.
Thirdly, the Government have a role to secure an open approach to the world, and we should not be isolated, either as an economy or as a country. This means international engagement and an open, outward-looking approach to the world. It also involves, of course, the big question before us that will be coming up in the next year or so: the question of whether we stay in Europe. In my view—and I am sure it is shared widely around this House—it would be disastrous if Britain were to leave the EU. Shutting ourselves off would pose a huge threat to our future prosperity.
I have tried to give a theoretical basis as to why the party that I represent regards the sort of market economy that we now have as the one that is appropriate for us. I worry about the concerns that I have expressed in regard to whether the market will go far enough to ensure a proper public-interest concern for people and their aspirations. I think there are practical implications that this Government should take ahead.
The Earl of Courtown (Con)
My Lords, I thank my noble friend Lord Howell for moving this debate and I am grateful for this opportunity to speak. It was fascinating to hear his journey through his old department and the extent of the work he carried out. I also join other noble Lords in welcoming my noble friend Lord Young of Cookham, particularly as just over 20 years ago, as he may remember, I, as a very junior member of the Government, worked with him as a Whip in this House.
It is always wise to remind ourselves from time to time of the benefits to our economy of markets that operate efficiently and effectively and the important role the private sector plays in achieving this. We have spent considerable time over recent decades debating all sides of these issues. It is fair to say—as was also said by my noble friend Lord Young—that the arguments in favour of the market economy and of private ownership of industries and, indeed, some institutions, have been won and are now generally accepted by most across the political spectrum.
As my noble friend Lord Howell said, since the 1980s all serving Governments have committed to privatisation to a greater or lesser extent. Depending on the nature of the business an organisation is involved in, privatisation can come in a variety of shapes and sizes. There are, for example, the large utilities that provide consumers with critical services, which were privatised in the mid-1980s. During the period from the 1980s to the mid-1990s, both British Telecom and Cable & Wireless were wholly or partly privatised. Combined with the introduction of economic regulation, these privatisations resulted in strong competition in the telecoms market place and significant gains for consumers.
Other utilities such as water, gas, electricity and airports have also been privatised successfully. Some people may argue that these privatisations have created privatised monopolies. However, privatisation has proved very successful in reducing costs to the consumer. By 1995, telecoms prices had fallen by 40% since privatisation while gas prices had fallen by 25%.
The regulation of the sector, which has gone hand in hand with privatisation, has also helped to drive investment to ensure that the system can cope with the demands placed on it by industry and the population.
These privatisations brought with them an end to ministerial control and led to the creation of independent economic regulators such as Ofcom to monitor the market and regulate the behaviour of newly privatised industries in the interests of consumers. Over the years, these and other sectors which saw significant privatisation have matured and developed and in most cases have delivered good performance and positive consumer benefits. More recently we have seen the successful privatisations of the Tote and Royal Mail, as well as the continued divestment of the taxpayers’ stake in UK financial institutions back to private investors. Why, however, is privatisation seen as necessary, and what are the benefits? What is the case for private ownership of industries and institutions in the UK?
The more cynical among us may emphasise the raising of income for the Exchequer as the very objective of privatisation. This has certainly been the case in the past and is still a useful tool for Governments to deploy in support of other important initiatives. An interesting example of this, cited in a House of Commons research paper, is the sale in 1977 of 17% of the Government’s shares in BP, which raised £560 million to help them meet the terms required to secure a loan from the IMF, including the reduction of the UK budget deficit. Indeed, the Government have recently announced their intention to bring forward sales of land, buildings and other assets the Government bought or built, which will raise up to £5 billion over the course of this Parliament. The proceeds from these sales will be recycled to help fund new infrastructure projects and capital investment.
However, we know that there are more long-term benefits from the private ownership of industries. Where there is no longer a strong policy reason for continued public ownership or where the asset would clearly operate more effectively in the private sector, there is clearly no argument for retaining it within the public sector and at a cost to the taxpayer. Privatisation is a step on the road towards competition, and many of the privatised monopolies are now competing in competitive markets. Where competition is not possible, economic regulation has created the incentives for efficiency gains and investment. Energy network costs have halved in the 15 years post-privatisation, while the water sector has received £116 billion of investment since 1989.
The “political interference” from all angles experienced by nationalised industries in the past led to some perverse strategic decisions that did not make any kind of commercial sense. The businesses did not become more innovative or competitive; in fact, just the opposite happened, and many, such as British Leyland, were sold off. Both Jaguar and Land Rover, which split up when British Leyland was sold in 1984, are now major British multinational brands, albeit foreign-owned. Without the private foreign investment we have seen in our car industry over recent decades, it is unlikely that we would have the strong, internationally competitive industry we now have in the United Kingdom or the highly skilled workforce and good-quality jobs in regions such as the West Midlands and Northumberland.
Removing the burden of national ownership from Governments and Ministers, as many noble Lords have said, has allowed industries to seek critical investment from elsewhere and has enabled Governments to focus their attention and limited resources on more strategic cross-cutting issues that will have the most impact on our industries and the economy, such as apprenticeships, and on encouraging a more entrepreneurial spirit that will help our industries succeed in global markets. However, of course we need to ensure that the other ingredients are in place to allow business to operate free from unnecessary constraints or unfair practices of other firms, so that it can compete and innovate. At the same time, Governments must also look after the interests of consumers and the workforce, and protect the integrity of the market.
We are fortunate in this country to have one of the most effective competition regimes in the world. The Government have worked hard, both during the last coalition Government, as mentioned by noble Lords on the Liberal Democrat Benches, and since May to make the system more efficient. Last year we created the Competition and Markets Authority by bringing together the Office of Fair Trading and the Competition Commission into a single unitary authority.
Competition, as my noble friend Lord Howell said, is a key driver of growth and one of the pillars of a vibrant economy. A strong competition regime ensures that the most efficient and innovative businesses can thrive, allowing the best to grow and enter new markets. It also gives confidence to businesses wanting to set up in the UK. It drives investment in new and better products and pushes prices down and quality up. This is good for growth, for consumers and for the economy.
Competition and productivity go hand in hand. In July this year the Government published their “productivity plan”, which was jointly developed and signed off by the Chancellor of the Exchequer and the Secretary of State for Business, Innovation and Skills. The Government’s plan for improving our productivity performance is built around two key drivers or principles: encouraging long-term investment in economic capital, including infrastructure, skills and knowledge; and promoting a dynamic economy that encourages innovation and helps resources flow to their most productive use. The plan includes 15 action points which set out the Government’s objectives to establish and enable a long-term investment culture in this country, and which help address the structural challenges in areas such as pay, finance, regulation, infrastructure and rebalancing the economy.
Given the focus of this debate, I will direct my next comments to investment rather than the other aspects of the plan. As highlighted by the noble Lord, Lord Stoneham, and other noble Lords, traditionally, United Kingdom investment levels as a share of GDP have been lower than those of competitors such as France, Germany and Japan. In the run-up to the financial crisis, the growth in investment spending was focused on property rather than capital spend on equipment and machinery. We need to change this. Investment in new ideas and equipment is crucial to growing our economy. Access to finance to support investment enables companies to compete globally. Companies need to be able to anticipate fluctuations in markets and identify and respond quickly to opportunities.
How can we make the UK an even more attractive investment option? Among other things, the plan proposes reductions over time to corporation tax; increases the annual investment allowance to £200,000, its highest-ever permanent level; welcomes proposals to encourage and incentivise longer-term investment put forward by business leaders; and addresses issues around skills and education at school level, university and beyond, as highlighted by the noble Lord, Lord Stoneham. It is also ambitious in its plan to address a number of existing transport and infrastructure challenges, including long-term access to reliable, low-carbon energy at an affordable price, and establishing world-class digital infrastructure across the whole country.
However, crucially, on top of these very tangible and welcome initiatives, we need to create a long-term attitude to investment in companies and innovation and end short-termism. Financiers often focus on short-term investments and the quick return. This can have a clear and noticeably negative impact on funding for research and development innovation, which can be a risky pursuit and may also have a fairly long payback period.
A number of initiatives are included in the productivity plan which focus on creating financial services in the UK that lead the world in investing for growth. Our financial services sector has suffered since the financial crisis and we can do more to promote the most productive forms of investment. To this end, the Government have highlighted the importance of ensuring the supply of finance to support productive investment in setting the Financial Policy Committee’s 2015 remit; directed the Prudential Regulation Authority and the Financial Conduct Authority to create a joint new bank unit to promote competition; championed the development of new and innovative technologies and ideas, including through the appointment of a special envoy for FinTech; and are implementing a long-term plan for the taxation of banks, giving stability and sustainability and securing competitiveness.
I also draw attention to the speech of the noble Lord, Lord Wrigglesworth, and his pragmatic approach. I particularly agree with what he and many other noble Lords had to say about the pink-tinted specs the railways are sometimes viewed with. As a regular user of the railways I find it a great service. My noble friend Lord Cavendish emphasised the importance of small and medium-sized enterprises, and I could not agree more with what he said; they are often described as the backbone of our economy. The noble Lord, Lord Stoneham, mentioned training. I draw his attention to the debate I took part in last week, which emphasised the great successes of the apprenticeship system we have put in place. The noble Lord also asked whether the Government would support the Stewardship Code, which aims to support the quality of engagement between asset managers and companies to help improve long-term risk-adjusted returns for shareholders. The FRC is reviewing the code to ensure it works as effectively as possible. The Government support this voluntary code.
Private ownership with suitable safeguards seems constantly to have been shown to be the best approach to running the economy. It has encouraged the best performance from the vast majority of industries over the years. I should draw attention to the fascinating speech of the noble Lord, Lord Stevenson—even though it might be on a slightly sticky wicket. Private ownership and the competitive markets which follow lead to more efficient firms, owing to the profit motive and the need to be, or to become, a commercially viable proposition, whether at home or globally. There tend to be better outcomes because of the desire, or perhaps the need, to please consumers and to keep and develop their businesses, facilitated by the competition regime. Of course, competition provides companies with incentives to improve the quality of products or services, and to reduce prices as far as possible, all of which are of huge benefit to consumers.
Finally, competition and private ownership provide strong incentives for companies to innovate and develop their offerings so that they meet consumer needs more closely. It is the companies that can do this effectively that will grow and survive and provide the much-needed employment and sustainable wealth creation for our economy. A flexible, open marketplace that supports and encourages such private endeavour is also attractive for investors, including foreign direct investment, as the UK experience has proved so effectively over recent decades. All of these contribute to productivity and growth.
Lord Howell of Guildford
My Lords, it remains for me to thank very warmly all noble Lords who have taken part in this debate. In a way I am quite gladdened that it has been a low-key debate and your Lordships’ House has not been infected with too much of the frenzy from outside and nobody has made blood-curdling speeches about returning to the commanding heights of the economy and all that, or blood-curdling speeches about the need for unbridled capitalism. In fact, in my view, all capitalism should be, and always will be, bridled and that is really the answer to the ideological battles of the past. The market has to be regulated and work in a framework of control; if the framework is right the market works and if it does not then the Government begin to carry the can.
I am grateful for the support of the noble Lord, Lord Wrigglesworth, who broadly supported my view that technology and the technical wonders of the past 30 years have driven us away from the idea of the great state industries of the past or the state industries of other countries such as Russia as they simply became undesirable, unnecessary and unworkable. Some 30 years ago in the Department of Energy I was told by engineers, scientists and civil servants that it was impossible to privatise the utility industries because it was absurd to imagine there could ever be two telephone wires to a house or two electric cables or two gas pipes. It could not be done so we might as well forget the whole idea. Indeed, I remember that in India people said it was impossible to privatise the telephone industry because there were 9 million villages that had to get a cable to them. Well, we know what happened. Technology simply leaped all over that and transferred the argument into a completely different world in which, particularly with digitalisation and the computer, it became possible to operate a vast variety of diverse services within an overall organised framework.
I am very grateful to my noble friend Lord Young—he lived entirely up to my personal, and all our, expectations in that he spoke a lot of common sense and I think he will add to the common-sense resource of this Chamber, which is more and more difficult to maintain sometimes in a very tumultuous world. As he said, our job is to scrutinise legislation. We will go on doing that thoroughly. In addition, through debates such as this one we have a stabilising role in the frenzy outside. Although, I just put in a slight reminder that in our present condition where the Government keep losing the vote in the end they must be allowed to get their business. If that common-sense view about this Chamber is thrown away then we are heading for a really disastrous period in which the basis on which the House of Lords is able to contribute will be undermined.
I am very grateful to my noble friend Lord Cavendish with his wisdom on localism and the need for strong local authorities with expertise. We want to see more of that. If we are going to go for northern powerhouses we need northern powerful and intelligent regulation and administration in local government, and that must come back in a way we have not seen before.
I thank the noble Lord, Lord Stoneham, who made interesting points about ownership. I am not sure I agree with him about it not mattering. It was Anthony Crosland’s idea that it did not matter. He told the old Socialist Party that you should not have to nationalise everything. In the end it does matter. If you do not think about who owns and organises and competes in the great resources of this economy, disasters follow. I thank the noble Lord, Lord Stevenson, for pointing out that, of course, in the end the Government always do have a role, particularly in all the vital services and where the investor will not invest. Where it is too long-term, as we have seen—we mentioned nuclear power—Governments have to step in. It is as simple as that. They become political decisions. The taxpayer and the consumer will have to be ordered to pay up if an investor is not willing to do so.
My only disappointment, if I may end on this note, is that there was no further comment on wider ownership and some attempt to calm down and overcome the eternal alleged ideological battle between capital and labour which has gone on for most of my lifetime. I believed in the 1970s and I believe even more strongly today that, where wealth is being created, resources must be spread so that everyone in the community who wishes to be involved—there are always some who reject participating—benefits from the growth of wealth and resources in the economy. To put it in crude terms, where there is butter it must be spread to all corners of the toast. I think that is the answer to past battles. If all share in prosperity then all will feel that they have a stake and will contribute. That must be the ideal not only of one-nation Conservatives but of the social democrat Labour Party as I have worked with it and understood it in the past and, indeed, the Liberal Democrats as well.
I thank again your Lordships for a very interesting passing comment, in a way, on the storms outside. Let us hope that we continue to be an oasis of stability, quietness, calmness and common sense in a very difficult and chaotic world.
Zhang Kai
(9 years, 1 month ago)
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The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, with the leave of the House, I will repeat a Statement made earlier today in another place by my right honourable friend Hugo Swire. The Statement is as follows.
“We are in the middle of a hugely positive state visit, which the Prime Minister has said will benefit not just our nations and our peoples but also the wider world. Yesterday, the Prime Minister and Foreign Secretary had extensive discussions with President Xi Jinping and his delegation. Those discussions continue today, including when the Prime Minister will host President Xi at Chequers.
As we have made very clear, the strong relationship which we are building allows us to discuss all issues. No issue, including human rights, is off the table. The UK-China joint statement, which we have agreed, commits both sides to continue our dialogue on human rights and the rule of law.
Turning to the case of Zhang Kai, we are aware that Zhang Kai has been accused of “endangering state security” and “assembling a crowd to disrupt social order”, apparently in relation to his work with churches in Zhejiang province. We are concerned that his whereabouts are undisclosed, and he has been reportedly denied access to legal representation.
At the UK-China Human Rights Dialogue, which was held in Beijing in April this year, we raised issues relating to religious freedom in China, including the destruction of churches and religious symbols in Zhejiang province. We raised a number of related individual cases.
A transparent legal system is a vital component of the rule of law, and we urge the Chinese authorities to ensure that proper judicial standards are upheld”.
Lord Collins of Highbury (Lab)
My Lords, I thank the Minister for repeating that Statement. In July, the Minister expressed deep concern over the detention of Chinese Christian lawyers arrested that month as part of a major crackdown. She fully supported the subsequent EU statement calling for the release of those detained, who had sought to protect rights under the Chinese constitution. Now, we have the case of Zhang Kai, who was taken into custody by the police on 25 August. On 31 August, China Aid reported that he had been sentenced to six months’ imprisonment for gathering a crowd to disturb public order and charges relating to stealing, spying, and buying and illegally providing state secrets and intelligence to entities outside China. The Minister referred to some information that she had. Could she go into more detail about what is available to the British Government in terms of this case, and in particular whether further charges have been made and whether there will be a further hearing?
I understand what the Minister said about raising this and other cases. However, will she confirm that she or other Ministers have had the opportunity to raise this further case with their Chinese counterparts, either before the current state visit or during it?
Baroness Anelay of St Johns
My Lords, I am grateful to the noble Lord for making reference to the fact that the Government are being consistent in their relationship with China and to the fact that we have pressed the importance of human rights upon our interlocutors there, because human rights underpin a stable and prosperous society.
On the noble Lord’s first question, with regard to the case, I am not in a position to give further information at the moment. What I can say is that it is the usual occurrence for diplomats in post in Beijing to keep a very close watch on any cases that are under way, to make attempts to visit people in detention and, when they are brought to trial, to ensure that they make every attempt to attend those trials. I am advised that, if denied access, they will remain in place in the court during the day to make the point that we are trying to see that there is proper judicial process. We have assistance in that from our EU colleagues.
In his second question, the noble Lord asked about the matter of imprisonment and the details of whether or not this issue has been raised, either before or during the course of the state visit. I cannot say further than I have at present because, as I mentioned very briefly in the Statement, there are continuing discussions this afternoon at Chequers and I would not wish to try to pre-empt what they may cover.
Lord Wallace of Saltaire (LD)
My Lords, first, will the Minister reassure us on one point? The other day, we heard worrying comments from the new Permanent Secretary to a Commons committee that the issue of human rights is now a lower priority in the FCO than the prosperity agenda. It would be very good, in the context of issues such as this, to have some reassurance. Secondly, could she explain how we have got into such a contradiction about our approach to countries such as China? We are extremely relaxed about sovereignty and Chinese foreign investment and anything else coming in, although human rights is, nevertheless, something that we talk about. However, in our relations with our European partners we are totally neuralgic, even sometimes hysterical, about invasions of sovereignty, and do not think that they should have the right to talk about human rights at all. How do we handle that sort of intense contradiction between our approach to democratic countries such as our European partners and authoritarian countries such as China?
Baroness Anelay of St Johns
My Lords, we are consistent throughout in our approach to human rights and in discussing these matters with countries around the world. Fortunately, I do not have neuralgia, either mental or physical, and have not detected any sign of it yet among my colleagues—I will keep watching, though.
I am grateful to the noble Lord, Lord Wallace, for giving me the opportunity to set out clearly the position of the Foreign and Commonwealth Office with regard to human rights. What the Permanent Under-Secretary made clear in his exchange in the Select Committee is that the issue of human rights underpins everything that we do at the Foreign Office. It is embedded across the Foreign Office. I was concerned that the previous way, in which we set out a list of priorities, meant that there were categories of people in this country who could look at those priorities and think, “I am not there; they don’t care about me”. There were people on that list who might think, “Why am I fourth on the list?”—freedom of religion and belief or of no religion was fourth. So in seeking to redraft the way in which we present our commitment to human rights, I was driven by the belief that those in the LGBT community or those who are disabled should realise that we are for all people. As I mentioned at the PinkNews event last night at the Foreign Office, no one person is more valuable than another; we are all valuable. That is what our redrafted approach to human rights makes clear, and it is embedded across all departments in the Foreign Office.
Lord Alton of Liverpool (CB)
My Lords, will the Minister confirm that Zhang Kai has been at the forefront of the fight in the Zhejiang province in speaking out for both the registered and unregistered churches, more than 1,500 of which have had their crosses removed and been subjected to intimidation and the kind of discrimination that she has just referred to? Will she further confirm that over 280 rights lawyers have been detained or disappeared in China since 9 July, including Zhang Kai? Rights lawyers in China are at the forefront of the defence of Article 18 freedoms: the right to believe, to not believe or to change your belief. As a result, their own human rights and freedoms are subject to heavy restrictions. Perhaps the most well-known rights lawyer, Gao Zhisheng, remains under house arrest after years of imprisonment, torture and enforced disappearance. I hope that the Minister will assure us that she will pursue that case. Would she be willing to meet, during his present visit to London, Chen Guangcheng, the barefoot, blind human rights lawyer who was imprisoned for four years after exposing the coercive one-child policy in China?
Baroness Anelay of St Johns
My Lords, I always do my very best to meet those who seek to meet me. I have to say that my attention has been somewhat diverted at the moment by the European Union Referendum Bill. However, I will certainly see what I can do with regard to his request. I am very glad that the noble Lord, Lord Alton, has put on record the work of Zhang Kai, which is significant. He is one of those people whose bravery can only be admired by those of us who see the importance of human rights defenders around the world.
The noble Lord is right: we are extremely concerned about the activity of crosses being removed. We are told that, sometimes, the rationale behind that is that there are planning restrictions, but it seems odd to us. Certainly, detention and disappearance should not be part and parcel of a normal judicial system. Perhaps we will have the opportunity to look at this further when the noble Lord has a Question for Short Debate in the Moses Room about Article 18.
It is important that we continue our discussions on these matters. Last week at the FCO, my right honourable friend Hugo Swire, who has country-specific responsibility for China, met 14 people from the China NGO Network, representing those who have a particular interest in fighting for human rights in China.
Lord Lea of Crondall (Lab)
My Lords, does the Minister think that one way of responding to the disconnect alluded to by the noble Lord, Lord Wallace of Saltaire, is to say that the deepening of our relations on industrial and such matters reinforces the need and the moral duty to raise human rights issues?
Baroness Anelay of St Johns
My Lords, I certainly believe that a constructive economic relationship with another country gives one the opportunity to have a stronger voice on why human rights should underpin a stable and responsible government. That voice does not have to be a clarion call; it can be more modest. I am reminded that Tony Blair made the point that,
“ persuasion and dialogue achieve more than confrontation and empty rhetoric”.
I cannot often agree with him, but I do there.
Education and Employment Opportunities
Baroness Stedman-Scott
That this House takes note of the case for creating the right education and employment opportunities in the United Kingdom.
Baroness Stedman-Scott (Con)
My Lords, I must first declare my interests, in that I am a governor of Bexhill Academy, patron of Rye Studio School and an ambassador for the charity Tomorrow’s People. I speak not arrogantly but having had 30 years in this field, and it has consumed me, so it is in my DNA. I shall give some practical examples of the effect of there not being strong education and employment support for many of our young people.
I want to start by giving one example. About 15 years ago, a company asked Tomorrow’s People to help it recruit, induct and integrate 12 unemployed young people into its workforce. One young lady, by her own merit, got the job of booking all the executives’ travel which, for her, was very exciting. She turned up for work on Monday, Tuesday, Wednesday and Thursday, but on Friday she was missing. A member of our team went to her house and knocked on her door. It was about 10.30 am and she came downstairs in her pyjamas. When asked why she was not at work, she said that she never went to school on Fridays, so she did not think that she would be missed. The next week exactly the same thing happened. Somebody went to her house and told her to get dressed. She came and the next week she turned up—Monday, Tuesday, Wednesday, Thursday and Friday.
Quite rightly, in your Lordships’ House we often speak about great, intricate things, but some of the things our young people face are very basic. That is why we need strong education and employment support opportunities for youngsters in the UK. We must be driven when we see what happens when we do not have it. Please do not get me wrong; there is an awful lot of excellent work and progress taking place. It just seems to me that we have been presented with a window of opportunity to build and improve on what we have in place, and we have to grasp it.
During preparation for this debate, I sought to ascertain the data and statistics on those for whom the right opportunities have been in place but who have not been able to take advantage of them—those who are NEET. Obtaining those statistics has not been as straightforward as I would have hoped. However, I am happy to present to your Lordships’ House consistently reported figures from ONS. From April to June this year, there were 922,000 young people aged 16 to 24 in the UK who were not in education, training or employment. That was a welcome decrease of 21,000 from January to March 2015. Some 788,000, or 85%, of these young people were in England. The figures have remained stubbornly high during a number of strong economic periods and some difficult periods. From April to June, 370,000 NEET young people who were looking for work were classified as unemployed. The remainder were either not looking for or not available for work and were therefore classified as “economically inactive”. I will leave noble Lords to try to make sense of that.
The Impetus-PEF 2014 annual review for the ThinkForward programme states that,
“For every young person who goes on to become NEET, … £56,000 is lost to the public purse”.
When I looked at the maths—and, believe you me, I had to do it three or four times to make sure I had got it right—those 370,000 young people equated to £21 billion of lost money to the public purse. If there were ever a case for getting this right, it is now.
Those are just the fiscal costs. What about the other costs to those who are affected? There are people with special educational needs; those with dyslexia; those on the autistic spectrum; those with mental health issues; those involved in crime; those with addictions; and those suffering family breakdown. To me, family breakdown is one of the biggest generators of people not being able to achieve their potential. People talk of fiscal poverty; in my book, in this country there is a poverty of hope, a poverty of self-belief and a poverty of aspiration for the young people we are talking about.
The case for a step change has never been greater, but we must not forget the times in which we find ourselves. The employment rate is at a record high of 73.6%, with 31.1 million people in work. Unemployment is down to 1.77 million, or 5.4%. Long-term unemployment has fallen to its lowest level since 2009, down 526,000—a fall of a quarter compared to the same period in 2014. Vacancies are at a record high of 783,000. It is easy to make various comparisons, but it does not seem right that we have so many young people without employment. All this stands against the gloom and doom predictions of some that the opposite would happen—that unemployment would be up, vacancies down and the numbers of people in work would fall. We must recognise this success.
So let us concentrate on those who, thus far, have not fulfilled their destiny and ensure that what is in place will help them to do so. Prevention is better than cure and, if early intervention is genuinely accepted as being the right thing to do, it is seen by most as an investment rather than a cost. The benefits are seen as a saving of both social and fiscal capital, rather than as a cost of putting something right that had not worked in the way we had hoped.
The case for creating the right education and employment opportunities needs a little more articulation. From my experience, this means that we need to take young people on a journey, starting at school and arriving at a destination of a successful transition from school to work. We should be under no illusion that, once this destination has been arrived at, it is not the terminus. The journey does not end. There will be other phases along the way, but let us hope that we will have given them the confidence and skills to embark on that next phase with a much less heavy touch of the support that they will need.
I am grateful to all noble Lords who will speak in this debate—all of whom have areas of expertise on which their contributions will be made. I have no intention of trying to duplicate these, but I do want to talk about the journey path, about what I have seen work and about what the key components might be. I would also like to thank Gideon Levitt for his help in putting this speech together.
The journey definitely starts at school. Some say it does not start early enough—that it should be at primary school—but it should start in the education system. How can we build on the excellent progress made in our schools? There are a few things. Having focused predominantly on the academic path, can we now make sure that credible and meaningful vocational routes are bedded down into the school system and curriculum? These routes must be credible to employers. When they are considered, vocational opportunities are targeted at the most disadvantaged. Might they, too, not be more appropriate for others who enter the academic journey only to fall out too quickly?
I want to make a plea for core life and employability skills to be part of the curriculum. Perhaps the Minister could let us know the department’s position on this. This element of support is left to individual schools whose pressing priorities mean that, where they are included, they are done inconsistently and are very much dependent on volunteering with limited resources available. Employers need a well-prepared, highly motivated and energised workforce. Employers, too, are a critical component to the journey of a young person. Again, depending on resources and other priorities, employer involvement is not consistently embraced. Please can it be considered, so that all young people are able to have a good experience of the world of work?
By institutionalising the idea of a “career journey” for young people, we can break this vicious cycle of unfulfilled potential. This will in turn create the right conditions for the country to fulfil the economic potential which remains dormant within a significant portion of its population. The social benefits will be exponential, as we create motivated, focused employees where previously we sought just to shoe-horn young people into work by any means necessary. By creating an integrated, seamless system where employers have a permanent presence in the national curriculum, the truth of this interdependence can be realised. No longer should business involvement be artificially divorced from the classroom environment.
Much has been said about careers guidance. The setting up of the Careers & Enterprise Company is very welcome. The Leeds pilot has significantly improved business involvement in the enterprise network and enabled 3,500 young people to access new employer-led opportunities. We need an employment model which nurtures the career aspirations of our young people and we must shift our focus to schools. A careers guidance process which starts early and is tailored to individual needs creates a virtuous cycle of employability, rather than a reactive, costly cycle of long-term unemployment. A targeted investment in life employment and career readiness will create both a dynamic workforce over the coming decades and reduce the financial strains incumbent on long-term unemployment.
I want to introduce to your Lordships an initiative called ThinkForward, a partnership of Impetus-PEF and Tomorrow’s People, which has achieved great success: 85% of 14 to 16 year-olds have shown substantial improvements in their school attendance and behaviour; 60% of the school leavers achieved at least five GCSEs at grades A to C; and 96% of the 17 to 18 year-olds were in employment, education or training. If you remember the early figures quoted to you on NEET levels, you will see the difference this could make. Can the Minister give us the department’s view on the ThinkForward programme and any indication whether this could be offered to all young people, or at the very least those most excluded and vulnerable? Let us think about those in care who need this help, those in the criminal justice system and many others. It would be a good investment to enable them to achieve results and would negate the need for so many costly rectification programmes. It would enable young people to transition from school to work and be independent, aspirational and not dependent on welfare. I will leave it there on that for now.
I want to conclude by telling your Lordships about a young lady whom we helped. She was a bit of a handful. She got into so much trouble that she was not allowed to get on the bus to go through her high street to go to school, so her coach got on the bus with her at the beginning of the high street and got off at the end of it. The young lady went to college; the coach met her on the way back; and she never missed a day at college. And she got a job, which was great. When that coach was no longer able to support her, or it was deemed that she did not need the help, it was not too long before she came back to us and said, “I’m in big trouble”—the language was a bit more colourful than that, but the essence was that she was in big trouble. I was asked whether I could write a letter to the court to say that she really was a very good girl and that she should not go to Her Majesty’s pleasure. I said, “Well, I couldn’t possibly to do that, because if you’ve done something you’ve got to stand by it”. But I did write to the judge to say, “This young lady’s had humongous problems and when she’s had her personal coach with her she has proved what she can do. The minute the coach wasn’t there, obviously, things went wrong. Whilst I don’t condone for one minute what she’s done, when she’s got somebody with her, things are very different”. I would like to see every young person—I have said this before—with a personal coach, even if it is, to start with, for the most disadvantaged, to help them on their journey to prevent rather than cure.
I know that there is an elephant in the room—no disrespect to anybody here, I might say. Your Lordships will tell me, “It’ll cost a lot of money”. Well, it probably will, but it will not cost as much as if we do not do something. I know that social investors and big society capital are ready with finance to inject to pay for such coaches so that we can do something about this and prevent it. I know that the request to the Government for a local outcomes fund to pay only when a young person has reached a successful destiny in their journey is pure common sense and good for the public purse. So I say to the Minister that it is the curriculum; it is the coaches; and it is a financial model where the computer says yes. I beg to move.
Lord Blencathra (Con)
My Lords, I congratulate my noble friend on initiating this important debate. It is not the sexiest subject to debate, but it is vital for the continuing extraordinary success of our economy and equally important because good jobs and work are the surest means of lifting people out of poverty, however that may be defined.
So I want to begin by congratulating my right honourable friend the Chancellor on his extraordinary success over the past five years, which has been hard won. He inherited an economy with a record deficit and government spending was out of control. The deficit has now been halved to 5% of GDP and we are on track to be the fastest growing major advanced economy for the third year in a row.
Our economy is now 11.8% larger than at the 2010 election. Statistically, we were then about as bad as Greece, but whereas Greece decided to do nothing to grasp the nettle of government overspending, George Osborne decided that we had to take steps to balance the books as soon as possible. It was certainly optimistic to reduce the deficit as much as he hoped in the last Parliament, but if we did not send a signal that we were serious about austerity and living within our means, we would have had a run on the pound and interest rates out of control. Despite that really awful starting position left by Gordon Brown, we have got economic credibility because of the action taken by George Osborne.
Therefore, in looking at education and employment opportunities in the UK today, we can see a completely different scenario than if that disastrous, overspending programme of the last Labour Government had continued. Let us just look at employment and unemployment figures. The employment rate is at a new record high, 73.6%. The employment level is at a record high, 31.1 million—up by more than 2 million since 2010. Full-time employment made up 81% of the annual rise in employment, up 291,000 on the year. The female employment rate has maintained a record high of 68.8%. There is close to a record number of women in work, 14.55 million. The number of people working part time because they could not find a full-time job is down 85,000 on the year. The number of disabled people in work is up by 226,000 on the year. More than 3.2 million disabled people are now in employment. On average, 1,000 more people are in work each day since 2010. There are a million fewer people on the main out-of-work benefits since 2010. The claimant count rate is at its lowest level since 1975. Unemployment is down to 1.77 million, or 5.4%. The claimant count is down 796,000, down almost 160,000 on the year. Long-term unemployment has fallen to its lowest level since 2009: that is down 526,000, a fall of a quarter compared with this time last year. Finally, vacancies are at a near record level of 738,000. So we should recognise that the Government have been doing something right somewhere when we look at what else we should do in the future.
By any measure, that is an outstanding achievement which we now take for granted. It has been achieved because we have the strongest growing economy in Europe. As the EU falls further behind the rest of the world in competitiveness and its economy is in relative decline, the UK has been powering ahead. Some 2.3 million apprenticeships have been started. There are 760,000 more new businesses than five years ago. Corporation tax has been cut from 28% to 20% and will go down to 18% in the next few years.
We now need to concentrate on two areas. The first is getting more of those 1.7 million unemployed into those 738,000 vacancies, and second is making sure that work pays more than being on benefits. I support the work of the Department for Work and Pensions in trying to transform lives by supporting people to find and keep work. I do not know how many of those 1.7 million would be regarded as unemployable by employers. That is not a term I like, but it possibly describes the attitudes of some people rather than their abilities. Did some Opposition spokespeople say that my right honourable friend Iain Duncan Smith’s reforms would not work and we were doomed to an unmovable number of workless households and permanent long-term unemployment for many people? Those messages seem to be wrong. His welfare reform and work incentives have resulted in tens of thousands of people moving from benefits into work, so that the workless household rate is the lowest since records began and our long-term unemployment rate is less than half that of the EU.
For many years, Governments of all persuasions have said that work must pay more than being on benefits. Indeed, Tony Blair commissioned the excellent Frank Field MP to deliver such a scheme. Frank did so but it was kyboshed by the then Chancellor, Gordon Brown, who wanted everyone on his tax credit scheme. That is why universal credit is so important: it reduces poverty by making work pay. It provides a new, single system of means-tested support for working-age people and does away with half a dozen other benefits. I am led to believe that early results show that universal credit claimants do more to look for work, enter work quicker and earn more than jobseeker’s allowance claimants, and that is the way it should be.
I will say a few words about the minimum wage and the tax credits issue without straying too much into a debate we may be having next week. When Gordon Brown introduced tax credits, they cost £4 billion. This year they will cost £30 billion. Something has gone terribly wrong with his system so that, by 2010, nine out of 10 families with children were eligible. That is not what Gordon Brown initially intended. It was barking, and coalition Government changes brought the figure down to six out of 10 households. I understand that the changes, which are currently controversial, would bring it down to five out of 10 families. It is patently obvious what we should do to close the gap between pay and benefits, and it is not increase benefits.
It was inspired of the Chancellor to push up the minimum wage and aim for a living wage, but I urge him to go further and faster. We get the usual misguided whingeing from the CBI that it will reduce company profits and increase unemployment. Enhanced company profits earned on the back of poverty wages is not moral capitalism. As for unemployment, is it seriously being suggested that the major supermarkets, Amazon, Starbucks and Pret A Manger—every 10 yards on the pavement—are employing additional staff because they are cheap and that if they had to pay more they would lay staff off and drive for more efficiency? What nonsense: the big supermarkets and others are employing the barest number of staff they can get away with and paying them the lowest wages they can get away with. However, the Chancellor’s announcement of the national living wage in the summer Budget has changed the conversation about low pay and we have seen pay increases announced to meet it early, before the increase to £7.20 comes into effect in April.
This dynamic effect on wages has not been taken into account in any analysis of the Government’s changes to date. Nearly 200 firms have agreed to pay the national living wage in recent months. Morrisons has pledged to increase hourly pay to £8.20 from March; Costa Coffee is increasing it; Sainsbury’s has put up pay to £7.36; Lidl is now paying £8.20 an hour; British Gas is now paying the living wage and IKEA has said it will put pay up. This has to be the way to go. If those companies can do it then so can every other business. I said this in the Budget debate and I make no apology for saying it again: it is morally indefensible for companies to pay poverty wages, the taxpayer then having to pay up so that a family can live.
The salaries of chief executive officers and executives of the FTSE 100 rose by 15% in 2014 and the gap between the highest paid executives and their lowest paid employees has never been wider. In 1998 chief executive officers’ salaries were 57 times larger than the average worker’s. Now they are 178 times larger, and there is no correlation between huge salary increases for executives and company worth, growth or profits. The Chancellor’s increase in the minimum wage is 6% per annum. Since many companies seem to have had no difficulty paying their directors 15%, I want to see the minimum wage pushed up to that level as soon as possible. Everyone should share in a company’s success. Being in work, with proper pay, is the route out of poverty for all and it will make Britain the most successful entrepreneurial country in the world.
There have been some excellent changes to vocational training but my instinct is that it is still regarded as inferior to a university degree. That is so wrong: just look at those brilliant A-level students who turned down a place at Oxbridge so that they could become apprentices at Rolls-Royce. These people should, as in Germany, be entitled to be called Herr Doktor, or at least the English version. Germany regards their engineering skills as being like a doctorate, but we see them just as car mechanics or grease monkeys. My noble friend Lord Baker has done a marvellous job enhancing the reputation of vocational training and building city technology colleges, but we need to do more to encourage young people to go down these routes, rather than doing some worthless degree.
When the battery in my laptop died recently, I could not easily replace it. Being a MacBook Pro, it had to be dismantled, have half the guts removed and a new battery ordered—one of about 30 possible alternatives—and be repaired by an expert. For anyone with a broken Mac or iPhone, I recommend Honeylight Computers in Pimlico, which is an Apple repair agent. I am not on any commission. I do not know whether the guy who fixed my computer had a degree or a technical qualification, but without him I would have had to buy a new one at £2,000 instead of paying the £150 it cost. His contribution to our, and my personal, economy was worth £1,850 for that one little job and I could not have done it without him. I contrast that with the contribution of those graduate social workers who destroyed families in the Orkney Islands because they thought they were performing naked, outdoor witch dancing in February. Your Lordships may remember the case in 1991: it was dismissed immediately by the judge as utterly incompetent. These two radically different examples are simply two of millions showing that a degree is no guarantee of competence, common sense or worth, and the ability to fix things and make things which make our everyday lives infinitely better is no guarantee of good pay or status.
In conclusion, I congratulate my noble friend again on securing this debate. There is, of course, always more to be done. We need to make all schools free schools; we need even more apprenticeships; we need far better career guidance in schools; we need to ensure that no one teaches a subject at secondary level unless they have a degree in it. I was appalled when I came to England and found teachers with only some teacher training certificate who were not qualified in their subject. We need to get into teaching, at all levels, people who have retired early and are experts—and, more importantly enthusiasts—in their subject and who can enthuse young people. We need to let our best universities grow and expand to rival the Ivy League in the USA. We have some absolutely rubbish universities and we should let them die, as students voluntarily switch to better ones.
Above all, we need Britain to get back its freedom to be a world trading nation again, taking control of its own destiny and economy and not shackled to a dying and declining European political union. However, that may be a debate for another day.
Lord Young of Norwood Green (Lab)
My Lords, I too congratulate the noble Baroness, Lady Stedman-Scott, on introducing this debate. She gave a very interesting and practical analysis, on which I agree with many areas. I wish I could say the same about the following contribution. I will resist responding to a number of provocative statements but it was a bit of a Panglossian analysis of this Government’s record and perhaps the reverse as regards the track record of the previous Government.
The subject of this debate is of supreme importance. I was not necessarily planning to start with these comments but, on looking at today’s papers, I saw a large headline in the Times stating, “Apprenticeships are ‘a waste of money’”. In the past, I have declared an interest in that subject and I found it somewhat painful to look at that headline. When I found that no less than Sir Michael Wilshaw, the head of Ofsted, said that, it cannot just be dismissed. I notice the article went on to say that:
“Kirstie Donnelly, managing director of City & Guilds, which gives vocational training, accused Sir Michael of seeking to undermine apprenticeships”.
That is probably an unwise statement to make. It would be far better to look at why Ofsted has come to that conclusion.
I am one of the people who applauds this Government for their focus on apprenticeships. On many occasions, I have said I wish that they would get away from announcing large figures, such as 2 million or 3 million, without disaggregating them. I do not think that that helps the situation. I am not against a target as such but, if we are talking about apprenticeships, we should be focusing on 16 to 19 year-olds. The noble Baroness reminded us of the number of NEETs. The economy may be flourishing in all sorts of ways but we still have far too many NEETs and significant areas of youth unemployment in parts of the country. That is not to discount the progress made.
The article states:
“Sir Michael Wilshaw will accuse some employers today of wasting public funds on low-quality schemes that undermine the value of apprenticeships”.
We should be worried and concerned about that. I agree with a few of the points made by the noble Lord, Lord Blencathra, including the need to enhance the view of apprenticeships so that they are on a par and so that there is not a distinction between a vocational route or an academic route. As I have said on many occasions, young people should not be told that it is an either/or option. A vocational route can often lead to an academic route. It really is worrying when one sees a report like this on poor-quality apprenticeships.
The Government were aware of the problem that some apprenticeships were as short as six months. We knew that they were not really apprenticeships. The Government responded by making the minimum period one year. I am not sure whether that is sufficient. The way we monitor apprenticeships and check what employers are providing is not sufficient. What are training providers doing? If we do not have a kitemark or a badge of quality, we are going to undermine people’s views of apprenticeships. Worse still, we will not get value for public money. We should be worried on both those counts.
Referring to an Ofsted report, the article states:
“Poor-quality apprenticeships were particularly prevalent in retail, healthcare, customer service and administration”,
which account for a very large number of apprenticeships. We should be worried about that and I would be very interested to hear the response of the Minister. It continues:
“About 140,000 people started apprenticeships in business administration last year and 130,000 began healthcare apprenticeships. Standards were much higher in the motor vehicle, construction and engineering industries, where numbers were much smaller”.
Therefore it can be done but, unfortunately, it is not being done in too many cases.
The article states:
“Today’s report attacks many employers for failing to invest in and supervise apprenticeships”—
and, even more worrying—
“as well as some of the colleges and training companies that provide them and schools for failing to give informed and impartial advice to young people who can benefit”.
I want to spend a little time on that issue as well. As I have said, I will welcome the Minister’s response.
By law, schools are supposed to provide young people with career advice, which should not just consist of saying to students, “All of you should go on to A-levels and to university”. But far too many secondary schools still do that and do not have proper links with the business community. Legally, they are supposed to do that, so why are the Government not enforcing it? I think that it has already been mentioned in this debate that there are young people going to university when it is not the right route for them at that age. They drop out and would have been far better off going on the vocational route.
I am part of the Lords outreach programme and still find that when I go to secondary schools and ask 15 and 16 year-olds where they are going and what their intentions are, the vast majority say that they are going to university. I do not deplore that but when I ask whether they know of any alternatives, I am lucky if one hand goes up and they mention apprenticeships. Because I cannot stand it any longer, I am complaining to the teachers. I say, “Why are you not giving the full range of advice? You are disadvantaging young people”. We need to do a lot more on that.
I make no apologies for again referring to the article, which states:
“It will make sobering reading for ministers, who have pledged to create three million new apprenticeships … Ofsted describes this as a commendable aim”.
I agree that it is a commendable aim. It continues, stating that,
“so far, apprenticeships have not trained enough people for sectors with skills shortages”—
we have talked about that before as regards the desperate need in engineering and construction—and,
“that smaller businesses are not being involved”.
Again, we know that and we are still stuck at the figure of about one in five businesses. It is as though one is driving a car and cannot get the speedometer to go above 20 or 30 miles an hour. We need to do a lot more. The article also states that,
“not enough advanced schemes leading to higher skills and wages are being created”.
We have a strange situation where there is a demand for apprenticeships. I make no apologies for again citing British Telecom because it is a good example. It gets about 25,000 applications for 400 to 500 apprenticeships. There is huge demand.
There is an issue as regards getting young people ready for apprenticeships. We know that there is work to do on the educational side. I will not spend too much time on that issue because it was covered by the noble Baroness, Lady Stedman-Scott. She said that the journey starts at school, but as a primary school governor I say that it starts before school, which is why Sure Start and things like that were and still are important programmes. One can see a variety of achievement of children starting nursery school. Some are not even potty-trained and others do not know how to socialise at all. A big demand is made on primary schools these days.
The article states that the Ofsted report’s,
“conclusions were based on … 22 apprenticeship providers, discussions with 188 apprentices, a survey of 709 apprentices”.
Whether you think that this survey is good enough, there is enough in it to give us real cause for concern. It continues:
“Some apprentices were not aware that they were classed as such, while others did not receive broader training or support to improve their English and maths. In the retail, catering and care industries, inspectors found apprentices cleaning floors, making coffee or serving sandwiches”.
I am not sure that I necessarily disagree that they should have to do that. Doing a job involves a wide range of applications. The problem comes when they are doing it to the exclusion of being taught a wider curriculum—when there is no proper learning programme. We must remember that with apprenticeships we are trying to equip young people for a career, with skills that we hope will be transferable and enable them to progress in later life. I have been working my way through the Library Note on this debate, which is extensive and makes fascinating reading, especially when it looks at the changing nature of the world of work.
I ask the Minister whether we have the balance right between funding levels for vocational training, further education and higher education. I ask that because we have had another report from Professor Wolf—the noble Baroness, Lady Wolf—expressing concern about the level of funding in further education. If we wish to drive up the number of apprentices in the way that the Government suggest, it is worrying to hear alarm bells ringing in relation to funding. I am not here to proselytise on either one or the other. However, where I agree with the noble Lord, Lord Blencathra—although I am not sure that I agree with his analogy about the laptop repairer and the social worker—is on his point that it is just as important for us to get funding right in further education as it is in higher education. We should not see them as completely separate silos.
Another point in the government document interested me. It says:
“The government wants strong local areas and employers to take a leading role in establishing a post-16 skills system that is responsive to local economic priorities. The government will make an offer to local areas … First, the government will invite local areas to participate in the reshaping and re-commissioning of local provision to set it on an efficient and financially resilient footing. A differentiated approach to local involvement will be adopted which will enable areas with the strongest governance and levers to shape provision, building on the skills flexibilities agreed with Greater Manchester, London and Sheffield”.
I do not know why it is only the strongest areas—surely it should be every area. I have asked this in previous employment debates: why we are not looking at the areas covered by the local enterprise partnerships and the best practice in those areas? Why are we not looking at the areas where they have driven up the numbers of apprentices and where they have the best possible links between business and education, and seeing those as the role models and examples of best practice? I look forward to the Minister’s response.
Baroness Fookes (Con)
My Lords, I am delighted that my noble friend Lady Stedman-Scott has given us this opportunity to discuss some very important issues. I would like first of all to expand a little on the Think Forward scheme, which the noble Baroness mentioned in her opening remarks. I was fortunate enough to visit a school in London—I shall name no names—where the scheme was being carried out. As the noble Baroness explained, it involves a coach or mentor staying with a particular pupil over a period of years and giving them real support, very often in difficult circumstances. I met about half a dozen young people in receipt of this help. The difficulties that they had to face were an eye-opener to me: chaotic home conditions; fellow pupils who thought them stupid for trying to better themselves academically; the general world outside school, where there was precious little hope; and a kind of resistance to doing better for oneself. All manner of obstacles are put in the way of anybody even trying to make the most of their school education. Think Forward is a most valuable system, which—echoing my noble friend’s words—I certainly hope the Minister will take on board, to see if it can be rolled out on a much wider basis.
I like to think of the mentor or coach as the nearest equivalent any of these young people will get to a well-educated and supportive parent. We all know the value of a supportive family when it comes to achievements at school and thereafter. All the other schemes that we have tried certainly have their value, but I think this one-to-one scheme is the most valuable of all, and I certainly hope that it will receive a warm appreciation from the Minister and a commitment to try to extend it nationwide.
I now turn to the wider scene, which other Peers have already touched upon: the issue of further education. I sometimes feel that there is a distinct snobbery in this country about education, a very firm division where universities are seen as good and further education as the poor relation. I deplore that, because they should be working in collaboration and partnership; one should not be seen as better than the other. In the attempt to get more young people to go to university, successive Governments have gone rather overboard and, in doing so, have deprived people of very good chances of finding fulfilment and qualifications in another way. I hope that the Minister will take that on board in her reply.
It is extraordinary that spending is ring-fenced for education on the whole, but not for further education. Is that not an indictment of the way we organise things? We know that further education colleges have considerable financial worries, yet they can be responsible for so many people finding fulfilling and rewarding careers. I hope very much that this will be looked at.
Mention has also been made of careers education. Again, there are some very sharp failings in this area. As somebody has already pointed out—perhaps it was the noble Lord, Lord Young—teachers and career advisers barely mention any alternative to going to university. That is absolutely deplorable. There are many ways of setting about these things, and pursuing one option does not preclude another later on, if people suddenly turn out to have a particular academic bent. We have long passed the days when it was either brawn or brain. The brawn bits are now undertaken by machines. What we need is a whole range of people who have manual skills allied with intelligence and are able to put them to good use. I feel very strongly about this.
What is more, we have a number of skills shortages. Here we are, worrying about the ability of young people to get jobs and keep them, and yet we have these skills shortages. This is particularly true in the world of horticulture. Perhaps I had better declare my non-financial interest here as chairman of the All-Party Parliamentary Gardening and Horticulture Group. We are constantly hearing about worries over lack of skills. Ask any schoolteacher or careers adviser whether they have recommended the world of horticulture as a possible career, and you can almost bet that they will not have done. Both the National Trust and the Royal Horticultural Society have very serious concerns. Even last week, in the latest edition of Horticulture Week, the industry’s newspaper, there was a headline that says: “Arboriculture sector faces key skills shortage”.
This is in the world of arboriculture: the planting, care and surgery of trees. One of the experts in the field, who recruits, says that his company is having real worries about fulfilling key skills, to the point where it is hardly able to fulfil contracts. He says that colleges offer qualifications up to level 3, but his company needs people with level 6 qualifications and they are not finding them in sufficient quantities. That is just one small example of our shortage difficulties.
I now turn to apprenticeships, already touched upon by several others today. I, too, am less concerned about actual numbers than about the skills of apprentices. Let us remember that in centuries past, many apprentices would work for seven years, under a very skilled craftsman or workman, before they were allowed to call themselves fully engaged workmen or craftsmen. I am not suggesting that we now need seven years to do all this, but the ideas of “quality” and “apprenticeships” should be one and the same. Anything that means that an apprenticeship is watered down and not really worth it is not an apprenticeship. That is just a half-baked course, leading to half-baked qualifications. I want none of it. Apprenticeships should be restricted to where there are real, quality skills. Again, it is something about which I feel very strongly.
Many years ago—literally in another century—I was a schoolteacher. It was always my wish that the pupils under my care would do the very best that they could, but it was not always going to be in the direction of university. We really should be much keener on providing a whole series of alternative vocational arrangements. The various types of further education colleges can offer that. I believe that half the apprenticeships come from colleges as it is. There are also all these other skills that they can offer, but will they be able to offer them if they are worried stiff about their financial resources? Again, I leave that point for my noble friend the Minister to answer. Meanwhile, I again thank my noble friend for the excellent opportunity that she has afforded us.
Baroness Sharp of Guildford (LD)
My Lords, I have particular cause to thank the noble Baroness, Lady Stedman-Scott, for organising this debate. I had hoped to speak in the apprenticeship debate last week, but I had prior commitments that meant I could not. I am therefore very pleased indeed that this debate, which to some extent picks up some of the same issues, is taking place. I need to declare several interests. I am a patron of the 157 Group of large FE colleges. I am an honorary fellow of the City & Guilds of London Institute and of Birkbeck College.
I began my career back in the 1960s when I was a young assistant lecturer at the London School of Economics. At the time there was a technique known as growth accounting, which looked at where economic growth comes from, given the three factors of production that economists identified: land, labour and capital. With land not being regarded as an expandable resource, on the whole growth was accounted for by the increase in the population—of labour supply—and the increase in capital supplies in terms of investment. When they looked at the growth figures, they came up with what they called the “unexplained increment” in economic growth. This was put down on the one hand to technical progress and on the other to education—improvements in the capabilities of the labour force.
Those two elements have to some extent dominated my interests since then. I went on from the London School of Economics to play a part during the late 1970s in Neddy—the National Economic Development Office. Subsequently, I went to the Science Policy Research Unit in the University of Sussex, where I did a lot of work on research and development, and the role of research and development in promoting growth. I came to this House in 1998. Since then, education has dominated my interests, particularly further and higher education.
Going back to those days in Neddy, though, my job in the early 1980s was a very interesting one—a project looking at where Britain would be going in the 1990s. We called it the 1990s project. At the time, we identified an important trend. We had begun to see the disappearance of manufacturing industry in Britain. The textile, shoe and television industries were disappearing to what were then called the newly industrialising countries, such as South Korea and Taiwan.
What became increasingly apparent in our work—this picks up a phrase used by the noble Baroness, Lady Fookes—was the fact that Britain had to live by brain rather than brawn and that it would be very necessary to expand education generally. In those days only about 12% of the age cohort went to university. On the one hand it was about expanding higher education—one saw through the 1980s, particularly at the end of the 1980s, under the noble Lord, Lord Baker, when he was Secretary of State for Education, this very rapid expansion of the higher education sector—but we also recognised that skills were vital. We began a series of surveys of skills. I remember an OECD study that identified that Britain had an unduly high proportion of those with no skills and low skills. In particular, we lacked the intermediate skills—the HNDs and HNCs, the technician-level skills—that we needed.
Roll forward to the present day and we still have very considerable skills shortages. The total number employed in the UK is 31 million. As the noble Lord, Lord Blencathra, said, that is the highest number of people employed in this country ever. Of those, 23 million are in full-time employment and 8 million in part-time employment. Some 26 million are employed by other people and 5 million are self-employed. Self-employment and part-time employment have increased over the last two decades, even though, as the noble Lord, Lord Blencathra, suggested, it has decreased slightly in the last few years.
This is very interesting in itself: the shape of the labour market has become increasingly what some people call the “hourglass economy”. The top of the hourglass reflects the fast growth of high-skill, high-pay professional and managerial occupations, particularly those where skills are combined with technical and engineering capabilities. The bottom of the hourglass also reflects fast-growing areas of employment, but ones which are generally the low-skill, low-pay service sectors associated with personal care—children and older people, healthcare and healthy living—and the hospitality industry: restaurants, fast food, hotels and tourism.
The big change has been the drastic reduction in middle-range, blue collar management and clerical occupations. While these changes have in part been driven by technology, they also reflect globalisation and the push for more flexible labour markets. In turn, flexible labour markets have led to an increase in subcontracting in both public and private sectors, more self-employment and the rise of the zero-hours culture. Skills shortages mean that the expansion of the high-pay, high-skill sector has been accompanied by relatively higher pay, while the low-skill, low-pay sectors, although expanding in numbers, have seen little or no increase in their relative pay.
The general advice now given to young people is, not surprisingly, to aim for the high-skill high-pay occupations at the top end of the hourglass. This gold route—five GCSEs at grades A to C, A-levels and on to university—is now followed by almost 50% of the cohort of school leavers. But what of the other slightly more than 50%? Much noise is made about apprenticeships, but in fact only 6% of those school leavers go into apprenticeships. Some of the rest go straight into jobs with A-levels or their equivalent vocational qualification of BTEC, while others pursue jobs with lower-level GCSEs and vocational options.
Training on the job is the main source of training for these young people. Since 2011 the majority of apprenticeships have gone to those already employed. Most are not, as the public image of apprenticeships suggests, in sectors such as construction and engineering. As the noble Lord, Lord Young, said, the majority have actually been in sectors such as care, hospitality and business administration—those low-pay, low-skill jobs in the lower half of the hourglass. And most of these have been one-year apprenticeships, leading to a level 2 qualification—equivalent to GCSE with five A to C grades. Government pressure means that employers are shifting to providing longer apprenticeships of two or three years leading to a level 3 qualification—equivalent to an A-level—but this has yet to take effect.
The big skills shortages are at the technician level—the HND level—and we are not meeting them. The UK therefore ends up with a large number of young people going into the low-skill, low-pay sectors, receiving little by way of further training and with very little opportunity to develop a career pathway and upgrade their skills. It is hardly surprising that of every four people who were in low-paid jobs 10 years ago, three are still in low-paid jobs today.
The other side of the coin is that the UK, in comparison with our competitors, is well supplied with graduates—but we continue to suffer chronic shortages of those with intermediate and technician-level skills. The CBI recently reported that nearly 60% of employers—not just horticulturists and the arborealists—are worried that their operations will suffer because they cannot recruit people with the technical skills required.
Over the next 10 years, some 12 million of the UK’s 31 million workforce are due to retire, while the number of those emerging from the education system—approximately 600,000 a year—will total only 7 million. Many of those due to retire may stay in work longer, but this only serves to emphasise how important it is that there should be a route by which those already in work can upgrade their skills or retrain, in order to meet the country’s skills needs. Otherwise the trend, which is already apparent in UK industry, of filling those crucial vacancies with skilled workers trained overseas will become the norm. Meanwhile, many of those leaving school with relatively low skills will be locked into the low-skill, low-pay sector.
The scandal is that, just when we need to provide progression routes for upgrading skills, it is becoming more and more apparent that the Government are closing down those opportunities. The only game in town is apprenticeships. Outside apprenticeships, the adult skills budget has already been cut by 11% since 2013 and is scheduled for a further cut of 24% over the next two years. The traditional pathway for individuals wishing to retrain and acquire higher level skills—HNDs, HNCs and foundation degrees taken part-time at a further education college—has all but collapsed, while fees have trebled. Although loans are available, the terms are much less favourable than for degree-level students—and many mature students, already encumbered with mortgages or high rents, balk at the increased indebtedness. So if you cannot persuade an employer to fund you through a higher-level apprenticeship, there is very little you can do.
Alison Wolf—the noble Baroness, Lady Wolf, as she now is—in her latest publication, Heading for the Precipice: Can Further and Higher Education Policies be Sustained?, concludes that the result of current policies—I must confess that these are coalition policies as well as the policies of the current Government—is that:
“In post-19 education, we are producing vanishingly small numbers of higher technician level qualifications, while massively increasing the output of generalist bachelors degrees and low-level vocational qualifications”.
This as an immensely short-sighted policy and I hope that the Government will do something about it.
Baroness Newlove (Con)
My Lords, I too congratulate my noble friend Lady Stedman-Scott on bringing this debate to the House. I had some reservations as to how I could support my colleague on the subject of education and employment opportunities in the United Kingdom—so I shall speak wearing several hats today, and I hope that my words will have a place in this debate.
There are many things I could say about the value of work. Much has been written by greater minds than mine about its importance to individuals, to communities and to the economy. But for me personally, it was Barack Obama who summarised what it meant when he said,
“The best way not to feel hopeless is to get up and do something. Don’t wait for good things to happen to you. If you go out and make some good things happen, you will fill the world with hope, you will fill yourself with hope”.
Following the murder of my late husband Garry Newlove in 2007, and the ordeal of watching my three young daughters appear as witnesses at a trial, I felt angry, frustrated and traumatised. But I had to think about my three daughters and their future. I had to think of a way of providing for them financially and in terms of health, but I was also determined that they would grow up, as Garry would have wanted them to, as healthy, happy young women whose lives would not be entirely defined by their loss of their father on that night. So I took hold of my anger, frustration and outrage and put it to work.
In October 2010 I was proud and honoured to become the government champion for safer communities, and more so in December 2012, when I became the Victims’ Commissioner for England and Wales. Although I would not go so far as to say that work saved my life, I know that Mr Obama was right when he said that the best way not to feel hopeless is to get up and do something. That is the rule I live by, and the rule that I have instilled in my three daughters.
Employment needs to be accessible to everyone, and we should develop policies to bring this about. Everyone should have the ability to reach their potential and to find work that is meaningful, secure and satisfying. Some people may need help to achieve this. In his recent conference speech, the Secretary of State for Justice spoke about the importance of work for prisoners. I agree with this. It is not good for prisoners to sit idly in their cells. Learning the skills and discipline of working life is important, because, we hope, it will help them go out and live a law-abiding life.
However, what is harder to accept is that victims of crime do not seem to be given the same help and support. Once the offender has been sentenced, victims of crime often feel left with nowhere to go and very lonely lives, which they have to pull themselves up from.
Believe you me, the impact of a crime can last for many years; indeed, it never leaves you for the rest of your life. We are all different, and crime affects us all in different ways. It can impact on a young person’s ability to attend school. It can affect their concentration or ability to retain information. More than anything, it crushes their self-confidence and destroys their belief that they are capable of doing or achieving anything. I am standing here because I have seen my three young daughters struggle to retain the very abilities they were brought up with—their self-confidence and their belief in life gone. Lack of access to appropriate psychological support meant that my daughters never felt part of society—yet society had let them down.
My eldest daughter had been an A* student. She had a place at university, but felt unable to carry through her academic achievements and do what she had walked into that university with her father to do. Her confidence had been destroyed. My youngest daughter really struggled, at 12, to get up to go to school, and was living in a bubble, thinking that no one ever really cared about her, or could understand her mood swings. My middle daughter’s GCSEs had gone for ever: she could not get over what had happened to her—because nobody sat and spoke to her to ask how she felt, or about the trauma she was going through. More importantly, they were all grieving for their father at that early age.
What saddens me is that I meet many victims of crime throughout the country, all saying the same thing. We are all too familiar with the numbers of children who have suffered lengthy and systematic abuse. We are more aware than ever of how domestic abuse physically and mentally destroys the victim, and we know about the lasting damage that it causes children who witness such acts.
More recently, we have learned about the horror of those forced into years of sexual and physical slavery after being trafficked into this country. Many of these people will need a wide range of psychological and practical help. Without it, they are unlikely to recover sufficiently to take up and enjoy the benefits of regular employment or education. It is therefore essential that all departments work together to provide whatever a victim needs to help them recover. In some cases, victims of domestic abuse and sexual abuse will have turned to drink and drugs. Many victims can find themselves without a stable place to live, and many will not have acquired or retained the skills that enable them to compete in the job market. When the Government develop their many training, apprenticeship and employment schemes, they need to consider that these opportunities can be accessed by some victims of crime only if they have first received help in other areas of their life.
At the risk of saying the obvious, most people can hold down a job only if they have somewhere safe to live, are free from debilitating addictions and have a healthy body and mind. So I encourage the Government to ensure that their plans for promoting employment consider how their programmes can be accessed by all potential applicants. This means thinking not just about what employment plans should be produced by the Department for Work and Pensions, but about how the Home Office, health, education and justice departments can come together to ensure that barriers to education and employment are reduced or removed. Of course, that will not be easy. Bringing agencies together to make education or employment a realistic prospect for those who have been damaged and traumatised will be hard work, but the best preparation for good work tomorrow is to do good work today.
I stand here wearing many hats, but I speak as somebody who has lost a husband and who is now the only supporting parent of three beautiful young women. When victims are handed reports by the criminal justice system saying that offenders are now getting education programmes and employment and skills programmes because they were damaged in their early lives, please think about—the time has come for the Government to think about—what it really feels like for victims whose lives have been damaged and traumatised not by their own hand, but by somebody else. We need better support for victims and to give young people the education and employment support they need for a healthy future.
Lord Fink (Con)
My Lords, I, too, congratulate my noble friend Lady Stedman-Scott on securing this debate on a most important subject. Her knowledge and powerful advocacy of young people is well known and certainly appreciated by many in this House.
I also point to my entries in the Register of Interests, which include a range of non-financial interests in children’s charities. I wish to highlight my trusteeship of Ark, which is generally an educational charity which operates one of the largest chains of academies and free schools in the country. As well as being a trustee of Ark, I also have the privilege of being chair of the board of governors at Ark Burlington Danes Academy, a school in the White City area of London that I sponsored through Ark.
The debate so far has been wide-ranging and fascinating across the whole range of employment, apprenticeships, further education and, most movingly, from my good noble friend Lady Newlove on the subject of victims of crime, which is an area that I had not even contemplated for this debate. Because I have spent the majority of my time in and around schools, I want to focus my speech on primary and secondary education and on some of the achievements of Government in these areas, which have largely built on the remarkable academy initiative started by the noble Lord, Lord Adonis, and passionately supported, and then championed, by the then Education Secretary, Michael Gove and further by Nicky Morgan, the current Education Secretary, who between them have greatly expanded the academy programme and moved it through to free schools, which to most intents and purposes are very similar to academies.
I want to talk about the benefits to educational achievements that academies and free schools have created, particularly Ark, because I know a lot about it, and then explain some of the helpful ways in which the Government have expanded the programme and, indeed, most importantly, extended it to primary schools and beyond because, as several other speakers have said, the problems of the most needy need to be addressed very early.
Education was a transformational factor in my life, and as a former grammar school boy, I used to be a passionate believer in having more grammar schools as a major driver of social mobility, as it was for me and, indeed, many of the parliamentarians who sit in this House and another place. However, when I started looking at the data for the charities affecting the neediest, I realised that while grammar schools did help a large percentage of able students to achieve their full potential, indeed, incredible results, sadly, the attainment gap opens up in the early years for the most disadvantaged in our society. Most children in receipt of free school meals, which is one very important measure of poverty, would never make it into a selective school at the age of 11, as socio-economic factors and, in some cases, parental and family issues, will help determine the results of an 11-plus exam. Hence, despite having enormous respect for the achievements of all good and outstanding schools, including grammar schools as well as academies and all other schools, and particularly the staff who work in them, sadly, I cannot accept that grammar schools alone will achieve the social mobility needed to break the cycle of intergenerational poverty that affects many parts of our country.
I should explain that all of Ark’s schools are non-selective and almost all are in areas of major economic deprivation. The few that are not are in areas of very poor historical educational outcomes. Many, including my academy—Ark Burlington Danes—have high levels of free school meals and pupil premiums, some up to, and even beyond, 75%, which is over three times the national average. You have to be pretty poor to get free school meals.
Good academies with great teaching staff are achieving remarkable results for the most disadvantaged pupils. In fact, most Ark academies—we have several dozen now—are rated good or outstanding by Ofsted and achieve results well above the national average, despite poverty levels among their intake and prior attainment which would suggest that the students would achieve results markedly lower. I have to pay tribute to the executives at Ark, led by Lucy Heller, and the staff and senior leadership teams at our schools for these achievements and for their incredibly hard work. These schools are managing to get some of the poorest students into the best universities in the country, including Oxford and Cambridge. Many of the others go on to very useful jobs indeed, including some to apprenticeships, although I will leave that subject to others who know far more about it than me. But what is important to me is that whatever their pathway, the school helps them identify the right pathway, and the students have the confidence and resilience to shine at universities or places of work due to the extra work, initiatives and experiences that have been gained in school.
Ark uses a mixture of techniques to achieve this success and indeed is often rated the highest performing academy chain in the country. It starts with a real focus and incentive to get full attendance at school. When I first looked at secondary schools, I saw schools with attendance rates as low as 80% and, in some cases, the teacher attendance rates were nearly as low as the pupils’, which shows some of the intrinsic problems for both the schools and the problems for teachers teaching in a school with poor discipline, so we have rigorous attention to discipline and an extended school day because many children do not have facilities at home to do their homework, and we focus on depth before breadth.
The recruitment, training and promotion of many good young teachers who are generally fully qualified in their degree subject, including many Teach First teachers, combined with a very creative approach to the curriculum and innovation, including a programme called Mathematics Mastery that was modelled around the Singapore maths curriculum, which is a country that is rising up the league tables in mathematics, more or less mirroring Britain’s sad decline in maths, has helped to achieve our goals at primary level, where we are achieving levels of achievement for young children that are beyond any expectations.
As I said earlier, the main focus at Ark has always been depth before breadth. We want to ensure that literacy and numeracy are totally hardwired because, without this, it is difficult for students to benefit from the rest of the school curriculum or, indeed, get a job; if you are not numerate and literate other things really do not matter.
How are the Government helping? They are generally increasing the number of academies and free schools by changing the paradigm away from the original concept, under which too much was spent on each school’s capital cost because the sponsor was allowed its own choice of architect; many expensive architects were used. New schools were meant to cost £10 million to £15 million, but most of the data that I have seen suggest the average cost was in excess of £20 million. The programme has been made more sustainable by using refurbished schools and stopping the use of famous architects. Indeed, based on our data—the Minister will probably have more accurate data—the average cost today of a similar academy is less than £15 million. That is a cost reduction of about one-third per school, which clearly makes it more affordable to build more.
Another big improvement has been extending the programme to primary schools and encouraging its use all through schooling, from four to 18 years old, and beyond this, by trying to include nursery provision. When it first looked at academies, Ark was convinced, based on experiences in America, that for schools to be genuinely transformational they had to start younger. In many of the secondary schools it opened at that time, the first year or two were spent on remedial work, trying to offset levels of literacy and numeracy that were often two to four years behind expectations. This limited the teaching time available for GCSEs.
My school, Burlington Danes, eventually got permission to open a primary school last year. We started, in effect, in large porter cabins in an existing outbuilding. I went into that school last week. It has been operating for probably six weeks this year and already I saw a bunch of four and five year-olds who had started to make progress. I could see them beginning to learn how to read with the use of synthetic phonics and, using the maths curriculum, they were starting to be able to add up and understand numbers after just a few weeks. They also showed amazing discipline. They moved seamlessly from their desks to a bug board where they sat down for the lesson taking place. When they did not move quietly and efficiently the teacher asked them to do it again, and they did. I believe that sort of discipline, instilled early in a career, will hold them in good stead for the rest of their schooling—indeed for life.
I hope your Lordships believe that education should never be the subject of political infighting. I am privileged at Ark to work with the Labour Peer, the noble Baroness, Lady Morgan of Huyton, as well as the prominent Liberal Democrat supporter, Paul Marshall. Truthfully, we have seldom, if ever, had any disagreement on our goals and virtually none on the methods for achieving the best for each student, particularly the most disadvantaged, who we focus on.
I also want to do something that we perhaps do not do enough and pay real tribute to the teaching profession. I have direct experience with the teaching profession at Ark schools. As well as many curriculum differences, we have saddled them with expectations which are beyond anything that they or the Fischer Family Trust tables would have children achieving, when there is the intake we have. In many cases that has involved a lot of extra work for the teachers. Frankly, provided that we could convince them that what we were doing was in the best interests of their students, the teachers have never stinted in their efforts and their enthusiasm.
I hope I have given your Lordships’ House an insight into some of the factors that enable disadvantaged young people to have a better chance of success in a more competitive world.
Baroness Jenkin of Kennington (Con)
My Lords, I hope it is appropriate to pay tribute both to the noble Lord, Lord Fink, and to the noble Lord, Lord Harris, who spoke earlier this week on the Education and Adoption Bill, for their extraordinary leadership in setting up both the Ark chain and the Harris chain of academies. Their inspiring leadership is leading the way for educational achievement and changes in this country and we should be very grateful to them and the many others involved in this.
The case for creating the right education and employment is clear and I thank my noble friend Lady Stedman-Scott for providing us with the occasion to debate this topic. The opportunities and, indeed, the challenges so ably set out by my noble friend, vitally important as they are, must be for all the UK population. Opportunities in education and employment must be aimed not only at those who will be entering the workforce for the first time, but also at those who wish to stay in their jobs; to continue to progress fulfilling careers; or to join or rejoin the workforce in later life.
I would like to talk about the workforce of the “third age” because of a round-table discussion I recently attended, organised by the Centre for Social Justice and the Scottish Widows Centre for the Modern Family. I thank them for their advice in preparing for this debate. I learned a lot about the reality of older people in work—the drivers and barriers, the different roles in tackling old age and employment and how health plays a part—from eminent specialists such as Professor Sir Cary Cooper and Chloe Wright from Carers UK. I am glad to have the chance to raise and share, in this Chamber, a number of the important issues which were discussed at that meeting.
We know that we as a society are older than ever before. Thankfully, many of us will retain good health into our later years. The Government’s abolition of the default retirement age, so that workers can no longer be forced out, and the extension of flexible working rights, has seen more and more people working into what would have once been considered retirement years. More than a quarter of the national workforce, approximately 8 million people, are aged between 50 and 64. A further 1.1 million workers are aged 65 or over. Working later and longer is the new norm.
However, employment rates decline as people get older and these age groups remain less likely to be in work. The latest Labour Force Survey found that 67% of 50 to 64 year-olds are in employment, compared to 81% of 25 to 49 year-olds. Only around 10% of people aged over 65 are in work. One in four women and one in six men who reach the state pension age have not worked since 55.
The rapid demographic change being experienced by our ageing society means it is increasingly urgent to address premature exit from the labour market. Doing so would bring a significant boost to our economy. Recent estimates from the Department for Work and Pensions—which has been undertaking much welcome work on this topic—found that adding just one year to the average working life would increase gross domestic product by 1% every year. In 2014, this would have amounted to £17 billion.
It is not only on a national level but also within individual workforces that the benefits of retaining and supporting an experienced workforce can be measured. The hardware chain B&Q, for example, has been at the forefront of employing older people for more than 20 years. It has seen its staff turnover greatly reduced, as well as improved customer service from staff, who have lived in their own homes for many years and have personal experience in DIY.
I have spoken before in this Chamber about the importance of diverse workforces. Businesses which are able to harness and retain talent from all aspects of society are stronger performers and better attuned to their client and customer base. My comments on this issue have usually focused on the role of women in business, but the same evidence applies to older workers, and increasingly so, as the number of people in this age group continues to grow.
The stereotype of an older worker is too often deemed to be someone with outdated practices who is waiting for the opportunity to retire. However, a recent report from the Scottish Widows Centre for the Modern Family compiled the views of workers and business leaders, and happily revealed a far more appreciative view: 85% of employees, and a similar number of employers, welcome the skills and experience that older workers bring.
Given this context, it is clear that any discussion around increasing the number of people in appropriate and fulfilling work must include consideration of those who are approaching what would previously have been thought of as retirement age.
The challenge to extend working lives is threefold. First, there is the need to change perceptions of older people in the workforce, among both employees and employers—not, I think, an issue in this particular place of work. I welcome the fact that from April of this year older claimant champions have been introduced in each of the seven Jobcentre Plus groups. These specialists will work with work coaches and employer-facing staff to raise the profile of older workers, to highlight the benefits of employing older jobseekers and to share best practice. As the former business champion for older workers, my noble friend Lady Altmann did much to challenge outdated views of older people, to actively promote the business case and the benefits of employing older workers, and to engage both employers and employees on these issues. We must continue to build on her work.
Secondly, we must support businesses to provide the flexibility and support that older people may require to remain in the workforce. Older workers are more likely than young people to be affected by disability or caring pressures, out-of-date qualifications and skills, and discrimination—both intentional and unconscious —by employers. Nor should we assume that older workers will be able to, or wish to, remain in their current jobs. Scottish Widows research found that almost half the over-55s intending to stay in work are planning to shift to a part-time role; for example, to help family members with childcare support. Flexibility is a vital component in retaining this top talent, and we frequently see that those considered to be the best employers are thought of as such because they appreciate and adapt to the wider circumstances of their staff. The same report found that 50% of employees currently believe that their organisation is supportive of older workers, but only 18% believe that their employer would continue to support them if they expressed a desire to reduce their hours.
We should also consider that older workers will have physically demanding roles which may need to be adapted to allow them to remain in employment. The DWP has recently launched sector-specific toolkits to provide guidance for employers of older people. The experience and skills which develop over a long career do not need to be lost from a business, and mentoring roles can be a particularly important consideration; we know that many older workers thrive when they are able to help younger colleagues succeed.
Thirdly, there is a need to work with the older people themselves, to support them in gaining new employment opportunities and to help them access the retraining and education that they may require for the rapidly evolving employment market. Department for Work and Pensions research has found that unemployed people over 50 are more likely than others to remain unemployed for longer and are more likely to be economically inactive. The Government have made considerable efforts to directly address this point. A pilot project, launched in April this year, introduces targeted provision of work academies and work experience programmes for older people where age is a barrier to finding work. Separately, from May this year, the DWP has trialled an enhanced approach for career advice and reviews for older claimants, and has provided dedicated IT support to guide older people through modern job-search techniques.
I conclude with an acknowledgement that not all workers will wish to remain in their job. For some, working in later life will be a simple consequence of feeling as though they effectively cannot afford to retire. For women in particular, gaps in employment may mean a working life of low-paid and unfulfilling employment which does not provide transferrable skills. At present, two-thirds of working women over 50 are employed in just three sectors—education, health and retail—and the Scottish Widows research found that while more than a third of men want to continue working because they like their jobs, barely one in 10 women feels this way. For these people, the importance of part-time learning should not be underestimated. It can provide an opportunity to change their job but not give up work altogether.
As we in this House are only too well aware, older people play a vital role—one which will only increase—in both our national workforce and the businesses, large and small, which comprise it. With the continued focus of government, good business practice and a rebalancing of the way in which we think about older generations, I hope that this contribution may be better recognised. As a starting point, I encourage my noble friend on the Front Bench to ensure that the older generations are included in all conversations on this issue.
Lord Addington (LD)
My Lords, I thank the noble Baroness, Lady Stedman-Scott, for bringing this subject to our attention. It has been a very interesting debate, which has covered a plethora of activity. I agree with her wholeheartedly that early intervention pays. Every single person who has looked at getting the best out of a workforce knows that if you get in early and get your preparation right, you get a result.
The noble Baroness started off by looking at those people who have problems and for whom you need to intervene. She said that the journey starts with school. I would challenge her on that. I think the journey starts with your parents. The intervention starts the minute you have any organised education. Early intervention pays because that is when you can see where you should be intervening and giving that support. Clearly, all the social problems that we have talked about mean that that person is less likely to be employed; more likely to get caught up in anti-social activity and, indeed, the criminal justice system; and less likely to contribute to the well-being and happiness of the nation. That is accepted by everyone. The question is: how do we start to address this?
Having stated the obvious, I will go into what has been suggested. We are talking about our education system. One thing that was referred to again and again was the fact that we tend to pray to certain education gods. The A-levels and university path, the one I went down, gets quite a lot of prayer quite a lot of the time from most of us, because most of the people who make decisions went down it. As the noble Lord, Lord Fink, said, one of the most important observations is, “What I did is right”. We all know that. When our teachers go down this path, they say, “Pray at the same altar I did, because how could I have possibly made a mistake?”
My noble friend Lady Sharp, with her usual forensic analysis, said that we have always failed to address the areas where we have skills shortages. I have been hearing in this Chamber for well over 25 years that at HND, technician level we are underachieving in our skills base. There is no argument about that. It is a very old song. So how do we get to these groups which have been underperforming, traditionally, and get them into the right type of employment to guarantee them a valuable way forward? Unless we start to recognise that there is more than one way to skin this particular cat, we are going to get into real trouble. We need to intervene in the teaching process, because that is where the most intervention is required, and show that there are other ways of making a decent living and giving yourself some status.
We all know what teachers should be doing all the time, and the average teacher could spend several decades in training and not fulfil our requirements. How do we deal with this? There is a very good case for at least doubling the length of teacher training. I would like far more recognition to be given to special educational needs, and I will be bringing this issue to your Lordships’ attention in the future. If you do not know how to intervene and get your message across, you will always be at a huge disadvantage, no matter how willing and able you are. If you spend time on catch-up, the good will follow; those who follow the herd will follow, if you do it properly; the rest will slip away. A teacher should not have to be a saint; they should merely be competent at their job. The vast majority of us, when doing our jobs, are doing what is required of us. How do we educate teachers to take these options?
A less prayed-to idol, but one that is definitely improving its status, is apprenticeships. Everybody thinks apprenticeships are wonderful. I have spent a lot of time pointing out that they miss out on, for example, support for those with special educational needs. I raised a case involving dyslexia, and I faced huge resistance in trying to change the structure of this new shiny thing which was going to answer all the problems.
We still have not got it right. There is still not enough intervention to bring in the groups who are most likely to be linked and who are most likely to acquire those skills. So how do we bring them together? How do we have a coherent strategy of investing in further education to make sure we enhance our workforce? First, we need to make sure that those who are making the decisions have the skills to intervene and offer encouragement. If you intervene you may well, as the noble Baroness said, stop people thinking that activities such as gaining qualifications are “not for people like us”. Returning to my prayer theme, we pray to the value that “people like us do this; this is what we do”. Normal economic activity is not about passing exams and getting qualifications; it is not about even turning up to regular employment. We have to break into that idea, and we can only do it with a decent skills base in our educators, no matter which sector they come from. We must invest here.
The special educational needs group pulls all these factors together. Unless somebody tries to remove you from that group, your problems are going to be intensified considerably. We must always try to intervene. We were given a wonderful example of how the criminal justice system affects not only the criminals but the victims. That is something we often forget and I congratulate the noble Baroness for raising that issue. We have to start educating people to pick out the groups who find themselves gravitating towards this situation. Middle-class dyslexics, for instance, get support and help and often end up going to university. If you know how to identify the support which is out there and which we have provided over the years, you are fine. If you do not—I am talking about the social groups at the bottom—it all gets that little bit darker and difficult, and it looked pretty difficult in the first place. Breaking that expectation of failure is probably the most important bit. We are not going to achieve this unless we invest across the board in education. Further education provides a wonderful way in, because it does not have the “them and us” divide to anything like the extent of A-levels and university. It is just more accessible.
As many people have said, we should not be looking at this as an either/or situation. In a perfect world, these elements should come together. We are a long way from perfection, but let us aim for that anyway. Unless we get better education for teachers and lecturers in further education—which means continuing training after identifying the strategies to be put in place—we once again guarantee failure. The further education sector was fine for my own disability group, dyslexia, but now there are major structural problems because the group has not been identified.
So we have all identified a series of common goals. Unless we start to communicate more about what this pathway should be, we are always going to go back and forth, blaming one another for the last failure. To take my religious analogy slightly further, the idea that academies will solve everything is a fallacy. They will not because they are still schools, and they still have teachers who have to be trained. You may get an improvement and the shock of change, but ultimately they are still just schools, and once they get all the problems, they will have to deal with them. We are going to have to work with them. They will still have to make sure that they are achieving not prestigious outcomes for people, but putting them into further education to succeed.
Can we do this? Can we recognise that we should co-operate? We can. Oddly, we had a wonderful example from the Government of everybody at least acknowledging the idea of communality and that various factions should talk to each other. It is called sport. Read the sport consultation paper. It is wonderful. We get dozens of different departments all saying they have a part of the solution. I am not holding my breath to see if they actually do change their behaviour and co-operate. “Change the way we do things? No. We have said it is important. That is enough.” I have a nagging suspicion that is where we are, but we should at least start to think about co-operation in education and certainly within further education. How do we support one another? How do we have that coherent approach? It takes a lot of talking and a lot of communication to bring things together but unless we do, we will ultimately fail and we will go back to having little miracle solutions which will run into the ground and then get resurrected, with other miracle solutions working against them. We really should start to talk to each other more and stop shouting.
Lord McKenzie of Luton (Lab)
My Lords, like others, I thank the noble Baroness, Lady Stedman-Scott, for initiating and introducing this debate. She did so with commitment and passion. As we have discovered and as the noble Lord, Lord Addington, has just acknowledged, this has proved to be a multi-faceted topic and one which, in various ways, we have discussed elsewhere in recent days in our debates on apprenticeships, the Enterprise Bill and the Education and Adoption Bill.
When the noble Baroness, Lady Stedman-Scott, was introducing the Motion she said that what she was talking about was generally not technically sophisticated. I agree with that. She instanced the concept of personal coaches; I am sure they are challenging and rewarding jobs but not of themselves technically complex. She instanced the importance of transition from schools to work and the need to address this because of the poverty of hope, belief and aspiration. I found that I could not agree with much that the noble Lord, Lord Blencathra, said. I agree that work is a route out of poverty and that there is a need to encourage employers to pay people properly, but I remind him that the economy was actually growing when Gordon Brown left office and it was austerity which choked off that growth. On tax credits, I am sure we will have an interesting session on Monday.
My noble friend Lord Young of Norwood Green is a strong advocate of apprenticeships—he spoke about the need for proper monitoring if these are going to be effective—and the importance of Sure Start. The noble Baroness, Lady Fookes, gave us her own experience of the arrangements for mentoring and coaching and how important that could be, and touched on the need to raise the esteem for vocational education. I agree with that. The noble Baroness, Lady Sharp, took us down the path of her initiation into growth accounting. Despite all that and the march of technology and globalisation, we still have a skill shortage. The noble Baroness, Lady Newlove, spoke movingly about how trauma in her own life was the spur to action—she got up and did something—and the need to recognise that everyone should be able to reach their potential. The noble Lord, Lord Fink, spoke in an enlightened way about the contribution he had made and seen of education, praising the teaching profession. I very much support that. The noble Baroness, Lady Jenkin, spoke about the issue of older workers and the challenges that they face.
The Motion invites us to debate on,
“the case for creating the right education and employment opportunities in the United Kingdom”,
a case which can hardly be denied. It is implicit in the Motion, of course, that the opportunities at present are not as they should be and it begs the question of what constitutes the right opportunities. In a speech included in our pack, the Minister Nick Gibb mused about the purpose of education. His definition embraced being the “engine of our economy” and the “foundation of our culture”, educating “the next generation” and,
“instilling … a love of knowledge”.
It was also, he said, about,
“the practical business of ensuring that young people receive the preparation they need to secure a good job and a fulfilling career”.
I would not disagree with any of that. The speech might also have included that education can be the engine to drive greater equality and social mobility. The whole journey of a child through education needs investment to ensure that all young people have the opportunities they need and for our society and economy to thrive.
Sadly, we know that vocational education has been neglected, with spending plans for post-16 education threatening many colleges. We have heard that from several contributions today. That is showing: the CBI already says that one in three of its member firms is not confident that they will have all the skilled staff they need for the future.
If we are to create effective education opportunities, as my noble friend Lord Watson of Invergowrie spelled out in his excellent opening speech from these Benches on Second Reading of the Education and Adoption Bill, we need to address the fundamental problem of recruitment and retention of teachers. As he pointed out, nearly 50,000 teachers left the profession in the year to November 2014.
I think we all accept that what makes a difference in schools is much less to do with structures than with good leadership and good leadership teams. There is much else, but I recall attending a conference held by an international educational foundation which was unveiling its findings about the status of teachers in a variety of countries around the world. There had been a strong correlation between educational outcomes and the esteem with which teachers were held—an intriguing concept, I suggest.
We believe that more quality apprenticeships are essential to the prospects of young people and the future success of our economy. Although we welcome the Government’s expressed desire to create 3 million apprenticeships by 2020 and to protect the brand, the track record has not been inspiring. The focus should be on quality rather than quantity.
As my noble friend Lord Young said, just today we received the report of the Chief Inspector of Schools, with a damning indictment of the Government’s record on apprenticeships. As has been suspected for some time, despite the increase in the numbers, very few apprenticeships are delivering up-to-date skills in the sectors which most need them. One in three providers visited by Ofsted was failing to deliver high-quality training. Sir Michael Wilshaw has called it,
“little short of a disaster”,
that only 5% of young people took up apprenticeships at the age of 16—a real failure to prepare pupils for the world of work.
The Ofsted report identifies that too many low-skilled roles are being classed as apprenticeships and too few apprenticeships provide the advanced professional-level skills needed in sectors with shortages. Sir Michael is quoted as saying:
“We have won the argument over the value of apprenticeships. We have yet to make them a sought-after and valid alternative career choice for hundreds of thousands of young people”.
His call for urgent, joined-up action by schools, employees and FE and skills providers must be part of the creation of the “right” education and employment opportunities. Of course, that cannot happen without resource. The Government’s own adviser on skills has warned that there is simply no money with which to move from low to high quality.
We acknowledge and welcome the fact that unemployment has fallen year on year, although the number of people working fewer hours than they want to has increased by almost 1 million since 2008. The overall unemployment rate, at 5.4%, is below the OECD average but the youth unemployment rate, at 14.8%, is significantly above it. The previous coalition Government, by scrapping the educational maintenance allowance and trebling tuition fees, made it financially more difficult for those from low-income backgrounds to engage in further education. Disbanding the Connexions service and transferring responsibility for careers advice has led to a deterioration of careers guidance just when it was most needed.
We were expecting the Welfare Reform and Work Bill to include measures to provide Jobcentre Plus adviser support in schools across England to supplement careers advice and provide routes into work experience and apprenticeships. However, all that seems to have been announced is a small-scale pilot project in the Midlands. Does the original ambition still pertain?
Of course, we have the Earn or Learn task force—inaptly named, it is suggested, because why should those be alternatives?—which is supposed to oversee the end of long-term youth unemployment and decades of so-called welfare dependency. We shall see, but there is ministerial rhetoric about creating a “no excuses” culture, putting young people through their paces and references to boot camps. That kind of language blames young people who cannot find work for their own situation and assumes that they lack the necessary willpower.
We know that the Work and Pensions Select Committee has launched an inquiry into welfare-to-work provision to explore options for the future with a particular focus on promoting a broader range of specialist provision, including through innovative and community-level approaches. This is obviously to be welcomed. The DWP’s main contracts for welfare-to-work schemes— the Work Programme and Work Choice—are due to expire in 2017, and it is understood that a retendering process will begin in the new year. Most recent statistics show that of 1.76 million people referred to the Work Programme since 2011, about 27% have found sustained work. That is to say, more than 70% did not. The total price tag is £2.8 billion. Is that as good as we can do?
I think that there is general agreement that moves to greater devolution away from the centre and passing powers and responsibilities to local authorities—especially combined authorities—is a movement whose time has come. Local communities better understand their local economies and skills needs. It is a pity that this issue has got mired with the attempted imposition of elected mayors as part of the process. There is also concern that responsibility may pass without adequate resources.
The focus has been on the mainstream and at a macro level, but we should recognise that there is a multitude of circumstances across the country, where there is a range of organisations with low-key but vital projects helping to train and educate individuals, improving their chances of employment. I should like to introduce to the House just one, Noah Enterprise—that is, New Opportunities and Horizons—of which I have the privilege to be a trustee. It is a Luton-based charity working across Bedfordshire offering support and opportunity to people struggling against homelessness, addiction, exclusion and unemployment. It runs a welfare centre, and outreach programme and a furniture-based social enterprise that combine to provide a holistic approach to rehabilitation for those who are among the most vulnerable in our community. In helping people to recover their lives, they are encouraged to enrol in the academy, where they can engage in digital learning, learn English as a second language and be prepared for employment. That is combined with volunteering in the social enterprise, where they can learn skills, including furniture restoration, portable appliance testing, warehousing, white goods refurbishment, driver’s assistant duties, and others.
In those ventures, we look to generate income to contribute to supporting the running of the welfare services. They are, especially, a place where vulnerable people on the margins of society can find a rekindling of self-esteem, respect and confidence, a means whereby they can find a framework that helps them to live their lives constructively and with satisfaction—and, for the first time in many years, the prospect of a job. For them at this time, that is the right education and employment opportunity.
Baroness Evans of Bowes Park (Con)
My Lords, I would first like to congratulate my noble friend Lady Stedman-Scott on securing today’s debate and thank all noble Lords who have contributed. We have certainly had many impressive contributions today; I fear that mine might seem inadequate by comparison, but I will do my best.
We have covered a wide range of issues that are central to this Government’s ambition to extend opportunity and transform lives. Let me be clear: whoever you are, wherever you live, whatever your background, this Government’s aim is to help you to fulfil your potential in life. The core of our approach to improving life chances is to focus on tackling the root causes of poverty. A number of noble Lords referred to this today. Having a parent in work, and leaving school with good qualifications are the most important determinants of whether a young person will do well in life. Education and employment, the key drivers of opportunity, are captured in our new “life chances” measures set out in the Welfare Reform and Work Bill. It is through these measures that the Government will be held to account to ensure that we do improve the life chances of all children.
This Government want every family and individual in the country to benefit from the rewards of employment. Noble Lords have all talked about the importance of this. It is through work that parents provide security for their children and help them to get on in life. But the rewards go well beyond the financial; a steady job provides a sense of purpose and pride. Work is central to creating self-worth, self-confidence and self-belief. Conversely, worklessness—as we all know—is strongly related to poor mental and physical health, poor child outcomes and poor educational attainment. That is why this Government have set the ambition of securing full employment in this Parliament.
I know that a number of noble Lords do not like it, but, as my noble friend Lord Blencathra said, we are starting from a good economic position. The employment rate is at a record high and there are more people in work than ever before. There are 480,000 fewer children living in workless households than in 2010. The employment rate of young people who have left full-time education is continuing to rise. Since 2010, nearly two-thirds of the rise in employment has been in higher-skilled occupations, which generally command a higher wage. My noble friend Lady Jenkin will be pleased to know that there are more older people in employment than ever before. But we know that we have more to do, which is why we are committed to transforming our welfare system, improving our education system and growing our economy.
Central to our welfare reforms, as we have heard today, is universal credit, which radically simplifies our overly complex system: but it is much more than a technical exercise. Universal credit will make sure that work always pays. The structure supports parents to make joint decisions about how to balance work and raise their children, while, through the claimant commitment, every individual has a clear understanding of what is expected of them in finding work. As a result of universal credit, up to 300,000 more people are likely to be in work due to its more effective work incentives, increased simplicity and increased conditionality. As my noble friend Lord Blencathra said, early results show that it is working. Compared to JSA claimants, universal credit claimants do more to look for work, enter work more quickly and earn more money. I know that the noble Lord, Lord McKenzie of Luton, asked me about a specific DWP pilot project: I will have to write to him with details of that.
As a number of noble Lords said, we know that youth unemployment can have significant negative impacts on young people’s life chances, which is why we are committed to eradicating it. My noble friend Lady Stedman-Scott and the noble Lord, Lord Addington, laid out some of the issues that young people face. An important part of achieving this goal is our commitment to creating 3 million new apprenticeships in England in this Parliament.
Apprenticeships offer young people a route into the world of work, valuable experience and vital skills. The noble Lord, Lord Young of Norwood Green, said that we were not providing enough apprenticeships, but in fact, in 2013-14, 240,000 workplaces had apprentices. In 2015-16, we will be spending £1.5 billion in total. The noble Lord, Lord Young, and my noble friend Lady Fookes mentioned the recent Ofsted report. Of course we will be reflecting on the findings of that, but we are absolutely clear that we need good-quality apprenticeships. The Enterprise Bill, for instance, will be introducing a protection of the term “apprenticeship” to stop it being misused. We will certainly ensure that there is rigorous testing and grading at the end of apprenticeships. This is absolutely key: there is no point in young people taking apprenticeships that are not of sufficiently good quality, and the Government are committed to ensuring that they are. We also have in place degree apprenticeships in the nuclear industry, engineering, chartered surveying and the automotive industry, to name but a few. Other employers are exploring ways to develop their own apprenticeship programmes.
The noble Baroness, Lady Sharp of Guildford, the noble Lord, Lord McKenzie of Luton, and my noble friend Lady Fookes talked about the importance of further education and adult skills training. The Government take this very seriously. In relation to funding, we have the upcoming spending review, so I cannot say much more about that, but I reassure noble Lords that between August 2011 and February 2015, nearly 600,000 jobseekers started adult skills training.
Furthermore, key to tackling youth unemployment is early intervention to ensure that young people get the help they need before they leave school, so that they can make the transition between school and further learning or employment. That is why we are putting Jobcentre Plus advisers into schools around England. Working with 14 to 17 year-olds, these advisers will complement the work of careers advisers to ensure that young people get the advice they need on local training and employment opportunities.
The Government are also supporting young unemployed people through work experience and traineeship programmes so they can get that vital experience of the workplace to help them find sustained jobs. An evaluation in 2012 found that work experience participants were around 16% more likely to be off benefits than non-participants after 21 weeks. This is a similar success to the Future Jobs Fund but at 1/20th of the cost.
As a number of contributors to the debate today said, we know that attainment at school is the biggest determinant of our young people making a successful transition to adult life and future success in the labour market. As my noble friend Lord Fink so eloquently highlighted, a good education unlocks potential and lays the foundations for future success and employment prospects. Those who have benefited from a good education are more productive, healthier and happier citizens who contribute greatly to the communities in which they live. That is why we want schools not just to provide a high-quality education but to help their students develop qualities such as confidence, resilience and motivation. These character traits not only support academic attainment but are highly valued by employers.
The best schools—such as those of Ark, which my noble friend Lord Fink is involved in, and those of my noble friend Lord Harris, who we heard from earlier this week—do this through daily interaction with teachers and staff, through the curriculum, and through encouraging activities such as playing team sports, volunteering, learning an instrument or debating. But in order to encourage this further we are investing £5 million in character education and have already awarded grants to support 14 projects for schools, particularly those in the most deprived areas.
We are also ensuring that schools have the resources they need to close the attainment gap between the poorest students and their peers through the pupil premium. During the last Parliament we invested £6 billion of additional funding in schools in England through the premium and are providing an additional £2.5 billion this year. Schools such as Charter Academy in Portsmouth demonstrate the impact that can be achieved. In 2014, 82% of disadvantaged pupils achieved five or more good GCSEs including English and maths—double the national average for pupil premium pupils and 18 percentage points higher than the national average for non-disadvantaged pupils.
Our reforms also include a rigorous new curriculum, world-class exams and a new schools accountability system which rewards schools that push children to achieve their best. Now 82% of all schools in England are good or outstanding—the highest proportion since Ofsted began inspecting schools—and there are over 1 million more pupils in England in good or outstanding schools than in 2010. We will not hesitate to intervene where schools are failing or “coasting”. As the Prime Minister has said, we will have zero tolerance of the failing schools that still exist, so every inadequate school will be turned into an academy with new leadership.
Free schools are providing parents with more choice—and at a cheaper price, as my noble friend Lord Fink correctly said—and offering new opportunities for young people where there is local demand for new provision. Since 2010, over 300 new free schools have opened, providing over 150,000 new places for children. The free schools programme is encouraging school partnerships and allowing excellent practice to spread. For instance, Bury St Edmunds Technical Academy is being set up by an academy trust that already runs good and outstanding schools. It will be a 13 to 19 school focusing on STEM subjects through both academic and technical routes. Its partnerships with local employers will mean that students will be able to access work-based projects and work experience in addition to their studies. Free schools are more likely to be rated outstanding by Ofsted than other state schools, and almost half are in the most deprived areas of the country.
The noble Lord, Lord Young of Norwood Green, and my noble friend Lady Fookes talked about careers advice. We absolutely agree that high-quality careers guidance is vital if young people are to make good decisions about future learning and careers, and it is particularly important for pupils from disadvantaged backgrounds who may not get that advice at home. We know that some schools are doing excellent work and that their pupils are accessing the right support, but in too many cases careers advice has long been inadequate.
Since September 2012 we have devolved responsibility for careers advice to schools in England. They will now be held to account for the destination of their pupils, whether it is an apprenticeship, a job, further education or university. The Government have also set up the Careers & Enterprise Company to transform the provision of careers education and advice for young people. Last month it launched its Enterprise Adviser network programme to link employees in firms of all sizes to schools through a network of enterprise advisers drawn from business volunteers. As my noble friend Lady Stedman-Scott mentioned, the Leeds City Region was part of the Enterprise Adviser pilot, and its programme began in November 2014. Since then over 100 business leaders and 60 schools from across the city region have joined their network, which has resulted in over 3,500 young people accessing new employer-led activities and over 50 action plans created in schools to develop employability skills.
We also want to unlock the potential of all young people who have the ability to succeed at university. The Prime Minister has committed to doubling the proportion of people from disadvantaged backgrounds entering higher education by the end of this Parliament from 2009 levels and to increasing the number of BME students going to university by 20% by 2020. We recognise that graduates have a vital part to play in building a highly skilled workforce through their ability to challenge assumptions, energise and innovate. The best way to produce more employable graduates is for employers, either individually or jointly, to work directly with universities and colleges. They can and should help with course design and delivery, provide work placements and, where appropriate, offer sponsorship for students.
My noble friend Lady Jenkin of Kennington was absolutely right to mention that it is not just young people who need the right opportunities. The structure of our society is changing and life expectancy is increasing as people live longer and healthier lives. Despite the increase in the employment rate of older people, the problem of people leaving the labour market too early remains a problem. The Government have implemented a number of initiatives to help people to live fuller working lives. We have appointed a Business Champion for Older Workers, extended the right to request flexible working, and introduced Carers in Employment pilots in nine local authorities to explore ways for carers to balance work with their caring responsibilities.
In March 2015, in her previous role as Business Champion for Older Workers, my noble friend Lady Altmann published the report A New Vision for Older Workers: Retain, Retrain, Recruit. It makes a number of recommendations designed to challenge outdated stereotypes of older workers. The Government will respond to the report’s recommendations shortly.
I now turn to the issues raised by my noble friend Lady Newlove, who spoke so movingly earlier. The Government recognise that difficult circumstances can cause a substantial and varying amount of distress for children. All schools should create a caring and supportive environment and earlier this year the Government brought together a group of experts to advise on how to provide good school-based counselling services. We are providing nearly £5 million of funding this year to support 17 projects delivering a wide range of support for children and young people with mental health issues, including supporting Dove, an organisation that provides mental health support for bereaved children.
The Government recognise the variety of barriers that many people, including victims of crime, face and we agree that a holistic approach is required. That is why, for instance, the Government are committed to expanding the Troubled Families programme and why the DWP and DCLG are looking at what more they can do with local authorities to break down barriers. Victims of crime will be delighted that they have such a strong voice within government also fighting their cause. Finally, on Think Forward, raised by my noble friends Lady Stedman-Scott and Lady Fookes, the Minister for Children and Families will be delighted to meet my noble friends to discuss the programme and hear more about the benefits that they outlined.
In conclusion, high levels of employment and educational excellence drive opportunity and are at the heart of this Government’s social justice vision. It is through employment that parents provide for their families and through education that children, in turn, fulfil their own potential. It is by tackling worklessness and delivering excellence for all our young people that we will break the cycles of disadvantage—and this Government will focus relentlessly on both.
Baroness Stedman-Scott
My Lords, I thank everybody who has taken part in this debate. I almost feel like we are just getting going. I am sure, though, that the Companion does not allow me to apply for an extension to the debate. The debate has been very lively—livelier in some parts than others—but it keeps us on our toes. This is a subject beyond political banter and I hope our hearts beat in concert to try to do something about it.
I have a few closing remarks. I think it is work in progress on apprenticeships. We have more homework to do and we had better get on and do it. As the noble Lord, Lord McKenzie, said, we have got over to people the value of apprenticeships, and we need to make sure that those apprenticeships are valuable to the people who will undertake them.
There is nothing more to say on careers advice and guidance, but we are taking too long to get this right so we must re-treble our efforts and make sure that young people get the best labour market careers advice and employment support to ensure they can fulfil their potential.
The points about the rebalancing of higher and vocational education were well made by everybody, and I thank the noble Baroness, Lady Sharp, for her contribution. Her knowledge and experience is well respected and there is much more that we will be doing.
I have got the message on early intervention and where it starts. I really have got that, thank you.
I thank the noble Baroness, Lady Jenkin, for drawing our attention to older workers. They have a great contribution to make. We have got to keep them in the workforce and they act as good role models to younger employees and sometimes they become their “parent” in a roundabout way. I completely agree that it is competence rather than age and I hope that this House at some time in the future will remember that, too.
On education, I became a governor of an academy so that I really understood them and I hoped I could make a contribution. Teachers are to be complimented. They do great jobs. Of course, like in every workforce, they could do better in some respects but they are terrific. I concur that the noble Lords, Lord Fink and Lord Harris, and others have made a great investment in academies and our country will only be the richer for that.
The noble Baroness, Lady Newlove, has paid a high price, but her girls are a credit to her. She gets all the grief—believe you me—because they are teenagers but they are doing well. I think the next debate should be the rehabilitation of victims. We must do that.
I say to the noble Baroness, Lady Fookes, who has changed her place in the Chamber, that horticulture jobs are valuable. They need doing and there are a lot of people—one in this Chamber in particular—who spend a lot of time in horticultural establishments purchasing things for their garden. Horticulture is a great contributor to the economy.
Noble Lords have seen the value of coaches first hand. If any noble Lord wants to go and see a coach, see me and I will fix it up. There was nothing half-baked about the contribution, I must say.
The noble Lord, Lord Blencathra, mentioned the importance of the economy. If the economy is strong then employers will create jobs. It is a no-brainer. Of course, there is also the importance of the family in that particular journey.
I am really grateful for the offer of a meeting. Let me know when it is—if it is tomorrow, I will be there. I will go away now and prepare for that.
I received a phone call at 6.50 am today from my niece’s six-year old son, who was crying on the telephone. He has a massive eye infection, but he was not crying at the thought of going to the doctor but because he could not go to school and the people in his class might learn something that he missed and he might feel at some disadvantage. I hope that we may create that desire to learn in our education and employment system.
I thank all noble Lords for their contributions.
Chilcot Inquiry
(9 years, 1 month ago)
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Lord Morris of Aberavon
To ask Her Majesty’s Government what is their assessment of the case for discharging the Chairman and members of the Chilcot Inquiry, and inviting the Cabinet Secretary to set out a mechanism for an interim report to be produced on the basis of the evidence gathered.
Lord Morris of Aberavon (Lab)
My Lords, I welcome at last the opportunity to debate the Chilcot inquiry. I have been very critical of the scandalous delays in publication. It may well be that the members of the committee will, after all, turn out to be knights in shining armour and produce an authoritative report that completely justifies its delays—in which case, I would withdraw my criticism. This committee was set up in June 2009, but it is still not able to give us a firm date for publication. Sir John recently promised to write to the Prime Minister in November with a timetable but, crucially, will not give a date for publication. The proposed legal action of some of the families of the 179 soldiers killed may have moved him. They are the ones most directly concerned in the establishment of the truth as to why we went to war. They have been badly let down: justice delayed is justice denied.
As an ex-Law Officer, I am concerned with upholding the rule of law in all its manifestations. A public inquiry is set up where there is widespread public concern on an issue of great importance. Although the cynical may portray it as kicking something into the long grass, we have no means other than that: to identify distinguished persons, be they lawyers or others, to identify the facts, deliver an authoritative judgment and publish their conclusions in good time for lessons to be learned. Respect for good governance is undermined if reports do not see the light of day before issues become dimmer and dimmer in public memory. Failure to publish reports in a timely way is indeed kicking it into the long grass.
The Franks committee into the Falklands War took about six months. Prime Minister Brown accepted the Cabinet Secretary’s recommendation to accept it as a model, and probably its terms of reference, the choice of members and perhaps also the mistaken advice to choose a non-statutory inquiry without the controls of the Inquiries Act 2005. I believe that the committee’s remit into an eight-year war might have been more tightly drawn. In the view of the noble Lord, Lord Butler, the terms of reference are so wide as to be almost infinite.
Sir John has said that he was not given the opportunity to discuss the scope of the inquiry. The Cabinet Office was in such a hurry that he was given only 10 minutes to decide whether to accept the chair or not.
I trust that the inquiry has concentrated on two fundamental issues, rather than chase every hare. First, what was the cause of the war? Did the Government believe the claims about Saddam Hussein’s weapons of mass destruction or was the aim regime change, which has no basis whatsoever in international law? Was this the real motivation? Secondly, when was the decision taken to go to war? Was it at Crawford or Camp David, in April 2002, in discussions between Prime Minister Blair and President Bush? Even the British ambassador was excluded from those discussions and apparently no note was taken. If the decision was taken then, any subsequent discussions at the United Nations would have been a charade. It might explain why, blaming the apparent unwillingness of the French, no further effort was made to get an agreed political solution at the Security Council. In my memoirs I say that the Chilcot Inquiry may tell us.
The saddest feature of the inquiry process was the strenuous efforts of the Cabinet Office to block the committee from having access to whole swathes of vital documentation, including notes from Blair to Bush. Eventually, the Cabinet Office’s arguments could not be sustained and the committee deserves our congratulations on winning this argument. However, the agreed redactions and the agreement to publish just some of the documents will need very close examination. Sir John is not clear as to how much time was lost in the argument. At one stage the evidence was 13 months, but it could have been up to two years. The Minister’s comments on these two aspects will be of great interest.
The lost time is not the most glorious period in the history of the Cabinet Office. I presume that the committee has not considered the memorandum, disclosed last weekend, from Secretary Powell to President Bush. Sir John has stated that he has seen 30 minutes from Blair to Bush and records of conversations between Powell and Jack Straw. However, he did not have access to the archives of foreign Governments. Assuming the validity of the memo, will the committee need to reflect on it and will it affect its conclusions and the date of publication? Regrettably, there was no counsel to the inquiry, which can do the spade work, assemble the evidence and save a great deal of time.
The next cause of delay is the doctrine of Maxwellisation—briefly, in common law, fairness to all concerned. The criticised should have the opportunity to comment before publication. The Times has published some very important letters on Maxwellisation—for example, from Sir Robert Francis and Sir Stanley Burnton. In my view, the process of Maxwellisation, much criticised by a Select Committee of this House on which I had the honour of serving, is open to criticism for statutory inquiries. This doctrine and the fear of judicial review have been elevated to a far higher level than previously envisaged. We do not know how much time has been lost, how many witnesses were involved, and what has been deemed a reasonable time for replies. In his evidence, Sir John kept his cards very close to his chest.
The Prime Minister, who complained so much when the inquiry was set up about its estimated time of one year, has since been wringing his hands as he says the inquiry is independent. It may now be counterproductive to dispense with the committee’s services, although I have been calling since 1 July—and indeed earlier—for the Cabinet Secretary to assess the evidence and produce an interim report for Parliament to consider what further action could be taken. If this had been a statutory inquiry, Section 14 of the Inquiries Act 2005 would have allowed the Minister, with notice, to pull the plug and bring the inquiry to an end. Every public inquiry, one way or another, is subject to the will of Parliament. In this instance, I have a feeling that we went down the wrong way in not having a statutory inquiry with the controls of such an inquiry.
Lord Finkelstein (Con)
My Lords, I thank the noble and learned Lord, Lord Morris, for his speech; it was a privilege to listen to it. Earlier this month, I showed the great Beatles historian, Mark Lewisohn, around the House of Lords. He hopes to finish his biography of the Fab Four by 2028—by which time he will have spent almost a quarter of a century on it. Next week, the great Lyndon Baines Johnson historian, Robert Caro, will be here. His first volume on Johnson was published in 1982 and he still has not finished. Proper history—proper accounts of history—take a long time.
Sir John Chilcot has been asked to conduct a proper inquiry into one of the most controversial and complex events of modern times. It is not just, or even at all, a trial of Tony Blair. It is about, of course, how and why we went in, but also everything between 2001 and 2009. We may reflect on whether the terms of reference were correct, but, given the terms of reference, we have to understand that proper history and proper accounts of history take time.
Daniel Kahneman, the Nobel prize-winning social psychologist, says that it is a special cognitive illusion that, this time, things will be different and that our book will be quicker to write than everyone else’s. The Hillsborough inquiry, on a single afternoon, took from 2009 to 2012 to publish. The Saville inquiry took 11 years for the events of a single day. I calculate that if Sir John Chilcot proceeded at the same pace as the Saville inquiry, his inquiry should take 32,000 years—he is actually going quite quickly.
I am a journalist, and there is a trade-off between depth and speed, completeness and deadline. It is one of my central jobs to judge that correctly, so I wish to make two points. First, if Sir John is choosing depth over deadline, I believe that he is making the correct choice. If the House is anxious for an interim report on the Iraq war, I can give it one: it did not go as well as we had hoped. But he is supposed to try to do better. That is the only point of having the inquiry—we have already had so many books, articles, speeches and other inquiries. We have asked Sir John Chilcot to produce an inquiry which provides us with depth and authority, and such things take time.
Secondly, even if Sir John had made the wrong trade-off, the trade-off is his to make: it is an independent inquiry. Hurrying him is an infringement of his independence, and it is being done basically only as an insurance against him reaching inconvenient conclusions. A lot of my colleagues in the press believe that if they can discredit him in advance it will be a useful insurance policy in case he does not agree with what they already think about the Iraq war.
I supported the Iraq war, and that is why I want as much as anyone to hear what was right and what went wrong. It is extremely important to me to learn those lessons. But I do not want to learn the lessons that I already know from all the things that have been published; I want to learn the lessons from the deep inquiry that we have been engaged in. Of course we are all impatient for the outcome of anything we have invested time and energy in and wish to hear the results of, but we need to behave less like children in a car saying, “Are we nearly there yet?” and more like people who have asked for a big inquiry to tell us some very important things—which we are all going to hear, as we all realise, soon enough.
Baroness Williams of Crosby (LD)
My Lords, I agree with almost everything that the noble Lord, Lord Finkelstein, said. He is absolutely right that getting the truth about this very complex and troubling story is more important than having a particular deadline in mind. An attempt to have an interim report would be very dangerous; it would lead to Maxwellisation and counter-Maxwellisation in an endless effort to find out the truth.
One difficulty of the whole report is that we were still getting substantial chunks of serious evidence as late as last weekend. The discovery of the Powell memorandum that went to the President of the United States, which explicitly set out in terms that the Prime Minister of the United Kingdom was willing to consider military action, is of the first importance, not just because of the issue itself—many of us would disagree about military action; others would support it—but on an another issue that is equally important. It was March 2002 when the Powell memorandum was sent to the President, shortly before the summit meeting that took place at the ranch of the President in Crawford, Texas, in March 2002.
One of the crucial aspects of this was illuminated by the fact that, in February 2003, I asked the then Leader of the House, the noble Baroness, Lady Amos, whether there was any prospect of military action. I repeat the date: March 2003. The noble Baroness said: “I repeat that there is no prospect of military action at the present time”. The statement about Mr Blair’s view, dated March 2002, and the question that I asked the Leader of the House in February 2003, raise key constitutional questions. The immediate question which needs to be pursued by the Chilcot commission is whether the British Cabinet knew anything about the proceedings and negotiations between the Prime Minister and the President of the United States.
Mr Blair was a great believer in presidential leadership. One of his views was that something called “sofa diplomacy” was central to getting serious outcomes discussed and agreed. The difficulty with sofa government is that it excludes something which is critical to our way of doing politics, in which collective decisions are made by the Cabinet of the United Kingdom, not just by the Prime Minister. That has major implications. Presidential decisions—at least in theory—can be made by the President on his own. It is up to him whether he consults advisers or not. That is not the situation in the United Kingdom, and many of us would not wish to see it become the situation. The concept of Cabinet responsibility is deeply bound up with that of parliamentary responsibility.
What was the Chilcot commission asked to do? It has been harshly criticised on grounds it could not have avoided. First, as the noble Lord, Lord Finkelstein, correctly said, it was given an almost impossible mandate of exploring the period from 2001 all the way through to 2009: eight years of endless negotiation and discussion. The report is intended to cover not just the run-up to the war and the invasion of Iraq but also the issues of what the aftermath should be, what the exit strategy was and what steps should be taken to protect Iraq during the reconstruction. We now find that very little of that was ever openly discussed in Parliament or even in the US Congress.
I will take a moment to look at what was discussed in the US Congress. In September 2002, still well before the invasion, Congressmen asked Mr Powell and—perhaps more significantly—the Secretary of Defense, Donald Rumsfeld, where the money was going to come from for the reconstruction of Iraq. This reconstruction would be crucial to the prospects for peace in the Middle East and the surrounding area. Donald Rumsfeld answered that he did not know. He was asked if it was suggested that the money should come from the United States. The question was: “Will it be dollars for the reconstruction?”. His brutal reply was: “I do not think it will be dollars and I do not think it is likely to involve us”. In other words, he buried the issue of expenditure on reconstruction without the matter being discussed by Congress, which was crucially involved in giving support for any budgetary demand of that kind.
I will not go on—but, before I touch briefly on a couple of other matters, I will say that the Chilcot commission was confronted with an awful problem. The commission consists of five privy counsellors, selected not only for their long experience in international affairs but also, bluntly, for their outstanding reputation as people of integrity. I suspect that the issue of integrity was central for Sir John Chilcot and, as the noble Lord, Lord Finkelstein, implied, he is determined to find out the truth, however difficult that may be. We then roll on to the long, terrible story about the aftermath, in which it is increasingly clear that the British Government were hardly involved at all and that the issue was treated as a unilateral issue by the then Government of the United States.
I conclude by saying that we need desperately to have the truest possible account of this, which I think is the second-gravest mistake ever made in the history of the United Kingdom’s foreign policy after the end of the Second World War. It is on rather the same scale as the effects of Suez. Today, when we look at what has been tragically not only an attempt to try to invade Iraq but, perhaps more crucially, an attempt to see the Middle East fade away into a situation where there is almost no legally available support, let us not forget that an invasion based on the argument that you need regime change has no place in international law and no place in the United Nations.
Last of all, and perhaps most important, there is the straightforward fact that when we went along with the proposals for the aftermath, one issue that was never discussed with us was whether the Baathists should be completely expelled at the level of the police, the level of the army and the level of the civil service from a country which was then left in a desperate vacuum from which it has not to this day recovered. With peace in the Middle East very much in doubt today and very much sweeping towards a kind of nihilism, having a serious look at the truth of this report is probably the most important thing we can do to avoid anything like that happening in the future.
Lord Luce (CB)
My Lords, I am delighted to follow the noble Baroness. Just over 45 years ago, during the 1970 election, I opposed her and lost but I could not have asked to lose to a better person. I congratulate the noble and learned Lord, Lord Morris, on this timely and healthy debate but I hope that the House will allow me to say a word about Lord Howe of Aberavon whose funeral was held this morning. As his former Parliamentary Private Secretary and a Minister of State at the Foreign Office, I had many conversations with him about inquiries. We both gave evidence to the Scott inquiry, and the noble and learned Lord, Lord Scott, is here today. Had Lord Howe been alive and well, he would have undoubtedly wished to speak in this debate. Indeed, he chaired the Ely Hospital inquiry in Cardiff in 1969 when he had already taken Silk.
We are all familiar with Lord Howe’s distinguished career but, in my view, he was one of the most civilised, thoughtful and intelligent of post-war politicians, and a great parliamentarian. In a week when we are marking the state visit of President Xi, I should say that one of Lord Howe’s greatest achievements was negotiating the future of Hong Kong. It is worth saying that when he was negotiating with Deng Xiaoping in Beijing in 1983, I was on duty on a Saturday as a Minister in the Foreign Office when the British ambassador reported to say that Deng Xiaoping had disclosed that he trusted Geoffrey Howe. He authorised talks to go ahead and to conclude with the “one country, two systems” position. That was an act of great statesmanship.
It is the word “trust” on which I want to dwell because it is relevant to this debate. Clearly, it is essential that there is trust and confidence in the Chilcot inquiry and it has been continually under challenge. Like everyone else, I share the frustration about delays. But, as a former Civil Service Minister, I have to say that I suspect the most frustrated people of all are Sir John Chilcot and the other three distinguished members of the committee. Sir John is known for his fairness, impartiality and sense of duty, and all the members of the committee are known for their integrity and abilities.
Sir John has already made it clear that he never expected or wanted this inquiry to last this long. So why has it happened? First, I agree with the noble Baroness, Lady Williams, that unlike the Butler and Hutton inquiries—I am delighted that the noble Lord, Lord Butler, will speak shortly—the terms of reference of which were tightly drawn, the scope and terms of reference of this inquiry were immensely broad. It has lasted over eight years of study. The run-up to the conflict, the period of the conflict and the post-conflict period were all included in the terms of reference.
Secondly, I recall that, after the inquiry was announced by the then Prime Minister in 2009, the Select Committee on Public Administration called for transparent and open procedures, rather than having evidence given in private. I gave evidence to the Franks committee in private and that has its merits. However, in an atmosphere of little trust in Governments, and so on, it is right to hold proceedings in the open—but surely they are bound to take longer.
Thirdly, as has already been mentioned by the noble and learned Lord, Lord Morris, the amount of documentation the committee has had to study has evidently been absolutely massive. There are also questions of declassification and of the disclosure of exchanges between Bush and Blair—all that has to be sorted out and looked at. There were major delays, but I am told that 150,000 documents had to be studied and one should not underestimate the time it takes to work through all that. However, when the report comes, it should indicate who is responsible for the delays.
Fourthly, there is the matter of Maxwellisation. There are arguments for and against Maxwellisation, but that is not my point. Many people have suggested that that was the main cause of delay, but the Maxwellisation procedures did not start until the end of last year; I understand that they are now completed. They may have prolonged the process a little, of course, but I do not believe they were the main reason for delay. The big problem is the scale and complexity of the inquiry.
I agree with all those who suggest that it is not sensible to have an interim report. It is too late for that, in any event, and all stages of the inquiry are interrelated. It is also essential for Sir John to go on working to retain the confidence of the public and Parliament in what he is doing. What are the main causes of delay? It is perfectly reasonable for him to take opportunities to explain to the public the reasons for these frustrating delays, in order to retain the confidence of Parliament. Once the report is published, Parliament can debate the lessons to be learnt over Iraq and the lessons to be learnt about the nature and type of inquiries we hold in this country.
Lord Parekh (Lab)
My Lords, I thank the noble and learned Lord, Lord Morris of Aberavon, for securing this debate. As he rightly pointed out, no other inquiry in our public life has taken so long. It was announced in June 2009 and it is now 2015. I have two questions to ask. What explains the delay? Was that delay justified?
It seems to me that five factors are responsible for the delay in submitting the report. The first is that it was not set up under the Inquiries Act 2005, and therefore the committee had to make up its own rules as it went along—for example, the rules governing the publication of documents within less than 30 years.
The second difficulty was that, as the noble Baroness, Lady Williams, pointed out, its remit was extremely wide—not just the lead-up to the war in Iraq but what happened afterwards and what we should have done.
The third factor that explains the delay was the dispute over access to various documents. For example, it took nearly a year to obtain the Blair-Bush correspondence and the notes Mr Blair is supposed to have left with Mr Bush, to read them and to decide whether to include them in the report.
The fourth factor is Maxwellisation, and the fifth, which I shall concentrate on, is the chairman’s determined attempt to be absolutely fair and to produce as accurate an account of events as possible. As the noble Lord, Lord Finkelstein, said, every relevant fact had to be gathered, every “i” dotted and every “t” crossed. That is where my difficulty begins. I want to ask whether these five reasons for delay were all equally justified. It is obviously true that no inquiry can be exhaustive. If I were to write the history of the House of Lords, or of Parliament, it would not be definitive, for obvious reasons. Different facts and angles emerge, and you can look at the whole thing in many different ways.
In the case of this inquiry, we have already been told by Sir John Chilcot that transcripts of discussions and dialogues with foreign government officials were not properly written down or will not be circulated, so even this report will not be entirely accurate or comprehensive. Simply no report can be, because new facts constantly keep emerging. If you aim to write a definitive and comprehensive account on an event as momentous as this, you will have to wait until the end of eternity. The chairman was wrong to aim to produce that kind of report.
Maxwellisation is another factor. I am not entirely sure that we should have gone along that road. Maxwellisation emerged in a certain context and it was justified, but should it be applied to every situation? It may lead to counter-Maxwellisation: someone might stand up and say, “Look, he is involved in a public inquiry; he should be able to defend himself against every criticism”. The public inquiry body would then say, “Look, we want to be able to answer your criticism”, and there is no end to the process.
Also, a report such as this, which tries to cover every aspect, ends up saying that someone is responsible for this and someone else for that, and there is no focus of responsibility—no single agent is responsible for the war in Iraq. My feeling is that the inquiry needed to be limited in its remit from the beginning, but that is neither here nor there.
If one looks at what is happening now, there are two things to bear in mind. First, an inquiry of this kind is supposed to attain certain objectives, such as closure for the families and the country; to get at the truth of the matter; to suggest ways to restore trust in politics; and, as the terms of reference set out—in a rather strange form of English—to,
“strengthen the health of our democracy … and our military”.
If these are the objectives, the question is: how will they be realised? The longer the delay in the report’s publication, the greater the chance that public trust in our system will be weakened, or that closure for the war, the families and the country will not be obtained.
In my view, these objectives require that the report should have been published much earlier, or at least that it now needs to be published as soon as possible. Having said that, I want to make it absolutely clear that this does not imply that there is any reason at this stage for discharging the chairman or the members of the committee. They have done a most honourable job. As I pointed out, where they have faltered, they have done so with good intentions and a sense of honour. We need to learn lessons from the inquiry itself and ensure that it is allowed to publish its report as early as we would like it to be.
Baroness Falkner of Margravine (LD)
My Lords, I too thank the noble and learned Lord, Lord Morris, for initiating the debate. It is important for us to realise that this inquiry is crucial to the family and friends of those who lost their lives in Iraq, who must feel very badly treated in this sorry affair. To them it must feel that the decision to lay down the lives of their loved ones must have been taken in weeks or perhaps months, yet the analysis of why those decisions were taken—the basis of their understanding why it appears that this was embarked on almost with such carelessness—is still incomplete 12 years after the commencement of that war.
I start by making it clear that I have the greatest respect for the noble and learned Lord, Lord Morris of Aberavon, but I do not agree with discharging the inquiry at this point. It would be invidious because the report would be published incomplete—we all want a full and thorough account of what happened. Also, in any event, it would not come out very shortly because security clearances would have to be obtained before publication.
Before I go any further in my analysis of the failings of the inquiry, I should say that we have been talking about what led to the Iraq war. I bring to the House one other fact that my noble friend Lady Williams, in her extraordinary recall of how hard the Liberal Democrats worked at the time to influence the outcome of that decision, pointed out to me: that Liberal Democrat spokespeople in both Houses repeatedly pressed for UNMOVIC—the team of UN inspectors—to be given full authority by the UN to inspect Iraq for any evidence of weapons of mass destruction. Focusing on getting rid of such weapons would have been more effective and cost far less in lives and destruction than an invasion.
The British Government’s own dossier, published on 24 September 2002, stated that the inspectors had achieved a great deal in Iraq. The leader of the Iraq inspectors, Hans Blix, pleaded for more time to complete the inspection of all the suspect sites, but the US Government were not in any mood to concede this. So we lost an opportunity at that point, and it was clear that that particular US Government did not really want evidence or inspection; they just wanted to proceed to war—and it might now appear that that is what they had been promised by their ally, the United Kingdom.
Coming back to the Chilcot inquiry, it is worth noting that Sir John Chilcot has announced that he will write to the Prime Minister on 3 November with the timeline. I do not know to what extent the fact that the noble and learned Lord, Lord Morris, had tabled his Question to be debated today led to Sir John deciding to do that. I suspect that the Question was on the Order Paper before the decision was taken to set a date to publish the timeline.
In this sorry affair there have been big issues of judgment. The inquiry was announced on 15 June 2009. In this House on that day, as is recorded in the Hansard report, I said that given the very wide scope of the inquiry it should be in two parts—the first looking at the events that led up to the war, and the second looking at the conduct of the war. The response of the then Leader of the House, the noble Baroness, Lady Royall, was that:
“It is up to the committee how it structures its work”.—[Official Report, 15/6/09; col. 866.]
Three days later, the Public Administration Committee also recommended the same thing—a two-part inquiry into the decision to go to war, and another on the conduct of the war. The Labour Government again stated that it was up to the inquiry to decide what it wanted to do. So the question has to arise: given how very wide the scope was—everybody who has spoken has commented on that aspect—and that that was known from the outset, why did the inquiry decide to do its work as a single comprehensive exercise? Ultimately, that is a matter of judgment.
When Sir John gave evidence to the Foreign Affairs Committee in the other place on 4 February 2015, he admitted that he was not consulted on the scope of the inquiry; the noble and learned Lord, Lord Morris, said that in his opening remarks. In other words, Sir John was given the absolute thinnest of job descriptions: perhaps an analogy would be the kind of initial job advert that we see in newspapers. Rather than asking for a detailed job description with a detailed specification, and arguing the case for a different kind of inquiry or a different timeline—or different staff, more resources or whatever—he accepted the job in 10 minutes flat; frankly, I felt embarrassed reading that part of his evidence.
It therefore seems a fair criticism to ask why, once he had agreed to do the job, he did not take the opportunity to consider the recommendation that he proceed down a different course. Never mind the fact that I made that recommendation; it was also made by a serious committee in the other place, the Public Administration Committee. Sir John said in his evidence that the inquiry took evidence from 150 witnesses and saw thousands of documents. One is tempted to suggest that he might have foreseen that.
My second point is about the delays. Looking at the sequencing of events, it is clear that there was some kind of stand-off between the Cabinet Secretary and the inquiry team, which lasted for a while. Sir John is not ready to criticise the Cabinet Secretary for delay; none the less it took from July 2012 to January 2015 to reach an agreement on publishing the Blair-Bush correspondence. It is perhaps worth noting that Messrs Blair and Campbell, and Jonathan Powell, had been able to publish their reports of these conversations without hindrance.
I am running out of time, so let me conclude with this: the noble Lord, Lord Finkelstein, has put up a spirited defence about how long it takes to measure the march of history, by telling the House how long it takes to write a biography. I say to him that his colleague Charles Moore has written volume 2 of Margaret Thatcher’s biography, which I am reading at the moment, with great aplomb, in an extremely short time.
I want to pick up the issue of our continuing intervention in the Middle East. Let us go back to the August 2013 vote on not intervening in Syria. We as a country cannot, and should not, make a decision on that until we know of our hand in setting that region ablaze in the first instance. That is the least we owe the country.
Lord Butler of Brockwell (CB)
My Lords, I start by following the noble Lord, Lord Luce, in making a brief reference to Lord Howe, whose funeral was today. I would have liked to attend that funeral, but I decided not to because I felt that I should take part in this debate. However, seeing the noble Lord, Lord Cormack, in his place, who attended the funeral, I perhaps made the wrong choice, but I do not think I could have been sure of doing it. I had the privilege of knowing Lord Howe well from 1979, when he became Chancellor of the Exchequer. He was a major political figure and a great public servant. The noble Baroness, Lady Howe, and his family have been very much in my thoughts today.
I thank the noble and learned Lord, Lord Morris, for giving us the opportunity to have this debate. For the most part it will have given deserved comfort to Sir John Chilcot and his team because very many supportive things have been said. I think that the noble and learned Lord, Lord Morris, made it clear in his remarks that his suggestion that the committee should now be discharged was really a vehicle for the debate rather than a suggestion that he wanted the Government to take seriously. Many speakers have referred to the sense of frustration, which I am sure is shared by Sir John Chilcot and the members of the inquiry itself, that it has taken so long. But although the precise timing of the finish has not yet been specified by Sir John and the team, it is now in sight. To dissolve the committee and to produce a report which is only 90% baked would go a very long way towards wasting all the effort and the resources which have gone into the report so far. It would deny satisfaction to those who have been waiting for a full conclusion on the matters which are of so much concern to so many people, particularly those who lost loved ones in the war. It would require a gigantic learning curve for those who would be charged with taking up the task of producing an interim report, and it would almost certainly take longer than allowing the present team to conclude its task.
There has been much reference, rightly, to the problems which the inquiry has faced. First, as has been said, its terms of reference, settled in the dying days of the last Labour Government, I think in haste and under pressure, were ridiculously wide. They covered everything that happened, both politically and militarily, between July 2001 and 2009. The mind boggles at the number of documents and the number of people involved during that period. In the review which I led into intelligence on weapons of mass destruction, on Iraq alone there were many thousand intelligence reports. The number of documents and the number of people in this case must be many multiples of that. Then, of course, there is also the question of the confidential exchanges with allies, particularly the United States, which has been referred to. That is not a straightforward matter. My sympathies are, as noble Lords might expect, with the Cabinet Secretary in his difficulties over that because, if the President of the United States cannot speak frankly to the Prime Minister of Britain and expect those confidences to be preserved, future presidents will not do so. So that has been a genuine problem and, if I may say so, trying to deal with United States Administrations over the release of papers is also not a matter that you can conduct quickly, as I have found in my experience. Then there is the question of the Maxwellisation process and fair treatment of the people who were criticised. That, no doubt, led to more documents, which had to be accessed and assessed. And so the problem has gone on.
Whatever lessons the inquiry teaches us about the Iraq war, there are, as has been said, lessons to be learned about setting up inquiries of this sort. During my time in Government, I was involved in setting up inquiries and since then I have been set up myself, if that is the right term. I say to the noble Baroness, Lady Falkner—I am sure other people who have conducted inquiries would share the view—one does not often get the chance to discuss the job description before an inquiry is announced.
When an inquiry is being set up, there are huge pressures on the Government to widen the terms of reference to cover every angle. If the Government wish to confine the terms of reference, they risk being accused of covering up. I am particularly glad to see the noble and learned Lord, Lord Scott, in his place because I was concerned about the setting up of the arms-to-Iraq inquiry. I remember, vividly, that the Government were concerned about the charge that, by bringing a prosecution against Matrix Churchill, they had tried to put innocent people in jail. That was the subject which prompted the inquiry. The Opposition pressed, understandably, for it to be widened to cover the whole subject of the export of arms. The Government, because they did not want to give the impression they had anything to hide, agreed to that and the whole subject was opened up. An inquiry which they had expected to take three months—I do not know what the noble and learned Lord, Lord Scott expected, I have not asked him—took three and a half years to cover that very big subject.
The experience of the Chilcot inquiry shows that when we press for inquiries to be set up we should be careful what we wish for. In this case, it is a very big subject and it deserves proper treatment. If the inquiry has taken the time it has taken, I think we should judge it by its outcome and be patient until it is delivered.
Earl Attlee (Con)
My Lords, I have an interest to declare. I was a TA officer serving in Iraq on Op Telic 1, in the spring of 2003, and I served in the headquarters of the divisional support group of 1 (UK) Armoured Division.
I assumed that the Prime Minister at the time had a very good reason for invading Iraq. It was not my role to worry about why; my job was to do my duty. For me, the purpose of the inquiry is to find out what, if anything, went wrong, to learn from our mistakes and to inform future policy. I do not see the report as purely of academic or historical interest and I think it will help us with our current problems in the Middle East. I do not believe that democratic leaders can lead a country to war without being held to account for the decisions that they made on our behalf. I could see the dodgy dossier for what it was and the inquiry of the noble Lord, Lord Butler, told us about how sofa government worked.
In Iraq, when we crossed the start line on Operation Telic, we honestly believed that there were weapons of mass destruction, in military significant quantities, in Iraq. I well recall one evening when the Nuclear, Biological and Chemical Warfare Warrant Officer looked like death warmed up. We asked him, “What’s wrong?” and he said that the meteorological conditions were absolutely perfect for a chemical attack and that we had already crossed several strategic trip wires.
Fortunately, there were no weapons of mass destruction in Iraq. But in the first missile attack, I, along with all the other servicemen in Iraq, donned my full NBC protection equipment. I do not know what the temperature was but it must have been at least 40 degrees centigrade. I did not know whether I was going to survive the next hour but I did know that if I did not get my drills correct, I could be killed by my own mistakes.
Maxwellisation seems to be aptly named. It seems to be an invitation to be as economic as possible with the volume of the evidence that you give to the inquiry because the witness is safe in the knowledge that if the inquiry gets on the money, they can come back with better particulars. Surely it would be much better to make it quite clear that there will be no Maxwellisation or very limited Maxwellisation, so you had better tell the inquiry everything you know.
Many noble Lords have pointed out the difficulties that Sir John has experienced. It is worth pointing out that he could have declined to take the mission or could have changed the mission. He could have gone back to the Prime Minister and said, “I have had a look at it and it is far too difficult. We need to do two inquiries. We need a much more closely focused inquiry”. The key issue for people is: was this war—because that it what it was—legal and necessary? Actually, there was plenty of time to appoint the inquiry and to think about the terms of reference, because the inquiry was set up several years after we started the invasion.
On the Blair-Bush communications, if you take two democratic states to war, you must expect to come under a certain amount of scrutiny post the event. I accept that there would have to be some redaction but I think that the inquiry is entitled to refer, without all these delays, to what was going on between our Prime Minister and the President. I do not accept the arguments that we must never know what the two were discussing—because it is absolutely critical to understanding what, if anything, went wrong.
As someone who took part in the military operation in Iraq, I think that the inquiry is a complete waste of time. It is too late and it is too wide. It does not yet hold anyone to account. It also does not yet exonerate Ministers and officials who, in my opinion, have been unfairly pilloried—and, I am sorry to say, by senior politicians in my party who should have known better. Actually, in terms of the conduct of the operation, the logistics side of it, the Ministry of Defence did exceptionally well and there were some really unfair attacks on Labour Defence Ministers.
When we do get the report, it will really help us to understand how we got to the current situation in the Middle East, because Saddam Hussein was the first leader that we deposed and we are now not sure whether that was the right thing to do at all. Finally, of course, the delay in the report and in setting up the inquiry is extremely unfair to the Liberal Democrats because they have gone through several general elections without the benefit of the report, which would tell the electorate whether they were right or wrong to oppose the war.
Lord Dykes (Non-Afl)
My Lords, I, too, thank the noble and learned Lord, Lord Morris, for launching this debate and raising some of the very searching questions that he did, quite rightly. On 1 July at Question Time he referred to these matters and suggested that there should be some kind of interim publication.
None of us can be other than extremely sympathetic to the role that the hapless—I use the word deliberately—Sir John Chilcot has had to undertake in this inquiry. He is regarded as a person of great integrity, probity and distinction in his field. In many ways, there could not have been a better choice. But I was very struck on 4 February when the Foreign Affairs Committee of the Commons, chaired by Richard Ottaway, had its hearing with him. The then right honourable Sir Menzies Campbell—now the noble Lord, Lord Campbell of Pittenweem—asked,
“do you ever rue the day that you were asked to take on this responsibility, Sir John?”.
Sir John Chilcot said:
“I try very hard not to rue the day”.
He went on to say:
“May I put it this way, Sir Ming? All of us, and I say this in seriousness, are determined to get this thing done. None of us thought it would take this long. We want to get it done, but we are not going to get it done by scamping the work or failing in the essential principles that we have set ourselves: everything we say and conclude must be based on evidence. It’s got to be fair; it’s got to be impartial; it’s got to be rigorous—all of that”.
That must therefore be the background once again to the putative timetable for the eventual publication—I very much agree with the analysis of the noble Lord, Lord Butler, on these matters—of the substance of what happened in those terrible events in 2003: the declaration of a war that was illegal, only certificated by the UN under pressure afterwards; the worst possible post-war Foreign Office decision apart from Suez for the United Kingdom; the mistakes that were made.
In the debate which I raised in July 2014, which I think was probably the last substantial debate on this matter in this House apart from exchanges at Question Time, I was very struck by the contribution of a non- politician and a non-lawyer, the noble Lord, Lord Berkeley of Knighton, who is not here today. He said this of the commemorations of the First World War and all that:
“That is germane to what we are talking about because we owe it to the many people who gave their lives so bravely and to the many families that lost relatives to always look with microscopic attention at the reasons for going to war. We know now that many mistakes were made and we really should be trying to use the example of those errors to never make them again. That is why this inquiry is so terribly important. Then we have the families of those representing us who were bereaved in Iraq and—because of our actions there, arguably—the people who are still losing their lives”.—[Official Report, 1/7/14; col. 1698.]
That was when events were still taking place afterwards. It also applies to the fate of Iraqi civilians. That should be a substantial part of this report.
I remember vividly an exchange at Question Time before 1 July 2014 when I complained about the delay and the noble Lord, Lord Hurd, a former Foreign Secretary, who is not here today, said that the delay was a scandal, whatever the reasons for it, on the body politic and the public interest. Why was it so important for them to turn on Saddam Hussein if regime change was not the main driver? Why did Tony Blair have those embarrassing exchanges in 2002 when there was no question of there being any declaration of war? Why did the then Government ignore the instinct and feelings of 1.5 million people marching down Piccadilly to protest about what was still an illegal war? Why did the Americans and the British ignore the wise advice of the French Government under President Chirac and Foreign Secretary Dominique de Villepin about the mistake of going to war on that occasion? Those things must come up now and all I say in response to the very apposite points made by the noble Lord, Lord Butler, is that it has to be quam celerrime and not too soon. We look forward to seeing the timetable on 3 November and then making a judgment. Possibly there should be another debate in the House of Lords on this matter as soon as possible after that.
Lord Cormack (Con)
My Lords, I told the noble and learned Lord, Lord Morris of Aberavon, that if I got back from the funeral of Lord Howe of Aberavon I would try to say a few words in the gap. I begin by endorsing everything that my noble friends Lord Luce and Lord Butler said about Lord Howe. This morning’s service was a very moving one and the feelings of love were palpable throughout because he was a great man who deserved the affection in which he was held. There was much laughter as well, which was entirely appropriate.
I have great concern about this subject. When the inquiry was established I was worried about it. I was worried that we should have an inquiry which could jeopardise international relations and conversations between national leaders—the noble Lord, Lord Butler, has already referred to this—and I was also worried about its open-ended nature. However, in those immortal words, we are where we are. I endorse very strongly the general sentiments of my noble friend Lord Finkelstein. There is no point in having an interim report and abandoning what is there. We now need and deserve to know. There must be a thorough examination. Like the noble Baroness, Lady Williams of Crosby, I am especially concerned about what happened in the immediate aftermath of the invasion.
I supported the war, as did my noble friend Lord Finkelstein. He supported it in print; I supported it in speech in the other place. I believed that our Prime Minister was entirely patriotic in his designs and desires. I do not resile from that now, but I want to see a thorough inquiry. Sympathetic as we all are to those who lost loved ones who laid down their lives in this war—a small number but, nevertheless, each one an individual who means a great deal to his family—we must not allow our sympathy to create a sense of panic. So, Sir John, who has come in for much undeserved criticism, should know that he has the confidence of your Lordships’ House, that he and his team have our trust and that we trust that they will produce a report that is serious and far-reaching and makes conclusions and judgments that are entirely fair. They must not be rushed into so doing. We are grateful to the noble and learned Lord, Lord Morris of Aberavon, for giving us this opportunity, but the message that goes out from your Lordships’ House should of course be that we await with eagerness the publication of the report, but we do not wish to create any sense of undue pressure on those who have been charged with producing it.
Lord Marks of Henley-on-Thames (LD)
My Lords, I, too, commend the noble and learned Lord, Lord Morris of Aberavon, on securing this debate. I share with him and others the concern and frustration at the serious delay that has, I fear, damaged the credibility of the Iraq inquiry. However, like all the other speakers, I do not believe that discharging the inquiry would be sensible. In my view, that would send us back to square one, and for us now effectively to go back to the drawing board would be a great mistake. Indeed, were that course adopted, we might never, after all the expenditure of time and money, secure a final report—and securing an authoritative report is vital in the public interest.
What is required now is for the full report to be completed and published as quickly as reasonably possible. The public, those involved in the events of and around the Iraq war, within and outside the armed services—in particular, the families of the casualties— deserve nothing less than a thorough and convincing report within a clear and achievable timetable.
This inquiry has exposed a serious weakness in our arrangements for inquiries, whether or not established under the Inquiries Act 2005. Unfortunately, and no doubt in the interests of protecting his independence and that of his inquiry, Sir John’s correspondence has reflected the view that timetabling is a matter for the inquiry and is almost entirely free from scrutiny. Indeed, he resisted providing a timetable until 13 October, when he promised to write to the Prime Minister by 3 November with a timetable to completion. I agree with the suggestion of my noble friend Lady Falkner that that was probably in response to the tabling of this debate. As recently as 8 September, Sir John had written thus to the House of Commons Foreign Affairs Committee:
“There is, inevitably, further work for my colleagues and I to do to evaluate these submissions”—
he was referring to the Maxwellisation responses—
“which are detailed and substantial, in order to establish with confidence the time needed to complete the Inquiry’s remaining work. As soon as I am able to I shall write to the Prime Minister with a timetable for publication of the Inquiry’s report”.
I do not accept the view of the noble Earl, Lord Attlee, that there is no need for the Maxwellisation process, but I suspect that its management has been insufficiently strict. I also suspect that, had a senior judge been in charge, with experience of bringing difficult cases to readiness for trial, much tighter deadlines would have been imposed, and imposed publicly. The need for a public timetable is one of the things we should stress. I cannot believe, for example, that any individual needs more than two months to respond to indicative criticisms. I am also clear that only one response should be permitted, in the absence of the most exceptional circumstances, to avoid the process that fairness requires becoming a negotiation. In my view, the chairperson of the inquiry should publicly set out a timetable, subject to necessary adjustment, with a clear explanation of any need for extension.
When the then Prime Minister, Gordon Brown, announced the inquiry in 2009, he said that he was advised that it would take a year. It is unacceptable that, more than six years on, we have had only partial explanations for the delay, despite Sir John’s evidence to the Foreign Affairs Committee in February of this year. For my part, I entirely agree with the noble and learned Lord that I see no reason why this inquiry was not established under the Inquiries Act 2005. The Select Committee on the Act, established under the chairmanship of my noble friend Lord Shutt of Greetland, which reported last year, recommended that,
“inquiries into issues of public concern should normally be held under the Act. This is essential where Article 2 of the ECHR is engaged”,
as it is, of course, loosely, in this case.
Sir John, in his evidence to the Select Committee, did not agree. He felt that the power of compulsion contributed to an overly formal or court-like adversarial process, and said:
“The absence of legal powers to subpoena witnesses and to take evidence on oath was also the subject of debate when the Inquiry was launched…In my statement of 30 July [2009], I said that the Inquiry is not a court of law and nobody is on trial, and that remains the case”.
I disagree with Sir John as to the thrust of that. I regard the power of compulsion, along with firm time management, as essential. It is also quite clear that the protection of national security can be properly managed on an inquiry under the Act. There is a strong case for the Act to be amended to give the commissioning Minister the power to require the inquiry chairman to give a full timetable for his work at the outset and keep it updated as the inquiry develops, much as this House often does when establishing committees to report to the House.
I do not believe that an interim report on the basis of the evidence gathered would be helpful. Such an interim report would be no more than a recitation of the evidence to date, without conclusions or recommendations, or it would draw provisional conclusions open to reversal at a later stage. A record of evidence without the conclusions would be of limited use because the whole purpose of an inquiry is to draw such conclusions, and without them, the report—interim or not—is of no help. Moreover, I agree strongly with others who have spoken that an interim report containing the evidence and interim conclusions would be confusing and unsatisfactory. It would leave the inquiry open to charges of interference if any of the provisional conclusions were altered, and neither set of conclusions—interim or final—would command any respect. If they turned out to be the same, the final conclusions would be criticised on the basis that they were reached precisely in order to accord with the interim conclusions—by definition, the incompletely considered conclusions. If the conclusions were different, then the final conclusions would be criticised for inconsistency with the provisional conclusions earlier expressed.
Therefore, let us await the timetable for publication on 3 November in the hope that this debate has brought home to the public and the inquiry members the importance of completing an authoritative work and producing a report with expedition.
Baroness Morgan of Ely (Lab)
My Lords, I first stood at this Dispatch Box about a year and a half ago, and the issue we were discussing at that point was Chilcot; we were awaiting the imminent publication of the report. But here we sit, £10 million poorer and still waiting.
I thank my noble and learned friend Lord Morris for his perseverance in pursuing the publication of this report, but we do not believe that it would make sense, after all the money spent and all the time committed, to dismiss members of the inquiry team and produce an interim report. However, I cannot emphasise enough that Labour would like to see the report published as soon as possible without compromising the thoroughness of the inquiry.
It is worth recalling that we are not here today to debate the substantive issues of the Chilcot inquiry. Whatever the rights and wrongs of the Iraqi invasion, a Labour Government under Gordon Brown initiated the Chilcot inquiry in 2009—a public inquiry into the nation’s role in the Iraq war. We appreciate the vast scope of the report, both in terms of the time period it covers and the range of issues which it seeks to address. The report will cover the run-up to the 2003 conflict, the legality of military action, faulty intelligence, the subsequent military action and its aftermath, and will attempt to establish the way decisions were made and the handling of Iraq after the invasion. It will also identify lessons to be learned to ensure that in a similar situation the British Government will be equipped to respond in the most effective manner and in the best interests of the country. The task set for the committee is huge.
Six years since the establishment of the inquiry, with hearings completed in 2011, it is difficult to explain, in particular to the families of those who lost loved ones in the war—alluded to by my noble and learned friend Lord Morris and the noble Baroness, Lady Falkner—the prolonged length of time it has taken to complete this difficult exercise. The people involved in decisions on intervention in Iraq have also stated that they are keen to see the report published. Tony Blair himself said in June last year:
“I have got as much interest as anyone in seeing the inquiry publish its findings”.
However, the delay in the publication however does not matter just to them but to all of us. Even the most cursory glance at the region today leads us to conclude that post-war preparation was ill-conceived and ill-prepared. The area of Iraq is still extremely unstable, with IS having taken control of large swathes of the country. The United Kingdom Government, with support from Labour, have already agreed to go back into Iraq to help support the democratically elected Iraqi Government, who are finding it hard to withstand the incursions of ISIL. It would have been useful to know prior to that decision whether we could have learned lessons from our previous intervention.
With the Tory Government hinting very strongly that they are anxious to intervene in Syria, it would be invaluable to learn whether and how mistakes were made so that they can be avoided in future. That may determine whether and how we intervene at all—who knows? How and to what extent we should take a lead or work with coalition partners in future in the Middle East neighbourhood, and how much influence we have on them, are crucial questions for our long-term strategic plans in the region.
We know that there have been many reasons for the delay in publication; they have been outlined very clearly by my noble and learned friend Lord Morris and other noble Lords. It was caused partly by discussions over certain classified documents, in particular in relation to correspondence with US Presidents.
Members of the inquiry team have had access to and sight of this information; they are all privy counsellors and have had access to thousands of documents which have been declassified from a number of government departments, including the most sensitive intelligence documents. My understanding therefore is that Gordon Brown’s promise at the start of this inquiry that,
“No British document and no British witness will be beyond the scope of the inquiry”,—[Official Report, Commons, 15/6/09; col. 23.]
has been respected.
The Maxwellisation process has also caused severe delays and, while we do not object to this process, it seems extremely odd—as suggested by the noble Lord, Lord Marks—not to have given deadlines to witnesses within which time they needed to respond.
It is important that not only do we learn lessons from the invasion of Iraq so that those mistakes are not repeated but that we learn lessons from our system of carrying out inquiries in this country. Even independent inquiries need budget and time restrictions. This is not the first time that an inquiry has taken so long. The al-Sweady inquiry took five years to report and cost £24 million. The Baha Mousa inquiry took three years and cost over £13.5 million. The Bloody Sunday inquiry cost £195 million and took 12 years to report. These are obscene figures and we cannot continue to function in this way when the country is under such immense financial pressure.
We believe that it is time for the truth on this matter to come out. It is time for the report to be published but we are prepared to be a little more patient so that the job is completed properly.
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)
My Lords, I congratulate the noble and learned Lord, Lord Morris, on securing this debate on the Chilcot inquiry. I also thank all noble Lords who have contributed to this debate—there have been some extremely good and informative speeches. Once again a number of your Lordships, but by no means all, have spoken eloquently of the need for the inquiry to publish the report as soon as possible. As the noble and learned Lord, Lord Morris, and my noble friend Lord Dykes, said, uppermost in our minds are the families and friends who lost loved ones in Iraq, as well as those who were severely injured, who have been waiting for years for the publication of the report.
Despite this sense of disappointment that the report has still not been published, I am sure that everyone here would agree that, as my noble friend Lord Finkelstein remarked, this inquiry is unprecedented in its scope and scale. Never before has a UK public inquiry examined in such depth and detail a decision to go to war and its consequences with unprecedented access to question the people who took those decisions and advised on those decisions, as well as having access to the papers surrounding discussions. I think there will be surprise at the number and extent of highly classified and sensitive material that will be published with the report.
As has been said, it is more than six years since this inquiry of privy counsellors was set up by the previous Labour Government and no one at the time expected it would still not have published its findings in 2015. Sir John himself said, not long after the inquiry was launched, that he expected it to conclude within 18 months. However as Sir John said earlier this year:
“I don’t believe it was possible then … to have foreseen the nature and range of issues that would be disclosed progressively from the examination not only of witnesses in the oral hearings, but of the extraordinarily wide-ranging and voluminous archive”.
As a number of noble Lords have said, I am sure that when the report is published and its conclusions have been considered, we will also wish to debate what lessons we can learn from this inquiry, as the noble Baroness just said, in terms of the process that has been followed, be it on Maxwellisation, that the noble Lord, Lord Marks, spoke about or other matters, such as its remit or how it was established. However, I would argue that that debate is best had when the report is published. As to the publication of the report, since I last answered the noble and learned Lord’s Question in the Chamber last July there has been some progress. As we have heard, Sir John has confirmed that all the individuals who received provisional criticisms under the Maxwellisation process have responded and Sir John is currently evaluating those responses. Crucially, last week, the inquiry informed No. 10 that Sir John would write to the Prime Minister by 3 November with a timetable for the completion of the report. Therefore, by early next month, we should know when the report will be delivered.
I turn now to the noble and learned Lord’s question for debate. In the light of these developments, he will not be too surprised when I say that the Government do not believe there is a case for discharging the chairman and members of the inquiry and inviting the Cabinet Secretary to set out a mechanism for an interim report to be produced on the basis of the evidence gathered. As the noble Lord, Lord Butler, said, in less than two weeks we will have a timetable for publication, and we owe it to the families to continue with this inquiry as it aims to provide the answers that they desperately want. Discharging the inquiry at this stage would obviously not help that process.
As has been mentioned, the inquiry is fully independent of government. As the noble and learned Lord, Lord Morris, said, this inquiry was not set up under the Inquiries Act. This means, of course, that it has no statutory basis as such. If the Government were to accept the course of action set out in the Question, it would undermine the fundamental independence of the inquiry. Therefore, we have to see it through, otherwise any outcome will be significantly devalued and it will delay closure on what has been such a controversial episode in British political history, as the noble Baroness, Lady Williams, set out very eloquently.
Once the report is published, there will be an initial Statement from the Government in both Houses. Then, once we have all had the opportunity to read and digest what the report has to say, there will be an opportunity for a full debate in both Houses.
I will now touch upon a couple of points that the noble and learned Lord, Lord Morris, mentioned, in particular about the release of papers relating to Tony Blair’s correspondence with President Bush, a point that the noble Lord, Lord Butler, also referred to. I should make it completely clear at the outset that the inquiry has had full access to the information that it has requested. The discussion was about the disclosure of the information that the inquiry had access to. I hope that noble Lords will forgive me for setting out in a little detail what actually happened.
On 15 July 2013, Sir John Chilcot wrote to the Prime Minister confirming that he had begun a dialogue with Sir Jeremy Heywood about the material that the inquiry wished to reflect in its analysis of discussions in Cabinet and Cabinet Committees and the references that the inquiry wished to make about the contents of Mr Blair’s notes to President Bush and discussions between Mr Blair and Mr Brown and Presidents Bush and Obama. As Sir Jeremy Heywood made clear when he addressed the then Public Administration Committee in the other place in January this year, he approached the question of declassification with a bias towards transparency, including Tony Blair’s memos to George Bush and the Cabinet minutes. I should add that Sir John told the Foreign Affairs Select Committee in the other place:
“I have no indication that Sir Jeremy acted otherwise than properly throughout”.
On 28 July 2014, Sir John wrote to Sir Jeremy Heywood confirming that agreement had been reached on principles underpinning the disclosure of notes and records relating to the Prime Minister and US President’s discussions, and that agreement had been reached on the detail of what the inquiry would release in relation to the Cabinet and Cabinet Committee discussions. As Sir John told the Foreign Affairs Select Committee, this process took 13 months.
The noble and learned Lord is perfectly justified to ask why this process took so long. The simple answer is that disclosure in this way of papers involving communications between a Prime Minister and a US President is, as far as I understand it, almost unprecedented. I say almost, because the Franks report into the Falklands War did refer to the contents of communications between Margaret Thatcher and President Reagan, although these were direct references rather than extracts.
As the noble Lord, Lord Butler, said, the inquiry’s request for disclosure raised issues of long-standing principle; for example, the importance of preserving the privileged channel of communication between the Prime Minister and the US President. In taking the decision to allow disclosure of this information, Sir Jeremy had to balance the possible damage to UK-US relations, and the potential that, in future, free and frank exchanges might be inhibited by this disclosure, against the exceptional nature of the inquiry and the central importance to the inquiry’s work of these exchanges. The negotiations were worked through in good faith, with the aim of enabling the inquiry to publish as much material as possible. However, all this took time to resolve.
I turn to an issue that the noble and learned Lord, Lord Morris, the noble Lord, Lord Parekh and the noble Earl, Lord Attlee also raised—about the value and worth of releasing such material if it is redacted. Clearly, the best time for us to judge the answer to this question will be when the report is actually published. However, as Sir John Chilcot made clear earlier this year when he appeared before the Foreign Affairs Committee in the other place, it is essential to establish an account of what happened—an account that people can trust.
The inquiry has spent time and effort in ensuring it can publish the material it needs from those documents. I would, however, make a few observations. First, as Sir John Chilcot wrote to the Cabinet Secretary on 28 May 2014, regarding the use of quotes from the gist of notes pertaining to communications between the Prime Minister and the President of the United States:
“Consideration will be based on the principle that our use of this material should not reflect President Bush’s views. We have also agreed that the use of direct quotation from the documents should be the minimum necessary to enable the Inquiry to articulate its conclusions”.
Secondly, in all inquiries where national security is an issue, documents have to undergo a declassification process to protect sensitive information. As your Lordships will know, for the Iraq inquiry this process was conducted under a protocol agreed between the Government and the inquiry which established strict parameters within which the Government could seek redactions, principally on national security or international relations grounds. This states that, if the inquiry believes proposed redactions are not desirable, it can write to the Cabinet Secretary to seek a redaction. If no agreement is reached and the material is not published,
“it would remain open to the Inquiry to refer, in its report, to the fact that material it would have wished to publish had been withheld”.
Our aim has always been to allow the inquiry to publish as much material as possible.
In conclusion, we all agree that this inquiry must be fair and impartial but, above all, rigorous, with its conclusions firmly based on the evidence. To do that, it must be independent of Government and therefore, however frustrating it may be that the inquiry has not published its report, it must be allowed to complete its job.