Grand Committee
Official Histories
Lord Rodgers of Quarry Bank
To ask Her Majesty’s Government what is their latest assessment of the process for preparing official histories.
Lord Rodgers of Quarry Bank (LD)
My Lords, it is a little over two years ago, on 10 July 2013, that I last raised the future of the Government’s Official History Programme, and well over 100 new Peers have arrived at the House since then. In the circumstances, I think it is justified to pursue a matter I first raised in the House on 8 February 2008, and twice, briefly, in 2012. I am grateful to colleagues who have supported me before and I welcome those who, now or later, may share my thoughts.
The Cabinet Office leaflet of the Official History Programme reminds us of the background. The work on official histories began under the auspices of the Committee of Imperial Defence as long ago as 1908, with responsibility for,
“compiling the naval and military history of the nation”.
After 1945, responsibility was extended to cover wartime civil issues such as food and health. The first official history I read was Problems of Social Policy by R M —Richard—Titmuss, published in 1950. It is a seminal text on poverty and deprivation in wartime, by which the author made his distinguished name.
As the post-war period of official histories came to an end, the Prime Minister, Harold Wilson, following discussions with the Cabinet Secretary, Sir Burke Trend, announced that the range of official histories would now include selected periods and episodes in our peacetime history. So official histories continued and in 1997 the Prime Minister, Tony Blair, decided to renew the project.
I should explain my particular involvement. At that time, in 1997, I was appointed by the Prime Minister, together with Lord Healey and Lord Howe, as one of the three privy counsellors to approve the authors of official histories. Beyond those very limited responsibilities, I became interested in the planning and overall management of official histories. I was puzzled by what appeared to be two different series of books: the Official Histories Programme, with which I was involved, and a similar series published by the Foreign and Commonwealth Office. I enjoyed the official histories as they were eclectic, but there was no obvious logic in their character, sequence and timing, with some authors taking many years to complete their writing, or even dying on duty. I was very uneasy about the publication arrangements, including the marketing.
The then head of the Histories, Openness and Records Unit at the Cabinet Office, Tessa Stirling, was very helpful, as she had been to authors, but following further correspondence and discussion, I decided to seek a debate. That occurred in February 2008. The ministerial reply was bland, but as a consequence of the debate, within a year, a report on the official histories was commissioned which turned out to be positive and important. The report was written by Sir Joe Pilling, a retired civil servant who took evidence widely and quickly, concluding that,
“the overwhelming weight of evidence supported the continuation of the programme”.
To summarise, he said:
“I recommend that the official history programme should continue”.
He also made some suggestions on how to make the programme,
“better, stronger and more useful”.
Despite that, in August 2010, in a letter to the three privy counsellors, the Cabinet Secretary, Sir Gus O’Donnell, said that since the current Official History Programme was coming to an end. He said:
“Given the current challenging economic climate, I am sure that there is likely to be a hiatus in commissioning titles”.
That is how it was; there was no further explanation and nothing further about how to implement the Pilling report.
That brings me to the debate on 10 July 2013. In the course of my remarks, I asked several questions. Who decided to make a hiatus? Was it a ministerial decision and, if so, by whom and when? If we are in a hiatus or, alternatively, considering a new Official History Programme, precisely what are the financial consequences? As for the “current challenging economic climate”, how was it measured and does it seem the same as in 2010? At what point would it be judged appropriate to end the hiatus? After all, the Government are telling us that we are in happier economic circumstances. The Minister’s reply was unsatisfactory. There was no answer to my question on who made the hiatus, and so I ask again today: who decided? My following question is therefore: who can restore the Official History Programme?
As for the finances, without incurring disproportionate expenses, it is not possible to determine the overall cost of the current series of official histories. Further, the last year for which published costs were available was 2006-07. In the absence of these figures, how could a responsible decision have been made?
Almost four years ago, my noble friend Lord McNally, speaking on behalf of the Government on official histories, said:
“It would be a tragedy if we were to allow them to wither on the vine”.—[Official Report, 17/2/12; col. 547.]
I hope that the Minister today will endorse that sentiment. As an initial step towards reviving the official histories, the Government could agree the Pilling report, arrange for the Cabinet Office to discuss this with other departments, work out the financial implications and review the present publishing contract arrangements. My Lords, why not?
Lord Lexden (Con)
My Lords:
“We need a sustaining stream of Official Histories”.
So wrote our esteemed colleague, the noble Lord, Lord Hennessy of Nympsfield, who sadly cannot be with us today, in one of his recent books, which never fail to stimulate and entertain, as well as inform. Even a historian operating on a much more modest scale, as I do, knows what riches are to be found within the covers of the official histories. No other nation has ever produced an official history explicitly dedicated to wartime intelligence that approaches in magnitude Britain’s five volumes, amounting to more than 3,000 pages, published between 1978 and 1990. There is so much to relish and, naturally, historians in this House, in academic life and elsewhere feel strongly that the programme must endure and look forward to its relaunch.
We all tend to have particular projects that we would like to see proceed, so that the distinctive, complex, and often secretive processes of government in our country can be understood better. In all of this, a study of what the great HAL Fisher called,
“the play of the contingent and the unforeseen”,
so often turns out to be particularly momentous.
In an earlier debate on this subject, my noble friend Lord Bew referred to the case for an official history of the Northern Ireland Office. I strongly agree: the department is so frequently a neglected element in the various versions that appear of events that led eventually to the peace process. In the recently published second volume of his biography of Margaret Thatcher, based on a very wide range of official papers, Charles Moore has laid bare much of the activity of the Cabinet Office, some of it extraordinary in character, in the period leading up to the Anglo-Irish Agreement 30 years ago. But what about the government department that has been central to the implementation of British policy in Northern Ireland since 1972? How valuable an official history would be in elucidating it.
The construction of a programme of new work still lies very much in the future. What we have to do today is, first, to thank the noble Lord, Lord Rodgers of Quarry Bank, for the tenacity with which he has pursued the matters that have to be settled so that the official history programme can proceed, as so many of us want. Historians owe him an immense debt of gratitude. We must also recall with gratitude the work of the two other members of his group of privy counsellors, to whom he referred, who contributed so much to the programme: Lord Healey and Lord Howe of Aberavon, whose recent deaths caused us such deep sadness.
The second thing that we have to do today is to underline the importance of implementing the recommendations of the excellent report on the official history programme produced in 2009 by Sir Joseph Pilling, an old friend of mine who, as it happens, would occupy a prominent place in any official history of the Northern Ireland Office, having been its Permanent Secretary during the peace process. Sir Humphrey obfuscates; Sir Joseph is unequivocal. As the noble Lord, Lord Rodgers, reminded us, Sir Joseph stated:
“The overwhelming weight of evidence supported the continuation of the programme”.
He went on to lay out with clarity and precision the manner in which it should be done. Again, as the noble Lord, Lord Rodgers, reminded us, that was some six years ago.
Those Ministers who have had the—not especially enviable—task of explaining the Government’s position in response to the Pilling report, including the noble Lord, Lord McNally, who it is so good to see here, have resorted constantly to pleas of poverty in this so-called age of austerity. I suggest that the time has come to invoke a firm Tory principle and to bring it into play now. The principle is that, as the state divests itself of certain responsibilities, as this Tory Government are doing—particularly in the sphere of local government —so it should ensure that the state’s duty is fully executed in those areas that fall permanently to its care. The Official History Programme is one such obligation.
I would not dream of showing any disrespect to my long-standing noble friend Lord Gardiner of Kimble, but I rather wish that the noble Lord, Lord Bridges of Headley, could have joined us for this debate. The Official History Programme has never had a stronger champion than his grandfather, Edward Bridges, who was a wartime Cabinet Secretary and one of the greatest public servants—one of the very few rewarded with a Garter. In late 1941, a low point in our wartime fortunes, Bridges commissioned a series of official histories on both the civil and the military aspects of the conflict. He said:
“We must think in the long term of the continuity of the state”.
That above all is why this publicly-funded programme should continue, and continues to be needed.
Not that Edward, subsequently Lord Bridges, expected his own profession necessarily to be exalted or praised by the histories. “I confidently expect”, he said of civil servants,
“that we … shall continue to be grouped with mothers-in-law and Wigan Pier as one of the recognized objects of ridicule”.
A Government who include this great and witty man’s grandson ought surely to do their duty.
Lord Addington (LD)
My Lords, when I saw that my noble friend had put down a debate on official histories, I must admit that I thought, “Oh, I quite like reading history, so I will find out what an official history is”. It has been a voyage of discovery and, having listened to the debate so far and read previous debates, I realise that I am treading very gingerly on ground that I do not really recognise. But it has become clear that I have actually seen and used official histories on occasion. I did not know what they were—they were just history books that had been provided by the state to look at the state.
If that is being done properly, it is a great expression of confidence in the state by the institution of the state. I rather suspect that there are a great many people—say, a Minister—who will be keener on the idea of an official history going into office than on leaving it. So we have that idea bubbling around. But if we are doing this—looking at our comparatively recent past—the programme is probably a good thing. If we take it to be a good thing, what should we do about it? Quite clearly, the first thing that we should do, as the noble Lord, Lord Lexden, and my noble friend Lord Rodgers said, is continue to produce them.
I am further indebted to my noble friend for providing me with a copy of the Pilling report. One of the most important things it says is that great big books may be wonderful things for people who have the time and the inclination to read them. But I am a person who likes history but is rather addicted to the article: the small, easy to read copy. I pride myself on having a very good veneer knowledge of history: it is wide-ranging and has a nice shiny surface in places but in other places is worn through and is non-existent. Accessible articles are the best way forward. If you are going to do this work, which is valuable and not very expensive, surely making sure you divest and get it out there would be an extremely good idea. It is about using it in a more creative way.
There is an appetite for consuming history—and it is a broad spectrum of history we are covering here—and for using that knowledge. We have many institutions that will help us do it. Surely we should be tapping into that. We have an example in the Pilling report of a good way of using new media intelligently to reach a mass audience. Surely that is what is required here.
But you have to continue to do the work. Having less monumental lists of work and being more up to date and selective in producing things in a more realistic timeframe would also help the process. You could build into that an expectation of receiving knowledge and pushing it out again, but you should still carry on doing it.
It has already been suggested that we are supposed to be in much better economic times. Surely the Government’s general duty to inform and indeed encourage people to use our heritage come together here and feed off each other. One thing that we are absolutely sure about is the fact that nothing happens in isolation. If we want to keep alive the heritage industry, and indeed learning, we must use this approach to support it in various ways, and to support the work that has already been done. That is something that I would like an answer on, if not today then as soon as possible. How are we using this great store of knowledge to support education, general interest and other projects? That is something that we should be doing.
I do not think there is much more I can say that will help this debate. I hope that we will, first, carry on and, secondly, try to use any future work more creatively and go back and redistribute knowledge in a more creative way. We all have a very big, intimidating textbook at home that grins at us from the shelf. There is good stuff in it, but are we brave enough to open it and read a number of chapters? In certain cases, I certainly am not.
Lord Bew (CB)
My Lords, I rise to support the noble Lord, Lord Rodgers of Quarry Bank, who has taken the lead on this issue for a long time. He brought the matter before the House in July 2013 and February 2008. I supported him strongly on both occasions and I wish to support him strongly again today and to argue for a revival of the Official History Programme.
I want to follow up the arguments of the noble Lord, Lord Lexden, about the relevance of the case of the history of the Northern Ireland Office. The recent deal that has been made in Northern Ireland to get the political institutions to function again, known as Fresh Start, does not make any provision to deal with legacy or historic issues. That is not the worst part of that deal, but the issue will not go away in Northern Ireland. Only this week the BBC “Spotlight” programme castigated the British Government for their allegedly inflexible approach on these matters, even though it based much of the programme on material that was released in the normal way at Kew. This was presented as a dramatic and subversive fact, when it was just the normal release of documents.
The local press also reports that there is still talk about some new deal on the past. Every idea that I have seen since the talks shared by Dr Richard Haass has been expensive—far more expensive than anything that might be considered by the Official History Programme. Every idea I have seen involves another lawyerfest and contains the possibility of exacerbating rather than improving inter-community relations.
In these circumstances, it is a very modest thing to say that there is surely a role for something that would be exceptionally cheap—an official history of the Northern Ireland Office. It has been brought home to me in particular by the death this year of two Permanent Under-Secretaries of the Northern Ireland Office who both played a major role—Sir Kenneth Stowe and Sir Brian Cubbon. We ought to respect the significance of these careers.
Let us remind ourselves of what is at stake. Underpinned by bipartisan consensus in Parliament for 30 years, we asked our officials and politicians, in and out of uniform, to deal with a horrible sectarian conflict. One fact is not in doubt: well over 90% to 95% of deaths in that conflict were caused by the people of Northern Ireland themselves, but we asked the Northern Ireland Office to somehow manage this.
I have no doubt that it made mistakes. We have published extensively on the mistakes, such as Bloody Sunday, and Sir Desmond de Silva’s report on the tragic murder of Patrick Finucane. The state has spent many millions of pounds on many volumes revealing its own faults. Entirely in the spirit of the noble Lord, Lord Bridges, quoted by the noble Lord, Lord Lexden, I am certain that if we have an official history of the Northern Ireland Office, it will reveal mistakes. It will reveal civil servants, politicians and soldiers making mistakes in the handling of extremely difficult questions. That is really not the point. The point is that we ought to be saying that this is the effort by a liberal democracy to deal with a horrible problem. We ought to respect it and bring the full nature of this particular story to the public in a cool and calm way.
It is particularly important now and the argument is even stronger than in the past, not only because it is necessary as a balance, given some of the other ideas out there for dealing with the past in the Northern Ireland, but because we are in a second wave of terrorism. It is no longer the IRA, but we know that our society faces problems. We are again asking officials—people in and out of uniform—and politicians to make very difficult choices. Nobody believes that we can now march happily onwards into the sunlit uplands of an ever more free liberal democracy with ever more enhanced human rights. We want to do that but at the same time we all realise that there are also difficult choices to be made to secure the security of the citizen. This House has debated this for many hours and will have to debate it again for many hours in the years to come.
We are now in a second such conflict, and bringing out an official history of the Northern Ireland Office would reveal the errors and the many difficulties and mistakes: the tone of the comments of the noble Lord, Lord Bridges, quoted by the noble Lord, Lord Lexden, was absolutely brilliant. We would be sending out a signal that we have confidence that our politicians and our officials, both in and out of uniform, when faced with these ghastly problems, struggle to do their best. They do not always succeed, but they struggle to do their best, and at any rate, we are quite prepared to lay it out and to allow the public to judge. On the eve of, sadly, another period of British life when terrorism is again becoming a more significant issue, that is the signal we ought to be sending out. That is why there is such a strong case for the renewal of the Official History Programme. It expresses a self-confidence in the intentions of our officials, but is not an act of hero worship or piety—it is not that at all.
Lord McNally (LD)
My Lords, it is always a great pleasure to follow the noble Lord, Lord Bew, a very distinguished historian in his own right. My degree is in economics and social history, and I have always made a lifetime commitment never to describe myself either as an economist or a historian. The noble Lords, Lord Bew and Lord Lexden, made a very strong case for official histories, particularly in the case of the Northern Ireland Office.
The noble Lord, Lord Lexden, talked about the riches in official histories and of a programme that must endure, and made the point that pleas of poverty in times of austerity should by now be wearing thin. I deliberately left the withering on the vine statement— I do not think it was in the official draft—because I wanted a further look at the issue. I agree with the noble Lord, Lord Addington, that it could be looked at in a more contemporary way, feeding perhaps into education and using new technologies to deliver it.
One of probably the two most famous quotes about history is of course, “History is bunk”, by Henry Ford. Before the historians rush to tell me that Henry Ford never said that, I will quote what he did say:
“History is more or less bunk. It’s tradition. We don’t want tradition. We want to live in the present and the only history that is worth a tinker’s dam is the history we made today”.
Then of course the other great historical quote is Churchill’s:
“History will be kind to me for I intend to write it”.
That is what today’s debate is about: whether the Government are made up of brash young men and women who do not really care about history. If so, I am really worried, because I have to say that, in what now is a depressingly long 50 years around Whitehall and Westminster, the most dangerous politicians I have met are those who have no sense of history. I will not name them, but your Lordships could all make a list.
It is time for the Government to come clean. Do they no longer think that official histories have a value? Or do they believe that they can really leave it to those who write their own history? Are we going to leave the history of our times in the hands of Boris Johnson? Or do they see, as I do, a real value in this programme? It is too easy to take history for granted but, as was said by the noble Lord, Lord Bew, the exercise can itself be cleansing and can play a constructive role in healing old wounds. It is also important to retain a sense of national identity.
This has been a very particular year of commemorations, and I have been very pleased to serve on both the Magna Carta 800 Committee and the Speaker and the Lord Speaker’s Committee on the Magna Carta and the de Montfort Parliaments. Again, there is a sense of taking history and bringing it into contemporary understanding. What a joy it has been to see schoolchildren in particular going through Westminster Hall and seeing those wonderful banners, reminding this generation of the shoulders they stand on in terms of our parliamentary democracy. I personally think that Westminster Hall will look duller for those banners being removed, and I wish that they could stay.
I will use the brief time remaining to say a kind word about another jewel in our crown, which is the National Archives. I see that it has now been moved into what I hope will be the safe hands of the Department for Culture, Media and Sport. There again, holding on to our history is very important, and not only at a national level. We need to encourage businesses, religious organisations and charities to preserve their records, and we need to support local government archives. At the National Archives there is an archive development team that is available to help organisations keep their archives safe. Official histories are part of that commitment.
To quote the Library briefing on this debate,
“the official historian is, among things, the custodian of the national memory”.
Without these histories, we would lose something extremely valuable. So although I freely accept that in the past I may have contributed to the series of bland reports about which the noble Lord, Lord Rodgers, complained, I urge the Minister to ensure that there is no hiatus and no withering on the vine. I ask the Minister to tell us clearly what the Government want to do with official histories.
Baroness Hayter of Kentish Town (Lab)
My Lords, it is a great pleasure for historians to see three former assistant general secretaries and two general secretaries of the Fabian Society sitting alongside each other. I thank my predecessor in that role, the noble Lord, Lord Rodgers, who himself of course is a notable chronicler—Fourth Among Equals. Perhaps he also wrote to make sure that he was the one writing the history. His debate today is important to historians such as me, although I am a very junior one, unlike my PhD supervisor, the noble Lord, Lord Hennessy, or indeed the eminent noble Lords, Lord Bew and Lord Lexden, from whom we have heard today. It is also of course important to political animals such as any of us here, because if we do not know and understand the past and its lessons and precedents, we are then condemned to make some poor mistakes.
As the noble Lord, Lord Rodgers, reminded us, the official histories have a long history. They go back to 1908, and in 1966 they were extended beyond the military. They have produced some works of major significance by impartial and distinguished historians, even if questions have been raised about whether the Government themselves use such valuable works sufficiently, and whether they are disseminated or marketed widely enough, including in the easy-to-read versions alluded to by the noble Lord, Lord Addington. There is indeed a sad lack of information about them—a visit to the Cabinet Office website being as opaque as I fear outsiders always regard government secrecy. In fact, the only thing there are the now rather old reports on this subject.
The Pilling review quoted the purpose of the Official History Programme as providing,
“authoritative histories … a reliable secondary source for historians until all the records are available in the National Archives; and a ‘fund of experience’ for future government use”.
That phrase is key. Whether it is about capturing data by early access to papers, oral history or witness seminars, or about their analysis and publication, open government and the accountability of our leaders demands as early, vigorous and independent description and analysis as confidentiality permits.
This programme can help, whether through funding or by access, but also by encouraging and assisting research council-funded work. Government should also consider how to engage historians, particularly on areas of relevance to today’s problems, or to securing institutional memory—or, as the noble Lord, Lord McNally, said, “national memory”. Governments, both Ministers and civil servants, can also engage directly with historians, including via the History and Policy organisation, the King’s College Strand Group, the Queen Mary Mile End Group, or the Institute for Government. All these bring together academics and practitioners, exploring individual decisions, events or themes, helping to craft the preservation and use of institutional memory, including its value to staff development and to policy-making, and focusing on the lessons of history.
That does happen in some parts of Whitehall. FCO historians have blossomed; they were well used by the noble Lord, Lord Hague, when he was there thinking about current issues and general themes. Perhaps today we could also pay tribute to the work of the recently and sadly deceased Chris Martin in encouraging the history of No. 10, developing its website, and bringing in historians to advise. Relishing and fostering a sense of history in those who inhabit No. 10 benefits them and generations to come.
The programme was set up to provide a,
“‘fund of experience’ for future government use”,
which is a vital phrase. There is perhaps a question as to whether government could better use the outcome, both through far wider publication of the research in the media and at events and through a more committed use of the outcome within Westminster, Whitehall, and local and European government. It may be that the Official History Programme may not continue in exactly the same form as in the past, but we must not lose its original spirit and aims, and we should focus on better ways in which history can be recorded, analysed and used in ways that are useful to today’s Government, Opposition and for future academics, practitioners—and, even more, the public on whose behalf we all strive to serve. This is the work of their Government whom they elected and pay for. They need to know what happened in their name.
Histories help the accountability of elected Governments. So the question for the Minister is how the Government will encourage and use history for better governance, policy skills development, the capability of the Civil Service and for the contribution of history to evidence-gathering, analysis and policy. We need to have our history and we need it renewed, perhaps through an engagement programme. I support the pleas of the noble Lord, Lord Rodgers, and I endorse one particular Tory principle as enunciated by the noble Lord, Lord Lexden, which is that of the state fully executing its duties in those areas that fall clearly within its care. The official history is one such duty.
Lord Gardiner of Kimble (Con)
My Lords, this has been a fascinating debate, and as is customary in your Lordships’ House, it has proved to be highly educational for me. I thank in particular the noble Lord, Lord Rodgers, for his continued and loyal pursuit of this subject. Indeed, we acknowledge his valued contribution to the Government’s Official History Programme in his capacity as one of the three distinguished privy counsellors who advised the Cabinet Office on the choice of subjects and the appointment of historians over many years. I think that my noble friend Lord Lexden expressed much more fully than I am able to the gratitude of the Government to the noble Lord, Lord Rodgers, as well as paying tribute to the late Lord Howe of Aberavon and the late Lord Healey, who are obviously much missed not only in that regard but for the great contribution they made to our national life.
The noble Lord, Lord Rodgers, has asked for the latest assessment of the process of preparing official histories. Perhaps I may set out where we are with the histories which are currently in the pipeline before looking to the future. There are six official histories currently being prepared on behalf of the Government’s Official History Programme. They are expected to be ready for publication in the next two years. The subjects of these six works are Cabinet Secretaries, which will be published to coincide with the 100th anniversary of the Cabinet Office next year; the history of the Civil Service since the publication of the report of the Fulton Committee in 1968; the UK’s nuclear deterrent, which will be in two volumes; the Joint Intelligence Committee; the UK accession to the European Economic Community; and the criminal justice system.
These histories are, as I say, all nearing completion. Naturally, the costs of the histories and the time they take to produce vary considerably, depending on the subject and the individual historian. In some cases, recently retired historians are paid a personal fee, but in other cases the Cabinet Office would pay the historian’s university to buy his or her time. The sales of published histories varies, but generally only a few hundred copies per history is the usual number. The royalties from the sales of official histories barely contribute to offsetting the cost of each work—perhaps a few thousand pounds per book. Nevertheless, I should put on record the appreciation of the Government for the official histories which have been produced over the years. They have, particularly in the times before the information age, made a contribution to our understanding of some of the key events in our recent history.
But as these six volumes are now nearing completion, the Government will soon look again at the future of the Official History Programme, and the debate today will give them a range of issues to consider. I know that this will disappoint the noble Lord, Lord McNally, but looking to the future, the Cabinet Office, like all other government departments, is currently deciding how to implement the outcome of the recent spending review. For the Cabinet Office, this means a reduction of 26% in its budget. It will be necessary to take a hard look strategically at the functions of the department to ensure that the work that is done contributes to its key objectives. The future of the Official History Programme will form a part of the Cabinet Office’s considerations.
But this is not just or even primarily about costs. As the noble Lord, Lord Rodgers, said, the Official History Programme was introduced in 1908, but in a different form and in very different days. Initially it was all about military histories—and, as has been said, in the 1960s the programme was amended to include peacetime histories. Since that time, self-evidently, much has changed. We have moved from a society where access to information was limited to a small number to a much more open form of government—and I think that that is a concept that the noble Baroness, Lady Hayter, would rightly champion. Even since 2009, when the Pilling and Hamilton reports were written, the world has moved on, as more and more government information is available online.
I think that the noble Lord, Lord Addington, raised this issue for consideration as, increasingly, people’s preferences have changed. People seem to have less time to read the whole of a large volume of history, and instead are much more likely to refer to shorter works and compare different information that they can find online themselves. We now have freedom of information legislation, and are in the process of transitioning to a 20-year rule for records being opened at the National Archives. Government is also more transparent, with a great deal of information being published on routine transactions and important decisions.
Alongside increased public and media scrutiny of the decisions taken by government, there is now a great deal more information on the key issues of the day in the public domain, and we are opening up many more records to the public, such as the Cabinet Secretaries Miscellaneous Papers. That is something that the noble Lords, Lord Addington and Lord McNally, raised. In this age of information accessibility, records can be accessed readily by historians and researchers online—for example, from the National Archives.
I am particularly grateful to the noble Lord, Lord McNally, for raising the profile of the National Archives. I had the privilege of going there when I was part of the DCMS team; it is an extraordinary resource and a real jewel in our crown. Anyone who goes there will understand that there is an enormous commitment from the people working there to ensure that the National Archives is held in good condition and are readily accessible. One thing that very much struck me on that visit was the number of people sitting there and accessing it, deriving great interest from the National Archives.
I very much appreciate what the noble Baroness, Lady Hayter, said about Chris Martin, and I endorse it very much indeed. No. 10 now has a good deal of historical information available on GOV.UK, for example, including a monthly article by a guest historian, biographical information on all Prime Ministers and exclusive video interviews with six Cabinet Secretaries.
In these circumstances, there is, of course, an argument that the time may have come to reconsider whether it remains justifiable to give privileged access to government records to just a few chosen historians, and spend not insignificant public resources on doing so. It might be more in keeping with today’s climate of greater openness to be as good as we can be at getting information into the public domain so that independent historians can write histories, without the Government having editorial control, on the basis of information that is in the public domain and available to all.
It is undoubtedly the case that, in their heyday, official histories performed a particularly valuable role in giving the public a broad-ranging and reliably sourced historical perspective on key events in our history. As we have seen, today we have a much more open environment as far as access to government records is concerned. But I am particularly mindful of what the noble Lord, Lord Bew, and my noble friend Lord Lexden said about the Northern Ireland Office and I do, of course, promise to ensure that the Minister concerned is aware of the points made by the two noble Lords. I shall naturally ensure that my noble friend Lord Lexden’s guidance to my noble friend Lord Bridges of Headley about the words of his esteemed grandfather resonates in my noble friend’s ears.
This has been an exceptional debate. Again, your Lordships have heard from historians who care about the history of our country and have contributed to its history. I hope that in the reflection of this debate, the points made will be given all the consideration that they deserve. A decision as to whether the Official History Programme should continue in some form or not remains to be taken, and I will ensure that the views of your Lordships, which have been made so robustly today, are reflected to colleagues in the Cabinet Office.
Railways: Trans-Pennine Rail Line
Lord Shutt of Greetland
To ask Her Majesty’s Government what assessment they have made of the impact on the economic development of the north of England of the pausing of the electrification of the Trans-Pennine rail line.
Lord Shutt of Greetland (LD)
My Lords, for the avoidance of doubt, I confirm that the trans-Pennine railway line to which I shall refer is the Leeds-Huddersfield-Manchester line—I may refer to other matters, too—which does, of course, have important links further east and west. Its electrification was announced in the Chancellor’s Autumn Statement back in 2011, and was to be completed by 2019.
I put this Question down for debate shortly after the announcing of the pausing in June 2015. It would have been easy enough to have pulled the debate once I heard that the de-pausing had been announced on 30 September. However, it is not so simple. Many questions arise.
The first point to raise is the fact that although the pausing stage lasted three months, the delay that is now announced adds three years to the timescale. It is stated that electrification should be complete by 2022. Is there some doubt even about that date? It is very disappointing and does not sit well with another announcement this autumn in the booklet High Speed Two: East and West, the Next Steps to Crewe and Beyond. That tells us that there is to be a six-year acceleration of the route from the West Midlands to Crewe—so the Government pause, de-pause and accelerate. Many in the north, of course, will wonder whether the difference in treatment is due to HS2 originating in London. One wonders whether this would be put up with in London and the south-east.
Secondly, in the pausing statement in June, the Transport Minister, the right honourable Patrick McLoughlin, told Parliament that,
“we need to be much more ambitious for that route”.—[Official Report, Commons, 25/6/15; col. 1068.]
He was referring to the trans-Pennine route. It was announced that the revised electrification plan was an improvement on the previous plan, which only changed the power supply of the trains. That sounds somewhat minimal. Indeed, in order to benefit from the overhead power supply, new rolling stock would be needed, and in any event there would be the advantages of electric power and acceleration. But what is the extent of the change that makes the new plan so much better or more ambitious that a further three years are needed to complete it? What further infrastructure improvements are envisaged? Can the Minister give further details? Indeed, what is the extent of the Minister’s ambition?
Thirdly, little has been said recently about the much-vaunted HS3. In another document—there has been a plethora of documents this last few weeks—The Northern Powerhouse: One Agenda, One Economy, One North, published in March 2015, there are five pages, 17 to 21, on “Our Rail Plan”, but there is no mention of HS3. Similarly, in the Transport for the North: The Northern Transport Strategy Autumn Report, published in November 2015, there is again no reference to HS3. What is Her Majesty’s Government’s present position on HS3? Is that scheme in pause mode? Where is it? If it is still envisaged, what is the connectivity in respect of east-west electrification and HS2?
The fourth point is this. The HS2 east-west document, which runs to 120 pages, repeats that HS2 is not a stand-alone railway. It will be an integral part of our country’s rail system and wider transport infrastructure. The words “classic compatible” are used, yet in this document and another document still—The Yorkshire Hub—lies an interim report on the redevelopment of Leeds station. This document promotes what it describes as “option 2” for the redevelopment of Leeds. The proposal is, perhaps, marginally better than the original plan, which is now described as “option 3”.
I described that earlier plan as a hammerhead terminus. The only difference in the new plan is that the hammer shaft is nearer the hammerhead—or is it as bad as this? Is it intended that there will be another link from the south of the new terminal to swing into the west side of the present station? This is hinted at in The Yorkshire Hub, but it is not on the plan or the map in the Yorkshire Hub booklet. The documents are not clear on this, and for the sake of through connectivity, using existing electrified lines to Bradford and to Skipton, as well as the to-be-electrified lines to Huddersfield, Manchester and further west, and the lines to York, the north and the east, clarification—or perhaps change —is needed.
Another associated point, my fifth point, is that following the pausing/de-pausing/delay saga, could the Minister inform the Committee as to the present prospects for further trans-Pennine electrification via the Calder Valley and the Harrogate lines east of the Pennines? These were much vaunted in the run-up to the general election, but little has been heard of them since. It would be useful to have an update on that.
I am sure that, in his response, the Minister will trumpet yesterday’s announcements on the new franchises. I commend them, but I trust that the Minister will still tackle the issues that I raised, which need addressing now to future-proof the important infrastructure decisions ahead. We need the connectivity, whether it is connectivity HS2 to HS3 or HS2 to everywhere else. That has to be planned for now; it is something that cannot be put off. I look forward to other contributions in this debate and especially to the words of the noble Viscount.
Lord Scriven (LD)
My Lords, I congratulate my noble friend Lord Shutt for initiating this important and timely discussion. It appears that opportunities for better rail services in the north always seem to be disguised as a pause or a stop. Those who have nothing better to do than my Twitter timeline will notice that I have become more and more frustrated with trying to commute and travel between the cities and towns of the north. It is both an exasperating and sometimes fruitless exercise. Many millions of people across the north will be able to associate with that.
I have to say to the noble Viscount that warm words today will not be enough. The north is fed up with warm words. We seek today from this debate a real commitment with timelines and timescales and figures for some of the investment, particularly along the line of the debate heading. I come from Sheffield; I have lived in Sheffield for 20 years and I am not on the north Pennine route but on the south Pennine route. I know, however, that connectivity is absolutely key in the north. Apparently, the Chancellor also knows that connectivity is key, because without it, his northern powerhouse will not happen. We need to connect the great cities and towns of the north in order to deliver not just economic prosperity but a place where people can get around.
Can the Minister say how much money has been put aside for the electrification of the rail line? Is it guaranteed within the cost period 6 for Network Rail? We need to make sure that it does not go the way of the Great Western rail line, where there was a £1.2 billion overspend on an initial scheme of £1.6 billion, which caused the pause in the first place.
With regard to this scheme and the electrification of the Midland main line, does the Minister agree with the recommendation of the Public Accounts Committee in the House of Commons on 16 November which suggested that it might be appropriate to fund and manage these projects outside the five-year rail funding cycle? That is how Thameslink and Crossrail have been funded, rather than through these pauses, which seem to have become our opportunity. Those two schemes cost £21.1 billion. The scheme for the Midland main line, for example, is only £0.5 billion. I do not decry London getting investment, but I want fairness for the north. So will the Minister say whether these schemes will be out of the five-year funding cycle and will be ring-fenced in a separate fund like Thameslink and Crossrail?
On 15 July, I asked the noble Lord, Lord Ahmad of Wimbledon, in a Written Question if he would commit to the electrification of both the trans-Pennine route and the Midland main line to start and be funded before Crossrail 2 starts. I received very warm words in his answer and I now ask the Minister whether he will commit to funding and starting the two schemes before Crossrail 2?
People in the north do not want warm words. We want to see real delivery of these schemes. If connectivity is king for the north and the northern powerhouse, what about the electrification of the southern trans-Pennine route, via the Hope Valley, between Sheffield and Manchester? It is just as important. It is absolutely incredible that in the 21st century, a 33-mile journey by train takes 51 minutes between two great cities of the north. The One North report that was given to the Government last year asked for this. There has been no answer. In fact, there has been no mention of it. Can the Minister say yes or no? Will the Government commit to the electrification of the southern trans-Pennine route? Furthermore, the line has been downgraded. The Government promised to move from two to four trains an hour, even though the line has not been electrified. They have now committed to only three. So we worry about this route.
What about connectivity between HS3 and HS2, as my noble friend said? There is a big question about the station for HS2 in Sheffield. At present, it looks likely to be located in Meadowhall. However, the HS3 situation means that the HS3 station is in Sheffield city centre. A report by Sheffield Council showed that the Sheffield scheme creates 6,500 more jobs; an extra GVA of £2.5 billion; and should, when successful, create £530 million more business rates. Therefore, if connectivity is king, why is there an HS3 station in Sheffield city centre and an HS2 station out at Meadowhall? Will the Minister commit to trying to locate both in Sheffield city centre?
So we want a 21st century railway—we need it now, and we need firm commitments, not warm words. Unlike my noble friend, I welcome the two new franchises that were given this week. But to be honest, getting rid of Pacer trains and having free wi-fi and more real-time information boards is not the basis of a 21st century railway. Thank you for bringing us into the 20th century with the latest franchise, but we need to see the real issues dealt with regarding connectivity. I remind noble Lords that there is £21.1 billion for London and only £0.5 billion asked for the Midland main line electrification, which has now slipped an extra three years. That may not seem a long time but, when you are a business person who wants greater connectivity, it does.
Along with millions of others in the north, I want to see some firm and real answers to my questions. I want really to understand the cost of the electrification of the north system and when funds will be firmly committed, rather than just saying “by”. I want to see answers to the strategic connectivity for HS2 and HS3 in Sheffield city centre, and I want to understand the Government’s commitment to the trans-Pennine route on the south, between Sheffield and Manchester, where they are in terms of the electrification of the Midland main line and the northern route and whether they will ring-fence funds.
I hope that after the Minister has responded my Twitter timeline will be a little bit more generous and optimistic and that, in a few years’ time, when I am travelling on what we are promised will be a connected, speedy and efficient railway line in the north, others will want to retweet rather than show frustration.
Lord Berkeley (Lab)
My Lords, I am very grateful to have the opportunity to speak today. The noble Lords, Lord Shutt and Lord Woolmer, both mentioned the critical issue of connectivity. I gave evidence to the House of Commons Select Committee on the High Speed Rail Bill a couple of weeks ago and was astonished by how they are still plugging this perfection of a line going somewhere up the middle. It might go into Manchester Piccadilly but it does not seem to go to any other station that is of any use. Certainly in Birmingham there is a 20-minute walk from one station to the other. They have lost it in a kind of wish to be better than the Japanese, or something.
But we are talking about the trans-Pennine route and the north today. I question whether the electrification of the trans-Pennine was ever actually going to go ahead, because I do not think that they had decided where it was going to go or how many tracks it would have, along with little details such as whether the track needed improving and where they would put the posts for the catenary, which was what went wrong with the Great Western.
I am a great believer in electrification but the problem with electrified tracks is that when the electrification stops you either change trains or you have to have a bi-mode train. So it is fine having one electrified route, or even two, from Manchester, or maybe even Liverpool —it is not too far away—to Leeds and Sheffield. But if you want to go on to York or beyond you will have to change trains, or have a bi-mode train. I was therefore interested in yesterday’s Written Statement about having 500 new trains, which the noble Lord, Lord Shutt, mentioned. I believe that they can go at 125 miles an hour, but I cannot see anywhere in the Statement whether they are diesel, electric or bi-mode. Maybe I have got that wrong, but it would be nice if the Minister could confirm it because, if they are electric, they might have to wait a year or two. It would be nice to have them, but they will not be able to operate; they will be sitting in the siding waiting for the wires to go up, which is not a very good idea.
The shortest thing that can be solved is capacity. Noble Lords will know about trains going uphill, especially if they are freight—I declare an interest as chairman of the Rail Freight Group. The northern powerhouse people have been very positive about freight, and I thank them; they want to see more freight. But it is no good having a passenger train going 125 miles an hour uphill if it is stuck behind a stopping passenger service or a freight train. So putting back what used to be four tracks on the approaches to the tunnels is absolutely fundamental and should come first.
If they can put the posts up for the wires as well, that would be a very good thing to do at the same time. There is no earthly point in going at 125 miles per hour if you have to halt behind the next stopping train. The noble Lord, Lord Scriven, mentioned the need for more trains on the Hope Valley line. Yes, of course there should be, but there has to be a place for through trains to overtake the stopping trains and vice versa.
I hope that the Minister can give us some idea of the timescale for infrastructure improvements to bring more capacity, where those improvements might take place, and how they will be linked to the new trains which might be electric, diesel or a combination of both. Certainly some money needs to be spent, and in much bigger sums than have so far been committed on the ground.
Lord Shipley (LD)
My Lords, I am grateful to my noble friend Lord Shutt of Greetland for initiating this debate and for the contributions made by other noble Lords. Despite the fairly small number of speakers, the key issues have been clearly identified and the Minister has been given a large number of questions to respond to. It is likely that I will add one or two to that list.
Back in the middle of June we had an excellent debate on transport in the north, and on that occasion I spoke about the importance of thinking in a pan-northern way, pointing out that connectivity east to west matters far more than perhaps transport planners based in London understand, and that Transport for the North as a single body with a clear remit to promote investment in the transport infrastructure of the north of England is a very welcome development. We have moved on from the position of a few months ago. As has been pointed out, there was real concern just a few days after that debate when the commitments made before the election were paused, leaving the electrification of the trans-Pennine route in doubt.
A lot has been written and said about the matter. It does not affect only the trans-Pennine route between Manchester and York, and real concern has been expressed about the capacity of Network Rail and its planning. I hope very much that those issues have been overcome. It is possible that it may prove to be a blessing in disguise that the pause has happened at all. It may give time for the problems of projects suffering overruns caused by poor planning and poor estimation of costs by Network Rail to be identified and acted upon by the chair, Sir Peter Hendy. I welcome his work, and I welcome, too, the appointment of John Cridland as the first chair of Transport for the North. He said on his appointment a few days ago:
“There is much to do to improve transport capacity and links across the North”—
and he is absolutely right. I hope that he will bring some clarity to the planning process because we still lack a strategic transport plan for the north. Indeed, we lack a strategic transport plan for the whole of the United Kingdom. We have elements of it, but we do not have a single plan.
There are elements of a rail plan for the north of England and we certainly have ambition. I pay tribute to the Minister, to the Secretary of State for Transport and to colleagues in the department because a lot has been happening, and I welcome some of the achievements of recent months. However, we need much more work, and the debate today has identified a number of ways in which the improvements need to be made.
I welcome the decisions announced this week on the Northern Rail and First TransPennine Express rail franchises. I hope that I do not sound churlish when I say that I wish that the hyperbole of DfT press releases could be toned down a bit. This week there was an assertion that the planned rail improvements will,
“make the Northern Powerhouse a reality”.
As a statement that is slightly over the top. It will certainly help, but actually it will take a great deal more than that, including work by other departments of state, to deliver the northern powerhouse. But the sense of direction is right and I pay tribute to Ministers for that.
From the perspective of the north-east—as your Lordships know, I live in Newcastle upon Tyne—there will be 500 new carriages, new peak-time services, greater capacity, an end to Pacer trains, improved stations, better ticketing and full electrification between Liverpool and Newcastle by 2022. That is all welcome news, even though of course it has actually been delayed, as was pointed out to us by my noble friend Lord Shutt of Greetland.
In addition, the First TransPennine Express franchise will deliver £400 million in premiums to the Government over the seven years of the franchise. That is a level never previously achieved. It is good that it is being managed out of the north by the Department for Transport and Rail North Ltd, which represents 29 local authorities across the north and which will build capacity in the north.
I noted that in his press release the Secretary of State for Transport felt that:
“Arriva Rail North Limited and First TransPennine Express Limited went far beyond our requirements with exciting, ambitious plans”.
That made me wonder why the Department for Transport’s requirements were so limited in the first place. If it is easy for those running the franchise to deliver more than was expected in the bid documentation, it seems to me that maybe government underasked. The result demonstrates to me that there is demand for the services, and thus income from travellers will be forthcoming. That is a vindication of those who have been campaigning for improved services.
I ask the Minister to clarify the question of fares, given these two new franchises. Is all of the additional income that is coming in and the improvement to services to be achieved from current income, or is there an expectation that there will be higher fares? I have assumed that fares would not alter, but I would appreciate the Minister’s confirmation that fares will not go up on either of these new franchises over their lifetime.
I referred earlier to the need for a strategic transport plan for the north. There has been mention of integration with HS2, and we have talked about the issues around Leeds and in Sheffield, which I will not repeat. However, there does need to be better integration. I would like to hear the Minister’s observations on my view that the cost of spurs and links between HS2 and city centres should be appraised and budgeted for now as part of the overall HS2 project. There are some big costs that need to be thought about, but they do not form part of the current HS2 budget plans.
Paragraph 60 of the Command Paper that was previously referred to suggests that this can happen “seamlessly”. If these links to HS2 are to happen seamlessly, they have to be planned clearly, but I am unclear what that plan is. We have had a mention of the Leeds-Manchester link, but I am not clear what the top of the Y will look like in the context of HS3. I hope that the Minister will be able to tell us what the plans are for HS3, because I am not clear what the policy is on how the two sides of the Y will join up. The Chancellor has talked regularly about this, but I do not know what that link would look like.
Perhaps I could also ask about the east coast main line. Paragraph 51 of that recent Command Paper talks about the HS2 connection to the east coast main line via Church Fenton and states:
“We continue to believe that a link onto the ECML is necessary and complements the Government’s commitment to deliver better transport across the North-East and Yorkshire”.
The timescales are too long. If West Midlands to Crewe can be advanced by six years, there should be a clear commitment that the link to the east coast main line should be put in as part of the extension to Leeds; it should be constructed at the same time. I hope very much that some thought can now be given to that.
I turn to growth within the northern powerhouse. In the end, this is all about growth. Because local authorities will be able to keep 100% of business rate growth in future years, areas that attract development will grow faster, pay more in business rates and therefore enable those areas to invest in better infrastructure. A big worry for areas not on the high-speed line, even if they have the classic compatible rolling stock, is that they will miss out on that increase in business rate income. What assessment has been made of the impact of 100% retention of business rates on areas not on the HS track?
Finally, the point made by my noble friend Lord Scriven about planning cycles and funding cycles is extremely important. If some parts of the country can avoid five-year funding cycles, why cannot the north of England avoid those, too?
Lord Rosser (Lab)
I add my thanks to the noble Lord for securing this debate. We welcome improvements to rail services, particularly where they will have the biggest impact. The subject of the debate is about not simply the pausing of the electrification of the trans-Pennine line but about its impact on the economic development of the north of England. If I have guessed correctly in which of his many areas of responsibility the Minister is speaking today—and perhaps I have not—it is interesting that the government spokesperson for this debate is from the Department for Transport rather than from a department one might more normally associate with responsibility for overall economic development.
I do not know, if I am right, whether this means that when the decision was announced by the Secretary of State for Transport to pause the electrification of the trans-Pennine line, the Secretary of State was also responsible for making an assessment of the potential impact of the decision on the economic development of the north of England, or whether likewise when he was announcing that the pause had ended and then subsequently going along with the recommendations from Sir Peter Hendy—which put back the intended date of completion of the electrification of the route—the Secretary of State for Transport was also responsible for an assessment then of the impact of the delay on the economic development of the north of England. Certainly, the report from Sir Peter Hendy called for by the Secretary of State on the replanning of Network Rail’s investment programme did not address this point, and neither does he appear to have been asked to take it into account.
The usual very helpful briefing pack for this debate from the House of Lords Library does not appear to contain very much about any such assessment of the impact of either the pausing, unpausing or subsequent delay in the timescale of this electrification scheme. That could be an oversight. Alternatively, it could mean that such an economic development assessment does not exist, or at least not in the public arena.
I hope that the Minister will be able to tell us when he responds if in reality any proper assessment of the impact of the pausing of the scheme and then subsequent moving back of its completion on the economic development of the north of England has been undertaken, and, if so, who undertook that assessment and what it said. I ask that in the context that, from a purely railway point of view, there have been comments from some sources that the now extended timescale for the electrification of the line could have advantages in that purely electrification of the route within the original timescale within control period 5 would have led to an increase in the costs and complexity of subsequent intended and projected capacity and speed upgrades, and that if the electrification and track improvements to provide faster and more frequent journeys were instead to be undertaken together—as it appears may now be the case—that would also considerably enhance the benefit-cost ratio of the scheme. Perhaps the Minister could comment on that point in his response.
If that point has any validity, it highlights the problem, to put it politely, of Ministers announcing schemes for electrification of rail routes and pushing for early completion dates in the run-up to an election, without thinking through the consequences. Of course, once the election is out of the way, it is politically easier to repent at leisure over completion dates when the impracticality, and perhaps also the lack of sense, of the original timescale and apparent limited extent of the project has to be admitted, as has happened in this instance with the trans-Pennine route. In this case, though, the Government knew before the election—but remained silent—that their projects did not stack up. Network Rail has said that in mid-March 2015, it informed the Department for Transport that decisions might need to be made in the coming months about the deferral of certain schemes.
We have recently had the announcement on the setting-up of a national infrastructure commission to advise on major infrastructure projects. Will the Minister say whether the intended role of the commission is such that, had it been in existence at the time, it would have been asked to advise beforehand on the Government’s pre-election announcements on improved transport links related to the northern powerhouse concept? If so, the national infrastructure commission holds out the prospect for the future of announcements of significant transport infrastructure improvements made prior to an election not subsequently having to be hastily and significantly revised and amended immediately after the election. Perhaps the Minister could comment on the intended role of the NIC in this regard.
The briefing pack includes a copy of a letter dated 30 September 2015 from the Secretary of State to Louise Ellman MP, the chair of the House of Commons Transport Committee. The Secretary of State states that he has asked Network Rail to “unpause” the electrification of the Trans-Pennine route. Perhaps the Minister could say whether “unpause” means the same as “proceed with immediately”. The Secretary of State then goes on in his letter to Louise Ellman to say that,
“Network Rail will work with the Department for Transport and Rail North to develop a new plan for electrification of the TransPennine line between Stalybridge and Leeds and on to York and Selby to focus on delivering key passenger benefits as quickly as possible. This is an improvement on the previous plan which only changed the power supply of the trains”.
That point relates to the point I raised a few moments ago about the scope of the original decision. On that point, on the extent of the proposed electrification, the Chancellor of the Exchequer announced in March 2015—interestingly, again, close to the election—that electrification would be extended from Selby to Hull, with funding from the private sector. Will the Minister confirm that that is still on track, and indicate when this work will be completed and what level of funding will be required from the private sector?
The letter from the Secretary of State goes on to talk about faster journey times and significantly more capacity between Manchester, Leeds and York. Faster journey times and capacity increases are not, of course, simply about electrification. They are also about track capacity and line speeds. Does the new plan involve providing additional tracks on parts of the route, so that, for example, fast trains can be segregated from stopping services and freight trains—and, if so, to what extent and where? What will be the maximum line speed on the newly electrified line once the work has been completed? By what extent will the freight capacity of the route be increased following electrification and the increase in line capacity? These are all issues that will impact on the economic development of the north of England, which is the subject of this debate.
The report from Sir Peter Hendy states that Network Rail has sought to balance the level of expenditure required to manage the core business and the extent to which it can deliver the full enhancement programme within the available funding. The report goes on to say that Network Rail has concluded that the core business can be managed within the borrowing limit that has been set for control period 5, but that the principal change to achieve this will be a reduction in renewals activity, which Network Rail considers can be managed safely and will not create a backlog that cannot be caught up in subsequent control periods. Are the Government happy to see renewals activity reduced as part of the replanning of their investment programme, including electrification schemes? Presumably, the present renewals programme has been drawn up on the basis of what needs to be done and when.
A further consequence of the replanning of the investment programme is that Network Rail will have to divest itself of assets, including property assets, to provide required levels of funding. As Sir Peter Hendy’s report says, selling assets to fund enhancements has implications for the future funding of the railway, as less income from property means that more will have to come from elsewhere. That could, of course, include higher fares for passengers and freight. Reducing Network Rail’s future income looks like a decidedly questionable move, based on short-term considerations rather than long-term thinking.
The electrification of the trans-Pennine route will not now be completed until 2022. It will be delivered not within control period 5—as originally intended—but across control periods 5 and 6. Will the Minister say when, during 2022, it will now be completed? Will the Minister also say what the cost of the delayed electrification of the trans-Pennine route will now be compared with the previous estimated cost, which I believe was in the region of £240 million, but I accept that I could be seriously wrong on that? What part of any increased cost is due to the pausing of the scheme and subsequent delay in its completion? When will the electrification of the route now actually commence?
What impact will there be on rail services on the trans-Pennine route as a result of the necessary infrastructure work being undertaken during the period from now until the completion of the electrification project some time in 2022? If it will result in an adverse impact on services, both passenger and freight, over that period of time, to what extent will that be the case, and what impact will that have on the economic development of the north of England over the next seven years, which is what this debate is about?
I hope that some lessons have been learned from the pausing, unpausing and delaying of the trans-Pennine electrification scheme, not least the problems of playing election politics with major railway infrastructure projects. As the House of Commons Public Accounts Committee said last month:
“The 2014-2019 rail investment programme could not have been delivered within the budget which the department, Network Rail and the Office of Rail and Road agreed”.
It added:
“Over promising what can be delivered leads to inevitable delays and cost overruns; and simply delaying projects further as a budget management mechanism is not good financial planning”.
Viscount Younger of Leckie (Con)
My Lords, I congratulate the noble Lord, Lord Shutt, on securing this debate on the trans-Pennine rail line. I am very glad that he has pursued the debate, as I detected a slight hesitation in his speech as a result of the so-called “unpause” in September.
This has been a short but useful debate, with many very good contributions. I understand the depth of concern and why the debate was secured. A number of questions were raised—some quite technical from the noble Lord, Lord Rosser—so if I run out of time and am not able to answer them, I pledge to write to the noble Lord and copy in all other noble Lords who have taken part in this debate. I reassure the noble Lord, Lord Scriven, that this is not just warm words from the Government; there is some action. I hope that I will be able to prove that in the next 10 minutes or so.
I start by outlining the wider context of this debate. This Government have recognised that successive Governments have failed to invest adequately in transport both in the north of England and across the wider UK, and have now chosen to invest in transport for the long term. The transformation has already started. I am glad that some noble Lords recognised this in the debate, particularly the noble Lord, Lord Shipley. From March this year, electric trains were introduced on services in the north-west. Manchester Victoria station, once called the worst station in the UK, has been transformed. Train manufacturing has returned to the north-east, with Hitachi’s new £82 million factory in Newton Aycliffe, County Durham. This is creating more than 700 jobs and will support thousands in the UK supply chain.
Noble Lords will be aware that yesterday the Government announced an exciting new development, as was mentioned in the debate. The new northern and trans-Pennine rail franchises will see transformative improvements to passenger rail services in the north over the next decade. Rail journeys across the north will undergo the biggest transformation in decades, with an unprecedented package of improvements that goes far beyond the requirements we set out earlier this year. Together, these operators will oversee a very significant £1.2 billion boost to rail services with brand new, modern trains, more seats, more services and a host of improvements to deliver a modern, 21st-century passenger experience. This will include: the introduction of more than 500 brand new carriages; the removal of the outdated and unpopular Pacer trains from across the north; and space for 40,000 extra passengers at the busiest times.
I turn to the facts surrounding the pause of the trans-Pennine line and, indeed, the essence of this debate. I acknowledge the point made by the noble Lord, Lord Shutt of Greetland, about the doubt over the date of the 2022 upgrade of the trans-Pennine line. It is true that at a Transport Select Committee hearing in March 2015 the Secretary of State for Transport specifically acknowledged the slippage of the trans-Pennine electrification scheme from 2019 into the early 2020s. There is no doubt about that.
As noble Lords will be aware, on 25 June the Secretary of State announced that important parts of Network Rail’s programme for improving Britain’s railways were costing more and taking longer than planned to deliver. Sir Peter Hendy, who has a proven record of delivering on major transport challenges, was appointed as the new chair of Network Rail. The Secretary of State asked him to replan the whole of Network Rail’s improvement programme for England and Wales. Part of that announcement was that the scheme to electrify the trans-Pennine rail line connecting Manchester to Leeds and York via Huddersfield would be paused. Pausing the trans-Pennine electrification scheme did not mean that the Government’s commitment to delivering the project had faltered or stopped. I hope that I can reassure the noble Lord, Lord Rosser, to that extent.
In fact, the pause gave Sir Peter the opportunity to develop a better plan for this important route—what we are now calling the trans-Pennine route upgrade. On 30 September, work on the trans-Pennine scheme officially resumed. On 25 November, Sir Peter published his more robust plan for the Network Rail enhancement programme, to ensure that every part of Britain benefits from a growing economy. The noble Lord, Lord Berkeley, raised the importance of freight, which has not been mentioned much in this debate. This plan recognises the importance of the strategic freight network.
Let me be clear that the previous plan for the trans-Pennine line changed only the power supply of trains; it did not include the track work required to make journeys faster or for more frequent trains. The new plan for the full route upgrade will by 2022 make journeys faster, taking up to 15 minutes off today’s journey time between Manchester and York, right across to the east; permit more frequent fast trains—up to six fast trains an hour with limited stops between Manchester and Leeds; reduce crowding by allowing longer trains to run; and improve performance.
The original plan offered poor value for money. It included only electrification of the existing track, which brought limited benefits to passengers. The passenger benefits secured by the new upgrade proposal are expected to make the scheme medium to high value for money. During my briefing I asked in depth what was meant by “value for money”—about which many noble Lords will have more experience than me—but rather than go into that now I am more than happy to write to noble Lords with the information.
The next step in developing the new plan for the trans-Pennine route upgrade is the detailed design and planning of the works over the next two years. We are pushing on with works on the ground this coming January to improve the Calder Valley route from Manchester to Leeds via Rochdale and Bradford. These improvements will initially allow the Calder Valley to be used as a diversionary route for trans-Pennine services normally using the route via Huddersfield while it is closed for major work to enable the six tunnels along the route to accommodate the overhead electric wires. This includes the three-mile long Standedge tunnel, the fifth longest tunnel in the UK, with which I am sure noble Lords are familiar.
Noble Lords will no doubt be aware of the northern powerhouse. Our aim is to rebalance the decades-old north/south divide. Much has been said about this in the House over the past few months. Transforming transport connectivity across the north is integral to this ambition. The noble Lords, Lord Shutt, Lord Scriven and Lord Berkeley, raised the importance of connectivity. Connectivity, as I think I mentioned earlier, is at the heart of the northern powerhouse: joining the major cities of the north to bring together an economic powerhouse to rival London and rebalance the economy. There will be massive investment in rail capacity, delivering 500 new trains of all types—diesel, bi-mode and electric—space, as was mentioned earlier, for 40,000 more passengers, greater frequency and more services. The new franchise is just the start of that. This will start to deliver services to the north and needs to be allowed to be built upon by our plans for the northern powerhouse rail, previously called HS3.
We are working closely with Transport for the North, Network Rail and HS2 Ltd to develop our rail plans for the 2020s and beyond. Noble Lords might not be surprised to learn that we now like to call this the northern powerhouse rail network—there is probably an acronym for that. We have also commissioned HS2 Ltd to look at options for improvements to rail travel to Scotland, which we will consider next year.
I would like to address some of the questions raised. The noble Lord, Lord Shipley, acknowledged that we have the elements of a plan for transport in the north but need to do much more work. He is absolutely right. In the Autumn Statement, the Government announced £10 million a year for the life of this Parliament to fund the new Transport for the North organisation. It is tasked with producing a comprehensive northern transport strategy.
The noble Lord, Lord Shutt, talked about what was recently said about HS3 and asked what the Government’s position is. The Government have, jointly with Transport for the North, set out their vision for the transformation of the east-west rail connections across the Pennines. As I mentioned earlier, we now call this the northern powerhouse rail network. With Transport for the North, we have commissioned Network Rail to examine how we can deliver a 30-minute journey time between Manchester, Leeds and Sheffield, with links onward to Hull, Newcastle, Liverpool and, importantly, Manchester Airport. We will publish the findings of this work early next year.
The noble Lords, Lord Shutt and Lord Scriven, mentioned the electrification of the Calder Valley line and the south trans-Pennine route. The electrification of the Calder Valley line has been identified as a potential scheme by the electrification task force for the control period starting in 2019. Network Rail is currently considering the recommendations and will publish its electrification strategy in the next year for funding consideration by the Government after 2019.
The noble Lord, Lord Shutt, raised the issue of the design of the Leeds HS2 station. The Government have asked Sir David Higgins to look at the options for Leeds and its links to Leeds city station, and to find a scheme that will stand the test of time.
The noble Lord, Lord Shipley, asked what the Y aspect of HS2 would look like. The Government and Transport for the North are working very closely with Network Rail and HS2 Ltd to address these very questions.
The noble Lord, Lord Rosser, asked whether, had the National Infrastructure Commission existed before the election, the poor planning of the project—as he put it—would have been avoided. However, he will know only too well that his ex-colleague, the noble Lord, Lord Adonis, has been asked to chair the National Infrastructure Commission, with a clear remit to advise on the priorities for transport and, indeed, other infrastructure investment.
I hope that I have made it clear during the debate that this Government are both ambitious and practical about improving transport in the north of England. This is supported by yesterday’s announcement of a comprehensive plan for the railways in the north. I hope I have got it across that we have taken decisive action to ensure the trans-Pennine line electrification goes ahead with a better plan than before. Rail passengers will have a better service that will do far more to support the northern powerhouse economy.
In summary, and to conclude, we already have electrified the oldest inter-city railway between Liverpool and Manchester earlier this year; we have a clear view towards a better scheme, the trans-Pennine route upgrade, to be completed by 2022; we have announced the new trans-Pennine and northern rail franchises, with a transformational programme up to the mid-2020s; and we have taken steps, through establishing Transport for the North, for the north itself to set out a clear view of its transport priorities to complement the opening of HS2 to Manchester and Leeds in the early years of the 2030s. As has been acknowledged, this is just the start and there is much work to be done. Our journey has started, and I thank noble Lords for supporting the project so far.
Lord Berkeley
I welcome much of what the noble Viscount said. Five or six fast trains an hour across the Pennines sounds really good for passengers, but you will not have any stopping trains in that pattern unless you have more tracks. Perhaps the noble Viscount could write to us about the extra tracks that will be necessary to accommodate stopping trains and freight.
Viscount Younger of Leckie
I will certainly add that the number of questions that I have not been able to answer. I will include it with the questions put by the noble Lord, Lord Rosser.
Music Venues
Lord Clement-Jones
To ask Her Majesty’s Government what plans they have to support small grass-roots music venues.
Lord Clement-Jones (LD)
My Lords, according to UK Music’s latest figures, the music industry now contributes £4.1 billion to the UK economy, generates £2.1 billion in exports and employs more than 117,000 people. The sector as a whole grew by 5% in 2014. While our music industry is succeeding in many aspects, behind these impressive figures, elements of the sector are not doing as well. The focus of this debate, and of my remarks today, concerns what plans the Government have to support small grass-roots music venues. I am delighted that so many other music-loving noble Lords are joining in today’s debate.
Earlier this year, the Mayor of London established a Music Venues Taskforce. Chaired by the Music Venue Trust, and involving the Musicians’ Union, UK Music and representatives from two London venues—the 100 Club and Village Underground—the task force published its Rescue Plan in October to address the 35% decline in grass-roots music venues in the capital since 2007. While a lot of the publicity for grass-roots venue closures has been centred on London, the issue of grass roots is not unique to the capital. Venues such as Leicester’s Princess Charlotte, TJs in Newport, the Duchess of York in Leeds, the Picture House in Edinburgh and the Roadhouse in Manchester have all closed due to a number of issues that add up to the same thing: running a grass-roots music venue is becoming increasingly challenging.
In the task force’s Rescue Plan, the Music Venue Trust came up with a definition of a grass-roots music venue—as distinct from other premises—centred primarily on its cultural and social role and based on music programming being the establishment’s raison d’être. Furthermore, being a grass-roots venue means being a beacon of music and a key generator of night-time economic activity, and taking risks with programming and acts.
I am sure that many noble Lords have been enjoying the latest album from UK artist Adele, “25”, which has set records around the world for sales and is likely to be this year’s global music success story. Adele played her first gig at the 12 Bar Club in London, whose Denmark Street venue is now closed. She went on to play support slots and small shows across the country, building her skills and her experience in front of small audiences in the manner that has enabled UK artists to thrive for the last 50 years. Had it not been for the vital grass-roots music venue circuit, it is difficult to see how an artist such as Adele could have cultivated her creativity. In 1994, a little-known band by the name of Oasis undertook a 25-date tour of the UK which transformed them into the world’s leading live band. Of those 25 venues, only 12 remain open.
The UK’s ability to create more acts like Adele and Oasis is being challenged by a number of threats to these important institutions. These threats include rising property prices and rents, increased demand for housing in big cities, increases in business rates, lack of specific guidance on how to treat music venues in planning law, increased deregulation of the planning system—notably the permitted development right from 2013, which allows offices to be converted into homes without the need for full planning permission—and increased conditions put on other aspects of a venue’s licence, despite the exemptions put in place by the Live Music Act.
There has been a lack of central government legislative support when contrasted with other key music markets such as the USA or Australia. In financial terms, across continental Europe, the grass-roots music venues sector has attracted significant direct government or industry subsidy, which distorts the market, making it difficult for our venues in the UK to compete for international talent. Thankfully, there are a number of sensible actions that the Government can take in order to alleviate the problems for grass-roots music venues.
First and foremost, the Government should introduce the agent of change principle into planning law. This principle would mean that when a planning development is granted, the onus is on the incoming individual or business to take responsibility for any changes needed to deal with noise from businesses that existed in the vicinity before permission was granted. Such a provision would significantly reduce the financial and administrative burden placed on venues when new development occurs. The principle has already been adopted in some states in Australia and the US. The Mayor of London has indicated that the agent of change principle will be adopted in the London Plan 2018.
Will the Minister undertake to look at how primary legislation can be strengthened in this regard? An opportunity exists in the Housing and Planning Bill, where amendments to introduce the agent of change principle have been debated in the Commons. In the debate on Tuesday, Planning Minister Brandon Lewis rejected the amendments as unnecessary. He claimed that the National Planning Policy Framework incorporated the principle and so did the guidance—I suppose that he meant paragraph 6 of the noise planning guidance.
However, he said that he is trying to meet the music sector on this in conjunction with Culture Minister Ed Vaizey who pledged to arrange a meeting with a delegation when he attended Venues Day 2015, the annual national gathering of grass-roots music venues from across the UK, which is organised by the Music Venue Trust. UK Music has followed up on this but no date has been confirmed. Can the Minister undertake that this will happen before Report in the Commons on the Housing and Planning Bill?
Will the Minister also consider how the ground-breaking deed of easement of noise in the recent Ministry of Sound case can be further promoted as good practice in resolving cases between developers and venues? Will he also commit to a biannual meeting of key Ministers to consider, develop and monitor strategies of support for venues?
Secondly, the Government should introduce full relief from business rates for grass-roots music venues. As I have already outlined, business rates are problematic for music venues. A small London venue may pay tens of thousands of pounds a year in business rates, making it economically unviable without financial support. The Government are conducting a review into business rates relief for local newspapers. This creates a potential precedent for the Government to review rates for grass-roots music venues. Such a measure would go some way towards correcting the imbalance in cultural subsidies with our European competitors.
In monitoring the impact of the Live Music Act and further entertainment deregulation from earlier this year, the Government should review whether local authorities and the police are utilising and over- regulating other licensing conditions to regulate certain music venue activities which should otherwise benefit from the full impact of the coalition Government’s entertainment deregulation reforms. Internal government co-ordination is also key to this issue. This debate is being responded to by the noble Earl, yet other aspects of government such as DCLG, Defra and the Home Office also have a strong interest in this.
At Venues Day 2015, Minister Ed Vaizey firmly backed the idea that grass-roots music venues should have access to cultural funding. What steps are the Government taking to ensure that that happens, and specifically what can be done to ensure that any available funding acts directly to improve the infrastructure in those venues so that they are attractive places for touring artists to play?
Finally, will the Government make a specific response to the Mayor of London’s Music Venues Taskforce report, and what further work are they planning to undertake with other large cities and communities in the UK to promote the vital role of grass-roots music venues?
We protect and support our theatres, arts centres, civic centres, museums and galleries by recognising their cultural priorities. The Government should do all they can to ensure that these vital incubators of the live music industry are able to access similar levels of support and recognition from national government and local authorities as those received by other spaces. These issues are urgent for the future of live music venues and I hope that the Minister will respond appropriately.
Lord Colwyn (Con)
My Lords, I thank the noble Lord, Lord Clement-Jones, for securing this debate this afternoon. It provides a timely opportunity to identify the reasons behind grass roots music venue closures and address how this might be rectified. I thank UK Music and the Mayor of London for their help. My few remarks will relate to the task force report and comment on its conversations with a large number of music and night-time industry organisations.
Venues act as important centres for cultural activity in our towns and communities. Grass roots music venues act as important hubs for local music talent and offer a means by which musicians and performers can develop their performance. Problems for grass roots music venues are not unique to our capital. Other cities have been affected and have either closed or had considerable threats of closure placed on their businesses in recent years. I declare my interest as a patron of the National Youth Jazz Orchestra. I am co-chairman of the All-Party Jazz Appreciation Group, and I thank the British Phonographic Industry, the Performing Rights Society and, particularly, Phonographic Performance Ltd, which has sponsored the British Parliamentary Jazz Awards for 10 years. These awards have become one of the most important jazz award events in the UK jazz calendar. I am also grateful to Yamaha, which helps young jazz musicians at grass roots level with the loan and provision of instruments via the youth jazz and Yamaha scholarship awards.
I have been known to do some busking in local pubs, but regret that I no longer perform at the larger events. I much prefer to visit Ronnie Scott’s and ask Simon Cooke to point out the up and coming musicians and important guests or chat to Steve Rubie at the 606 as to why he gave up his career as a dentist to run a jazz club. Where did I go wrong? I am sure that my noble friend Lord Courtown and his family will have heard and danced to my band on many occasions. Looking around the Moses Room this evening, I see other customers of mine, including the noble Lords, Lord Addington and Lord Brougham and Vaux, who would have danced to my band.
Demand for live music is increasing, and music tourism is thriving. Grass roots music venues aid a vital talent developmental role that has not been replaced by television talent shows or social media. However, 35% of London’s grass roots venues have closed over the last eight years. The Mayor of London’s Music Venues Taskforce was set up to work out why so many venues have closed and what impact this is having on London’s culture and economy. It found that London’s grass roots music venues are pivotal to the ongoing success of the UK music industry and contribute to London’s desirability as a place to live, work and visit. However, planning, licensing, policing and fiscal policy is struggling to balance the needs of grass roots music venues with those of residents and businesses. An increasing population means that residential development and night-time activity are all connected. This pressure, coupled with rising property prices and increasing costs for grass roots music venues, is proving too much and venues are closing.
The task force found signs of market failure within the music industry. The research and development function that grass roots music venues undertake has not been properly supported. There is now a need to rebuild London’s grass roots venues and invest in new talent so that all parts of the industry can return to full health. Following extensive consultation with government, local authorities and the music industry, the task force has proposed a rescue package. The report also sets out an ambition to create new venues and harness the benefits of London’s tourism boom through new promotional campaigns. The task force calls for a change in how we think about music venues; it believes that grass roots music venues are cultural spaces and need to be recognised as such in policy documents. I hope that the music industry will now work with government in responding to this crisis at the grass roots level.
Lord Foster of Bath (LD)
My Lords, I too congratulate my noble friend Lord Clement-Jones on securing this debate. Like him and other noble Lords, I believe that supporting and nurturing live music of all genres is important and worthwhile. Not only does it give many of us enormous pleasure, it can also, for instance, enhance educational achievement, help recovery from ill health and improve well-being. It can play a role in cultural diplomacy, and it can help to reduce crime. It can assist in social cohesion and, of course, as we have already heard it can make a significant contribution to the economy of our country. The charity Golden-Oldies, based in my former constituency of Bath, demonstrates the power of music when it comes to well-being. The Goldies provide singing and activity sessions, bringing together older people who are socially isolated or people with learning difficulties, dementia and Alzheimer’s. It really does work. As Age UK has said:
“The power of music, especially singing, to unlock memories and kickstart the grey matter is an increasingly key feature of dementia care”.
As I have said, music can bring communities together. I was the lead Minister for Our Big Gig, which is an annual government-funded community music celebration of local musical talents and music-making. It brings communities together, with people from all sorts of backgrounds who live in the same neighbourhood often meeting for the first time. If live music is important, so too are the small venues which are its life-blood. That is why I was pleased to have the opportunity to pilot through the Commons my noble friend Lord Clement-Jones’ Live Music Bill, which is now the Act. The aim was simple: to reduce the regulatory burden on small venues hosting live music, and thus encourage more to do so. It has succeeded in helping some small venues to keep going and new ones to open, and it has played its part in seeing a growth in the live music sector and a corresponding increase in its contribution to the economy.
As we have already heard, venues are closing and the problems are growing. The Mayor of London’s Music Venue Taskforce has already been referred to, and we have heard of problems elsewhere in the country. However, precise information is hard to come by and the data is limited. For instance, venues that are encompassed by the Live Music Act no longer need an entertainment licence, so getting precise numbers to enable a before-and-after comparison is difficult. Many argue that the standard industrial classification, SIC, and standard occupational classification, SOC, codes which are used by ONS are unhelpful. We know that information gathered by a range of bodies such as UK Music, the Music Venue Trust and the Live Music Exchange is not adequately collated. I believe that it would help—and I hope that the Minister can assist us with this—if we could find ways of asking colleagues in different departments to look at the collection and analysis of data on live music to help us get a better feel for the situation.
There are definitely problems and many solutions have already been offered, ranging from night-time economy tsars to a review of venue capacity limits in light of the smoking ban. In the limited time I have, I will mention just two areas where I believe that progress can be made. The first is simply to give greater publicity to legislation and support systems that already exist—measures that I had a hand in bringing into force.
As an example, the Bell Inn on Walcot Street in Bath is a popular local pub and a live music and performance venue. Regulars became concerned that the pub could be sold, closed as a pub and converted to other uses, so they used existing powers under the Localism Act 2011. They listed the pub as an asset of community value, which meant extra protection from development and a potential six-month moratorium on any sale. Members of the community wanted time to put together the funds to make a bid to buy the pub themselves, something that they could do under the existing community right to bid. Deciding that they did want to try to buy the pub, the locals got help from the community shares unit and sold community shares in the pub via a crowdfunding-type website. They raised £720,000, well in excess of the £500,000 target that they had set themselves. They put in a bid, which was successful. In 2013, 536 shareholders who were customers, friends and staff bought the Bell Inn, and it continues as a vibrant small music venue which welcomes all visitors, and noble Lords would be very welcome. Greater publicity about the opportunities offered by the Localism Act, like those used by customers and staff of the Bell, could provide a route to help other small music venues that are under threat. I would be interested to hear the Minister’s comments on that.
My second point is in relation to the agent of change issue, which has already been raised. As we have heard, the extension of permitted development rights eases the way for unused commercial, retail or industrial properties to be converted into housing. Where they are sited next to existing music venues, that can create a difficulty. If at all possible, the agent of change, the developer, should take responsibility for that. An analysis of the debate that took place on Tuesday shows that the Minister, Brandon Lewis, did not fully understand the situation. I am delighted that he has agreed to talk to the music industry and his colleagues in DCLG. But like my noble friend Lord Clement-Jones, I am interested to hear from the Minister whether those meetings will take place and what views he has on the particular proposal for the agent of change.
The Earl of Clancarty (CB)
My Lords, I thank the noble Lord, Lord Clement-Jones, for the opportunity to participate in what is a remarkably timely debate, both on account of the London mayor’s rescue plan and the Commons debate on Tuesday.
The statistic of 35% of grass-roots venues lost in the last eight years in London alone is shocking. What we seem to have today is a perfect storm of spiralling rents, valuable building sites, increasing business rates and untrammelled development. The fundamental questions that we should ask are: how much is a local area or local community affected in the round by any proposed changes? How much do people in a local area have a right of access not just to music venues but to live arts generally? If they do, is it a good provision or not? Also, crucially, how much is that local community itself being destroyed, since the arts are a part of that and are an important part of the definition of a locality?
In this respect, noise, if it is a significant problem, is a by-product of a more fundamental concern. Noise would simply not be a problem—or at least less of one—in a more cohesive community. Yet unfortunately it has become necessary to deal with it, which is why I would certainly support the agent of change amendments to the Housing and Planning Bill. In Tuesday’s debate, the Housing and Planning Minister, Brandon Lewis, said that, although he was happy to meet with organisations, the proposed amendments were unnecessary because the National Planning Policy Framework incorporates the principle of agent of change already. But tell that to the Point in Cardiff. Actually we cannot do that because it no longer exists. It installed £68,000-worth of sound-proofing to stop complaints from the new development next door, but had to close because it could not afford to pay the loan. This should not have been the Point’s responsibility. It seems clear that this will work and the agent of change principle adhered to only if there is something specific in law, as has been proposed by Dr Blackman-Woods and others. Otherwise, there is a huge danger that it will be overlooked.
What was not discussed on Tuesday in the Commons was the situation the other way round, which is what would then be the responsibilities incumbent on a new venue setting itself up in a neighbourhood, which of course sometimes happens when the already existing club has been forced out of the city centre and has had to relocate. It is surely better that a venue does not have to relocate in the first place but remains in the community where it belongs. The report to the London mayor is a valuable document with many worthwhile recommendations. I hope that both the London Assembly and the Westminster Government look at it closely. Music venues must be an integral part of the next London plan, and a night-time mayor is well-worth considering.
This is not a problem for London alone, as the noble Lord, Lord Clement-Jones, said. To take an example from abroad, with increasing gentrification, some of the same problems are starting to happen in Berlin, an equally vibrant city in terms of live music, even though there is less of a problem there. For instance, in Berlin I have been to what might be termed pop-up live music events advertised perhaps a few days beforehand. You go along, a makeshift bar materialises and you hear some amazing music, which could be anything from jazz to experimental classical or folk. Sometimes, it is a bit like wandering into someone’s living room. This kind of flexibility would be unthinkable in London, but it happens in Berlin because the audiences for these events live next door, or even in the same building, and have not yet been driven out of the centre of the city. Berlin, like many places in Europe, is a renting city, but additionally it has a strong rent-cap policy. We absolutely need to cap rents in London to help preserve our communities.
However, these problems also exist in other towns in the UK, and it is important to point out that live music can also be funded by local government, often as part of arts centres. Some of these venues may now be under threat of closure. It really is extraordinary how further real-term cuts in the arts can be broadcast as good news, although what is happening with local government funding is the worst news of all.
One example of these uncertain times is the situation in respect of the successful Electric Theatre in Guildford, developed as recently as 1997 by Guildford Borough Council as a community arts venue, allowing public access to different media, including live music. Instead of running it itself as it has done up till now, the local council intends to lease the site out, and has invited private bidders from the arts and entertainment sector. There will now be no guarantee that the balanced needs of the local community will be met. It seems that we are moving into the extraordinary position where, instead of local councils helping to fund the arts, the arts are now expected to fund local councils, which is, for much innovative art and music, frankly an impossibility. In the long term, such an approach will have a serious detrimental effect on the arts in the UK. It is a long way, too, from the principle that some of us have argued for of there being a statutory obligation on the part of councils to provide local communities access to the arts, which is becoming an increasing deficiency in many areas.
On the future of independent clubs, Mark Davyd of the Music Venue Trust, who runs the Forum, a music venue in Tunbridge Wells, and chairs the London mayor’s report, has said:
“You can’t blame people for selling up. The valuation of the Forum as a music venue is about £375,000. If we sell it to be flats, it is worth £1.2 million”.
If short-term economic factors were the only consideration, we probably would not have any grass-roots venues at all, not just for music but for the arts in many media. Therefore, the question must be asked: how important is it to preserve our grass-roots arts venues for local communities, for the creative economy and, in the case of music venues, for the development of the music industry itself, which are all long-term goals? That is not to mention the long-term contribution made by such venues to the economic value of the local area itself, all of which is why this is an issue that cannot be left up to the open market. Grass-roots venues must be protected and nurtured through necessary legislation, through sensitive planning and, where necessary, through governmental financial support.
Lord Berkeley of Knighton (CB)
My Lords, I am grateful to the noble Lord, Lord Clement-Jones, for identifying this absolutely vital ingredient in our creative industries. Why is it vital? It is because the great companies of this country—opera houses, orchestras, and pop and jazz groups—are often seeded and nourished at grass-roots level. All the great talents have to start somewhere, and that somewhere is often in small venues up and down the country. I think of my visits to the Cavern Club in Liverpool, for example, where the Beatles, among others, found fertile ground to gain experience. I shall never forget visits to the Marquee in Soho, where I played and many more successful groups than mine took flight. I think of small venues at festivals like Cheltenham and Huddersfield and clubs in Manchester and Birmingham. I think of Club Inégales, a haven for contemporary composers in London. For many audiences, small venues offer the only opportunity to hear live music.
How I envy New York its plethora of small jazz venues and its resulting success with modern jazz; yet visit Ronnie Scott’s or Pizza Express—and occasionally the House of Lords—and you will find here, in this country, a huge and healthy appetite for jazz. At a recent Classical Music meeting here in the Lords, we heard from Ed Vaizey. I was extremely impressed by his passion; doubtless this commitment helped inform the very welcome financial news regarding the arts from the Chancellor in his recent Statement, although I take my noble friend’s caveat on board.
I did, however, point out to Mr Vaizey that because music commissions are very much now largely in the gift of major Arts Council clients, and since the devolution of commissioning funds, small groups and less well known or younger composers have rather fallen through a gap in funding. Indeed, small venues were often instrumental in commissioning new and promising talent. I and my colleagues had our early works performed—and what a learning process that is: to hear your music and hear the mistakes you are making—in music clubs and village halls before some of us found ourselves at the Royal Opera House or the BBC Proms in the Royal Albert Hall. Indeed, on one occasion I had a work premiered in a venue that I gather doubled as a strip joint and pole-dancing venue. I could not help thinking that perhaps hard-hitting contemporary music would have even bigger audiences if we could combine these two activities. But then, of course, I thought how much music plays a very vital role even in that.
We are not talking about a huge amount of money here, but small venues and commissions are financially the, if you like, soft underbelly of experimental and innovative creativity in this country. They are such an easy target for cuts and they exist on a knife edge, yet feed into and supply the income-generating companies that help to fuel the economy of which the Government are justly proud.
I have a request for the Minister. Ed Vaizey promised to take back to the DCMS the point about composers and the gap. I would like to go further and combine it with what we are talking about today. Therefore, will the Minister please talk to him about the way in which we can address these two issues together to see whether there is any way of protecting and nurturing the vulnerable but vital work of small venues and thus, in the long run, the overall future health of creativity in this country?
Lord Addington (LD)
My Lords, when you find yourself slightly further down the list of speakers, you look at your briefing notes and suddenly realise that most of your points have been mentioned. Therefore, I am afraid that I will repeat some of the points that have already been made.
I have danced to the music of the band of the noble Lord, Lord Colwyn. Indeed, I remember that my wedding was greatly enhanced by the spontaneous spotting of accents in the room and the way that the music followed them. The sight of people in morning suits dancing reels will stay with me for quite a while. However, as noble Lords have said, we have lost 35% of our smaller music venues. That means that one in three has gone. Clearly, these venues are under pressure. This is not the result of intentional policy but a classic case of Murphy’s law as the pressure on these outside bodies is leading to them being squeezed. If we are not going to subsidise them, we have to make the system work for them. I think that my noble friend Lord Foster pointed out that we should bring together the various parts of government and make them work together because it is clearly in nobody’s interest to lose these venues. Some people will say that such a step is in their interest if it is to their perceived personal advantage. Nimbyism will always be present, but if we adopt something like the agent of change principle, surely we can put this in a sensible context.
Who has not chortled over their cornflakes at newspaper articles about people who move next to pubs then complain when customers leave them after closing time or who, better still, complain that the cows in an adjacent field moo? We need to state that if you move somewhere where a venue is already in place which is deemed to be good by the vast majority of people, you will have to live with it or make changes to your property that allow you to live with it. It is not beyond the wit of man in the modern world to install sound insulation in a property. The person who moves into the property should take on that responsibility. It is important to get that across.
On business rates and so on, we must encourage local authorities to think about the venue. What does the economic activity going on there mean to the local area? Are people spending money in it and does it provide employment? The figure may not be exact, but another statistic which has been mentioned is that more than 117,000 people are employed in this sector and deriving an income from the music industry. These venues make a contribution to local restaurants and other bars in the area. They do not stand by themselves, and surely that must be taken into account. You will get the odd venue that goes a little bit rogue and possibly needs some intervention to deal with it, but most of the time they are peaceful, law-abiding institutions to which people go to enjoy themselves. Ensuring that people appreciate what else is going on is vital to this.
It has been suggested that we should have what I think are called “night mayors”. I love the idea of the first prominent person to hold that position. The cartoonists will have an absolute field day. I think the expression “night tsar” was used, which is a wiser way of putting it. It is probably necessary to have someone to co-ordinate leisure activities and the economic activity that goes with them because there are competing stresses on how all this is implemented. It is important that people are made aware of this. We all know that the world is focused on us, and we are all very capable of losing our peripheral vision when it comes to changing situations. Making sure that we understand that music venues and the leisure activities that result from them are part of a wider economy would probably be the best thing we could do here.
There is a great deal of good will around this, and much legislative change has already taken place, but when the noble Earl comes to respond to the debate, can he give us an idea of how the co-ordination is being handled, how guidance is being produced and then pushed down to local authorities, and what help is being given to enable them to reach out themselves? This will cross boundaries for local authorities, so how will it be done? That is important because we are in danger of getting rid of something which is of great benefit all round. Whatever problems there are, they will be as nothing compared with the damage that will be done to a whole sector of our creative economy.
Lord Stevenson of Balmacara (Lab)
My Lords, I add my thanks to the noble Lord, Lord Clement-Jones, for securing this debate, and I thank all the music-loving Members of the House, of whom I am sure there are more than we have been able to squeeze in to participate in today’s debate. Indeed, it has brought back fond memories of the first Bill that I was involved in, the Live Music Bill, which is now the Live Music Act 2012, which I had the honour of stewarding through from the Opposition Front Bench. Although I declare an interest as a rather part-time member of the Parliament Choir, I have none of the expertise so much on display of those with professional and semi-professional links who have talked about their experiences; I acknowledge how much that has contributed to our debate today. But all of us are here because we share a commitment to the sector in its widest sense, and I hope that that message is loud and clear for the Minister. This is a matter that cuts across all the parties and sectors of the House.
The unanimity of purpose in coming to the debate today has been echoed in a message that the Minister will have picked up, which is that there is common ground here. Grass-roots music venues play a key role in enabling some of the biggest names in music to develop as artists and to build their audiences. They are in some senses incubators, and so protecting these live music venues is crucial to our creative industries. As several noble Lords have observed, they contribute to a sense of place and they add to an area’s desirability as a place to live, work and visit.
This is not just a London problem. Noble Lords have mentioned Cardiff, Lancaster, York and Edinburgh, and there are all too many others. We should congratulate the Mayor of London—I do so publicly today—on setting up the Music Venues Taskforce, which has informed so many of today’s contributions. Perhaps in response to the point made by the noble Lord, Lord Foster, we should invite other cities to replicate this work and extend it so as to produce the evidence which I am sure would convince Ministers, even if they have not been convinced by what has been said in the debate today.
What exactly is the problem? There is a lot of concern and anxiety around this, and Ministers will want to be sure that they are in the right area on this. It seems to me that we have differential planning, licensing, policing and fiscal policies in play, which means that it is a struggle for those involved to balance the needs of grass-roots music venues with those of residents and businesses. All these are legitimate concerns. But without thinking through the policy implications, tensions are bound to arise. It is obvious that an increasing need for housing means that residential development is taking place cheek-by-jowl with existing night-time activity. This pressure, coupled with rising property prices and increasing costs for grass-roots music venues, is proving, as the noble Earl, Lord Clancarty, said, a perfect storm, and as a result venues are closing. This is a very depressing scenario. Everyone has argued that we want to do something about it, but nobody has come up with a very clean and obvious solution that would, with one stroke, solve this. I will just touch on some of the issues that have come up today and invite the Minister to respond to each of them.
First is the agent of change principle, which has received a fair amount of discussion. This puts the onus on the developer to mitigate any future problems which might emerge between newcomers to an area and long-standing local venues. Funnily enough, I came across this the other day on a visit, as part of my secondment to the Metropolitan Police, to an area on the outskirts of London which houses the police mounted brigade. It is fully equipped to look after horses, and obviously with horses come noise—in this case, a forge, which is not quiet but is used through the day and often at night. The adjacent industrial estate is going to be turned into a housing estate, and the Metropolitan Police is concerned that its existing practices and procedures will be affected by future complaints. This is not just a music issue, but is of wider concern.
A number of noble Lords mentioned the debate on the Housing and Planning Bill, in which the Minister, Mr Brandon Lewis, said a number of things about this. I will pick up a slightly different quote, which seemed to me to be a way forward. He not only said, as others have mentioned, that he wants to look further at the matter and has been working with the Minister for Culture and the Digital Economy but accepted that:
“If a business is working and a nearby building converts to residential housing … It would be entirely wrong of the people who moved … to complain about the business that existed before the residential housing was there”.—[Official Report, Commons, Housing and Planning Bill Committee, 8/12/15; col. 598.]
When the Minister comes to respond, can he update us on where discussions have got to on this point? There are opportunities coming up in this House which would allow us to take the point further, should that be appropriate.
On business rates, one thing that has not been mentioned up to now but which came up as a live issue in the recent Enterprise Bill—whose Third Reading is still to come—is the question of whether or not there will be action on the rating demands being raised by the VOA on grass-roots music festivals which operate on agricultural land. It is slightly tangential but it bears on the wider point, also raised by the noble Lord, Lord Clement-Jones, about the way in which local authorities could affect the incidence of business rates not only on venues but on portable festivals. Again, could the Minister update us on where we have got to on this? I think the last statement on this was from the DCMS Minister, the noble Baroness, Lady Neville-Rolfe, who said that,
“if there are no permanent physical adaptations to the land … and the duration of the festival is only a matter of a few days, it is unlikely to attract a rating”.—[Official Report, 2/11/15; col. GC 314.]
However, that is not what is happening on the ground: ratings have been applied and they have been causing problems.
My fourth point follows the rather interesting point made by the noble Lord, Lord Clement-Jones, about the feeling in the industry, which I think is genuine, that there is overregulation of the activity here. It is easy to knock regulation—good regulation is essential for the proper functioning of a good society—but it may be that perhaps the better regulation unit in BIS could be asked to apply a task-oriented focus on this area to see whether it could come up with some plans for deregulation which would both satisfy the Government’s overall aim to have two out for every one in and relieve some of the problems of the music industry.
Finally, the noble Lord, Lord Foster, reminded us that music can have a restorative effect on social cohesion and health. Can the Minister sketch out for us what his department is doing to spread the word about why DWP, DH and CLG should be working with DCMS to make sure that music is supported in this way?
The Earl of Courtown (Con)
My Lords, I, too, thank the noble Lord, Lord Clement-Jones, for securing this debate, and thank other noble Lords for their contributions. The debate is particularly appropriate as the noble Lord was the parent of an important Bill that went through this House.
The future of small, grass-roots music venues is clearly an issue that attracts strong interest from this Committee and across the whole House, as was mentioned by the noble Lord, Lord Stevenson. I am fully aware of the important contribution that the live music scene makes, not just to the UK economy but to its overall cultural landscape.
Noble Lords mentioned the many venues that they have seen various acts at, and I should mention that many of those venues formed an important part of my youth, such as Friars in Aylesbury, where I remember seeing Cockney Rebel twice in one year. I also saw John Otway and Wild Willy Barrett, although I did not really get too much into their music, to be perfectly honest. More recently, I visited the Horseshoe in Clerkenwell to hear a folk singer from Courtown Harbour in County Wexford sing a song called “Lord Courtown”, which is about an ancestor of mine. Strangely enough, it was very complimentary about the famine work that my family did during those bad years.
Music is one of the things that makes our country great, and often provides a person’s first introduction to all things British. It is one of the principal reasons that the UK is currently ranked number one in the global soft power index. British singers and musicians, as mentioned by noble Lords, provide the daily soundtrack to the lives of millions.
When I talk about talent, I am looking not just at the artists. This country provides the industry with outstanding producers, sound engineers, writers, arrangers, promoters, roadies and many others who are all part of the UK’s music ecosystem. Music tourism—not mentioned before in this debate—generated more than £3 billion of spending in the UK last year and sustained nearly 40,000 jobs. Last year, 546,000 people came here from overseas because of music, spending an average of £751 each.
The Government will carry on supporting and promoting an environment in which UK music can continue to thrive. I note that between 2012 and 2016, the Government will have invested £460 million in a wide range of music and cultural education programmes. We have moved to boost our orchestras with a new tax relief at a rate of 25% on qualifying expenditure from next April. The music export growth scheme helps independent music companies to reach overseas markets, ably assisted by the BPI and UK Trade and Investment—Mercury Prize winners Young Fathers being just one of the bands to benefit from the scheme.
Grass-roots music venues are a vibrant and vital part of our music ecosystem and our communities, as was mentioned by the noble Lord, Lord Foster, and others. That is why, since last year, we have reformed entertainment licensing to make it easier to perform and play live and recorded music. We have also noted calls for the adoption of the agent of change principle to protect music venues from noise enforcement when it comes to changes in nearby land use. I will say more on that later in my speech.
We have made changes to the National Planning Policy Framework, which now includes a specific reference to the need for consideration of existing live music venues when it comes to changes of use in nearby land. Additionally, the Supreme Court judgment in a common law nuisance case, Coventry v Lawrence, has made changes to the way nuisance law is interpreted in the 21st century. The judgment helps in emphasising that the regulatory regime must strike a balance between enabling people to enjoy music at well-run venues and managing any potentially adverse effects from noise for residents.
This is, as noble Lords have said, challenging, but we are exploring what more can be done to ensure that local authorities take all relevant factors into account, as in the case of Camden Council. Noble Lords have mentioned its 2010 strategy for Denmark Street, which acknowledges the street’s renown as,
“a centre of popular music instrument retailing”,
its “unique and vibrant atmosphere”, and its significant contribution to the area’s “special interest and character”. It is right and proper that plans have been approved to bring the 12 Bar Club building back into use as a music venue, and planning permission has been granted for a brand new 800-capacity music venue directly opposite the site where the Astoria once stood.
Many noble Lords, including the noble Lords, Lord Clement-Jones, Lord Foster and Lord Stevenson, commented on the agent of change principle and the debate that occurred in the House of Commons last week. I shall answer as much as I can on the issue, but I shall ensure that the substance of this debate is put to my colleagues in that department as well. This is a complex issue, which cuts across planning, licensing and noise protection regimes. We have looked into the planning provisions in Victoria, Australia, but they apply only to developments within 50 metres of live music venues, whereas the National Planning Policy Framework says that existing business such as music venues, regardless of distance, should not have unreasonable restrictions put on them because of changes in nearby land use since they were established. Elements of the agent of change principle already exist within planning policies and guidance and can already influence planning decisions, because planning law requires planning applications to be determined in accordance with the local development plan, unless material considerations indicate otherwise. National policy and guidance are material considerations.
The noble Lords, Lord Clement-Jones and Lord Addington, and the noble Earl, Lord Clancarty, drew the attention of the Grand Committee to business rates. The Government recognise that business rates represent a fixed cost that can be more burdensome during times of economic difficulty, particularly for small businesses. That is why my right honourable friend the Chancellor has extended the doubling of small business rate relief until April 2017, which gives targeted support to single, small properties. Some 600,000 eligible small businesses are estimated to benefit and 400,000 businesses will pay no rates at all as a result of the 12-month extension.
Local authorities also have the power to offer business rate discounts beyond predefined reliefs at their discretion. This is funded 50% by central government and 50% by the relevant local authority. We would expect local authorities to take full account of the funding provided by central government for discretionary rate relief when making their decisions. The Government are currently undertaking a review of business rates, which will be fiscally neutral and will report at a later date.
The noble Lord, Lord Clement-Jones, also mentioned deeds of easement, such as that in the case of the Ministry of Sound. It is a matter of choice for all the parties involved; every case where the potential exists for adopting such an approach will need to be considered on its own merits. It must be the decision of those affected as to whether entering into such an agreement is right for them.
Many if not all noble Lords mentioned the issue relating to cross-governmental co-ordination and the meeting to be arranged between my honourable friend Mr Vaizey and colleagues in the DCLG. My honourable friend remains committed to taking a delegation of music venue owners to meet the Planning Minister, and it is my understanding that the relevant ministerial offices are currently working to secure an appropriate date for the new year. Furthermore, I can confirm that officials from the department concerned have already met to discuss these issues on a number of occasions and, led by the Department for Culture, Media and Sport, we will set up further meetings to look at what can be done. As the noble Lords, Lord Clement-Jones, Lord Addington and Lord Berkeley said, co-ordination between all those departments is so important; it does not involve just one department but a wide spread of departments. At the same time, we will look at better collection of statistics. As the noble Lord, Lord Foster, said, it is difficult to define these venues.
A number of noble Lords also referred to my honourable friend’s mention of funding and access to funding during his participation in Venues Day this year, when he encouraged music venues to apply for Arts Council funding. He was, however, also clear that funding decisions are made by the Arts Council independently of government. The Arts Council already provides funding for a number of small music venues, such as Band on the Wall in Manchester, Cecil Sharp House in London and the Stables in Milton Keynes. Several noble Lords mentioned the Mayor of London’s Music Venues Taskforce. It is not the intention of the Government to deliver a formal response to the Mayor of London’s Music Venues Taskforce report.
The noble Lord, Lord Foster, raised the subject of the amendments brought forward in Committee in another place. As I have already said, the National Planning Policy Framework, supported by planning guidance, incorporates the agent of change principle by making clear that existing businesses wanting to continue and develop should not have unreasonable restrictions put on them because of changes in nearby land uses since they were established.
The Earl of Courtown
I would be happy to try to answer the query of the noble Lord, Lord Foster, if he writes to me. The noble Lord also asked about assets of community value. This policy area falls within his old department, and I will ensure that the point is made to my colleagues in that department.
In closing—I realise that I have not dealt with all the queries put to me—I say to noble Lords that we want to encourage people to live in our towns and cities while at the same time enabling small grass-roots music venues to flourish, giving a range of musicians and artists a valuable opportunity to perform in front of a live audience and local communities a valuable social hub and cultural attraction. Although we have done much already to help music venues across the UK, we welcome the ongoing dialogue with the music industry on what more can be done to protect those venues.
Energy: Security
(9 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bowness
To ask Her Majesty’s Government what they consider to be the roles of the Energy Community and the Energy Charter in improving energy security and alternative supplies and sources of energy for the member states of the European Union and its neighbours; and what is the extent of United Kingdom involvement in both organisations.
Lord Bowness (Con)
I thank the Minister and his Whip, and the noble Lord, Lord Grantchester, for attending this debate and allowing me the unusual opportunity of knowing that there at least two people who will listen to what I say.
When I was appointed to the Energy and Environment Sub-Committee of the EU Committee—I make clear that I am speaking personally and not as a member of the committee—in the course of attempting to catch up with EU energy issues, I came across the Energy Charter and the Energy Community. This was at a time when the need for more and new sources and supplies seemed an urgent priority in the face of Russian actions in Ukraine and the ups and downs of the various new pipelines. The more I read, the more I felt there was more that we should know about both these organisations.
Both organisations may be familiar to other Members of the Committee but they were not so to me and indeed the more I looked into them the more questions arose than I have time to pose this afternoon—although I am not sure whether the personal time limit trumps the overall time limit for this debate. Should I sin in one direction, I shall assume that the overall time limit is what controls our proceedings.
I turn first to the Energy Community. This is an international body dealing with European energy policy. It was established by a treaty signed in Athens in October 2005 that came into force in July 2006. The parties are the European Union and eight other countries of south-east Europe, the Black Sea region and beyond. It seeks to extend the European Union internal market rules to interested non-EU countries in Europe and beyond. Its own website says that the role of the community is to:
“Attract investment in power generation … Create an integrated energy market allowing for cross-border energy trade … Enhance the security of supply … Improve the environmental situation in relation with energy supply … Enhance competition”.
Those are all aims to which I presume the United Kingdom Government would subscribe.
Although the European Union is the party to the treaty, not the individual states of the Union, all the European Union states may take part in the various institutions of the Energy Community. I was therefore a little surprised by the Answers that I received to a number of Written Questions which I put down in the previous Parliament. In asking who represented HMG in the gas, oil and social fora of the Energy Community, I was told that the UK does not participate in those fora and that the EU Commission represents the EU member states’ position. I also asked who was our non-voting representative on the Energy Community regulatory board. I was told that we were not represented and that the European Commission represented the EU member states. I asked who was our representative on the Permanent High Level Group of the Energy Community and was told that an official from the Department of Energy and Climate Change attends this group when issues to be discussed require the United Kingdom’s attendance. Lastly, I asked who attended as our representative at the annual Ministerial Council and was told that it was an official from the department.
Although those Answers were in many ways a welcome recognition of the role of the European Union in these matters, I must ask the Minister, if our participation is so limited, what our assessment is of the value of the organisation. Is there not a case for greater United Kingdom involvement given our interest in the security of supply, not just in the United Kingdom but in the European Union and its neighbours as a whole?
For what may have been the first time, the department wrote to the European Union Select Committee in September this year, advising it of the agenda for the Ministerial Council of the Energy Community which took place on 16 October. The letter tells me that the European Union position on items was agreed by the Council of Ministers and that the United Kingdom Government supported the proposals, which included reform of the institutions and their working methods.
Can the Minister advise the Committee of the outcome of the Ministerial Council and in particular about the proposed procedural act to organise a meeting of representatives of Parliaments to formalise the existing network of parliamentary co-operation? Is it the intention that this role will fall to the European Parliament, not Westminster? Where and how does the Energy Community relate to the European Union’s own energy union policies? How does the work of the Energy Community relate to the work of the Energy Charter?
The Energy Charter dates back to an initiative of the early 1990s. In 1991, the Energy Charter political declaration was signed in The Hague, followed by the treaty, which was signed in December 1994 together with an important Protocol on Energy Efficiency and Related Environmental Aspects. The treaty came into force in 1998. It aims to encourage and facilitate international cross-border co-operation on energy and represents an important international effort to build a legal foundation for energy security based on open, competitive and sustainable development.
The Energy Charter’s website lists its basic elements as investment protection—through ensuring a firm legal framework—stable energy flows and increased energy efficiency. Unlike the Energy Community, 52 member states, from Europe and Asia, have signed or acceded to the treaty. The United Kingdom is a signatory, together with the European Union and EURATOM. Observer states include the United States of America, Canada and other non-European Union states. Apparently a modernisation process was launched in 2009, and in 2014 negotiations started on an updated charter. Can the Minister advise us about the updating process and our involvement in it? Can he tell us more about the working of the organisation, including the Energy Charter Conference, which has political responsibilities for the implementation of the charter working groups and ad hoc committees? I wonder who attends that.
It is worth noting that this is perhaps more important than may appear at first sight, because Russia chose to withdraw from the treaty by presidential decree in 2009. That clearly had serious implications for countries supplied from the Russian Federation, given also the provisions in the charter for resolving disputes. Will the United Kingdom attend the ministerial meeting of the charter in Georgia on 15 December, one day of which is devoted to fostering regional co-operation through cross-border energy trade?
I repeat the questions that I posed with regard to the Energy Community about who represents us, if at all, and when and where. What value do we place on the organisation and how does it relate to the Energy Community and the European Union’s Energy Union? It seems that there is considerable overlap between the two organisations, if not in the work they do, at least in their stated objectives. Do the Government have a view about that?
Lastly, I hope that the Minister will be able to tell us more than I have managed to research or had time to cover this afternoon. Does he agree that these are matters which should be of considerable concern to the United Kingdom and about which Parliament should know rather more than it is currently told?
The Earl of Erroll (CB)
My Lords, I wonder if I could speak in the gap, since the debate is rattling on quite quickly. I have two points. First, having lived in a world some time ago when we were not worried about terrorism or problems like that—and I now live in an IT world—how on earth one secures the transmission of the gas or whatever it might be through potentially hostile territories, particularly in an internet world where these things are controlled electronically, is extremely difficult. Since one has no power, particularly to enforce certain security levels in other countries that might be travelled through, there are huge vulnerabilities. I feel very sorry for the people who try to do this. I know that we have some very good people working on it, and I just hope that they manage to keep us secure, because we are highly vulnerable with the route from some of the supply fields all the way to the UK. At the end of the day, we are at the end of the line.
Secondly, I want to put in a plug for something. This morning, I was speaking at the Institution of Engineering and Technology on the internet of things, and one of the interesting things that came out of this with machine-to-machine communication was the concept of the virtual power station. I ought to declare an interest as chairman of HyperCat. That is short for Hyper-Catalogue, which it is about machines communicating interoperability on the internet of things. This might sound off the point, but if we can start to look at the energy requirements and start to move it around a little, we can save ourselves the need to fire up a power station at certain moments. I throw that in because we were talking about alternative supplies, whereas this is far more important: the high-level stuff and the negotiation of treaties.
At the practical end, where I live a lot of the time—I am not expecting any answer to this at all because it is left of field for this particular debate—there are technologies out there and new things coming along. The Government should look at some of the funding for what we call the internet of things, which, at the moment—although it sounds techie—is climbing up the degree of importance. It could really help in areas such as this when talking about alternative supplies: not because of the supplies, but because of the savings that can be made. Therefore, I make a quick plug for new technology and perhaps government funding in the next spending round. That area is doing quite well thus far; it could do better.
Lord Grantchester (Lab)
My Lords, I thank the noble Lord, Lord Bowness, for tabling this important Question today, for his interesting introduction, and for his continuous probing into lesser-known forums for energy discussion. I endorse all of his questions to the Minister and I thank the noble Earl, Lord Erroll, for joining our debate today.
While the Energy Community is essentially an enlarged EU platform to expand the EU’s internal energy market to nine states in south-eastern and eastern Europe, the Energy Charter is an independent, international, intergovernmental organisation of 52 states in Europe and Asia, including the Russian Federation. Those can play a major role in expanding the energy borders of EU energy policy through co-operation and alignment for a more secure and resilient world. Both can focus on the promotion of investment, stable energy flows and increased energy efficiency.
The Energy Community has an interesting approach to its various categories of membership: 19 of the 28 EU member states are participants, including the UK, while four EU neighbours—Armenia, Georgia, Norway and Turkey—are observers. Georgia has applied to join the Energy Community as a full member. Will the Minister comment on the fact that not all of the EU member states participate? Do the Government consider that this non-participation of some member states reduces the influence and work of the Energy Community? How do the Government approach the question of whether Georgia should be granted full membership against the background of turbulence in Ukraine and Crimea?
The Energy Community is taking the EU-model approach to a wider area. While this should perhaps not be interpreted as a precursor to widening membership of the EU, it nevertheless establishes a wider commonality of approach in this vital area of energy policy, decarbonisation and climate change. It is good timing by the noble Lord, Lord Bowness, that he has initiated this debate while the climate change talks were taking place in Paris. The Energy Community is tabling various EU directives and seeking application to eastern Europe through timed convergence within the region. For example, on electricity, community directives set minimum requirements for the establishment of competitive markets, including the development of coherent, transparent and non-discriminatory security of supply policies.
On the gas sector, the Energy Community is seeking the unbundling of transmission system operations over the next two years. On the environment, directives are identifying and assessing the environmental consequences of projects before any building or operation permit is granted. The Energy Community is presently preparing for the adoption of directives on energy efficiency, setting energy-saving targets into the future. Similarly, contracting parties of the Community are under an obligation to introduce rules to place competition on three pillars: first, the prohibition of anti-competitive agreements; secondly, the prohibition of abuse of a dominant position; and, thirdly, the prohibition of state aid. The Energy Community is also replicating EU policy with binding national targets for renewable energy in the electricity, heating and transport sectors, and with binding sustainability criteria for biofuels. The lessons of these developments of the EU policy have very much been learnt, with sustainability criteria to be verified by a dedicated body according to the rules.
On bringing coherency to a wider region, the Community is reviewing its dispute settlement mechanism. Four dispute settlement cases are currently open, and another 11 cases have been brought forward. To help implementation and enforcement mechanisms, the Energy Community has established a high-level reflection group to overcome shortcomings. Does the Minister agree that this should improve the effectiveness of the Community, and which states are members of the group?
I ask the Minister to expand on the questions posed by the noble Lord, Lord Bowness, in the Written Questions he referred to in his speech which were answered by the noble Baroness, Lady Verma, in March this year. The Answers suggest that the UK uses its influence only indirectly as a member of the EU, and it is the EU collectively, through the Commission, that engages with the Energy Community. This must surely dissipate the UK’s voice. Yet in another Answer the noble Baroness, Lady Verma, suggests that an official from the Department of Energy and Climate Change represents the UK at the annual ministerial Councils. Would the Minister clarify this position, and tell us what grade of official would undertake this assignment? Would ministerial attendance enhance the UK’s role at these meetings?
The Minister of State for Energy and Climate Change in the other place attended the European Energy Council in Brussels at the end of November. Discussion items included energy labelling regulations, electricity market design, the role of smart meters and a possible further EU-level instrument to address any anticipated shortfall against our 2030 renewable energy target. Many or perhaps all of these items could be of significance to participants in the Energy Community. How does dialogue at Energy Council level feed into the operations of the Energy Community? The development of interconnectors between supply grids is increasingly important to the security of supply, bearing in mind the high import dependency of many members of the Community. Interconnectors are regarded as key components of a national infrastructure. Do the Government consider the legal basis underpinned by the Energy Charter sufficient to provide jurisdiction between states?
The Energy Charter treaty plays an important role as part of the international effort to build a legal foundation for energy security. The noble Lord, Lord Bowness, said in his introduction that this treaty is acceded to by 52 states, the European Community and the European Atomic Energy Community—EURATOM—totalling 54 members including the Russian Federation. Observers to the recent conference included many more, such as the United States, China, Saudi Arabia and the UAE, among others. There is now a clear conviction among the contracting parties that the Energy Charter treaty is set to become an important instrument for global energy governance. The Astana Declaration of the Energy Charter Process for Global Energy Architecture is a political document which will guide the conference over the coming years. The conflicts in Crimea and south-east Ukraine have grave political consequences, with a negative impact on energy co-operation and will reshape relations between the EU and the Russian Federation. The resulting sanctions and the development of a mechanism for amicable dispute resolution must enhance the authority of the charter.
Bearing in mind that the 26th charter conference, which took place on 3 and 4 December, coincided with the Paris climate change conference, can the Minister confirm whether the UK, as a member state, attended, and was this at official level? As the EU is also a member, what representation was there in that regard and how do the UK Government make their voice heard through this participation? Will the Minister provide the House with a report on that conference? Did it decide on any new instruments and joint initiatives within the charter framework? What approach are the UK Government taking towards the Energy Charter activities?
Here in the UK the Government are resetting their energy policy and causing considerable anxiety. They have scrapped their flagship Green Deal home improvement fund and the zero-carbon homes policy. They have been warned that premature cuts to renewables subsidies have created a climate of uncertainty for renewable energy. Indeed, the CBI has recently condemned the Government’s policy-making for destroying investor confidence and blocking low-carbon energy infrastructure, while encouraging high-polluting diesel generators to enter the capacity market. At a time when stability and coherence is so needed at the international level and these new cross-national developments need careful support and guidance, the UK Government need to be aware of not diminishing their voice on the international stage.
Labour would argue that the UK needs to develop and implement a long-term energy plan. The UK faces a huge challenge to its energy supplies as sources of power come to the end of their useful life. We need a diverse energy mix, balancing the dilemmas of affordability, decarbonisation and security to power the economy and ensure the transition that meets climate change targets. The noble Lord, Lord Bowness, has highlighted the important frontiers of EU energy competencies in which, we believe, the UK should play its full part.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, first I thank my noble friend Lord Bowness for raising this important topic in the House, and the noble Lords who participated in the debate. I thank particularly the noble Earl, Lord Erroll, for ensuring that participation has gone up 25% just by being here. We are most grateful for that.
Because of the reference by the noble Lord, Lord Grantchester, to what is happening in Paris and the importance we all attach to that, before coming to the substance of this importance debate I will first say a little about that. I was there until yesterday evening, so I know that very good progress is being made. Issues of domestic policy do not often come up, but in so far as they came up in any meeting that I attended, the thing that seemed to have caught the attention of other participating states—every state in the world bar North Korea—and that had landed well and pleased other states, was our decision to withdraw coal-fired power stations by 2025, in so far as that is achievable while ensuring energy security. That brings us back to the substance of this debate, which is clearly about secure energy, so let me say something about that and then try to deal with some of the points made. Where I cannot deal with them—that will certainly include the answers given by my noble friend Lady Verma earlier this year—I will ensure that a full response is sent to all those participating in the debate.
Secure energy supplies at affordable prices are a critical issue for any country or region, and I welcome the opportunity to discuss the role which the Energy Community treaty and the Energy Charter treaty play in our energy security, which is the essence of both treaties, though they come at it with different types of provision.
In 2013, to put this in context, the EU energy market imported 53% of its energy requirements, a figure which may well grow in the future. As such, access to secure supply sources is key, a point which all noble Lords who participated in the debate have made. This is particularly the case for gas, of course. As a commodity which can be supplied only by pipelines that are laid and from import terminals that exist, it is, and should be, a focus for EU energy security improvements. A total of 29% of the gas consumed by the EU comes from just one country; namely, Russia. It is also the key supplier to many countries close to the EU where customers have no choice of supplier. They also have less power to determine the price, timing and amount of gas they receive. In short, they have insufficient energy security.
The better connected the internal EU gas market is, and the stronger the links across the area, the easier it will be for gas to flow where it is needed at affordable prices. The Energy Community treaty and the Energy Charter treaty are two important tools to address this issue. Perhaps I may turn first to the Energy Community treaty of 2005 which was set up to extend EU energy market liberalisation to non-EU countries such as Montenegro, Albania, Serbia, Moldova and Ukraine. Assisting these countries to liberalise their energy markets in line with the EU approach has multiple benefits. These include making trading across borders easier, and helping to attract investment into much needed energy infrastructure. Assisting the liberalisation of these markets is particularly advantageous to the United Kingdom and EU energy security as the non-EU countries that are party to the agreement are situated on significant routes between gas and oil producers such as Azerbaijan, Kazakhstan, Russia and the Middle East, and customers in the EU. It is for this reason that the United Kingdom is a strong supporter of the Energy Community treaty.
We engage fully with the objectives, but of course it is the EU that is a member rather than member states as such, so we attend EU meetings to make policy on Community objectives. At the moment, the Energy Community is focusing on additional EU energy legislation such as the energy efficiency directive to ensure that it is properly enshrined in the Community. It will have particular value in reducing emissions in countries such as Ukraine, which is the least energy-efficient country in the whole of Europe. Other reforms include strengthening the dispute settlement procedure and strengthening our engagement with Parliaments and civil society organisations. We consider the reform programme that is being put in place within the Energy Community to be sensible because it will improve the functioning, usefulness and transparency of the Energy Community treaty. These are basically the outcomes of the October Ministerial Council, and the EU position is very much in line with the UK position, so the UK is wholly on board for that.
In essence, the Energy Community treaty aims to improve competition, encourage liberalisation and support energy consumers. It is a key way of reducing the market power and associated political influence of any single energy supplier. With greater market integration and investment in new infrastructure, gas should flow to where it is needed following price signals rather than political signals. This is very central to our aims. The secretariat, which is essentially funded by the EU, holds significant expertise on both Energy Community members and on EU energy regulation. It is a trusted leader on reform in the region. We believe that this expertise is already benefiting south-eastern European states, and therefore the whole of the EU, so it is making a significant contribution to energy security.
For example, Serbia, Ukraine and Albania have transposed the EU’s third energy package, which includes market reforms and is challenging the dominance of the incumbent energy suppliers. Ukraine has also adopted gas liberalisation laws in compliance with EU laws. The Government are committed to playing our part in this process, and to that end we have funded a project with the Energy Community secretariat that assists Ukraine in improving its electricity market legislation. That is a key stepping stone in Ukraine’s wider reform process. Ukraine’s energy sector is a major source of revenue but it is also, as I have indicated, extremely inefficient and poorly regulated, wasting valuable resources and putting off external investment. This is one way of demonstrating the United Kingdom’s commitment to the Energy Community and its treaty.
Let me move now to the Energy Charter treaty, which has many similar aims but is a quite separate organisation. It was agreed in 1994, essentially in the wake of the break up of the Soviet Union, to promote international investment in the energy sector in eastern Europe and central Asia. It established legal rights and obligations with respect to energy investment and the trade and transit of energy goods. As has been said, there are 54 treaty members, including European and Asian countries, as well as EURATOM. Groups have signed or acceded to the Energy Charter treaty. Russia provisionally applied the treaty until 2009, but Members will be aware that there is a dispute at the moment in relation to Yukos, and Russia is no longer a treaty signatory having come out of the treaty process.
The treaty enshrines in law a mutual commitment not to discriminate against foreign investors. If an investor has a claim against a member of the treaty in relation to the provision of energy—by pipeline or whatever—this provides the mechanism for settling that, and there are rights and obligations set out in the treaty to help with that.
Another key area of the treaty’s provisions is energy transit. Building on World Trade Organization rules, the transit provisions oblige participating states to take the necessary measures to facilitate the transit of energy. Essentially, those measures are between states—for example, between the states of central Asia and the states of Europe. Therefore, the treaty deals with investment-type disputes between individual investors and a state, and also provides mechanisms between states in relation to energy transit. There were some specific questions about how we engage fully with this, and we do that both through the EU and as a separate member.
There were also questions about the conference—I think it has just happened rather than is just about to happen. This year, it was in Georgia, and last year it was in Astana in Kazakhstan. Although it is open to Ministers to go, for a number of years, the general process has been for a Minister not to go but to send a messenger. That happened this year and last year, and we were represented at higher executive officer level. I think many other nations do that too.
Although the conference is important, I am sure noble Lords will appreciate that, this year, we had the run up to what has been a very important process in Paris. That has engaged politicians across the board and, in particular, the Government. In the case of the Government, my right honourable friend the Secretary of State has been in Paris practically throughout the process, and I have been there for a considerable time. Therefore, the Minister of State has necessarily been doing a great deal of business in the United Kingdom, not least with regard to the flooding situation, to which they were central to helping deal with that and the necessary action that has followed. However, we have been well represented at the conference.
I will ensure that noble Lords get a detailed response as to exactly what happened in Georgia. An annual report is published, and those noble Lords who picked up the pack—I see that the noble Lord, Lord Grantchester, has his—will have seen a copy of the report on last year’s conference. We will make sure that we get a detailed breakdown of what happened this year for noble Lords.
My noble friend Lord Bowness asked what was happening in the process of making changes to the Energy Charter and updating it. The process has been largely about updating the language; I do not think that there is any fundamental change. For example, it has not been updated since the USSR was no longer the USSR, so there has been a tidying-up exercise. I do not think it is much more fundamental than that but, if I am wrong, I will certainly let noble Lords know when I write to them. That is the basic position.
I hope that that has dealt with most of the points. If I have missed anything, I will ensure that we pick it up in the write round. I once again thank my noble friend Lord Bowness for bringing forward this very important issue. I will ensure that he gets a full reply in relation to the points raised in the questions to my noble friend Lady Verma, and any other points that I have missed. I thank noble Lords for contributing to the debate on this key issue.
In closing, noble Lords will know that we are, as a country, focused on three essential aims: affordable energy, secure energy and green energy. The top priority, as set out by my right honourable friend the Secretary of State in her recent speech, is energy security. This debate, therefore, has been particularly timely and helpful.
Business Community
Baroness Greengross
To ask Her Majesty’s Government what assessment they have made of how the business community can contribute to resolving the major challenges facing the United Kingdom.
Baroness Greengross (CB)
My Lords, I am sure that all of us in this House are seeking a fairer and more sustainable future. I seek to shed some light on how business can have the greatest impact on some of the big issues involved and be drivers for change where it is needed. Many of the examples I know are through the All-Party Parliamentary Corporate Responsibility Group, which I co-chair with Jonathan Djanogly MP, and which I have been privileged to lead since coming into your Lordships’ House.
In the time available, I can comment on only a very few of the challenges that we face. However, creating meaningful employment is surely one of the most significant ways in which business can contribute to the lives of individuals and communities. For many, it is the only sustainable route out of poverty, as we know, and many businesses proactively help people to gain sustainable employment by building skills, removing barriers to work and making the workplace more accessible for disadvantaged people. One example is Ban the Box, an employer-led campaign to remove the criminal record tick box from application forms. It is a brave and, understandably, often very controversial measure to which, since October 2013, 55 employers have committed themselves. Some 10 million people in the UK have some sort of criminal record, and research suggests that 75% of employers discriminate against such people. When employers Ban the Box, they encourage only a candidate’s skills and abilities to be seen.
The Land Securities Group, a winner of the 2015 Responsible Business Awards, developed its London employment strategy to help disadvantaged people get jobs and to improve the mix, in terms of gender, ethnicity and disability, of entrants into its industry. The strategy has trained 656 people through sector-based work academies designed in partnership with further education colleges, and already 511 of these people have progressed into work.
We all know our population is ageing, with 10 million people in the UK over 65, a number that is projected to double by 2050. Through Business in the Community’s Age at Work programmes, businesses are seeking to meet these challenges and reap both commercial and social rewards. But much more still needs to be done, especially for the over-50s, who do worse in this respect than those over 60. That may seem a bit surprising, but it is a fact.
As we know, black, Asian and minority-ethnic people are under-represented at every management level in the workplace. One in eight of the working age population is from such a background, yet only one in 10 is in the workplace, and they hold only one in 16 top management positions. BITC is, to its credit, doing much work in this field.
Both industry and the economy have changed extensively in Britain in recent times, but benefits and problems have not been equally felt. More work needs to be done in how we source goods and services. The retail sector, especially the food sector, has led the way in this, but much more is needed. For example, the Arc access programme connects social enterprises with business to share expertise and innovation, leading to employment opportunities and local regeneration. The programme has already created 3,000 jobs. BITC’s Healthy High Streets programme will provide intensive support for 100 high streets and help them to realise their potential in our rapidly changing economy.
Business can also help create and develop economically viable and cohesive communities by supporting young people in schools. For example, an initiative called Business Class brings business and schools together to support young people facing disadvantage. I have had a lot of the people involved in this at two receptions here in the Lords, and it is really impressive; it supports 450 schools, impacting on 140,000 people who leave school with a much better understanding of work through knowing at least one business really well. The businesses get incredibly involved with the schools they support, forming long-term relationships.
At this point, I pay tribute to the noble Lord, Lord Baker, and his role in the development of university technical colleges, which are very important. They develop the skills needed by business and industry through training young people between 14 and 19 years old to ensure that they are qualified, ready to work, proud of their achievements and geared to today’s society and its needs. This is a good example of business working with the public sector, which funds the development of these colleges, and which are then very much supported by businesses.
There are many other ways that responsible business can and does all this. We are very aware, for example, of the devastating impact of recent weather patterns. National Grid and the rail industry have worked day and night to restore services to people in the north-west of England. We tend to take this heroic effort for granted, but it is a great example of responsible business in action. The clothing sector is another example, in what it is doing in tandem with WRAP to promote recycling in very many rather exciting ways.
The British food industry is yet another example, with the great success it has achieved in supplying affordable food. Hopefully, it can now turn its attention to doing more to provide healthy food—food lower in sugar, fat and salt—and to assist and promote healthy eating. At the same time, it should stop promoting unhealthy food, especially to children. The amount that the food industry spends today on promoting unhealthy food vastly exceeds what we publicly spend on promoting healthy eating, and rather nullifies the good work. The obesity and diabetes crisis that is occurring under our noses could well bankrupt the NHS in 30 years’ time unless we take urgent action now.
One of the challenges that the All-Party Parliamentary Corporate Responsibility Group has faced is that MPs have not recognised fully their potentially critical role in terms of the leverage and the power that they have in working in their constituencies with the business sector to address many of the challenges we all face. As a result, we, the officers of the group, created an awards scheme last year to recognise best practice, with nominations recommended in each case by MPs. This was enthusiastically taken up by MPs. The first winner was London City Airport, in recognition of its very impressive activities that benefit the area in which it is situated. We were delighted at the number of schemes that MPs nominated and have great hopes for future years.
In all of this, we must not forget that truly responsible business practice should also include setting an example by living an example. Maybe this is a subject for another debate, but business must demonstrate that it has a responsibility to society, not merely in the way it interacts with people but in the way it organises and runs itself: to take one simple example, by paying tax in the UK on monies earned in this country, even if it could evade that payment.
Today, I ask the Minister to focus on areas of policy where government can support employers to drive real change. This should include better integration of health and social care services with employers and employment support services, and enhanced statutory flexible working, to enable people to remain healthy and in work and to work longer. We also need a cross- government national skills strategy for older workers, and for race to be added to the UK Corporate Governance Code. There will be many other ways our Government can help all of us in this, and I am confident that the Minister will soon bring to us many such ideas. I thank her in anticipation of her doing just that.
Baroness Lane-Fox of Soho (CB)
My Lords, I thank the noble Baroness, Lady Greengross, for her wide-ranging and inspirational introduction. I hope to be a ray of sunshine in today’s debate on a rather gloomy afternoon.
I was reflecting on how quickly the business landscape has changed in my career since 1994—it feels rather long, although I realise that it is still relatively short. Even when we started our business, Lastminute.com, in 1997, the idea that we should build in any kind of social responsibility right from the beginning would have been strange, and yet I was somebody who, I hope, had always had that value at my core. When I think about the start-ups at the time and the energy and excitement with which they were being built, very few had a social purpose or the idea of corporate social responsibility hardwired into them. How things have changed.
I was reflecting on the biggest challenges faced by the UK. In an attempt to be ambitious, I picked out the three that I reckon will be hardest to solve over the next 50 years—climate change, gender equality and the technology disruption that we all face. From every angle, each of those challenges is being addressed in a profound and interesting way by businesses, beyond the core nature of their daily commercial life.
Before talking through some examples that I know in detail, I declare an interest as a board member of Marks & Spencer, which is world class in addressing some of the big structural challenges that we face, particularly climate change. Marks & Spencer was one of the first companies to declare itself carbon neutral; to make all its stores carbon neutral; and to launch huge programmes of recycling. Fashions could be brought back to stores and sent back to factories to be remade into other things. It has huge programmes beyond the UK’s shores to help people in countries where we have supply bases. It is one of the first companies to have a really robust and transparent view of every single worker in the supply chain and deployed in the company. The company has an extraordinary and profoundly important influence on the landscape of British business.
Your Lordships may not be aware that, most recently, Marks & Spencer has worked with a new organisation, the Blue Marine Foundation, which is creating huge marine reserves around the world, particularly with commercial and private money. It has created one of the largest protected areas around Lyme Regis to bring back the fish stocks. Fish is already being supplied to Marks & Spencer’s stores, and the fish stocks in Lyme Regis are being rejuvenated with incredible speed.
Marks & Spencer is one example of how a company has taken a huge lead on climate change. Because of that, it has been asked to be part of a global force for good: collectively.org, of which some noble Lords may be aware. It is a website for younger people sponsored by some of the biggest companies in the world but with an absolute focus on the big social challenges that young people are interested in, including climate change. Everything from Coca Cola, to Intel, to Marks & Spencer comes together to help share stories about how to change the world and make it a better place.
The next huge structural challenge that I want to talk about is gender equality. There are so many examples of corporations taking the knotty and important issue of how to encourage more women into work and make sure they are paid the same and not only reach the boardroom but have equal access when they first start work. When I asked on Twitter for some good examples in the UK, I was struck that the only example that people could give that was tangible and not just pontificating and making signals about the direction of travel was Arup engineering, which I thought was interesting. From the beginning, it has had the ambition to recruit women as 40% of its engineering workforce. Apparently, it is very successful—something I was not aware of.
One of my favourite global examples is Intel and its Girl Rising project, which is hugely successful on social media. It is an enormous programme of work with lots of different examples of women all over the world, from Africa to India to south-east Asia, doing incredible things. There is a big programme of funded education for women in work. We need those programmes here in the UK.
The third challenge and perhaps the one that I know best is the technology disruption, which I think many noble Lords wish had never happened—but unfortunately we are stuck with the internet, with all its wonders and some of its woes. I have recently been working on basic digital skills. My noble friend referred to that in her speech, although not directly. We face a profound challenge of skills in this country. As I have said before, the House of Lords—unlike me, not given to hyperbole—described the skills challenge as a “crisis”. That is true the whole way through the chain from basic skills through to how we will fill the 600,000 empty jobs right now in the tech sector and the 1 million jobs that will be empty by 2020.
The issue of basic digital skills is what I have been working on most urgently. We have 12 million adults in this country who cannot use the internet to get the basic benefits of being online, such as saving money— £100 a year even in the poorest households—getting work, because 90% of jobs are advertised online, and just communicating and being safe, as all of us like to be. However, what I have had most success with is the establishment of a charity called Go ON UK. It is entirely paid for by the corporate sector. We have 10 CEOs round our boardroom table from EE to Talk Talk, the Big Lottery Fund, Age UK, E.ON and Lloyds Bank. They all turn up and are dedicated to the cause and we are beginning to make some real inroads. We have created platforms and data to show where the profound problems are, and a heat map so that we can see where digital exclusion exists. We are doing deep dives around areas of the country where we are trying to create places where everyone is brought online.
Noble Lords can imagine that the power of the network of people around the boardroom table is very interesting. When we match the Post Office with Lloyds Bank and messaging from the BBC, we can really begin to create change, because we are able to reach consumers from lots of different angles, not just using the government lever. I firmly believe that this joined-up working will solve problems, and Go ON UKs CEOs around that boardroom table are dedicated to doing just that. I hope that that is a robust and good example of where business is changing.
When I think back to all of the start-ups that are energising the UK—as I am sure the Minister will tell us, there are practically more start-ups in this country than in Silicon Valley—it is an exciting time to be starting a business in the tech sector. Those start-ups come to fruition with a very different set of moral values: it is interesting. Younger people are just more cognisant of the complicated issues that they face and the complicated landscape in which they will operate. I am heartened. An incredible programme has been set up by Founders Forum, the Founders Pledge, which is getting people starting businesses to say that, at exit, 2% of the value of that exit will go to good causes. With £100 million businesses, that can have a really interesting effect. It already has 156 signatories, so I hope that that will lead to real change.
I am also much taken by a good piece of recent research by a media company called Adjust Your Set into what millennials are thinking about business and social purpose. Some 70% of millennials say that they do not want to interact with a company that does not show what its social purpose and value in the world is. I would caution any organisation to take big heed of that, because their consumers of the future will not be their consumers unless they rethink how they position themselves in the world and the wider responsibility that they have as a corporate.
The world is changing. We have some big challenges and I am particularly keen to hear from the Minister how we can keep reducing the silos between the corporate sector and the charitable sector. I have recently started a new organisation, Doteveryone. Even applying for status, whether as a limited company, a CIO or a charity, is just too complicated—it is still far too difficult to do different things. But I am an optimist and I believe that the world is changing in the right direction.
Lord Taylor of Warwick (Non-Afl)
My Lords, I thank the noble Baroness, Lady Greengross, for initiating this important debate today. I have long admired her work across a number of areas, such as equality, elder care and corporate ethics. It is also a pleasure to follow the noble Baroness, Lady Lane-Fox of Soho, who is a true champion in the cause of digital online skills.
I take noble Lords back to the Victorian era. In those days, Britain had no government welfare state. It was the church and in particular Quaker families who recognised the power of business to improve the lives of the poorest in society. Companies such as Cadburys, Rowntree and Fry came out of that movement and became very successful, but their inspiration was driven more by prophecy than profit. Indeed, in my home city of Birmingham, the Cadbury company built Bournville, a whole community of homes for its employees.
Coming now to modern Britain, it seems that one of the major challenges facing us is unemployment, especially youth unemployment. In the UK, youth unemployment is still approaching 1 million, and the fact is that it is even higher in other European countries, such as Greece, Spain and Italy, does not mean that we can be complacent. Business is becoming increasingly globalised as we continue to outsource manufacturing and service industries to low-wage economies.
Recently, I was a guest speaker at a London Fashion Week event held in the Jubilee Room. It may be the first time in parliamentary history that the House of Commons has staged a fashion parade. I hasten to add that I was not part of the fashion parade. Then more recently I attended the launch of Dance UK, an organisation formed only a few days ago which tries to promote dance across the whole range. It reaches from the enormously successful brand of “Strictly Come Dancing” to ballet, hip hop and African dance. Having attended those two events, the thing that I became most aware of was frustration among the young people who want to enter the world of fashion and music but are finding it so difficult to get finance or scholarships. Even when they entered those professions, it is hard for them to stay within them. The UK is a centre of excellence for fashion and music. Those industries are great exporters of our talent and, of course, they are especially attractive to young people. I believe that we need more paid apprenticeships and scholarships for those particular industries to combat the problem of youth unemployment. However, I am not going to ask that more money should come from the public purse for that. There are industries, such as the banks and hedge fund companies, which make vast profits. The UK is especially strong when it comes to the finance sector, and I would like to see the Government looking more to that sector to help combat youth unemployment.
The professional football industry in this country has a strong influence, especially when we consider that most cities have at least two major clubs. For example, Manchester has United and City, while Merseyside has Liverpool and Everton. I am a patron of Aston Villa, but since it is at the bottom of the league, I shall gloss over that quickly. However, the Premier League is amazingly wealthy, especially from television revenue. Although I know that most clubs have community programmes, the image which has emerged is that of millionaire superstars who are remote from the problems that many of their adoring fans face on a daily basis. How encouraging it was to hear this week of players from Carlisle United, in the lowly fourth tier of professional football, helping the residents of Cumbria who have been affected by the dreadful floods. I hope that that sets a trend whereby some of the football clubs become even more involved in their communities. There are reserve players at Aston Villa who are millionaires, so they can afford to offer some of their time. They cannot score goals, but they can offer their time. Indeed, when we think about it, most of the larger, wealthier clubs are situated in the poorest inner city areas, and many of their fans are unemployed. It is a tragedy, in my view, that these players do not recognise their responsibility to help their communities.
Closer to Parliament, the Westminster Volunteer Centre works with a large number of companies such as Asda, DHL and William Hill to provide mentors for 14 to 18 year-olds. In my own small way, I try to mentor a number of young people. Growing up as a young black man from Birmingham, born of a single mother, I found it very difficult to locate the right mentors, and I would suggest that mentoring is a key factor. I know a little about Greggs, the high street bakers. It runs its Breakfast Club Programme in primary schools in poor areas. Marks and Spencer runs its own Marks and Start work experience programme for unemployed people. The noble Baroness, Lady Lane-Fox, may like to know that a couple of weeks ago I went into Marks & Spencer, where there was a young black boy who had just started work experience. He was so polite and so grateful for the opportunity, so well done to Marks & Spencer.
It is not just big business that can make a difference. The Voice of Local Shops Survey polled more than 1,000 independent retailers across the country, and found that 80% of store owners are involved in their community in some way. Indeed, 71% collected for a local or national charity, and 25% provided sponsorship for local schools and sports teams. I was recently appointed as one of the board directors of the International Small Business Congress, which represents small companies, not only in the UK but globally. The organisation is especially keen to recognise racial and cultural diversity. I know that the noble Baroness, Lady Greengross, understands those problems and I thank her for her comments. It is very difficult when you are black people and you look at society and do not see people like yourself at the top. When I was at school and doing my O-levels and A-levels, I went to see the careers master. He asked me what I wanted to do, and I said, “I want to be a barrister, sir”. He went red in the face and said, “I don’t think that would be a good idea, John”. I said, “Why not? Am I not doing reasonably well?” He said, “Well, you’re coming top in every subject but, John, you need to understand that black people don’t do that sort of thing. I can get you a job in the Post Office”. I have nothing against the Post Office, but I did not want to work there. I happened to have a strong mother who said, “Look, John, if you want to be a barrister, you get yourself there”. Mentoring is vital, especially for people who do not have parents like my mother.
Schools and universities can also be a catalyst between business and society. For some years I was chancellor of Bournemouth University, which has a proud tradition of providing graduates for local businesses, and I was privileged to open its business centre and strengthen the link between academia and business. Lastly, Business in the Community produced a report entitled It’s Time for a New Contract between Business and Society. It made the point that the prosperity of business and society are tied together, and one cannot succeed without the other. It seems to me that a bad attitude is like a flat tire. Unless you change the flat tyre, you cannot make progress. Any business must have a positive attitude if it is to move forward. It is that positive attitude which business brings that can help resolve the major challenges facing the United Kingdom.
Lord Suri (Con)
My Lords, I thank the noble Baroness for securing this debate. This is a very pertinent question for us to consider today. As a businessman, I have often thought of business as the original big society: a way of solving issues and problems that Governments alone cannot fix. What could be a bigger issue than climate change? In many ways, it affects us all. The Secretary of State for the Environment, Food and Rural Affairs suggested this week that it was to blame for the recent terrible floods in Cumbria and Lancashire that have caused £0.5 billion of damage and the loss of many homes. Heavier rain and hotter weather will also come over the next few decades, and will affect our children and our children’s children. The Health Protection Agency projects that higher temperatures will mean a rise in heat-related mortality of 70% by 2020 compared with 2000, which will put further strain on our National Health Service.
I hope that the UN Climate Change Summit talks in Paris will be fruitful, but more and more onerous regulation on climate action can often be a poor means of achieving lasting change. I believe that any solution has to come from the Government, yes, but also from business. I was gladdened to read last week that an increasing number of large corporations have realised their corporate social responsibility to their consumers and will commit to sourcing all their energy from renewables, through the RE100 initiative. Some businesses, such as Unilever, are going even further and trying to become carbon positive, on which I congratulate them. Whether they succeed depends largely on the quality of the research and product output that is conducted by businesses in the private sector, which are already making great strides with renewables and carbon capture technology. At every step when tackling this generational issue, business will have to be deeply involved if there are to be successful results.
Another challenge that the UK faces relates to employment. The current figures are relatively good, but more can be done to make this country into the high wage, high productivity and low welfare state that our Prime Minister wants us to transition to. The best way to decrease unit labour costs and boost productivity is through investment by the Government and business. The Government must do their bit on education and infrastructure, but the huge role that business plays in training, developing and nurturing talent is often overlooked. Business investment here reached 11% of GDP in the second quarter of 2015, the highest level since 2000. Businesses are increasingly ploughing their retained profits back into the workforce, because they can see the gains that will secure their future. In my business, I have been able to do that because of the business-friendly environment that the Government have created.
From the data, we see that productivity has broken free of its time lag and is again on the rise. This is a real example of business fixing social problems. If we are to fix social problems we must move away from a top-down, heavy-fisted government approach, regulating the problem away. We must work with business, because the interests of socially-responsible businesses are the interests of their consumers.
Lord Stoneham of Droxford (LD)
My Lords, I, too, thank the noble Baroness, Lady Greengross, for initiating this debate. I dealt with her particularly on issues concerning the elderly, but it is good to grapple with these issues of business and social purpose. I was also delighted to hear the noble Baroness, Lady Lane-Fox, talking about Marks & Spencer. It reminded me of an incident earlier in my life when Lord Sieff, who was on the board of the Independent, started to bring in performance and efficiency indicators for the newspaper. I was, down the supply chain, the principal print contractor for the Independent when it started. It was partly his initiatives—that guidance—that led us to build a business that became one of the foremost contract printing businesses. That shows the importance of big businesses supporting and working with their supply chains.
On the main subject of the debate, the foremost priority for the country and for business has to be getting the right kind of economic recovery over the next five years. All the issues that we confront—more exports, business investment, innovation—have historically been long-term disappointments in the British economy. Therefore, if I wanted to pinpoint key issues for business management and business in this country, ones that will affect society as a whole, they would be concentrating on better management effectiveness and improving the skills of the labour force. This will become more apparent and important as the labour market tightens—as it is doing—and we can no longer rely on immigrant labour to fill shortages. If business rebuilds the apprenticeship framework, and puts emphasis on much higher skill levels, it will help rebalance one of the key social issues of our time: still having high-status academic study and, sadly, low-status non-academic study. That is one of the greatest challenges that we face, and business has a very important role in redressing that balance.
It is also important that business pays attention to its image, and is alert to issues that undermine that image. The noble Lord, Lord Taylor, mentioned Cadbury’s. The company not paying taxes—however legal, though clearly contrived—is an issue, and is damaging. It happened, sadly, not just when Cadbury’s became a US company: it was something endemic in Cadbury’s before it was taken over by Kraft. I think there should be a little more emphasis on Quaker values in this debate—government and business working together out of mutual interest to deliver social purpose and economic success. These are linked issues.
I also took three examples. They are very different from those of the noble Baroness, Lady Lane-Fox. I have taken the issues of prisons, housing and regeneration. Prison reform is one of the key areas of public sector reform. I am very excited by the new Secretary of State. I did not think I would be, but I was very disappointed when Ken Clarke stepped down that we began to lose some of the reforming mode that we had in the early part of the coalition Government. There has to be a recognition in the public sector that if we are to reduce public spending in prisons, we also have to reduce reoffending. We cannot do it without radical changes. One of the keys to reducing reoffending is to provide better skills training in prisons and jobs immediately on release.
I would like to highlight Timpson. It is not a natural company for a Liberal Democrat to mention, but it surprised me a few years ago to hear its chairman say on the radio that something like 10% of his workforce were ex-offenders. The company specialises in shoe repairs and key cutting, so it might have been thought that risk reputation would not have encouraged it to think out of the box, but it has done. Since then, I have had all my shoe repairs done by that company. It said that it was dealing with pretty damaged people, that it supported them, and that it recognised that in prison one-third needed a job, one-third needed health treatment and one-third were probably people that one would not want to employ. He said that the one-third who needed a job were the ones to concentrate on.
I was pleased to see a quote in the Times today, which reminded me of the company. The chief executive of Timpson said that the remarkable thing was that the people he took from prison tend to be more loyal and after being in prison they are obsessed with turning up on time. Other companies are following Timpson’s example. If we are to have reform in the prison sector, this area is fundamental.
I turn to housing. Not only do we have to house more people, we need to counter rising house prices which are currently distorting investment and saving in the economy. This is a huge problem in a sector where capacity has been destroyed in the recession; where there is going to be an increasing reliance by developers on outsourced contracting; and where there is going to be a rush to build more houses which could affect quality. There is huge potential for market failure in a very cyclical industry.
I am afraid that if the Government concentrate on only one part of the market, which is owner occupation, it will be severely distorted. The Government have to reach across all sectors: owner, rented and social housing. I declare an interest as chairman of Housing & Care 21. This is an industry which has to address skills, supply chains and costs and it needs steady growth. But we have seen the marginalisation of housing associations.
Housing associations have spent a lot of time building up skills. They have been important in the counter-cyclical building of homes when the private sector was no longer in a position do so. They pay attention to vulnerable people who need not only a home but help with skills training to get back into the labour market. At the moment, the Government are marginalising this area, which needs to be part of a partnership covering all sectors of the industry. This will have social benefits as well as benefits for the economy.
Finally, I turn to regeneration. There is a report in the Financial Times today about the great divide between London and the south-east and other parts of the country, particularly our northern cities. We know we have the big project in the northern cities, but I re-emphasise that it is not just about reforming local authorities, it is about creating partnerships between businesses and communities. There are no quick fixes.
In my own city of Portsmouth in the 1990s we transformed the economy from recession by a partnership between the local authority, businesses, the Navy, housing associations, the university and developers. So its image was transformed, employment diversified and we laid a base, although it was not a complete base, for future prosperity. There is still much to do, but a partnership was absolutely essential.
So the right type of economic recovery is essential if it is to last; businesses are going to need to be very focused and competitive to survive, improved business investment and productivity will be essential to success, and the public and private sectors need to work together, because they will find that there will be more mutual benefit than they realise.
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank the noble Baroness, Lady Greengross, for securing this imaginative debate about how business can help to achieve a fairer future for our country, citing some notable examples, including Ban the Box, Age at Work, Diversity, Healthy High Streets, affordable food and better integration of health and social care—a wise agenda. I want to concentrate on business and poverty, concepts not normally grouped together. As the noble Baroness, Lady Greengross, described, business and society are intertwined and interdependent, requiring each other to be healthy and effective to meet their own objectives. If many people are poor, that affects the quality of our society and that is bad for business in all sorts of ways.
The first dimension is productivity. Our productivity gap with the other G7 countries has widened to its largest since 1992, with output per hour falling to 17 percentage points below the average of other leading industrialised nations. There are several hypotheses for why this is, but one is the impact that low pay has on the well-being of workers. For example, a report by Barclays Wealth, Financial Well-being: The last taboo of the workplace?, found that one in 10 employees is struggling financially. Among those who are struggling to make ends meet, 22% said that worry had made them less productive at work. Overall, the report estimates that this negatively impacts the bottom line by around 4%. The report says:
“Employees don’t leave their financial worries at the door when they arrive at work. The impact on the workplace is significant and has a real effect on the bottom line, more than employers realise”.
Secondly, poverty undermines education, and low education attainment in turn undermines skills in the workplace, meaning that employees cannot find the skills that they need, as we have heard from the noble Baroness, Lady Lane-Fox. But there is a potential virtuous circle, as acquiring the right kind of skills plays a massive role in increasing opportunities, improving people’s life chances and social mobility, and lifting people out of poverty. Meanwhile, the UK’s ability to increase productivity and compete rests on skills, so paid and fairly allocated internships, volunteer programmes and apprenticeships all allow more people to compete for valuable experience and support the social mobility needed to stem the flow of poverty from one generation to the next. That enhances life chances yet cannot be achieved without government, business, education and parents working together.
Thirdly, with regard to reputation, companies are increasingly under scrutiny from consumers and the public, as the noble Baroness, Lady Lane-Fox, said. Scandals and shortcomings have reduced public trust and confidence in business. As John Cridland of the CBI wrote in 2013:
“Businesses can only realise their full potential when they command the confidence of the public—the individuals that companies employ and the customers who buy their goods and services”.
People rightly expect companies to clearly show that they are holding themselves to ever higher standards when it comes to payment of tax, executive pay, transparency, customer services, how they treat their staff, sustainability and diversity in business. A clear commitment to help to solve societal problems—perhaps the Quaker way—would do much to enhance the reputation of business.
There is another element, about how businesses allow for the public interest in their day-to-day decisions and negotiations. Take land values: local government might want to sell off some land to raise funds for its community, presumably at the highest price. Another part of the same local authority might want to maximise the amount of social housing on that land, or minimise the harmful effects of a tall development on the local community; but such a policy could reduce the land value. That is a difficult issue that faces local government.
It is, however, also difficult for business. How does it allow for, or even promote, the public interest viewpoint into its thinking? Developer by developer, each decision might help the bottom line, but as a whole, society might suffer from the combination of this assault on the built environment, the social mix and the life chances of local people to find work or homes—all the things that make for a successful economy and society. Sadly, we hear a government Minister suggesting that people should decide whether they can afford to live in London, with apparently no thought as to where the jobs are, the cost of commuting if living on the minimum wage, or the access to family support or childcare for young families. These are big public interest and ethical issues which government alone cannot solve, but with which business needs to involve itself for the good of the whole.
It is in the interest of business to engage with social issues, especially poverty. The questions are about how they can do this and what stops them. Research commissioned by the Beatrice Webb memorial trust—I declare my interest as vice-chair of that trust—found that some businesses would like to do more, but are put off by criticism from anti-poverty campaigners which, they claim, makes them retreat into their shells. It may or may not be the case, but it certainly calls for more and better dialogue—or a contract, in the words of the noble Lord, Lord Taylor—between business and organisations working to address poverty.
The All-Party Parliamentary Group on Poverty has put this into its programme, and will carry this work forward. It is in everyone’s interest to have a world where business flourishes and the fruits of business are used to ensure that all have a standard of living that enables them both to feel part of, and to contribute to, our economic recovery and society.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, I thank the noble Baroness, Lady Greengross, for her Question. I enjoyed the wide-ranging debate and the range of examples that we have gathered together this evening. Over the past decades, I have been impressed by the noble Baroness’s work addressing so many issues faced by the aged in our society and by her work with Age UK, with BITC and, of course, with Jonathan Djanogly on responsible business practice. That includes companies such as Electricity North West, which was recognised at the Responsible Business Awards this year for having recruited households to its power saver challenge.
I wanted to mention Electricity North West today partly because, of course, it and several other companies, as mentioned by several noble Lords, are wrestling with a difficult challenge as a result of the catastrophic floods in Cumbria. Our hearts are completely with the families, the pensioners and the businesses going through such unbelievable difficulties as the rain continues. As a Government, we are making £60 million available, which will help ensure that affected businesses can get back on their feet.
I was delighted to hear from the noble Baroness, Lady Lane-Fox of Soho, about the practical steps being taken by Marks & Spencer on climate change, such as the revitalisation of British fish stocks. Of course, her own experience and efforts are part of the digital revolution. She is an inspiration in showing how big companies and charities can work together. This is for us all, not just a government matter. I believe that businesses make an enormous contribution to addressing the challenges facing society. The fact is that all the resources available to government for schools, hospitals, housing, welfare and defence ultimately depend on the wealth that the business sector creates and the taxes that it properly pays in the UK. I have found that business is also a great source of innovation. This matters in many of the areas we have discussed today. Companies in the digital world are pivotal to the UK economy and, indeed, to continued small business creation and growth. We made it clear in the Autumn Statement that we were investing £1.8 billion in digital technology. In health and social care, digital devices are making the monitoring of diseases so much easier.
Much the most important contribution the business sector can and does make to our national well-being—probably 95% of its contribution—is to run businesses efficiently, innovatively and successfully so that they take on more staff, pay them more and in most cases—it should be in all cases, of course—pay more taxes. My noble friend Lord Suri is a brilliant example of the contribution that business can make to society with the jewellery firm that he has built up. I was so inspired by his comments this evening. I agree with the noble Lord, Lord Stoneham, that this is not only about skills. As he has often said, better management is vital and is especially important to growing the economy. As he also said, people should pay their taxes. I think that we will come back to his notion of Quaker values in future discussions.
Economic efficiency has a direct read-across to national welfare but, of course, the business sector also has an impact in softer ways. I endorse what was said about the British food industry and the supply of food at great prices. I know that it has worked closely with the Food Standards Agency to reduce fat, salt and sugar, although there is still much more to do. Customer trust is important, as the noble Baroness, Lady Hayter, said. I enjoyed working with her on reforms to consumer rights.
Businesses also directly or indirectly pay for the training of much of the UK workforce, ensuring that the UK can grow and prosper. I agree with the assessment of the noble Baroness, Lady Greengross, of the vital role that older workers play. Workers aged 65-plus bring a unique wealth of experience and skills to many workplaces, not just this one. For example, McDonald’s has reported 20% higher performance in its outlets where workers aged over 60 are employed.
However, as has been said, youth unemployment remains high. My noble friend Lord Taylor said this. The good news is that youth unemployment is at its lowest level since 2006, and the employment rate for young people who have left full-time education is up to 74%—the highest in more than a decade. However, there is more to do, and it has to be everywhere, not just in finance or football, particularly at Aston Villa. Everybody needs to play their part. As my noble friend said, mentoring can make a huge difference. We all have a duty to mentor people, which is actually very enjoyable.
In the last Parliament, more jobs were created in the UK than in all the other EU member states combined, with most of those jobs being created in the private sector. However, there are certainly areas for improvement. It is true that we have performed less well on skills. We know that skills are one of the major drivers of productivity growth, accounting for around a fifth of UK growth over the last 30 years. That is why we have committed to significantly increasing the quantity and quality of apprenticeships in England to 3 million starts. The noble Baroness, Lady Lane-Fox, described the digital challenge in skills. I commend all that she has done and I was interested to hear about Go ON UK. A huge amount needs to be done on digital skills. As she says, they feed start-ups and scale-ups, which is what we need if we are going to stay ahead in global markets.
Frankly, there has been a steady decline in the amount and quality of training undertaken by employers over the last 20 years, so a UK-wide apprenticeship levy will be introduced for all larger employers in the public and private sectors to help fund the increase in quantity and quality of apprenticeships that we need. We are encouraging large businesses to train more apprentices than they can themselves use. We are doing more to help small businesses as well by offering them apprenticeship support. We have made a commitment to address the proportion of apprenticeships started by young people from BME communities and to increase it by 20%, and to encourage employers to think of apprentices from diverse backgrounds as the norm.
Many major companies have put training programmes in place: BAE Systems, for example, opened a new £5 million training academy in north Lincolnshire recently, which will take on more than 60 apprentices. There are lots of examples. I join the noble Baroness, Lady Greengross, in commending the work done by my noble friend Lord Baker and his role in developing university technical colleges. It is an amazing model and obviously links in with household names such as National Grid, Toyota and Siemens, and really helps to get the economy going.
Businesses tend to reflect the local communities in which they operate, and we can be proud of the fact that the UK achieved a female employment rate of 69% in the last year. This is the highest figure ever recorded in the UK. It is also the second-largest annual increase among the G7 and the highest in Europe. The noble Baroness, Lady Lane-Fox, gave us more excellent examples, including Arup and Intel. One of my ministerial priorities is to press ahead with Women on Boards, a successful voluntary initiative supported by government and led by the noble Lord, Lord Davies, who has done a great job doubling female representation on boards since 2011. There are now no all-male boards—unimaginable, frankly, in 2010—and the companies mentioned here have played a part in that. We are now focusing on the talent pipeline to ensure that women are able to move through a company and that skills and talent are recognised.
A start has also been made in addressing BME representation, with Sir John Parker of Anglo American now leading a business endeavour with a view to ending monocultural boards in the FTSE 100 by 2020. I was delighted to hear about the work on Ban the Box and the comments of the noble Lord, Lord Stoneham, about the training and employment of ex-prisoners. John Timpson’s record is amazing, as has been mentioned; there is also Halfords and Virgin. They are all doing more work in this area and we want others to join them. Ex-cons, given a job, are loyal and have learnt to turn up on time.
The noble Baroness, Lady Hayter, talked about the flatlining of productivity. I am delighted that the Government have decided to address this with the launch of our productivity plan in July. Part of this is the productivity leadership group of business leaders chaired by Sir Charlie Mayfield. I listened carefully to her observations and to those of the noble Lord, Lord Stoneham, whose comments about housing, regeneration, skills, apprenticeships and education are all relevant to this cross-cutting productivity work. We need to bring that together and create a sense of momentum. This includes 200,000 starter homes by 2020 and of course the right to buy. There is more to do, but we have five years to do very good things.
To conclude, there is much for the Government and other stakeholders to do, but business can contribute—and I believe is contributing well—to resolving some of the major challenges facing the United Kingdom. We have heard this evening about some more things that we should be doing.