Grand Committee
(8 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Food Waste
(8 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Scott of Needham Market
To ask Her Majesty’s Government what action they are taking to reduce food waste.
Baroness Scott of Needham Market (LD)
My Lords, it is almost two years since the EU Energy and Environment Sub-Committee, which I chair, published its report into food waste. At the time, it was enormously gratifying for the committee to produce a report that generated so much interest. The press office tells me it had more coverage than any other Lords Select Committee report.
The fact that around one-third of all food produced in the world is wasted is truly shocking. The waste of land, labour, water, carbon and all the other resources is truly staggering. When people around the world are going hungry, when the global population is set to increase and when many thousands of people here in the UK do not have enough to eat, this becomes a moral issue, too. It does not matter what sort of political philosophy you have—there is a case to be made for dealing with this as a matter of urgency.
So two years on seems like a good time to see what has happened since. In this time, food waste has rocketed up the agenda and efforts are being made at all levels. I am very grateful to all noble Lords who are speaking in the debate today and very much look forward to hearing from them.
The United Nations sustainable development goals, which were published in September, contain a commitment to halve food waste at the consumer and retailer level and to reduce food losses along the supply chain. The UN goals make a distinction between the two, as we did in our report, but I would like to give an example of where this is no longer quite so clear-cut. The campaigning organisation Feedback has spent several years looking at the supply chains of our major supermarkets. Focusing on Kenya, Peru and Guatemala, it has uncovered evidence of late cancellation of orders and overzealous size and shape specifications resulting in up to half the crop being wasted and massive hardship for farmers.
These were exactly the sort of practices which in UK agriculture had led to the establishment of the Groceries Code Adjudicator in 2013, and it is increasingly clear that farmers in the developing world need protection, too. Is the Minister aware of this issue and would he agree with me that bad behaviour should be stamped out, regardless of whether the farmer is in Norfolk or Nicaragua?
Our report made recommendations aimed at all levels of government. We asked the European Commission to look at areas where it has responsibility—date labelling, the regulations around the feeding of waste to animals, packaging regulations, fish discards, and the use of CAP funds for food waste reduction projects—and we asked it to spearhead work on common definitions, measurements and benchmarks.
Around the same time as we were producing our report, the EU Select Committee reported on the role of national parliaments in EU decision-making. It concluded that national parliaments should have a power to request action as well as to object. Under the leadership of the noble Lord, Lord Boswell, a so-called “green card” procedure was developed with the support of all EU parliaments. I am really pleased that the first-ever green card to be issued in the EU was based on our work on food waste. It was signed by 18 parliamentary chambers.
In December, the Commission published its Circular Economy Package, which includes a section on food waste. That reflects many of the recommendations that were made in our report and in the green card proposal. Will the Minister say whether the Government are minded to support the proposals on the table?
The thread which ran through our 2014 report was the role of the supply chain in generating food waste, and why it is essential to look not just at each stage but at the links between them. The UK is fortunate to have a highly effective think tank—that is what I will call it—WRAP. It is now a charity independent of government and it provides a unique combination of academically rigorous analysis, supply-chain knowledge and campaigning skills. It really excels at developing partnerships and has been at the forefront of doing so with regard to food waste. Its work with the hospitality and food service sector achieved a 3.6% reduction in food waste by its second year. In a sector where an estimated one meal in six is thrown away, it is really important to address this. The food service giant Sodexo has developed some very good initiatives and what strikes me from what it told me is how important it is to get the staff engaged, because, when they are engaged, things begin to happen and it is more effective than just setting targets.
A couple of weeks ago the Times ran an article outlining how top chefs are now moving away from à la carte menus in favour of more limited menu choices. That is exactly to reduce food waste. One Michelin-starred restaurant said it thought it could halve the amount of food it wastes. So regardless of the size of your business there is a clear economic case for dealing with this. This is an area where a lot more could be done, particularly by the large outfits. Will the Government meet WRAP and perhaps me and other Members to discuss what more could be done about this? Clearly, the public sector is an enormous user of these catering services.
Another good example of this partnership is the Courtauld commitment. The voluntary agreement started in 2005 is in its fourth stage and aims to reduce packaging waste as well as food waste. While recognising the limits of the new charitable status of WRAP, I hope that the Government will commit to continue to support its work. I was certainly very taken by a briefing from the campaign group Stop the Rot which talked about how important this is and I know that it, and I suspect some noble Lords here today, would like to see Courtauld do more and be more ambitious.
Retailers are still very reluctant to publish food waste data, so, in this regard, hats off to Tesco, which has been more open about its levels of waste; others should follow suit. Retailers are crucial in reducing supply-chain waste. They impact not only on the growers, as we have heard, but on the processors of food, and are key influencers of consumer behaviour. Tesco and Asda have done some very interesting work to assess levels of waste of their most popular products and have looked right through the supply chain to see what can be done. It is not rocket science—for example, using bananas that cannot be sold off the shelf as a base for frozen smoothies or using things for soups and sauces makes absolute sense, as does sending bakery waste to animal feed or converting used vegetable oil to biodiesel. The Food and Drink Federation told me that KP is now using potato starch generated from its processes to make products such as wallpaper paste. This is real value added from waste.
Our report highlighted a food waste hierarchy in which food produced for humans should, wherever possible, be eaten by humans—then turned into animal feed, then used to generate energy, then composted and so on to achieve zero to landfill. I think this is one of the most important aspects of this whole debate. Without getting into discussion about the need for food redistribution, of course it makes sense to use this food wisely. FareShare has reported a 30% increase in the food redistributed in the last two years. Indeed, its partnership with Tesco provides 1,700 community groups with meals. The Co-op increased its depot-level redistribution from 85 tonnes to 300 tonnes in the last year.
Marks & Spencer is using an app called Neighbourly that links stores with local charities and in the pilot a single store in Bristol in just six months redistributed 4 tonnes of perfectly good food that otherwise would have gone to anaerobic digestion. FareShare estimates that around 300,000 tonnes of supply-chain food waste could go to feed people instead of feeding animals or going to digesters or landfill. Will the Minister commit to exploring ways of ensuring that the incentives to behave in this way are lined up? We are still a long way behind the US, Belgium, France, Italy and Spain, and they all have some sort of fiscal incentive.
While it is true that much household waste occurs at household level, it is a complex issue to tackle. As we uncovered in our evidence, the causes are often rooted in modern life—irregular eating patterns, the weekly shop, a wider variety of food and so on, and much less basic knowledge about food. WRAP has developed the Love Food Hate Waste label and has even exported it to Canada. The retailers have stepped up to the plate on this, but there is still much to do to demystify date labelling, despite the Food and Drink Federation’s Fresher for Longer initiative.
We have made a lot of progress in the past two years but we are really still only in the foothills of what we need to do to make permanent inroads into the scandalous waste of food. What gives me cause for optimism is that I think that we have developed a sort of ecology. We have the academic rigour and analysis from WRAP; a huge variety of civil society groups, from the Trussell Trust to Stop the Rot; innovative use of technology; a willingness on the part of industry to really see the business case; and the campaigning zeal of people such as Tristram Stuart from Feedback, and celebrities such as Jamie Oliver, who are so effective at mobilising public action. We have done a lot, but there is much more to do.
Baroness Jenkin of Kennington (Con)
My Lords, I thank the noble Baroness for initiating the debate and for her excellent overview of where we are at the moment. I start by proudly declaring my interest as a new member of the board of WRAP—for the uninitiated, that is the Waste and Resources Action Programme—taking over from the noble Baroness, Lady Jones. I look forward to learning much more from that organisation and supporting its excellent work over the coming months and years. I am so glad that I decided not to focus on the Feedback report from Kenya, which is a very important part of all this. The noble Baroness mentioned the brand, Love Food Hate Waste, which will be well known to all in this Room and increasingly better known even to those who take less of an interest in these matters, as well as consumers.
I was asked on BBC Essex this morning what the problem is, why it matters and what we can do about it. I am not sure that I can answer all those questions in five minutes, but I shall give it a go. The problem, as the noble Baroness said, is that each year one-third of all food produced for human consumption across the globe is lost or wasted throughout the supply chain from production to consumption. The costs are enormous. Enough food is grown to feed the world today as well as the coming billions. We must support farmers in developing and sharing knowledge around cultivation methods, seed varieties and rearing techniques to reduce pre-farm gate losses. Improving food storage and investing in transport, which is badly needed to move food from producers to consumers, could help to reduce the amount of food lost across the globe.
Why does it matter? In a nutshell, we have a duty of care to the next and future generations to conserve and preserve the earth’s finite resources. Cutting down rain forests to grow soy, not for human consumption locally but to import for our pigs, seems absolutely crazy. What can we do about it? The noble Baroness has put a lot of questions to the Minister, whose answers I look forward to hearing. Here in this country, there are many more things that we can do, as government, supermarkets and consumers. I too pay tribute to the campaigners in this field who have done excellent work to highlight the issue—to Tristram Stuart at Feedback and to Hugh Fearnley-Whittingstall, whose two brilliant television programmes last autumn motivated a new audience. What a great communicator he is. Who can forget him taking one-third of the food out of a shopper’s trolley and just chucking it away to illustrate graphically the amount of food consumers buy and then bin, as well as all the additional collection costs? How can we not be ashamed that the average family throws out the equivalent of £700-worth of food every year? That is £60 a month, and more than half of that food is edible. Between 20% and 40% of UK fruit and vegetables are rejected before they even reach the shops because of strict cosmetic standards set by supermarkets. This too was graphically highlighted by Hugh in his film about the parsnip farmers in Norfolk and their treatment by Morrisons. They tragically subsequently went out of business, but I would be surprised if the adverse publicity did not also damage Morrisons’ bottom line, as well as its reputation.
The point is that all of this could be a win-win. Greater support could be offered to FareShare, for example, which saves food destined for waste and sends it to charities and community groups who then transform it into nutritious meals for vulnerable people. The food it redistributes is fresh, quality and in-date surplus from the food industry. Last year, it redistributed the equivalent of 16.6 million meals. But despite a 30% growth last year, Fareshare was only donated 2% of what is available, unlike in France, for example, which redistributes closer to 25%, potentially saving charities £250 million. That is a heck of a lot of money. I hope that all large food retailers will commit to the principles of Courtauld 2025 and take immediate voluntary action to embed practices to cut food waste and improve implementation of the waste hierarchy in their disposal of food.
Confusion about food labelling persists. As far as I am concerned, the “sniff, smell and taste” test works, but if you are anxious or squeamish the use-by date is the only one that really matters. There are lots of encouraging figures in terms of reduction but there is so much more to do. As consumers, we can all do more to waste less. We can plan better, shop better, cook better, and be aware that by doing so we are saving ourselves money and saving our planet for future generations.
Lord Young of Norwood Green (Lab)
My Lords, I congratulate the noble Baroness, Lady Scott, on the debate. It is a vitally important issue and the Library research document is, I must admit, a mine of information. I only have five minutes so I am going to focus. The noble Baroness, Lady Jenkin, has ensured that I do not have to worry about the sheer cost per household because she has given your Lordships the facts on that.
I am focusing on food waste in the home. I had a brief discussion with Lady Young before I left and said that I was going to reveal some intimate details of the Young household—well, not that intimate, but relating to food. I have here exhibit 1. I usually have fruit but this morning I decided that I was going to have Shredded Wheat with a few bran flakes on top, so I picked up this packet of bran flakes. Lady Young does not throw things away unnecessarily and it said: “Best before 31 May 2014”. I thought, “I’ll give it a whirl”, and it was perfectly okay. It had been stored in an airtight container; it was tasty and I did not notice any difference. I doubt that the Shredded Wheat was any younger than about six months to a year either.
Then I started to look around. I looked at a tin of baked beans. I do not think it gave a use-by date but it said that once opened, the beans should be stored in the fridge and used within two days. That is a load of rubbish. I have eaten baked beans that are nearly two weeks old. What prevents me eating them? If I look inside and there is a bit of green mould, I draw the line at that. The noble Baroness, Lady Jenkin, made this point. If we threw out sell-by dates and put in smell-by dates, and if we threw out use-by dates and had “use by common sense” dates, we might start making progress in this area. I looked at a tin of salmon that has not been opened. It went out of date in 2015 but we are going to use it. If there is mouldy cheese, I cut the mould off and carry on using it. So there is a lot more that we could do in how manufacturers approach this, in the information that we give consumers and in education.
I had not heard of the Love Food Hate Waste programme but I think that it is brilliant. It made me think about reusing. I had my grandchildren down and I did the breakfast so I gave them bubble and squeak. “What is that?” they said. What is bubble and squeak? It is the great British invention and it recycles. It saves you wasting. Why do people use a bread bin? Put it in the freezer and pull out the slices when you want them. If there are any crusts left over, Lady Young incorporates them into bread pudding. Even our dog is not exempt from Love Food Hate Waste. Charlie the cocker spaniel loves cauliflower and broccoli stalks now, so we are all in on it—and it is important. It is a culture and an attitude of mind.
Regarding food, our council is changing collection and delivery. Only about 25% to 30% of households have food-waste boxes—very few—so we know that food waste is going into landfill, which is the worst possible option. Not everybody can compost, but our peel goes into compost and the small amount that we waste goes into the food-waste bin. The one area that concerns me where recycling does not seem to be done very well is cooking oil which, if poured down the sink, is really bad news. It goes into the water environment and it is quite hard to get rid of it. I was asking the council recently why we could not leave bottles of used oil out, which it could collect and recycle.
What else can we do? Love Food Hate Waste is great but I would like to push it into an area where I have an abiding interest, as many other people here no doubt have. I am a school governor in a primary school. If we educate the next generation to start encouraging their parents into good habits of cooking and how they use food waste, that would make a big difference. So my question to the Minister is this: what are we going to do about these very generalised sell-by and use-by dates, which contribute to the problem rather than help? Of course we have to have guidance on how to use and store food, but there ought to be a lot more common sense in it than currently. I am conscious of the time, but I hope that the Minister can give me a positive response on whether we can extend the ideas in the Love Food Hate Waste campaign into schools.
Lord Teverson (LD)
My Lords, it is not often that one finds it impossible to follow certain speeches, and I am not going to go through my breakfast because it probably would not be as impressive as that of the noble Lord, Lord Young.
I must declare an interest as a member of the board of the Marine Management Organisation, and I will say a little about that later. I start by congratulating not just my noble friend Lady Scott but also the noble Baroness, Lady Byford, and my noble friend Lady Parminter for following this subject through, which is so important. I know from having been chair of the House’s Arctic Committee, which did not get quite the same level of publicity but did not do badly, that it is so important because we in this House put so much energy into these reports. It is important that the chairs of those committees, and other Members, follow them through and make the differences that we open out.
On the fisheries side, I congratulate the coalition Government and the present Government on having followed through with Europe in terms of landings requirements. That now means that, increasingly, the discarding of fish is illegal at last. That is true of the pelagic stock, for which it was introduced last year, and this year it is sensibly being introduced for demersal species. That will make a huge difference to the immoral waste that there was; something like 15% or 20% of some stocks was being thrown back into the sea to die. I do not think that the Government need any encouragement, but nevertheless I encourage them to keep strong in that area, not just in terms of our own fisheries but also those of our EU partners. That is really important.
The area that I want to talk about a little more is the developing world. Clearly, most of the subject so far has been around the UK. During the general election, I attended a meeting with the NFU in Devon and Cornwall as the Lib Dem representative. The meeting was in Exeter, and there was a lot of consensus and it was most interesting. But one question from a landowner in Devon was about the fact that we have a population of 6 billion on this planet and we are going to go to 9 billion. He asked, “How the heck are we going to feed them and deal with that?”. I put my hand up, schoolboy-style, and said, “Please, sir, I’ve got the answer to that one because I have read the report from the House of Lords which states that around 30% of all food globally is wasted”. So one key way of solving the problem of feeding not just the increased population but the existing people in poverty is by looking at this whole area of food waste. We need to make it not just a national issue but a global one.
Over the last year, I was very privileged to chair a commission for the University of Birmingham on the “cold” economy and doing “cold” smarter—it was all about refrigeration and supply chains. Again, one key thing to come out of that was that a large proportion of food waste in the developing world is because of wastage due to not being able to control temperatures; obviously the other major issues are just not being able to get to markets and pestilence. Cold chains are really, really important. There is a huge amount that we can help developing countries with in that area and I am very interested to hear from the Minister on that. It is clearly a DfID issue rather than a Defra one, but in terms of the global development goals and UK aid, are we helping in that process?
One of the other things about it is that, although waste food takes up the equivalent of about the size of Mexico and impinges on water and land usage as well, refrigeration engineering technology is extremely bad, polluting and energy inefficient. We have technological solutions for that in this country which we are implementing. It is so important that we allow that technology to go out to the developing world.
I congratulate the noble Baroness, Lady Scott, on securing this debate and moving it through. The last thing I would say is that one of the great solutions to food waste in Cornwall is organisations such as the Cornish Food Box Company, which delivers food boxes and does not care what shape the food is at all. I recommend that fellow Members go to that source.
Baroness Byford (Con)
My Lords, I thank the noble Baroness for securing the debate today and for the work that she led in the sub-committee. It was a joy to serve on that committee, which produced one of the most interesting reports I have taken part in. The important thing, which Lord Teverson has just touched upon, is to follow it through. This issue has had a lot of coverage and is hugely important. I declare my family’s farming interest at this stage.
The committee considered food production from seed to plate, understanding that waste occurs in the growing of the crop, from harvesting through to storage, processing and delivering before it ends up on the shop shelves. Waste occurs when crops fail due to climate conditions and they rot in the fields. However, as we heard earlier, it also occurs when retailers reject produce because it is misshapen, considered too small or fails to meet the standard size. The fact that there is nothing wrong with the freshness or the taste of the produce does not stop the item being wasted. This really is disgraceful.
The publication Force-Fed, produced by the Food Foundation, hit our desks this week. It contains some staggering figures which I should like to include in my contribution. It is based on a typical British family in the middle income band. The research shows that family food spend takes approximately 18% of weekly household expenditure, of which two-thirds is consumed at home and one-third on eating out. Of that, half the average shopping bill goes on processed food. Some 74% of people are not eating enough fruit and vegetables and 25% are obese. However, as we have heard, 7 million tonnes of food are wasted each year at a cost of £13 billion, which could be saved by buying more carefully and not wasting food. Households in the UK throw away 4.2 million tonnes of household food and drink annually, which is the equivalent of six meals every week. Vegetables, salad, fruit, fresh poultry and chilled ready meats are in the categories of higher- value waste.
This morning’s news caught my eye because it contained an item which showed that the average household loses some £700 a year through wasted food. The noble Baroness is topical because this issue has hit the headlines again. I believe that each of us has to take responsibility for the way we live our lives. We can make a difference, however small. I congratulate WRAP for the lead it has taken in raising awareness of the challenges we face. I particularly thank the noble Baroness, Lady Jones, who has served on it before, and my noble friend Lady Jenkin, who now works very closely with WRAP. Its persistence in tackling the food waste scandal is absolutely key.
The Government have taken a series of steps. They backed WRAP and introduced a Groceries Code Adjudicator to ensure fair dealings between farmers and the top 10 retailers. They sought to establish better labelling, including what I call end-of-life—but that is something which would take another afternoon to debate—and calorie content. They have improved the standards required for school meals, particularly in primary schools, and most importantly they responded at Davos last week, via Liz Goodwin, to commit to the aim of halving food waste and reducing food loss globally by 2030 according to target 12.3 of the sustainable development goals. These are important steps.
Finally, I turn to food waste itself. In the first instance, wherever possible surplus food should be offered for human consumption. Secondly, where appropriate, it should be sold or given for animal feed, and finally, rather than throwing it into landfill, it should be used for anaerobic digestion.
I have two quick further observations. First, TV chefs, who have already been referred to, have been doing important work in showing us how good, wholesome meals can be cooked simply and cheaply using raw ingredients. Secondly, we should give credit to farmers who have opened up their farms, especially to schoolchildren for them to see how food is grown. Children come away having enjoyed the visit and having seen a farm for themselves rather than thinking of food only as they see it in the shops. Surely it is a scandal that we waste food when millions are dying each year of starvation, that obesity has become a regular norm of modern living, and that we look to others to solve these problems. Government does indeed have a role to play, but so do we.
The Earl of Shrewsbury (Con)
My Lords, I congratulate the noble Baroness, Lady Scott, on securing her Question today. I should declare an interest as a former farmer and producer of food. Although a relative newcomer to this subject, I nevertheless have considerable concerns regarding food wastage in general. I was fascinated by the comments made by the noble Lord, Lord Young, regarding his cocker spaniel. I have a black Labrador. She does not even allow us to get to the food before she has it before Sunday lunch.
I shall be very brief in what I have to say. Food waste is not a problem peculiar to this country. It is a worldwide phenomenon which has a vast financial and environmental cost, but the United Kingdom has a particularly wasteful record amounting to some £700 a year for every household, yet there has been a reduction in household food waste since 2007 of some 15% despite a significant increase in the number of households. This reduction has been achieved by the excellent initiatives being carried out through the Courtauld commitment and WRAP’s Love Food Hate Waste campaign. I congratulate them both.
Yet we continue to waste unacceptable quantities of food on a daily basis. To illustrate this, in the run up to Christmas, a very large provider of oven-ready poultry in the Midlands was marketing at greatly discounted prices carcases nearing their sell-by date which had been returned from supermarkets. With three days to go until Christmas Eve, I asked a member of its staff what would happen to a bird should it not be sold in time. The answer was that it would go to landfill. What a terrible waste. That is nothing short of appalling. In days gone by, the pig industry was an avid guzzler of swill, which took up considerable amounts of food waste. However, that practice was rife with some pretty dodgy activities and it was subsequently, quite rightly, limited following the foot and mouth crisis which did the agricultural industry so much damage. Why could this food not be frozen and brought out later for consumption in, say, hospitals, prepared meals and a large range of other uses for human and even pet consumption? What a waste. It is totally unnecessary to discard it.
What is being done to minimise the sending of such food to landfill? Surely the cost of sending such materials to landfill is significant in landfill tax when some sort of return could be achieved from recycling that material. Anaerobic digestion technology has revolutionised the disposal of waste food in the UK and beyond, but it is extremely expensive to develop at entry point. The start-up cost is millions of pounds. One has to ask the question whether, with the proposed reductions in feed-in tariffs, that makes the development of new AD systems and technology less economically viable, which is likely to reduce the attraction of using waste food as feed stock.
Finally, the practice of discarding considerable amounts of the catch by our fishing industry is immoral. It deprives our seas of breeding stock and the consumer of a product which could be used in a wide variety of foods. Is the Minister able to provide an update on the current situation regarding discards? While things might be seem to be heading in the right direction, with a great deal of effort from many people and bodies, in many influential areas there is still a very long way to go in our attitude to and handling of waste food.
Baroness Parminter (LD)
My Lords, I am not the first or, I am sure, the last to use the word “shocking” in regard to the levels of food waste that we are finding in the UK and globally. For me, the issues are about respecting the resources that the environment provides for us as humans and sustaining people who are in need. Equally, one other issue which has not been touched on quite so much so far today is the impact on climate change, which the food waste levels that we produce in this country contribute to. As the Government look to address the fifth carbon budget later this year, I hope that they will be looking seriously at the leadership they are showing on tackling food waste as a key component of the draft legislation which they will be obliged to bring forward.
This House has a proud record of bringing forward this issue and, in that regard, I pay particular tribute to my noble friend and colleague Lady Scott, who has led this debate, both personally and through her work as the chair of the committee which, as the noble Baroness, Lady Byford, said, both she and I were privileged to serve on. The report produced was excellent. The initiation of the green card was an exceptional step forward in addressing this issue and showing how House of Lords committees can have a major impact on public policy issues. Having seen the green card and its impact, it was therefore a great disappointment that when the commission brought forward its circular package directive at the end of last year, there were no targets on reducing food waste. I am also particularly disappointed by the response of the Government to the circular economy directive, which talked about avoiding unnecessary burdens on business and seemed to fail to grasp the opportunities for reducing food waste now and providing green jobs with WRAP, the excellent work of which other noble Lords have mentioned. On green jobs, WRAP said that if the EU did more to move towards the circular economy, at least 160,000 new jobs could be created by 2020 alone.
In the time allotted, I want to touch on just two issues. First, there is the lack of progress on food waste collection in England by local authorities. Only 31% of local authorities in England separate our food waste; most of it ends up in landfill. The overall increase in food waste collection in the UK has been driven strongly —almost entirely, if I may say so—by the devolved Administrations in Wales and Scotland. Wales has an approach which is quite mandatory and I think that it has achieved 86% of its local authorities having separate food collections. Scotland has gone for a different approach: it has a central waste framework and while it is not supporting a mandatory approach it has separate food collection for urban food businesses. Both approaches have in different ways delivered very impressive reductions in food waste, so it is really important that the Government do more to encourage local authorities to extend separate food waste collection.
As noble Lords have already said, that is important in its own right but also important if we are to encourage anaerobic digestion. The Government have said that they are keen to support AD but that will not happen if there are not significant food stocks to drive AD, which requires supplies 24/7 and 365 days a year. We therefore need more local authorities doing separate food waste collections, otherwise that sustainable local energy just will not happen. What plans does the Minister have to drive up English food waste collection?
The other issue I want to talk about briefly is retailers. Other noble Lords have mentioned the initiatives that retailers have delivered in the past year, given their pivotal role in the food chain. When we have the next Courtauld commitment, the recommendations will take us up to 2025. I do not think that we have seen as much progress as we could have done. If retailers do not make the progress that we want to see by that date, are the Government considering whether to bring forward not voluntary but legal targets?
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful to the noble Baroness, Lady Scott, for consistently championing this issue over the years and for tabling the debate today. We have had an excellent debate which has seen considerable and welcome cross-party agreement. In the short time I have to speak, I would like to echo the following three points. Sadly, I will not have time to share my breakfast habits with noble Lords—perhaps later.
First, as has been said, this is an issue with huge global ramifications as a result of population growth and the socio-economic changes which have seen a more western diet spreading across the world. The demand for food is expected to increase by 60% to 70% by 2050 and this will undoubtedly have a major impact on food security, prices and the environment. Yet as we have heard, a third of all food in the food system globally is wasted, valued at around £600 billion. Apart from the obvious waste of scarce resources, as we have heard, this contributes to 3% to 5% of global warming, so there has never been a better reason for collaboration to tackle food waste on a global scale. That is why we support the delivery of Sustainable Development Goal 12.3 which seeks to halve per capita global waste throughout the supply system by 2030. It is also why we welcome the Champions 12.3 coalition of leaders to inspire ambition, mobilise action and accelerate progress towards achieving those goals. Perhaps the Minister could clarify what support the department is giving this and other initiatives to deliver the sustainable development goals.
Secondly, we have made some early progress on reducing food waste at the UK level, and like others I commend WRAP’s work on this issue. Its Love Food Hate Waste campaign highlights not only the scandalous waste of food that is being binned, but also the unnecessary cost of the food that is wasted, averaging some £700 per household per year. Partly as a result of the campaign and with the help of celebrity campaigners—people have mentioned Jamie Oliver and Hugh Fearnley-Whittingstall, who are both great food campaigners—consumers have reduced their food waste by some 21% since 2007.
But it seems that the efforts of consumers, although I know that we have further to go on this, have not been matched by the food industry, which remains responsible for more than half of all food waste across the supply chain. Like others, we very much welcome WRAP’s Courtauld 2025 voluntary agreement, which will be launched in March this year. The aim is to bring together food suppliers, retailers and the hospitality sector to deliver the food waste sustainable development goals. While this is by its very nature a voluntary agreement, it would be helpful if the Minister could give us some insight into how the department will be putting some backbone into it and encouraging a maximum sign-up by the industry. In particular, we need suppliers and supermarkets to address the huge amount of waste generated upstream, starting with farm surplus, a point which has been referred to a number of times. For example, an estimated 20% to 40% of all UK fruit and vegetables are rejected by supermarkets before they even reach the shops. Meanwhile, farmers in developing countries such as Kenya are being forced to waste up to 50% of their produce. This cannot be right and it makes consumers very angry. It feels immoral to throw away good food while people queue at food banks or go hungry. Can the noble Lord clarify whether the department has any initiatives to specifically tackle farm-gate waste?
Finally, we need to address the scandal of unsold good surplus food being destroyed by supermarkets. Currently, only 2% of this food is redistributed to charities. As we have heard, the charity FareShare has done tremendous work to highlight this issue and persuade some supermarkets to think again.
FareShare estimates that if the UK diverted just 25% of supermarket food for distribution, it would save the voluntary sector some £250 million a year. In France, the Government voted to require supermarkets to give away unsold food that has reached its sell-by date. I pay tribute to my Commons colleague, Kerry McCarthy, who campaigned tirelessly on this issue but whose Food Waste (Reduction) Bill was not even granted a Second Reading this week. Do the Government support that Bill? Are they giving active consideration to measures similar to those adopted by the French Government?
At the end of the day, the solution to food waste lies in tackling food surplus at source, prevention through better ordering systems, redistribution of surplus to those who are hungry and, finally, diversion to livestock and recycling when all other options fail. I hope that the noble Lord will be able to confirm that he supports those principles.
Lord Gardiner of Kimble (Con)
My Lords, I am most grateful to the noble Baroness, Lady Scott of Needham Market, for securing this important issue for debate. Indeed, I applaud the influential work of this House on food waste, including the 2014 report, Counting The Cost Of Food Waste: EU Food Waste Prevention. This debate today, with all the contributions to it, highlights your Lordships’ commitment to addressing this pressing matter. I believe that we are overwhelmingly all on the same page and I acknowledge all the campaigners mentioned today who, of course, give a greater awareness of this issue.
Food waste requires urgent action across the globe. As many of your Lordships mentioned, a third of the food that the world produces is wasted. This is a waste of food, water, energy, land and money, and—as the noble Baroness, Lady Parminter, said—it is an issue for climate change as well. Indeed, my noble friend Lord Shrewsbury and the noble Lord, Lord Teverson, both raised an important issue about waste: that of fisheries. The fact is that for years now we have been wasting fish stocks at an absurd and immoral level. That is why we, the Government, seek to address this by implementing a discard ban. I say to the noble Lord, Lord Teverson, that we will keep strong.
Half of all food wasted in the United Kingdom is produced in the home. The noble Lord, Lord Young of Norwood Green—and his wife—took us through what I call the practical common sense that most households in this country should adhere to. The noble Lord looks very healthy on his regime, if I may say so. UK households waste 7 million tonnes and spend £2.5 billion every year on food that could have been eaten but ends up being thrown away. This amounts to £470 a year for the average household. I checked on this because the noble Baroness, Lady Jones of Whitchurch, and my noble friend Lady Jenkin mentioned £700 a year. This is for UK households with children. Both figures come from the WRAP report. That shows that not only in households but in households with children we need to work with parents and schools. We need to do more on this matter.
The noble Baroness, Lady Parminter, also mentioned local authorities. We are all working on this and it is very important that WRAP will publish updated guidance in the near future to assist local authorities which want to introduce or improve their collection schemes. I will not go into waste collection today because we would have a considerable debate on that, but clearly this is an issue we all need to address.
The Government are helping households to waste less and save money through the Waste and Resources Action Programme—WRAP—campaign, Love Food Hate Waste. I, too, acknowledge the work of the noble Baroness, Lady Jones of Whitchurch. I am delighted that my noble friend Lady Jenkin is carrying on the baton. It is very important that WRAP’s work is successful. It is about raising the profile of the campaign, with campaigns in 10 cities offering support to households to reduce the food they waste. This includes the development of practical skills through community cooking classes, guidance and initiatives to improve shopping habits and budgeting.
Retailers are also working directly with their customers. For example, the town of Swadlincote has been awarded £1 million from Sainsbury’s to invest in ways to halve household food waste. Sainsbury’s plans to spend £10 million over the next five years to promote similar schemes across the country—small beginnings, but very important. This approach has made a difference. UK annual household food waste has decreased by 15% between 2007 and 2012, which amounts to 1.3 million tonnes. The waste prevented would have filled 2,600 Olympic swimming pools.
Food is also wasted across the supply chain: 3.3 million tonnes in manufacturing, 0.2 million tonnes in food retail and 0.9 million tonnes in the hospitality sector. The noble Lord, Lord Young of Norwood Green, is absolutely right about dates. Defra and FSA published date marking guidance in 2011 to help ensure that dates are applied consistently. Use by labels should be used only where the safety of food cannot be guaranteed after that date. Most other foods should have a best before date only to indicate when the food is no longer at its best but is still safe to eat. We are seeing date markings to meet guidance. The noble Lord made a valuable point and we should all be mindful of it.
The Government have been working with retailers through WRAP to reduce food waste through the voluntary Courtauld commitment. Signatories reported a reduction of 7.4% in supply chain waste between 2009 and 2012, with interim results showing a further 3.2% reduction by 2014. The Courtauld commitment encourages action in line with waste hierarchy. It was very helpful that the noble Baroness, Lady Scott of Needham Market, explained that hierarchy.
It is clear that the production of surplus food should be minimised. However, when good food is left unsold, it should be distributed to feed people in need. I assure the noble Baroness, Lady Jones of Whitchurch, that the Government and industry are working together to ensure that more surplus food is redistributed to people before being put to any other use. Signatories to the Courtauld commitment have reported a 74% increase in the level of food redistributed between 2012 and 2014 which would otherwise have gone to waste. We welcome the actions that organisations such as FareShare and Company Shop are taking to ensure that good quality surplus food gets to people in need. We encourage the food industry to forge closer links with redistribution charities, and support the action and public commitment on redistribution made by all retailers. For example—my noble friend may have mentioned this—Morrisons has recently announced that unsold safe food will go to local community organisations from early this year.
The voluntary approach is delivering results, but we want to do more. Following the Secretary of State’s meeting last year, a working group is driving forward work to waste less and redistribute more. The group is developing a partnership model to provide a consistent framework for providers and recipients of surplus food to reach agreement on working together. WRAP has also commissioned research which will identify where and why waste and surpluses occur in the supply chain. This will help industry to take appropriate action to increase waste prevention and assist redistribution.
There will always, I fear, be some unavoidable food waste. That is why the anaerobic digestion strategy is in place to reduce the amount of organic material going to landfill. My noble friend Lord Shrewsbury was absolutely right to mention anaerobic digestion. If he wanted to raise with me more privately where the producer was proposing to take the landfill, I would be prepared to take that up, because it is terribly important that we ensure that landfill is the very last option.
By 2014, retailers reduced the proportion of waste sent to landfill to 7%, down from 43% in only 2005. Under the Courtauld commitment, WRAP has also worked with supermarkets and consumers to support acceptance of the use of imperfect fruit and vegetables. My noble friends Lady Byford and Lady Jenkin and other noble Lords mentioned this matter. We welcome the action by supermarkets to sell a greater range of produce in stores. For example, in January 2015, Asda began trialling the sale of misshapen fruit and vegetables at reduced prices. This trial has now been rolled out to 25 stores and covers a wider range of product. Asda plans to increase the range further in 2016. This is a very good example of what should be done much more widely. The fruit and vegetables taste just as good. I assure noble Lords that my misshapen parsnips taste very good indeed.
The UK is at the forefront in tackling food waste internationally. We acknowledge WRAP’s work over the past decade, which many across the world want to replicate. Liz Goodwin, WRAP’s CEO is one of the 30 champions in the new UN coalition chaired by Dave Lewis, group chief executive of Tesco, which aims to accelerate progress towards meeting the new UN target to halve per capita food waste by 2030, to which my noble friend Lady Byford and the noble Baroness, Lady Jones of Whitchurch, referred.
Defra continues to fund WRAP—£13.5 million for this financial year—to help drive forward and deliver improved resource management and efficiency. This includes devoting approximately £4.1 million to take action to reduce food waste and improve sustainability across the supply chain. I emphasise Defra’s commitment to all this. We want to go further. That is why WRAP is now brokering a new agreement, Courthauld 2025. It is an ambitions farm-to-fork industry commitment—I am particularly mindful of what my noble friend Lady Byford said about from the farm—bringing the food industry together to make the food we produce and eat more sustainable and secure and to reduce waste even more. Pre-farm-gate waste—I mention this particularly as the noble Baroness, Lady Jones of Whitchurch, referred to it—will be within the scope of the new farm agreement.
Significant progress has been made over the past decade, but we all want to do more. I am very conscious that there may be particular points that noble Lords have raised—
Lord Young of Norwood Green
I enjoyed the Minister’s contribution very much, but he did not mention extending the Love Food Hate Waste campaign into schools.
Lord Gardiner of Kimble
I think I said at the beginning that that is something for education, but if I did not say it, I intended to say that this is issue that we wish to work on. I will raise it with officials and with WRAP. I apologise because it was in my notes to raise it.
This has been a very interesting and helpful debate. I am conscious that I may not have specifically answered some of the precise points that were raised in the time available. I would find it tremendously valuable, if noble Lords would be interested, if we continued these discussions and if noble Lords who are interested have meetings with officials and with WRAP. I started by saying that we are all on the same page. I do not think there is much difference between us. I am most grateful to the noble Baroness. This has been a fascinating debate, and I think we have more work to do together.
Homelessness
(8 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Suttie
To ask Her Majesty’s Government what consideration they have given to the issue of preventing homelessness in the context of the current Spending Review.
Baroness Suttie (LD)
My Lords, I am delighted to have the opportunity today to raise issues surrounding homelessness and the impact of the spending review on measures to prevent it. I am grateful to noble Lords, including my noble friends, for taking part in the debate.
Homelessness is a highly complex issue, which touches on so many issues of public policy, including provision of affordable housing, local government finance, public health, mental health, substance abuse, immigration and relationship and family break-ups. Given the time constraints today, I can only begin to touch on some of those issues.
Two years ago, I had the privilege of volunteering with Crisis at Christmas. I also volunteered to work on Crisis’s English-language classes, and, last August, I did an overnight shift with a brilliant outreach team from St Mungo’s Broadway in north-west London. In my attempts to understand homelessness issues, I have been consistently impressed by the dedication of the professional and voluntary staff I have met at Crisis, Broadway St Mungo’s, the YMCA, Pathway and the Olallo centre, to name but a few.
Homelessness figures are significantly on the increase and must be a cause for real concern. Outreach teams recorded 2,862 individuals sleeping rough in London from October to December last year, a 12% increase in the total figure from the year before. However, the statistics alone do not begin to tell the tragic and often harrowing personal stories that lie behind them—lives that have gone off course but, with timely intervention, can be put back on track.
The estimated annual cost to the state of homelessness is £1 billion. However, recent research for Crisis drawing on large studies of homelessness across Britain has shown that tackling homelessness early could help save the Government between £3,000 and £18,000 for every person helped.
The figures for homelessness are in themselves extremely worrying, but many more people do not show up in the statistics. They are the hidden homeless: those who are staying with friends or family members or living in squats, often in very insecure and inappropriate accommodation. Research by Crisis suggests that about 62% of single homeless people are hidden and may not show up in official figures. The hidden homeless are often subject to exploitation, and risks to personal safety are high.
One of the main causes of homelessness is the ending of tenancies in the private rented sector. The sector is home to 18% of the population and is in desperate need of reform. Private-sector rents have become untenably high in many parts of Britain, most notably here in London, and many renters are now paying more than half their disposable income in rent. Moving from one rented home to another can be very expensive, with high lettings fees and large deposit requirements. Rented homes often fall below a decent standard, and there are continuing problems with rogue landlords, which can lead to a family becoming homeless.
I welcome recent changes to protect tenants from revenge evictions: legislation which was passed by the coalition Government. I also welcome the provisions in the Housing and Planning Bill to tackle rogue landlords. It is vital that we strengthen the private rented sector if we are to hold the rise of homelessness. I have very real concerns, however, about the effect of the Bill on the level of social housing, which is extremely important when it comes to bringing down homelessness. Selling off council homes to fund the right-to-buy extension, with no requirement for replacement properties to be of the same tenure, will have the effect of pushing more people into the private rented sector in the long term.
What measures do the Government plan to take to prioritise funding for new housing that is affordable to rent for people on low incomes? Will they make it clear that low-cost homes for ownership—starter homes—should be additional to, not built instead of, housing to rent?
I welcome the Government’s announcement of 17 December last year on maintaining and protecting homelessness prevention funding for local authorities and on increasing central government funding for homelessness programmes to £139 million over the spending review period. I welcome, too, their commitment to work with homelessness organisations and across departments to consider options, including new legislation, to prevent more people becoming homeless. However, I would like to use today’s short debate to ask the Minister for some further details on these proposals. What measures are the Government taking to ensure that the homelessness prevention grant is allocated based on actual levels of homelessness and housing need in each local authority area, and what measures will be put in place to monitor how the money is spent? Will the Minister give a commitment to keep the level and allocations of the homelessness prevention grant under review to ensure that it is sufficient to implement any new legislative reforms on homelessness?
I turn to the specific issue of public health and homelessness, and in particular tuberculosis. I declare an interest as a vice-chair of the APPG on Global Tuberculosis. Rates of TB have been found to be as high as 400 per 100,000 among London’s homeless population, more than 10 times the London average and more than 30 times the national average. Homeless people are also less likely to access healthcare to complete treatment and are therefore significantly more likely to develop drug-resistant strains, which have been described by the WHO as a global health emergency.
As infectious diseases, particularly drug-resistant diseases, pose a threat to the public health of all UK citizens, it is extremely important to support the outreach programmes and multidisciplinary teams required to diagnose and successfully treat people with chaotic lifestyles. If admitted to hospital, a homeless person cannot be discharged unless either their treatment is completed or they have a permanent address to which they can be discharged. In practice, this leads to people with long-term conditions such as TB being admitted to hospital and bed-blocking, sometimes for as long as six months. The cost to the NHS of a hospital bed per night is around £500. By contrast, however, dedicated hostel provision can cost as little as £60 to £70 per night and would include life- skills coaching, three solid meals a day and secure accommodation. This would help to ensure that patients complete their treatment, which is particularly important in the case of tuberculosis.
One such hostel is Olallo House near Euston station, which has a very effective TB programme. It is also, I believe, unique in its specialised provision of beds for homeless European migrants in London, and does a fantastic job in assisting people to return home, should they want to. I understand, however, from my last visit there just before Christmas, that its future funding is now in question. Will the Minister consider visiting the Olallo Project with me to see how such it works in practice and just how effective—and cost-effective—it has been?
In conclusion, homelessness is a highly complex issue which transcends party politics. It crosses over several government departments and requires co-operation between local government, devolved Administrations and central government. It requires programmes for homeless people with complex needs that join up services, pool budgets and provide holistic, tailored support. For this reason, I believe that a national homelessness strategy is now required involving cross-party consensus. Such a strategy should have input from local government and the devolved Administrations, as well as from practitioners and the homelessness charities. It should provide sharing of best practice from local government of the many excellent programmes on the ground, some of which I have seen. Above all, a national strategy should monitor national resource requirements and anticipate increases and changes in these requirements. Such a national strategy would be an effective step forward in the prevention of homelessness.
Lord Young of Cookham (Con)
My Lords, I commend the noble Baroness for her choice of subject for this short debate and for the powerful speech she has just made in opening it. She raised a number of pertinent questions which I know my noble friend will want to answer.
It is 50 years since 1966 when “Cathy Come Home” was first shown on television. It was a powerful film that showed how a young couple through no fault of their own could become homeless and have their child taken into care. In the wake of it, two great national charities were formed: Shelter and Crisis. They are both approaching their 50th anniversaries, and I know they will do all they can to ensure that the issue of homelessness remains very high on the political agenda. It is also 25 years since, as Housing Minister, I launched the rough sleepers initiative here in London with the objective of making it unnecessary for anyone to sleep rough on the streets of London. Anybody who has been round London at night knows how much remains to be done. This is not to belittle the steps that have been taken in the past 50 years. Without the legislative changes and financial investment, the position would be far worse, but no Housing Minister could possibly ignore the challenges that remain.
At a strategic level, as the noble Baroness has just said, there needs to be an increase in housing supply, not least so that those in temporary accommodation can move on into permanent accommodation and free up spaces in hostels and temporary accommodation for those in greatest need. I welcome the initiatives in the Housing and Planning Bill designed to drive up the supply of new homes. I also welcome the financial initiatives in the Budget and the recent public expenditure review, which had the same objective of increasing supply. Like the noble Baroness, I was pleased that in the recent spending review the homeless prevention grant for local authorities was protected.
However, as in health, so in housing, and we need to put more emphasis on prevention. I was delighted to see that the ministerial group on preventing and tackling homelessness continues. Perhaps my noble friend can bring us up to date with its work. I understand it had a meeting last month. It would be helpful to know what its priorities are for this Parliament. Is my noble friend also able to confirm, as asked by the noble Baroness, that the Government have not ruled out legislative changes on the prevention of homelessness in the light of discussions that her ministerial colleague Marcus Jones has been having with interested parties?
On this subject, I was reading Crisis’s report, Turned Away, which shows how the services provided by local authorities can vary. Its mystery shoppers found that in more than half of their visits local authorities turned them away with little or no support leaving them in very vulnerable situations with the prospect of sleeping on the streets. That is simply unacceptable.
I also welcome the recently announced review of the funding regime for supported housing. Unlike mainstream housing that depends on rents and housing benefit, supported housing needs a stream of funds from a variety of sources and has higher management costs and more voids. We need to put this vital housing sector on a much firmer financial footing so it can play its full part in helping homeless people.
Can my noble friend update us on the no second night out initiative, which her department is helping to fund, to stop those who had no option but to sleep rough adapting themselves to that very dangerous lifestyle? The average life expectancy of somebody sleeping rough is 47. It would be helpful to know how that initiative is going. With the 1990s initiative, we were able to reduce the number sleeping rough in London by two-thirds, but of course it has gone up again. This may be partly due to better recording, but today there are many non-UK nationals in this country who were not here in the 1990s, and we need some targeted initiatives to resolve that problem. Homelessness is the symptom of wider problems—alcoholism, relationship breakdown, financial problems, discharge from prison or care without proper support—that need to be addressed at the same time as accommodation is provided. The supported housing movement is so important as it can provide the one-stop shop that is needed.
Finally, I welcome the initiatives to make it easier for homeless people to access private rented accommodation. I note the reservations the noble Baroness has about the current regime. The Minister’s department has funded the private rented sector access development fund since 2010. This provides a good model for persuading landlords to accept families who are threatened with homelessness. If assurances can be given that the deposit will be available, the rent will be guaranteed and if the arrangements do not work the family can be rehoused, many landlords who might be cautious about accepting homeless families might overcome their reservations. Homeless families are not synonymous with problem families, and if they are given decent accommodation many can rebuild their lives.
We may need legislative change to reinforce the safety net. We need to spread best practice. We need financial support for cost-effective and targeted initiatives. We need a stable funding regime for the voluntary organisations on the front line. If we get all those arrangements in place, I think we in this Parliament can make a real impact on tackling homelessness.
Baroness Gould of Potternewton (Lab)
My Lords, I, too, thank the noble Baroness, Lady Suttie, for initiating this extremely important debate. It gives me the opportunity once again to raise the problems of a group of women who, for many reasons beyond their control, find themselves vulnerable and homeless. These women have been overlooked for far too long and can find themselves in a downward spiral of chaos and exclusion. Just over 1,000 women have been recorded as sleeping rough in London. As no such gendered information is available for the rest of the country, will the Minister say whether there are any plans to collect this information, not least because, as has been said, the number of homeless people is rapidly on the increase? It is estimated that about 30% of rough sleepers will be women, and they have special needs. There are also many thousands of women who make up the hidden homeless. Homeless rootless women with few belongings will often show up in the head count of rough sleepers. These hidden homeless women may be sofa-surfing, staying with family and friends or trapped in an abusive relationship because they have nowhere else to go.
Women’s homelessness can occur after a prolonged period of trauma, including physical, sexual and emotional abuse. It can follow a cycle of mental health problems, substance use and myriad other problems. The figures show, however, that half have experienced domestic violence, 78% report mental health needs and one in five has a combination of mental health and physical health problems.
As the noble Baroness, Lady Suttie, said, homelessness has to be seen as being not just about a place for people to go but as a health issue and, sometimes, even a life issue. The average age of people who die while homeless is 47; for women, it is just 43. According to research from the Salvation Army, 53% of homeless women have attempted suicide at least once. Despite facing such harsh health inequalities, women who are homeless often do not get the right healthcare. Their health problems often remain untreated until a health crisis requires urgent care. That comes at a cost, for both individuals and the NHS. That is clearly illustrated by one instance. Angela has a history of homelessness and substance use and has spent time in prison. She says, “I got mixed up with the wrong people. I never imagined in a million years I would be selling my body for drugs. I have nearly been killed three times doing it. I have been raped doing it and as a result I have HIV”, which is another cost to the health service.
In my area of Brighton and Hove, evidence from the women’s centre—I declare my interest as patron—shows that almost half its clients are mothers. Of these, 67% have had their children taken into care or adopted. Much of the complexity of homeless women’s needs is rooted in histories of violence and abuse stemming from childhood. So not only are they grieving for their lost children, they are also grieving for their own lost childhood. These problems are intergenerational. We have to make sure that they are not passed on to the next generation.
To add to their problems, and to make the way out more difficult, women are marginalised in the labour market. Evidence from St Mungo’s states that the majority want to move into employment, but about only 9% of its female clients have a job. The importance of having an occupation, of being trained with the consequent boost to self-esteem, cannot be overestimated as a way of recovery.
Making matters worse for many of these women, they experience stigma and shame because they are homeless and are judged by societal expectations that women should be good mothers and maintain a home. A perceived failure to live up to these expectations can be a significant barrier to recovery. Unfortunately, the histories of far too many of these women are full of missed opportunities, through insufficient co-ordination by national and local government and inappropriate and erratic interventions, to get the right help at the right time, leaving needs unaddressed and making recovery much more difficult.
It is feared that unless urgent action is taken now, too many women will not get the help they need to escape from homelessness, a situation not assisted by the cuts to public services, the restrictions on welfare, rising private sector costs and the lack of social housing supply. I also have concerns about the consequences of the Housing and Planning Bill. There are also cuts in local authorities’ spending on specialist services, such as refugees and women-only hostels. That has reduced the number of places where women can go. It is estimated that next year there will be a shortage of something like 15,500 places. The Government have said they will consider legislative changes to prevent more people becoming homeless, which should take into account the provision of holistic, gender-sensitive support. There have to be imaginative approaches and partnership working across government and local government. Will the Minister say what progress has been made in getting some legislation on the statute book? The longer a woman sleeps rough, the worse her problems become, and the more costly it becomes to help her off the streets and make her life worthwhile so that she is able to contribute to the economy of the country.
Baroness Grender (LD)
My Lords, I thank my noble friend Lady Suttie for sponsoring this debate. We visited St Mungo’s Broadway together to see its work last year. As a former trustee of Homeless Link, the membership body for organisations working with homeless people, over the years I have had the privilege of seeing St Mungo’s Broadway’s innovative approach, led by Howard Sinclair. It has never ceased to impress. Street Link is just one of the examples. It was set up in 2012 by St Mungo’s and Homeless Link to connect people on the street as quickly as possible to local services. It continues to have very welcome support from the Government, including the No Second Night Out initiative referred to by the noble Lord, Lord Young of Cookham.
Fifty years ago, Shelter was formed, as the noble Lord, Lord Young, mentioned, with the express ambition of quickly putting itself out of business. A short walk from here along the Strand any evening of the week suggests that the work of my former employer, Shelter, is needed now more than ever. The stats seem to bear out what we can all see, especially in inner cities, not just London but elsewhere. The latest quarterly figures, which came out at the end of January for the period October to December 2015, show that outreach teams recorded 2,862 individuals sleeping rough in the capital, a 12% increase on the total figure for October to December 2014. New rough sleepers accounted for 46% of all rough sleepers. In a way, the good news is that there are fewer people out for longer periods of time. It would seem that there is some achievement in that area. Intermittent rough sleepers account for 39% of all those recorded.
Will the Minister share with us what is happening with the Government’s statistics, which are now under criticism and scrutiny? The recent assessment by the UK Statistics Authority concluded that the official statistics for homelessness prevention and relief and rough sleeping do not currently meet the required standard of trustworthiness, quality and value to be designated as national statistics. They have been retained, on condition that urgent action is taken by the Government to make a series of required improvements. That seems a far cry from when my former colleague Louise Casey was in charge of this.
Today, I would like to tease out one of the things that particularly affects homelessness, which is the danger of unintended consequences when developing policies in government and the need, among friends and in this safe atmosphere, for Governments occasionally to change their minds and recognise when policies go wrong in this area. Away from party point scoring, there is value in recognising just how often Governments with the best of intentions end up with some of the worst case scenarios. From right to buy and care in the community all the way to the spare room subsidy or the bedroom tax, recent political history is awash with policies that have impacted badly on homeless people
Other speakers referred to the overall supply of affordable housing and the chronic decline in social housing. What has been needed ever since right to buy is a substantial housebuilding programme, but the loss resulting from the sale of 1.7 million council homes between 1979 and 2001—covering two Governments—has never been recouped. Local authorities are now left with such limited stock that today’s councils find themselves in the invidious position of deciding to move homeless foreigners out of their own boroughs to areas with cheaper rents for temporary accommodation. As Inside Housing and others have shown, the increase in the number of households placed outside the capital often comprises vulnerable families. Often, a local authority in receipt of them has not been informed that they are within their area.
Given all we know, those accepted as homeless often have complex issues. As Homeless Link’s research showed, 78% report a physical health problem and 86% report some form of mental health difficulty. From those on the front line of street homelessness represented by Homeless Link, the most pressing concern right here, right now—and possibly an unintended consequence—is the proposed cap to social rents to LHA levels. I would love to hear from the Minister some reassurance on that because this is in the welfare area. Many of Homeless Link’s members now say that they will be forced to close homeless provision, hostels, supported accommodation and refuges. There is also a danger in terms of funding that drives more and more towards generic provision of service and away from specialised services, for instance for women or trans communities. These are unintended but damaging consequences.
I can recall as far back as 1996 when at Shelter I asked my policy team why housing benefit did not go direct to recipients rather than landlords—a classic question coming from a Liberal, if you will forgive me. Now, having seen how HLA will be delivered, I can see unintended consequences from it going to any chaotic individual rather than the landlord. However, I am out of time.
Lord Farmer (Con)
My Lords, I join others in congratulating the noble Baroness, Lady Suttie, on securing such a timely and important debate. The impact of the CSR announcement on capping social rents kept us all up late last Wednesday during Report on the Welfare Reform and Work Bill—and quite right too. This is an incredibly important issue for many providers of supported housing for the most vulnerable, whose care and shelter may be all that stands between those they serve and unbearable hardship or even death.
I think about Jonathan, who was offered a place in the Exaireo homelessness project in Loughborough after he tried to drink himself to death when his marriage foundered. Exaireo means to rescue and restore. It did not just put a roof over his head but gave him a reason to hope again, to rediscover a sense of purpose and his worth as a human being. Within a couple of years, with Exaireo’s help he had set up a consultancy that has since worked with local authorities on their housing strategies. It has a great track record in getting people off benefits and into jobs and higher education. For information, the criminal justice system savings from keeping ex-offenders out of prison are more than 300% higher than the housing benefit costs they incur.
Certainly, organisations such as Exaireo are concerned about the sword of Damocles that hangs over their funding, as has just been referred to. I am sure the Minister can imagine the trust they and others must place in the Government’s review as they seek to expand to meet growing need. My noble friend Lord Freud repeatedly stated that this Government take their responsibilities to the most vulnerable extremely seriously as they seek to reform welfare. Ministers responding in last week’s debate in the other place on housing benefit and supported housing were also unequivocal that they had no interest in cutting off the social housing sector at the knees.
However, this debate is about preventing homelessness, and I want to spend the rest of my time talking about what we must do to reduce the number of people who need the services of organisations such as Exaireo. Many providers cite the prevalence of relationship breakdown as a potent driver of destitution. Exaireo says that it is a significant factor for more than half, possibly three-quarters, of all the people they help. Certainly many of them have addictions and mental health problems but, as Professor Kim Etherington’s research has shown, the roots of these often lie in the trauma from emotional, physical and sexual abuse that people experienced in childhood. Poor parenting has to be addressed, so I welcome the Prime Minister’s life chances speech, which highlighted this as well as the need to support couple relationships.
Tragically, the pressure group Crisis says that the biggest cause of homelessness in young people is being told to leave the family home by their parents, when the relationship between them has broken down considerably or irretrievably. The inspiring Liv Bauckham, who leads Love4life, another award-winning Midlands charity, says how difficult it is for the vulnerable young people she works with when a string of different partners come into their mothers’ lives. Many single parents are utterly devoted to their children and either put their own romantic aspirations on hold or tread incredibly carefully in this area, but it can be the case that young girls and boys suddenly find themselves living with older men whom they have never met. When there is conflict, often borne out of the teenager’s fear for their own safety, the mother, says Liv,
“will always put her boyfriend first”.
The teenager is seen as an unruly and unpleasant interloper in their romance and is given the ultimatum that if they do not like the living arrangements, they can always leave. Crises are easily reached, and underage teenagers find themselves sofa-surfing, going into care or disappearing into the shadowlands of gang and drug culture, easy prey for exploitative adults. Yet their mothers are often outworking a dysfunctional parenting blueprint they somehow survived themselves.
In many families in our poorest communities, and even in some where there is less financial need, the relational fabric of society lies in tatters. There are solutions that could ultimately stem the flow of people into homelessness services, but we have to start early. Your Lordships, and indeed now a number of Ministers, are aware of my focus on the need for family hubs. Some pioneering local authorities facing greater social need and smaller budgets, such as the Isle of Wight, have transformed their early years children’s centres into hubs where families with older children can go when they are struggling. Troubled families programmes are wholly integrated into this service. Often it is the conflicted relationship between parents that hinders them from giving their children the safe, stable and nurturing environment that they need to flourish. Bromley family hubs recognise this and, if staff cannot help couples, there is a small budget for Relate sessions.
Leadership from national government is urgently needed to encourage local authorities to broaden the purpose of children’s centre infrastructure. Many children’s centres are deserted from 4 pm onwards; certainly they are underused at evenings and weekends. Let us sweat these assets. Will the Minister undertake to look more closely at family hubs and perhaps consider using her role in the Cabinet Social Justice Committee to create a caucus for change in this vital area?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I congratulate my noble friend Lady Suttie on securing this important debate. At a time when the House is beginning to debate the Housing and Planning Bill, we do well to consider the plight of those who are homeless. The number of homeless families has rocketed by one-third since 2010, with a record 56,040 families on the streets last year. I draw noble Lords’ attention to my entry in the register of interests as vice-president of the LGA. We have heard from my noble friend Lady Suttie who spoke eloquently of the brilliant work of St Mungo’s and other organisations to assist homeless people back into employment and decent housing. Similar organisations operate across the country to great effect. Many rely heavily on charitable donations to carry out their work. This is a very hand-to-mouth existence and deserves more security.
One-third of those who find themselves homeless do so as a result of private landlord tenancies ending. There are very considerable costs to renting in the private sector with myriad fees: agent’s fees for introducing a property; fees for drawing up the tenancy agreement; fees for credit checks; and at least four weeks’ rent, and often six, as a deposit in advance, and then a month’s rent also in advance. The previous deposit is not returned in sufficient time to be used for a new property. Many of those reliant on the private sector for housing do not have this kind of money, so when their tenancy ends they have nowhere to go but the streets. These people deserve better.
Outside of those who are homeless as a result of tenancies ending or evictions are those with mental health issues, those given to alcohol and substance misuse, and those suffering from domestic abuse. It is widely reported that among those arrested and spending a night in police cells are many suffering from mental health problems. I am pleased that the Government are at last allocating resources towards dealing with mental health on a par with physical health. This is long overdue and needs urgent attention.
Not many years ago I frequently used the Tube at Hyde Park where there were often male rough sleepers on cardboard. One morning there was a woman with a boy of about eight sleeping there as well. Both were clean and reasonably well-dressed. Women do not sleep rough with their children unless they are fleeing domestic abuse. Local authorities have a duty to provide housing and accommodation for many categories of vulnerable people, especially those suffering from domestic abuse. However, these services are continually under threat as contracts outsourced to private contractors collapse due to insufficient profit being available. Services are returned in-house and re-let to another provider. On each occasion, the specification and the cost are reduced. Since the ending of ring-fenced funding for Supporting People, local authorities with dwindling resources find it increasingly difficult to prioritise this section of our communities. The current local government settlement has put these people at very serious risk.
Currently, my own county has given notice that the existing contract which provides for vulnerable adults will end in April 2016. It has a statutory duty to provide for those with mental health issues but the other elements of the contract will only receive £1.4 million for all other elements of homelessness, including substance abuse and homeless hostels over the whole county. Other counties are suffering similar choices. Analysis from the National Housing Federation suggests there are 110,000 places in supported housing in 2015-16 for those of working age. That is 15,000 fewer places than needed. This shortfall is set to grow to 30,000 places by 2019-20. Is the Minister aware of this situation and is she prepared to take action to ensure that vulnerable people are safeguarded? This is a particular challenge in two-tier areas where districts are the statutory housing providers. Funding is now channelled through the counties which, under pressure, are withdrawing sufficient funding and saying to districts, “You are the housing providers; you take responsibility”. Is the Minister aware of this tension?
Social housing is increasingly important for people who are homeless or at risk but the availability of social rented housing has halved since 1994, dropping from 3.6 million properties to 1.6 million properties in 2016. Many local authorities find that they have insufficient housing to accommodate emergency cases. Some of these people will resort to sleeping rough or will be placed in temporary accommodation in a hostel or bed and breakfast. One of my colleagues who is the leader of a large council tells of how she cried the first time she had to put a family into bed-and-breakfast accommodation as there was nowhere else for them to go. This is soul-destroying, especially for those families with young children. How many people—both individuals and families—are currently in temporary accommodation up and down the country? There is a desperate shortage of housing for those vulnerable people needing to rent. I look forward to the Minister’s response to the comments made this afternoon.
Lord Kennedy of Southwark (Lab)
My Lords, first, I thank the noble Baroness, Lady Suttie, for putting this Motion down for debate. Secondly, I declare an interest as an elected councillor in the London Borough of Lewisham. When discussing homelessness and how we can prevent it, I am always drawn to the fact that we are one of the richest countries on the planet. As a nation we have achieved some remarkable things in almost every field you can think of, and yet we have people sleeping in doorways and on friends’ sofas, and the problem is not being addressed properly. The noble Baroness, Lady Suttie, is right when she tells the Grand Committee that this is a complex issue that needs tackling across government.
I am sure the noble Baroness, Lady Williams, will produce a raft of statistics. As organisations such as Crisis and Centrepoint point out, these official figures do not reveal the real scale of the problem and, unless we get true figures and a real understanding of the problem, then we will struggle to get a grip with this issue. You have only to walk the streets a few hundred yards from this House to see people sleeping in doorways. I was struck by witnessing homeless people on the Strand, close to Charing Cross station, gathering in the early evening to be fed by charity workers, who brought them bread and soup.
You can break homelessness down into different categories and circumstances, and with some it can be easier when trying to find solutions than with others. Families that find themselves unintentionally homeless have protections in law, and local authorities have a duty to help them. However, changes that the coalition Government made to welfare and housing benefit, and other reforms, mean that, particularly in London, local authorities often have to rehouse people in temporary accommodation many miles away. Many Members in the other place, representing constituencies in the north of England and the Midlands, have told me of families coming to their surgeries who were rehoused from parts of London but who want to go back to their own communities. An immediate problem is solved, but others are created.
The Government have allowed local authorities to use the private-rented sector to house homeless families. They also have overseen the building of the smallest amount of council houses, as I mentioned earlier, building fewer than 11,000 social homes for rent last year compared to Labour’s 33,000 in its last year in office. During the Second Reading of the Housing and Planning Bill, I recall the noble Lord, Lord Horam, from the Conservative Benches, making a plea for the Government to build more council homes and social rents. On the subject of rent, the affordable rent strategy being pursued by the Government just creates an unaffordable private-rented sector for young people and families in many parts of the country, particularly in London, and that is no solution.
You then have people who are not protected by legislation, including single people, young adults, the poor and renters in the private sector, who are being failed by the policy decisions taken by the Government. We are seeing more and more of these people on street corners in our cities and in London. The noble Baroness, Lady Suttie, outlined the measures in the Housing and Planning Bill concerning the sale of housing association properties and introducing more unaffordable rents that will do nothing to help the homeless or those people at risk of becoming homeless. The noble Lord, Lord Young of Cookham, mentioned “Cathy Come Home”, and he is right about the effect of that programme and the founding of Crisis and Shelter. I was five years-old at the time and benefitted from a council house that my parents were allocated in Southwark. I also remember the revulsion against the activities of people like Peter Rackham and their effect on the private-rented sector at the time. It is very different today with so few council houses being built and the Government seeing the solution to the problem very much more in the private-rented sector with these expensive rents. The noble Lord, Lord Farmer, talked of family hubs in his contribution. I would say to the noble Lord that the Sure Start programme, which has been decimated by the Government, was about those family hubs and I think we need to get back to those programmes.
Can the Minister set out what initiatives the Government are taking to help these people and what the process is for reviewing policy decisions made by the Government? In addition, what is actually happening in London and elsewhere? Can she say how the No Second Night Out programme is progressing? It is supposed to tackle the problem of people living on the streets. What review of the programme is taking place? The Motion asks the Government what steps they are taking to tackle homelessness in light of the current spending review. A proper assessment of the success or failure of government initiatives in this area must be used to inform the spending review. One of the risks for this forgotten group of homeless people is to have no protection from the real dangers they find themselves in. They can be targeted by criminals, who can get them into a life of crime, drug and alcohol abuse and dependency, prostitution—and young lives destroyed. We have too often seen the tragic results of these cases in the media. As my noble friend Lady Gould of Potternewton said, there are effects on young women, in particular, and I very much agree with the points she made.
I believe some work is needed to look at the effects of government policy across departments and the cumulative effect of those decisions. These are decisions about building fewer council houses, welfare and benefit reforms, unaffordable private sector rents, the reduction of mental health spending, and what services can be provided to asylum seekers where people are left destitute. Taken together, you have a toxic mix of misery, despair and hopelessness. People with mental health problems also make up an alarming number of the people sleeping on our streets, as the noble Lord, Lord Farmer, said. Can the Minister tell us what is being done across government?
Finally, when discussing homelessness, we should never forget the plight of our former service personnel, who make up an alarming number of the people sleeping rough on our streets. Again, what are the Government doing to help these forgotten heroes? Many have suffered mental trauma from what they have witnessed in other parts of the world.
In any debate of only one hour it is hard to touch on all the issues one would like to. It is clear that the picture is bleak and the Government need to sharpen up their act. This debate has been very worth while. I am grateful to the noble Baroness, Lady Suttie, for enabling us to discuss these issues.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank all noble Lords who have taken part in this debate. The contributions have been many and varied and have touched upon some of the key issues for society, both now and in the future.
The Government have always been clear that we are committed to supporting the most vulnerable people in our society. During the previous Parliament, we made significant progress in securing the right support for homeless people, not only so they have a roof over their head but so they can get back on their feet. Since 2010, we have invested more than £500 million, which has helped local authorities prevent almost 1 million households from becoming homeless. For example, we invested £8 million in the Help for Single Homeless fund, enabling 168 local authorities to partner up to help some of the hardest-to-reach individuals. These projects are offering support to help people turn their lives around and find long-term solutions. Likewise, our access to the private rented sector programme, which one noble Lord mentioned and which we have funded Crisis to run, has helped more than 9,000 people access privately rented accommodation and the right support they need to rebuild their lives. However, we remain clear that one person without a home is one too many. Protecting the most vulnerable in society and supporting their housing needs is just as much a priority as driving down the deficit. There need be no contradiction between these two aims.
The noble Baroness, Lady Suttie, started with the point about rogue landlords and young homeless, and the two may often be linked. Noble Lords will be aware that we will be dealing with this through the housing Bill. Strong cross-party support is emerging for dealing with this really poisonous and irresponsible practice, which is far too prevalent. Young homeless people often find themselves at the mercy of these rogue landlords. The noble Lord, Lord Farmer, talked about young homeless in relation to fractured family relationships. Young people find themselves homeless for a variety of reasons but often it is because relationships within the family break down. These are two very important aspects for us to think about.
Despite the need to take tough decisions on government spending, we prioritised the need for investment in this area and increased funding for homelessness programmes to £139 million over the course of this Parliament. As the noble Baroness recognised, we also protected and maintained the homelessness prevention fund that goes to local authorities, which will amount to £315 million by 2020. We have also put in place additional discretionary housing payments to local authorities. We are also assessing, along with homelessness charities and cross-departmentally, other options for preventing more people from becoming homeless, including legislation. A number of noble Lords brought up that point. We are not ruling that out.
The noble Baroness also asked about a national housing strategy. At this point we are looking at the best practice locally but we are not ruling out legislation. I am sure we will revisit this in due course.
The noble Baroness talked about support to local authorities. We know that local authorities are facing challenges, like every area of the public sector, in managing the pressures of homelessness. In addition to maintaining homelessness prevention funding, we have also provided support to help build local authorities’ capacity to manage these pressures, including: funding the National Homelessness Advice Service, which is delivered by Shelter and Citizens Advice, to provide expert training and assistance to front-line staff dealing with homelessness issues; and helping to kick-start the National Practitioner Support Service, which is a sector-led programme to improve local authority homelessness prevention.
My noble friend Lord Young of Cookham talked about his role, 35 years ago, in the Rough Sleepers Initiative. The figures for last year, 2015, will be published on 25 February. He touched on the point of rapid intervention, which is absolutely crucial in this area. He also talked about the No Second Night Out system in England. The result of that has been that two-thirds of rough sleepers in London spend no more than one night out. Two-thirds of rough sleepers in the 20 key areas outside London also spend no more than one night out. We have also co-funded both Tower Hamlets and the City of London in their quite ambitious No First Night Out pilot—in other words, so that people do not have to even sleep rough at all.
The scheme has supported the development of a housing options toolkit to identify clients at risk of sleeping rough—that is how it works—and is providing the rapid intervention service and intensive mediation to support those identified in accessing accommodation. It also includes a safe connections service, supporting rough sleepers from outside the boroughs to return to their home area, and aims to significantly reduce the number of new rough sleepers across the three boroughs.
My noble friend also talked about the interministerial group on homelessness. The noble Baroness, Lady Grender, talked about complex needs, as did the noble Baroness, Lady Bakewell, which is all part and parcel of what that that group is looking at. Its priorities are to reduce and prevent rough sleeping as much as possible. We introduced the world’s first social impact bond in London, which has helped nearly 900 rough sleepers, but we are now looking at a new social impact bond for the most complex individuals, such as those with mental health problems or substance misuse problems—those who are really very vulnerable. We are looking at introducing this very soon.
The noble Baroness, Lady Gould, talked about the very important issue of domestic violence. That is something that I absolutely homed in on when I became a Minister, after seeing the effects of domestic violence on so many areas of family life and on society and public services. Over the last few years, we have given £13 million to support victims of domestic violence, and I was very pleased that the Chancellor announced funding of £40 million over the spending review period for innovative solutions to prevent domestic violence and support victims.
The noble Baroness, Lady Grender, asked about the UKSA report. One thing I can tell her at this stage is that the Secretary of State will be meeting Andrew Dilnot to discuss it. I cannot give her any more information at this point, but I will do when I have it. She talked about out-of-borough placements. I recall her asking me about that during Questions the other day. It is not unusual. Local authorities have a duty to ensure that wherever possible in-borough placements are prioritised, particularly when people need to be within the borough for school or work reasons, but it is not unusual that families are placed out of borough. In the vast majority of cases they will be placed within London—if that is the area we are talking about. She also talked about complex needs, which I have dealt with.
My noble friend Lord Farmer has previously talked to me about family hubs. I fully recognise the importance of early years support for children in difficult families. It is not something that I have forgotten about and we touched on it in the Social Justice Committee. I will take away what he said and consider how working across government we could take that forward.
The noble Baroness, Lady Bakewell, talked about why finding a woman with her child on the street at night might be related to domestic violence. I have no doubt that she is correct. The statutory framework is very clear that families with dependent children are a priority for accommodation. That is not to deny that what she saw happens, but there is a framework in place to prioritise them.
The number of households in temporary accommodation is currently 68,500, and the peak was 101,000 in 2004. The number of children in temporary accommodation is currently 103,000, with a peak of 130,500 in 2006. A £5 million fund was announced in December to support 25 areas under the greatest pressure.
I need to wind up, as I am on my 12th minute. I again thank all noble Lords for their contributions on a very serious matter. The Government are well aware of the problem and have prioritised tackling it.
Education: English Baccalaureate
(8 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Earl of Clancarty
To ask Her Majesty’s Government what steps they are taking to ensure that children receive a balanced and rounded education in schools; and what effect the English baccalaureate requirements will have in that regard.
The Earl of Clancarty (CB)
My Lords, I am grateful for the opportunity to have this important debate. I look forward to hearing all noble Lords’ contributions and the Minister’s response. I am only sorry that we do not have more time. I thank the many organisations that have sent me briefings, all of which, without exception, either decry the omission of arts subjects from the English baccalaureate performance measure or wish to see the measure removed entirely. The consultation on the implementation of EBacc closed last Friday, but I hope the Minister will take the contributions made today on EBacc specifically in the spirit of being additional to that consultation.
There is a sense of déjà vu. It is almost exactly three years since, following a huge outcry from educationalists, arts educators and the creative industries, Michael Gove made the announcement that the EBacc certificate would be “a bridge too far”. Yet, three years on, the Bacc for the Future campaign is reconvened, and here we are again with the EBacc strengthened as a performance measure. The newer “progress eight” accountability measure may include arts subjects, but there is every sense from the Government that the EBacc is to be the most significant measure.
There are many reasons why a broad-based or rounded education is a good thing—I would say an essential element of a child’s preparation for life. I will go through some of these reasons and suggest where the EBacc or other curricula might relate to it. I have an 11 year-old daughter who will go to secondary school later this year, so these concerns are very much on my mind. First, I believe that the important thing for my daughter is that her curiosity about the world should be met by her education and that she should enjoy learning. I could stop right there, because that is the most important thing and something it is far too easy to forget in today’s political culture—not necessarily shared by all—which so firmly yokes an idea about future work and assumptions about what employers will want to education, where education has become synonymous with what is termed “academic achievement”.
Personally, I would get rid of all league tables. Germany, which has recently reorganised its school educational system and has 7% youth unemployment, as opposed to our 12%, does pretty well without them. The Cultural Learning Alliance, alongside others, argues against having the EBacc at all, not just because of the arts omission, but because there is, as it says, an already desperately crowded accountability system of measures—five of them now, including three EBacc ones—with the exclusivity of the EBacc as an all-or-nothing measure particularly concerning. This is a long way from education for its own sake.
Secondly, a broad-based education creates as many opportunities as possible, whether it is the history class that fired you up, or that particular art teacher. Children will not necessarily be excited by everything. This is the cardinal mistake that Nick Gibb made in his social justice speech last June. Real social justice is to treat children as individuals who are open to a variety of possibilities. The narrow and, crucially, uniformly set EBacc curriculum of eight subjects, which could be pushed to 10, and the average number of subjects taken at key stage 4 of eight will, once you include statutory RE and PE—and PSHE, which should be statutory—leave very little room, if any, for art, music and drama, or other subjects, including technological courses.
It ought to be emphasised that this is an observation made not just by interested arts organisations. The Association of School and College Leaders, for example, argued precisely this in its EBacc consultation, noting, as many others have, the danger that music and drama courses will end up becoming the preserve of the elite, accessible only to those who can afford private tuition, or, indeed, private schooling. Department for Education figures, quoted by the Cultural Learning Alliance, show that between 2010 and 2014 the number of hours that the arts were taught fell by 10% and the number of arts teachers fell by 11%.
Other subjects, too, are being pushed to the margins—philosophy, for instance, which AC Grayling and John Taylor of Rugby justifiably argued should have its own GCSE. Tom Sherrington of the Headteachers’ Roundtable makes the case for sociology. But what all such arguments make apparent is the increasing lack of flexibility in subject choice. What is the Minister’s reaction to those schools which are resistant to the EBacc, particularly considering that an ASCL survey last year found that a staggering 87% of secondary school leaders are unhappy with the EBacc proposals? One of the conditions, too, of the setting up of academies was that they should provide a broad-based education, which, as I will endeavour to show, the EBacc, by its very nature, opposes.
Thirdly, a narrow curriculum will be a poorer one because a broad-based curriculum is one that, in a good school, will allow subjects to have conversations with each other. I like very much the developmental psychologist Howard Gardner’s description of the international baccalaureate—a more broad-based, balanced and outward-looking curriculum—as one which helps students,
“think critically, synthesize knowledge, reflect on their own thought processes and get their feet wet in interdisciplinary thinking”.
In this sense, an EBacc without the arts should be unthinkable; a core curriculum without the arts will not raise standards but lower them. Students being able to make connections between disparate subjects is not only part of the learning process; it will be that innovation that fires the future.
Finally, a rounded education treats the main areas of education as being of equal value. This is not just good for the pupil; it is good for society that in later life the scientist or technologist should have an equal respect for the artist or creative, and the artist the same respect for science. A broad-based education is not the enemy of specialisation but part of the same process—the T-shape. I do not know whether any of your Lordships have read the remarkable blog by 16 year-old Orli Vogt-Vincent in this week’s Guardian, which describes the prejudice she has had to face at her school, not just from fellow students but from teachers too, in deciding to choose dance as a main subject of study—shades of “Billy Elliot”.
But this kind of experience seems to be becoming increasingly common again, and unfortunately what the EBacc will do is institutionalise this prejudice further, and further polarise subject areas in schools which will not be a reflection of the reality outside. The artist Bob and Roberta Smith made an interesting contribution to last year’s Warwick Commission report when he said that CP Snow’s “two cultures” distinction of science and humanities—for which you can also read the arts—
“had been made irrelevant by … the power of digital technology”.
We have, for instance, a burgeoning video games industry which is dependent—as so much new enterprise is—on a number of different interactive disciplines. It happens to be crying out for fine and graphic artists, but the industry has to go abroad to obtain them. Nevertheless, the latest figures, released by the DCMS last week, show that the creative industries are now worth £84.1 billion, so we must have been doing something right somewhere —at least in the past. Because why then, even using the Government’s own arguments about education and work, is not the huge importance of the creative industries being reflected in a similar status for arts and art and design education in our schools?
Through changing the culture, the EBacc will have an effect throughout all the key stages and beyond. Why, for instance, would primary schools take seriously subjects that are considered inferior at a later stage? The National Society for Education in Art and Design, in a survey of more than 1,000 educators, the full results of which are to be presented at next week’s all-party art, design and craft education group meeting, indicates that in the last five years 53% of key stage 3 art and design teachers report a fall in levels of attainment at secondary transfer, whereas only 6% said that standards had increased.
At present, the EBacc subjects are taken up by just over a quarter of students. The Cultural Learning Alliance has shown that in the last five years take-up of GCSE arts and design subjects, including music, drama and design and technology, among other subjects, has already dropped by 14%. What, then, will be the outcome for a balanced education if the Government achieve their current target of 90%?
I repeat that the vast majority of secondary school leaders oppose the current EBacc as it stands. The National Association of Head Teachers, the NUT, the Creative Industries Federation, the Music Industries Association, the Design Council and the CBI—the list goes on and on. Hundreds of organisations and institutions have expressed concern over the omission of creative subjects from the EBacc as well as its inflexibility.
The EBacc is a flawed measure. It should either be radically reformed, or dropped entirely.
Baroness Morris of Yardley (Lab)
My Lords, I thank the noble Earl. Lord Clancarty, for securing this debate. It is very timely given the end of the consultation on the next phase of the English baccalaureate. I join him in inviting the Minister to take note of this debate as part of the responses to the consultation. I agree with everything that the noble Earl said and I do not want to repeat it. Having said that, I think I understand where the Government are coming from as well. That is my starting point.
I am not against maths, English, science, foreign languages, history or geography. I am not against action to promote their learning and to cherish what they offer to the nation. However, I am worried about the way that has been done and the situation in which we now find ourselves.
I remember that when I was first in the job that the Minister is now in, I learned a valuable lesson which sounds easy but escapes your mind. If you say that you have a priority, you are saying two things: first, that I have a priority and, secondly, that I give less priority to the other things. That has been the problem with this story about the English baccalaureate.
I am giving the Government the benefit of the doubt. I do not think they are against music, art, drama, psychology or religious education. I suspect that they access these subjects for their own children and those they care for, so I do not think they are against them. However, I think they have forgotten the point about priorities. When they say that these subjects are important, what is heard is that the other subjects are not important. We should know by now that the English school system will act on that message with a rigour that is unmatched anywhere else in the world. That, therefore, is the problem with picking up the consequences of something that, by itself, was not a bad thing to want.
So we have a problem. One of the problems now is that schools are spending too much time talking about the curriculum and assessment, and how they can fiddle their staffing and their curriculum to get more points through the English baccalaureate. I have sat in too many conversations in the last two to three months where time has been spent on the adjustments that will need to be made to the curriculum to get a higher level in the English baccalaureate. That time should have been spent on teaching, learning and getting better outcomes from students in the classroom. So there is a problem and there is a consequence. The noble Earl made that quite clear.
We are bound by the national curriculum to offer a broad and balanced curriculum. We do not have one. This English baccalaureate is not a broad and balanced curriculum and that, by law, is what we are meant to be achieving. When I tabled a summer debate on the literacy and numeracy strategy, I said, “There is nothing to stop schools doing art, drama and all those things”, and I suspect the Minister may say the same. However, the reality is that schools are not doing so and are losing the facilities needed. The teachers are not being recruited. The time is not being made available.
We have, therefore, two problems. We have people spending time responding to the English baccalaureate and also reality that they are taking teachers away. It is no good the Secretary of State quoting in the consultation King Solomon Academy or Whitmore High School. It is great—fantastic—that they do this and offer the arts as well. However, we cannot have a school system where the law is made up on the assumption that everyone will do the things that Ministers think they should be able to do. On that basis, we should have no need for a school improvement system.
It is not that we are against the subjects of which the Minister is in favour. My question to him is twofold. He has made two mistakes. He has assumed that it is best to pursue a rounded academic curriculum and that these subjects define that. If that is what he believes, he has to defend his belief against all the evidence that shows that it is not the case. Secondly, he has gone back on the most sensible move that, 18 months ago, his Government made towards the Progress 8 measurement. Why on earth has he done so, producing a document two or three months ago that introduces five new accountability measures, all of which involve the English baccalaureate?
Baroness Pinnock (LD)
I stand up with a bit of hesitation, because the previous two speakers have described with great eloquence all that is wrong with forcing the EBacc on whole years of learning in our secondary schools. I am pleased that we have the Question here today because it sparks off a wider consideration about the purpose and aims of education. Obviously, the answer is partly that it prepares young people for life as adults as well as for the world of work. Another element is that it develops individual talents and provides a sense of achievement and self-worth. The question I have asked myself is: what does the EBacc, which is to be imposed on 90% of our secondary-school pupils, contribute towards these aims?
By sheer chance, I chaired a seminar about education in London today where there were contributions from the world of business by a representative of the chambers of commerce, from a think tank, from academia and from a head teacher of an academy trust. Without exception, all agreed that the EBacc consisting of five subjects was not a problem but imposing the EBacc on 90% of school students certainly was. They all agreed that it was a retrograde step. The business leader said that what business wanted was soft skills in young people entering the world of work. He defined these as the ability to communicate, to collaborate, to co-operate in a team, to be critical and to work on projects—none of which he felt would be developed in young people through the EBacc diet. The head teacher was even more outspoken. He was the executive principal of an academy trust. I have asked him if I can quote him but I will not say where it is as I do not want to endanger his future. He said, “The EBacc is disastrous; it is not relevant to the modern world and not appropriate to modern learners.”
I am a school governor in my own town in West Yorkshire. When I discussed this with other governors and the head teacher there, they said they have a real moral dilemma. Do they follow what the Government are imposing on schools, giving a diet of subject matter which is indigestible to a good percentage of the children in the school, or do they try to meet the children’s educational needs? It is not just the EBacc which is narrow; the content of the subject curriculum is also narrow. So not only have we narrowed down what is taught in the broad sense with the five subjects, but we have narrowed down the content of that curriculum. Altogether, we are proposing a narrow diet for our young people when they face the world of work which is opening up. I beg the Minister to reconsider what he is offering.
Lord Freyberg (CB)
My Lords, I, too, thank the noble Earl, Lord Clancarty, for initiating this debate. He has made a strong case and, like other speakers today, I find it extremely difficult to understand why the Government are encouraging schools to adopt the EBacc with no cultural component, when all the evidence suggests that the withdrawal of creative subjects and the teacher training in these subjects will have a knock-on effect not just in the cultural sphere but across industry. This seems particularly unwise when our creative industries account for one in 12 jobs and have been the fastest growing sector in the UK economy, increasing by 15.8% since 2011 to 1.8 million jobs and contributing some £84 billion to the UK economy.
Successive Governments have invested heavily in our arts education and this has been the foundation of our current success, with students from around the world coming here to train and absorb our creative know-how. Despite that, we have severe skill shortages. In a recent survey of members by the Creative Industries Federation, education and the skills pipeline was the overriding issue of concern. The migration tier 2 shortage occupation list, which permits the sponsorship of migrants in recognition of severe skills shortages, highlights that our country is already crying out for a combination of creative—in particular, design—and technical skills.
Since the introduction in 2010 of the EBacc, where the emphasis has been on core subjects, there has been a rapid erosion of vocational subjects such as design and technology, and many schools are already cutting back on creative and arts options, which the EBacc measure does not include. No one disputes the value of these subjects; indeed, in different combinations they are essential for the prosperity of the creative sector. However, this focus is contributing to the sidelining of creative subjects, as highlighted by an early research report by Ipsos MORI for the Department for Education in 2012. It found that 27% of schools had cut or withdrawn courses for the 2012-13 academic year, as a direct result of its implementation. Indeed, over the past five years there has been a 14% decline in the number of arts GCSE entries, from 720,438 in 2010 to 618,440 in 2015. Those figures do not even include BTEC qualifications, where arts and design entries have fallen by approximately 20,000 since 2010. On top of that, the number of hours for which the arts are taught in secondary schools has fallen by 10%, while the number of art teachers fell by 11% in the years 2010-14.
In effect, the introduction of the EBacc as a headline attainment measure sends a worrying message that the creative subjects are not a central and essential part of schooling. That is particularly troubling when a recent report, commissioned by the Creative Industries Federation, highlighted that countries such as China, South Korea and Brazil have learned from our success and are investing heavily in their creative education because they, too, can see the economic value of culture.
Another concern is the reduction in career pathways. The Russell Group of universities list of facilitating subjects was used to support the introduction of the EBacc, but it is only one indicator of what is useful for students to study. Creative subjects require different combinations of subjects if they are to continue to produce students for the creative industries. By focusing on a group of subjects that benefit one group of students you may diminish the life chances of another, who are less likely to perform well on these measures.
Evidence has shown that many of the courses that need students to study art and design also have high levels of students with special needs, such as dyslexia. These students epitomise the dangers of what might happen when EBacc becomes the headline assessment measurement for schools and students have to study seven of eight EBacc GCSEs. The fear is that they will struggle to perform in the subjects that the Ebacc requires them to study. At this point, students are more likely to drop the extra arts subjects to concentrate on the required curriculum. I believe that it is irresponsible to introduce measures that are likely to limit achievement for a significant number of students at a time when there is such a demand for their skills.
The Lord Bishop of Norwich
My Lords, like others, I am very grateful to the noble Earl for securing this short debate. The importance of this subject is out of all proportion to the length of our discussion.
I agree with so much that has been said but I shall concentrate on two specific issues. The first, noble Lords will not be surprised to hear, concerns the omission of religious education from the English baccalaureate. I realise that it is not the only omission—I would rather like art, music and much else to be there, too—but I believe that it is a serious mistake that is going to be deleterious to a rounded education.
I believe that the previous Secretary of State, Michael Gove, thought it unnecessary to include religious education since it is a statutory subject. That is true, but it is not enough. During my secondary education 50 years ago—a frighteningly long time—religious education was statutory, although I think it was called “religious knowledge” then. That meant one lesson a week by an uninterested teacher for a form of boys who looked at the 40 minutes as time off or a time to play up. It was good life experience for a future bishop to experience such religious indifference but it was not a rounded education—although it might have been argued that it was quite a good introduction to juvenile sin, not least my own.
The impression given was that religion was a fading phenomenon that we did not really need to bother about in preparation for life. How wrong that has proved to be, for bad reasons as well as good; just as there can be bad politics, there can be bad religion, and there is a lot of it in the world. We need much greater religious literacy to understand the world in which we live and to understand the difference between good and bad religion—for instance, there is a growing danger that we regard anyone who is deeply religious as an extremist. Far more people around the world define their identity through their religion than we seem to understand in a country like ours that has a largely secular mindset, yet the huge rise in the number of students taking GCSE and A-level religious studies in recent years—it has been one of the fastest-growing subjects—indicates the interest generated in the subject among young people. It has been a subject of equal standing with others in a way that it will not be in future, and I think that the decision to exclude it will inevitably be harmful. That is what nearly every religious education teacher that I speak to thinks. So I ask the Minister, whose fairness and passion for young people I admire, either to assure me of a reconsideration or to suggest ways in which statutory religious study might avoid the marginalisation that I experienced at school.
My second point is related not to the baccalaureate at all but to international school links and their significance for a rounded education. I am still a governor of the first academy to be set up in Norfolk, where I was originally a co-sponsor. Last year I was one of a group of governors who met the Ofsted inspectors—happily, the academy got a good outcome—and we were asked the ritual question about “promoting British values”. I commented that what we were seeking to nurture was actually future citizens who had an international outlook. We have very strong links with schools in the Netherlands and the Far East—the latter more able to come here than we are able to get there—but it is quicker to get to Holland from Norwich than it is to London, especially given our train service.
We also try to take as many students as possible on overseas visits. Many who come from the estate on which the school is based and the surrounding area experience very little travel of any sort. In this setting, experience of other cultures is essential for a rounded education. Finding the financial resources is a challenge but it can be done, and I would be grateful to know from the Minister what advice, if any, the department gives schools on international links, and whether Ofsted normally makes any inquiries about such things. The inspectors I met did not seem to be familiar with investigating such things, but I believe that a rounded education needs the widest possible context.
Lord Young of Norwood Green (Lab)
My Lords, I come to this debate with a general interest in education. I am a school governor at my local primary school, just so that I can occasionally get up and contribute to an education debate and feel that I actually know what is going on in a primary school. I, too, congratulate the noble Earl, not only on giving us the opportunity to debate the issue but on his introduction to it.
I find myself a bit torn. I was listening carefully to the noble Earl when he suggested that we get rid of league tables. I do not think I would go as far as that, mainly because it is an abiding concern of mine that by the time pupils reach level 6, every one of them should be reasonably literate and numerate. If they are not, the cost of trying to achieve that in secondary education is almost exponential by comparison. I do not know what other way that we as governors have of ensuring that we make progress, but that is a whole other debate.
I am concerned about the EBacc because I tend to agree with those who have said that it is restrictive, does not pay enough attention to the creative areas and somehow seems to give a signal that vocational is not quite as good. That might not be the intention but we have to watch for unintended consequences. I have to be honest: I remember us, when we were in Government, basically putting our finger in the air and suggesting that 50% of young people ought to go to university. In some ways I agree with that—it is good for social mobility and aspiration—but speaking to young people showed me that it also sent another signal: if you were not going to university, the vocational route was second-class. I do not think that is what the Government want to signal. It is a real concern of mine that in an era when the Government are, quite rightly, setting themselves a very ambitious target of 3 million apprenticeships do we really want to signal that the vocational route is somehow not quite as good? I do not think that we do. I do not think that would help us in the current circumstances.
I am a bit puzzled about this approach that it has to be 90% and this core curriculum when every other signal that the Government give is, if not quite “let a thousand flowers bloom”, that they are in favour of academies and free schools. They are saying they want that kind of flexibility and want to see new ideas in education emerging. It seems to me that what they are proposing does not quite chime with that.
Some of my colleagues do not necessarily agree with free schools. I am not particularly worried about them as long as they meet decent standards. I think there is no one true path to education, so I am interested in variety as long as it is accompanied by quality. There is a need for a core curriculum, but I smiled a bit when the noble Baroness, Lady Pinnock, mentioned the dreaded soft skills. I do not know why we use this phrase. They are not soft; they are essential skills. However, while employers ask for them, they also need employees to be literate and numerate, so there are other ways of going about it. The consultation process has not quite ended yet. It will be fascinating to see what emerges from it and whether the Government are prepared to listen and to recognise that they have not quite got the formula right.
Lord Aberdare (CB)
If the noble Baroness, Lady Pinnock, had the problem that some of her best points had already been made, mine is even worse. While I, too, congratulate the noble Earl on obtaining this debate, I am sorry that he should have had to do so. When the EBacc was first proposed in 2010, there was widespread concern over its omission of arts and cultural subjects. In 2012, as we have heard, the Bacc for the Future campaign was launched to argue for the inclusion of a sixth pillar of creative subjects, including music. As we have heard, most of the EBacc proposals were subsequently dropped in favour of new progress 8 and attainment 8 measures which allow room for creative subjects to be included and were rightly described by Michael Gove as more balanced and meaningful.
Therefore, it was disappointing that last year the Government changed tack once more and announced their intention that the EBacc should be made virtually compulsory for all pupils and be used as the basis of two of the five headline key stage 4 performance measures for schools. Bacc for the Future is indeed back again. With more than 170 supporting organisations, it has had to gear up all over again.
The Government’s motives are excellent. They claim that a compulsory EBacc will enhance the prospects of pupils, particularly disadvantaged pupils, by ensuring that they receive a core academic curriculum that allows them to retain options in subsequent education and in the employment market. I heartily endorse this aim, but I am concerned that the proposals will not work for pupils or for the wider economy.
They will not work for pupils because the curriculum is too limited. The message, although unsupported by the evidence, seems to be that, although all pupils should have opportunities to study the arts and creative subjects, they are less important, less rigorous or less valuable than the EBacc subjects—as the noble Baroness, Lady Morris, said—whatever the particular abilities, interests and skills of individual pupils. As a result, many may be left with much-reduced choice and with their potential talents largely untapped.
The Government claim that the EBacc leaves room for other subjects, but it requires at least seven GCSEs against the average number taken of just over eight, and fewer than that taken by low attainment pupils. Other subjects are likely to be frozen out for more disadvantaged pupils, and that will widen the gap between their schools and the highest performing schools which give proper focus to the arts and creative subjects. I share the view of the noble Lord, Lord Young, that, if anything, schools seem to be too focused on an academic rather than all-round education. For example, hardly any of the many talented apprentices I have met were steered into the apprenticeship route by their schools.
Nor do I think the current proposals will work for the economy by better meeting the UK’s skills needs. Employers increasingly say they want and cannot get enough of skills such as creativity, innovation, entrepreneurship, teamwork, communication, self-discipline, problem solving and the ability to cope with uncertainty. To quote the headmaster of Rugby School:
“We know that, in the world of work, creative vision, entrepreneurial skills and artistic flair are key transformational advantages that derive from studying the arts”.
I am also struck by the lack of focus on digital skills in the EBacc proposals. The report published last February by the Digital Skills Committee, on which I served, argues that digital literacy should be taught as a core subject alongside numeracy and literacy and be embedded across all subjects and throughout the curriculum, but it seems to appear in the EBacc only in the guise of computing as an optional science subject.
I applaud the Minister’s clear commitment to providing a balanced and rounded education for all pupils, but I urge him to listen to the concerns expressed by the Arts Council, Bacc for the Future, the CBI, the Design Council, Edge and numerous others—I could, but will not, go on through the alphabet—and to think again about how best to achieve his laudable aims, both for pupils individually and skills in general. To meet the evolving needs and challenges of the future we need an education system that not only sets high standards and expectations but does so across a broad enough range of subjects to allow all pupils to develop their unique talents, including in the arts and creative subjects, not least music.
Lord Berkeley of Knighton (CB)
My Lords, this is a huge issue for the arts world. Sir Simon Rattle told the classical music APPG the other day that he was appalled that music was not a core part of the EBacc. It would be unthinkable, he said, for a country like Germany not to have the arts—and music in particular—as a central subject. Anticipating the Minister’s response let me quickly say that the music hubs have done well and I warmly congratulate the Government on their success, even if it is sometimes sporadic in coverage.
However, that is not enough. It is the profound question—as we have heard—of educational emphasis, priority and national identity that we are concerned about. In Germany, Sir Simon continued, high-ranking politicians are frequently to be seen at concerts, operas and arts events. There is a central thrust and hunger for the arts, not just because of their economic success but because of the role they play in social cohesion. In this country the success of the arts is all the more remarkable for the comparative backdrop of philistinism they have emerged from. Where courts in 18th-century Europe felt the need and desire to employ and commission great musicians, the landed gentry here were more interested in hunting and fishing—I have to put some of my ancestors into this bracket, even if they did, through their goings on at Berkeley Castle with Edward II, inspire Shakespeare and Marlowe to some of their most disturbing lines. The arts have had to fight their way up the ladder.
I am glad to say that we have moved on, but not far enough as this debate articulates because it all begins with education. Ministers here rightly bask in the warm financial glow generated by the creative industries but we need to look to the next generation and the musicians and artists who will refuel and sustain that success. I cannot put it better than Dr Chris Collins and Professor Rachel Cowgill from the National Association for Music in Higher Education who wrote in the Guardian on 2 February—there have been articles in lots of other papers too—that,
“the Ebacc attainment measure in England will reduce the availability of creative and artistic subjects in schools. The adoption of a similar performance measure in sixth-form league tables … has led to an 18% reduction in the number of students taking A-level music. Since creative arts subjects like music tend to be more expensive to deliver in schools, they are all the more susceptible to being axed when times are hard and budgets tight. This slump has made A-level music unviable in many schools and colleges, further perpetuating the decline and resulting in regional deserts where the subject is completely unavailable. If, as we fear, the forced adoption of the Ebacc results in a similar decline for GCSE music, the subject will be decimated in English schools”.
I would add that we are not simply talking about classical music. Think of all those musicians who play in theatres, on backing tracks, on film scores—you name it. Just think too of the effect of access to the arts, both visual and musical, on popular music. John Lennon, David Bowie, Elton John: these are just a few of the names that have propelled this country to the forefront of the world stage and boosted our economy at the same time. Are their successors getting the same opportunities? I rather fear not but I hope the Minister will provide a pleasant surprise.
Lord Storey
My Lords, Britain's got talent. We have a strong creative and cultural heritage. Our worldwide reputation for creative performers, artists, filmmakers, designers, video-game makers and writers is formidable. Tourists flock to our cultural and creative landmarks to experience our theatre, music and heritage. They admire the work of our designers, filmmakers, musicians and performers. Some of Britain’s leading exports are our creative industries, talent and experiences. As George Osborne said:
“Britain’s not just brilliant at science. It’s brilliant at culture too”.
Even Ed Vaizey, the Minister for Culture, said:
“The creative industries are one of the UK’s greatest success stories … Growing at almost twice the rate of the wider economy and worth a staggering £84 billion a year”.
Why would we do anything to put this in jeopardy? The EBacc in its current form will have unintended consequences for our creative industries.
No one disputes the value of the subjects included within the EBacc. But the measure itself, requiring achievement in only a narrow range of academic subjects, will not meet the ambitions and aspirations of many learners, let alone the skills required for a future workforce—the skills that employers require. With the EBacc there is little room for students to study creative subjects. Why do I say that? Because the EBacc requires students to take a minimum of seven prescribed subjects which do not include any arts or creative subjects. “Ah!” shout Ministers, “There is nothing to stop pupils studying further subjects”. But we know from official figures that the average number of GCSEs taken by a secondary school pupil is eight. If the EBacc becomes a reality, there would be little room left for pupils to study creative industry related subjects—music, art, design, technology, drama, and many other subjects would be squeezed out of schools altogether. What then for our next generation of musicians, technicians, designers, artists, actors and the £84 billion industry that Ed Vaizey talked about?
We are already seeing this happen as schools facing budget cuts ditch non-EBacc subjects or are unable to offer the full range of creative subjects. Some even believe that because a subject is not part of the EBacc offer it has not got the same importance and status. Between November 2011 and November 2014, the number of teachers teaching creative subjects declined by 13.1%. The number of hours being taught in creative subjects in secondary schools is also in decline. It becomes a vicious circle, as fewer students being taught or taking creative subjects leads to a decline in the number of teachers being trained, which leads to a reduction in the number of available teachers of creative subjects. As the NAHT said in its submission to the consultation on the EBacc:
“The decline in available curriculum time for optional subjects and the exclusion of creative and cultural subjects from the EBacc will lead to a significant reduction in pupils taking these subjects”.
It is little wonder that universities and businesses, including the CBI, have asked the Government to think again on the exclusion of arts subjects from the EBacc. Perhaps the Minister in his winding-up speech could explain why Michael Gove’s EBacc Progress 8 measure needs to be changed. It offered a better balance for pupils. It maintained the importance of English and maths, and ensured that pupils took three EBacc subjects to give a clear academic core. It allowed a basket of further EBacc subjects of high-quality, non- EBacc or vocational-subject courses. This enables schools to maintain a broad curriculum, offering pupils and parents to choose what is best for their children. Can the Minister also say, with the consultation on the EBacc having been concluded on 29 January, what the means are by which the responses are accessed, evaluated and responded to?
Our competitors would give their right arm to have the success of our creative sector. For example, in China national and regional governments are pouring resources into providing educational support, market activity and financial incentives for the creative sector. Let us not throw this success away. I thank the noble Earl for organising this debate. It is really important.
Lord Watson of Invergowrie (Lab)
My Lords, I, too, thank the noble Earl, Lord Clancarty, for promoting the debate and for the persuasive way in which he introduced it.
Despite the views of most education professionals, the Government are determined to press ahead with their aim of having 90% of GCSE students take the EBacc by 2020. We understand that the driving force in this is the Minister of State for Schools, Mr Gibb, who seems to be in thrall to E.D. Hirsch and his theory of the core knowledge system, which above all is characterised by one word: inflexibility.
Labour is not opposed to the EBacc per se. We recognise its value and it is right that every student should have the opportunity to take all five EBacc subjects if they want to, but we do not believe that it should be compulsory. Forcing it on 90% of GCSE students is sensible for neither them nor the long-term needs of the economy. My noble friend Lady Morris said that this is about priorities. By imposing the full EBacc the Government are claiming that foreign languages, and history or geography, are inherently, and in all circumstances, of more value than non-EBacc subjects. If the Minister can point to the evidence to support that theory, I and many others with an interest in education would be eager to see it. It is certainly important to ensure that disadvantaged children are not left with a second-class education. EBacc subjects have a clear role to play in that. Every talented child should study as many of the core subjects as possible, and every encouragement should be given to them by schools and teachers.
We can all appreciate the essential nature of English, maths and science, but for modern and ancient languages, much less so. On history or geography, I must ask, why? The Minister may be interested to know that someone applying to study geography at Oxford University does not require an A-level in geography.
There are other things that should be an equal part of any student’s education. It can surely be argued that the arts and technology are just as important as modern languages, not least because, as the noble Earl, Lord Clancarty, said, the creative industries are now such an important feature of our economy. We should not be sending a message to schools and young people that creative and technical subjects are not valued. A great deal has been written about the need to close the divide between academic and vocational education, but with the EBacc the Government are unequivocally promoting the superiority of the academic pathway.
There is also likely to be a major teacher-supply problem, not least in modern languages. Time prevents me from going into detail on that crucial issue, but the National Association of Head Teachers’ response to question 4 of the Government’s current consultation set it out with great and persuasive clarity.
Only 39% of students took the EBacc in the past academic year. Yet already there has been a significant effect on other subjects since 2010—most notably, on what I argue is the key subject of design and technology, for which there has been a 29% drop in take-up. The curriculum should not be driven by the needs of the minority who are going to the most selective universities. Every student should have elements of the EBacc subjects in their curriculum. Equally, they should have artistic and practical elements. Many of the essential work-related skills that the CBI says are in short supply may well be better developed in artistic and practical contexts.
Last week in the debate on adult educational skills, the noble Baroness, Lady Evans, stressed the Government’s promotion of the apprenticeship route as a valid alternative to university. The Government now allow FE colleges to recruit 14 to 16 year-olds directly, and are encouraging still more university technical colleges and studio schools, which will almost certainly not offer the EBacc. To say that these initiatives leave the Government’s position a little confused would be an understatement.
The EBacc adopts too narrow a definition of rigorous academic study. The progress 8 measure, as various noble Lords have said, offers a better balance. I urge the Minister to give more thought to the effects of the proposals before it is too late and today’s children pay the price.
The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, I thank the noble Earl, Lord Clancarty, for securing this important debate and I am grateful to noble Lords for their contributions. I welcome the chance to explain our thinking behind the EBacc and to share what we are doing to ensure that all pupils, regardless of their background, have the right to a balanced and rounded education that opens doors to their future, prepares them for realising their potential in adult life, whatever their ambitions may be, and, as the noble Earl said, responds fully to a child’s natural curiosity, which is so important.
The Government expect that all pupils should have the opportunity to study a range of subjects at primary and secondary school, including the creative arts. Art and design and music are compulsory subjects within the national curriculum for five to 14 year-olds. The national curriculum also sets the expectation that pupils will have opportunities to study drama as part of the English curriculum, and dance as part of the PE curriculum.
Every child deserves to leave school fully literate and numerate, with an understanding of the history, geography and science of the world they inhabit and a grasp of a language other than their own. These elements form the core of a rounded academic education. I have to say, I found quite a bit of today’s debate extremely depressing—it seemed to infer that we are moving away from some kind of golden age of education in this country. We must realise the appallingly low base that we started from in 2010. As the noble Baroness, Lady Morris, said—I have a great deal of respect for her—we all know that schools respond to incentives. That is why we have to look so closely at the incentives that we put in the school system at this point in time.
In 2010, many pupils, often those from the most disadvantaged backgrounds, were being denied a basic education in the core academic subjects. Only 31% of pupils took a GCSE in history, only 26% took a GCSE in geography and only 43% took a foreign language GCSE. These figures are shocking. Between 1997 and 2010, the number of pupils taking the core suite of academic subjects fell from 50% to 22%, as vocational subjects were rated as equivalent to GCSE. I have mentioned some of these subjects—cake decorating, hazard control and fish husbandry—in the past. Some of them were rated as equivalent to four GCSEs. When you take out grammar schools, which account for 5% of education in this country, it means that, in 2010, fewer than one in five pupils educated in comprehensive schools were receiving a core, basic education that one would expect in any country—and certainly in any independent school.
The noble Earl, Lord Clancarty, talked about social justice. To get social justice you need social mobility; to get social mobility you need social immobility—you need to give pupils from a disadvantaged background the core suite of cultural knowledge they need to compete with pupils from a more advantaged background. This has been acknowledged across the board, including by Diane Abbott and in studies by Edinburgh University.
The Government had to act and, in 2010, the EBacc was announced as a measure in the school performance tables. The EBacc recognises the success of young people who enter and achieve good GCSEs across core academic subjects. The success of that strategy is clear: the proportion of pupils entering the EBacc has risen nationwide from 22% in 2011 to 39% last year. We have made considerable progress in our school system over the past five years: we now have 1.4 million more pupils educated in good and outstanding schools; last year we had 120,000 more pupils than in 2012 achieving the core phonics ability in reading; and we have many more pupils leaving primary school with the literacy and numeracy skills they need.
Pupils who are eligible for free school meals are half as likely to be entered for the EBacc as those who are not. It cannot be right that where a child goes to school or the wealth of their parents should determine what they study. So, last year, the Government announced that, in time, 90% of pupils would be entered for the EBacc. Proposals to achieve this goal are set out in the public consultation, referred to by noble Lords, which closed at the end of January and to which we will respond in the spring.
As the noble Earl, Lord Clancarty, mentioned in his speech, as did many other noble Lords, there are concerns that this ambition will damage the creative arts. However, on average, pupils in state-funded schools enter nine GCSEs and equivalent qualifications, rising to more than 10 for more able pupils. This means that there still remains room for other GCSE choices, and Progress 8 will be the key accountability measure going forward. As noble Lords know, this will be the key deciding accountability measure in deciding whether a school is coasting. I certainly do not agree with the noble Lord, Lord Young of Norwood Green, that we should abolish accountability measures—all the international evidence is that autonomy and accountability is the right balance.
Lord Young of Norwood Green
I did not say that we should abolish them but that I was in favour of them.
Lord Nash
I am sorry; I agree entirely with the noble Lord—we should not. One only has to look at Wales to see what abandoning accountability does for an education system.
I reject suggestions that music and arts are not core subjects. We believe strongly that every child should experience a high-quality arts and cultural education throughout their time at school, which is why at key stage 4 all pupils at maintained schools have an entitlement to study an arts subject if they wish. Our commitment to rigorous arts qualifications is a reflection of the significant and ever-increasing contribution the creative industries make to our country, as my noble friend Lord Freyberg mentioned, bringing in £84 billion a year and outpacing growth and job creation in many other industries. EBacc qualifications help support this growing creative sector, and of course we have introduced computer science.
The noble Lord, Lord Berkeley, mentioned music education hubs. The network of music hubs provides valuable extra-curricular activities, after school and at weekends. These hubs also play an important role in supporting music within the school curriculum. One of their many roles is to ensure that every child has the opportunity to learn to play a musical instrument through whole-class ensemble teaching.
The right reverend Prelate the Bishop of Norwich talked about religious education, which of course counts towards Progress 8. In 2011, 32% of pupils in state-funded schools took a GCSE in RE; the figure is now 46%. I entirely agree with the right reverend Prelate that we need to increase our pupils’ religious literacy, which is so important, particularly in the modern world we live in. I know that the Church of England does a great deal of work on this; I attended an inspiring event recently called Living Well Together, and I know that it has a great deal of plans in that regard. As regards international links, quite a lot of work is done by the British Council on this, and I would be very happy to discuss this further with the right reverend Prelate.
I found some of the things the noble Baroness, Lady Pinnock, said, particularly depressing. A head teacher said:
“‘The EBacc is not appropriate to the modern world. It is not appropriate to modern learning.’ Oh dear. It sounds like the sort of person who would say that you don’t need knowledge because you can look it up on the internet”.
That is an exact quote from another head—I know it is not from the noble Baroness.
Lord Nash
It was not you, but that was what someone said. Modern cognitive and neuroscience makes clear that you need knowledge to develop skills. I know that the noble Lord, Lord Watson, wants evidence. He mentioned ED Hirsch; if he would care to look at the effect of the Core Knowledge curriculum on the “Massachusetts miracle” in schools there, he would see what an effect such a curriculum can have, particularly on disadvantaged pupils.
Some students at key stage 4 may wish to start an element of technical or vocational study alongside the EBacc. We have of course reformed vocational education. Following the review from the noble Baroness, Lady Wolf, which we instigated immediately after being elected in 2010, we abolished 96% of vocational qualifications so that we now offer high-quality and valuable qualifications, which employers value. That is also why we also focused on dramatically increasing the quality of apprenticeships.
I hope the noble Lords will recognise that enabling more pupils to leave school having studied a basic academic core is a commitment of the Government—and why we are doing this—which does not preclude the study of additional subjects, particularly creative ones. I am quite sure we can have 90% of pupils taking EBacc; I have absolutely no doubt. I know the noble Lord, Lord Watson, does not like me referring to anecdotes, but when we first arrived at Pimlico Academy in 2008 I remember asking the teachers why so many pupils were doing BTECs. Although the answers came couched in a lot of very politically correct words, they basically said that the pupils could not manage “study” subjects. Well, the same kind of pupils are now managing big time and getting into universities and on career paths which were not previously available to them. From my own experience, children never disappoint if you give them enough challenge and satisfy their curiosity. It may be that when we have 90% of pupils taking the EBacc that we can look again at the incentives that we place in the system and we will, of course, respond to the consultation, but I am satisfied that broadly, for the moment, we have our incentives right and I thank all noble Lords for participating in today’s debate.
Drugs
(8 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Patel of Bradford
To ask Her Majesty’s Government what is their response to the Office for National Statistics’ report on deaths related to drug poisoning in England and Wales in 2014.
Lord Patel of Bradford (Lab)
My Lords, I am grateful to have the opportunity to raise the important issue of deaths related to drug poisoning. I thank the noble Baroness, Lady Walmsley, and my noble friend Lord Hunt for speaking on this today. The Office for National Statistics report on deaths related to drug poisoning highlights a number of concerns which I have been raising in questions and debates in this House for some time. I cannot begin to cover all these issues today. Suffice it to say that I have grave concerns that the Government’s drugs policy may have contributed to the increase in drug-related deaths in England. I am aware that this is a serious assertion and I hope the Minister will take my concerns with the sincerity with which they are meant.
Heroin is involved in more fatal overdoses than any other illegal drug. The most common form of treatment for dependence on heroin is opioid substitution therapy. Under this treatment, the street heroin to which a person has become addicted is replaced by a pharmaceutical substitute, usually methadone. The evidence is clear that this treatment can halve a patient’s risk of death for as long as they remain in treatment but, because relapse is common, the patient’s risk of death increases significantly when treatment ends. So the longer a patient remains in treatment, the better their chances of staying alive. However, rather than being evidence-based, I strongly suggest that the 2010 drug strategy reflects the Government’s concerns that there were too many people on methadone for too long—a point vigorously reinforced by the Work and Pensions Secretary, lain Duncan Smith, who said that he felt too many people were “parked on methadone”. Therefore the Government introduced a payment-by-results system to incentivise service providers to encourage drug users to more quickly complete treatment and achieve abstinence.
What is wrong, you may ask, with encouraging more drug users to become abstinent more quickly? Surely that is a good thing. However, UK and international evidence clearly shows that there are major risks in pressuring drug users to withdraw from treatment. The Government’s own Advisory Council on the Misuse of Drugs stated that there was strong evidence that time-limiting opioid substitution therapy would increase the rate of overdose death. Of course I understand that the Government’s decision-making must include public opinion and there is a fear of being seen as soft on drugs—there has been from every Government who have been in power. However, I know from working with drug users myself for many years that the first treatment a drug user receives must be about stabilising the chaos in their lives, and abstinence should be about providing the right range of treatment options at the right time. The evidence shows that heroin addiction is a long-lived condition, averaging around 10 years, so drug users must be ready to achieve abstinence, because if they relapse after they have left treatment they are at a high risk of fatal overdose, since their tolerance to heroin is obviously greatly reduced.
What has been the result of the Government’s approach? On a positive note, between 2011 and 2012 an estimated 8.9% of adults used an illegal drug. This is the lowest level of drug use since figures were first collected in 1996. The number of people who completed drug treatment, free of dependence, is at record levels. However, perversely, in 2014 there were 3,346 drug-poisoning deaths in England and Wales, the highest number since records began in 1993. Deaths involving heroin increased by almost two-thirds between 2012 and 2014, from 579 to 952.
More worryingly, Public Health England’s own network—the National Intelligence Network on the health harms associated with drug use, which exchanges intelligence on blood-borne viruses, new and emerging trends in drug use and drug-related deaths—reported in December 2015 that the number of drug-related deaths is increasing, and that the rate of increase is probably accelerating. Amphetamine and cocaine deaths have also been increasing in recent years. However, the network’s analysis showed that treatment is protective against drug-misuse deaths.
I have cited a number of facts and figures, but let me put a human face on this and highlight some wider impacts. A number of local areas have conducted their own drug-related death reviews. Some have found an increase in female drug-related deaths, some individuals are parents, some people were released from prison and needed further support and treatment. In fact, in 2010 I produced a national report reviewing drug treatment in prisons and highlighted the importance of ensuring good continuing care for vulnerable people leaving prison to prevent relapses and drug-related deaths.
More people had complex health issues involving repeated presentations to hospital wards and A&E departments. Some have mental problems requiring treatment and repeated admission to mental health wards. They have a dual diagnosis of substance misuse and mental ill health. Only last week, as the Minister will know, we heard that the number of deaths annually among mental health patients in England rose by 21% over the past three years, from 1,412 to 1,713. The number of those killing themselves or trying to do so has also increased, by 26%, from 595 in 2012-13 to 751 in 2014-15. I wonder how many of those people had a dual diagnosis.
In light of this, will the Minister agree to see if an investigation can be set up to look into the causes of the drug-related deaths and the mental health deaths, and to see how many had a dual diagnosis? I understand that an update of the UK clinical guidelines on drug misuse and dependence is expected this year. In fact, I thought it was going to be published by February. These are essential guidelines for all clinicians who provide pharmacological interventions for drug misusers as part of their drug-treatment programme. This is a positive move, but I strongly suggest that it is also time that the Government carried out not just an annual review but, more importantly, a full impact assessment of the current drug strategy. Will the Minister therefore agree to ask the relevant government department that a risk and impact assessment of the current drug strategies be carried out, ensuring that an evidence-based approach be developed that tackles the failures and weaknesses of the current strategy, including, obviously, reducing drug-related deaths; training, employment and housing for drug users; integrating prison and community services; and, as I have already mentioned, the important issue of provision of dual diagnosis?
Finally, we know that there is a major funding issue within the NHS, and this is having an impact on services that work for these vulnerable people. Drug and alcohol treatment are no longer part of the protected NHS spend, but will have to compete for resources in the much harsher local government public health environment, which is likely to result in a reduction in services. In fact, I have seen a reduction in services in many environments already.
As for mental health, suicides among people in touch with crisis resolution home treatment teams, which are there to support people in crisis to stay in their own homes rather than being admitted to hospital, have increased significantly. It has been reported that these teams have lost their funding and have been disbanded or merged into community teams. So their specialist function has been lost, at a time of increasing demand. We also know that the number of specialist mental health nurses has fallen by more than 10% in the past five years.
In conclusion, I ask the Minister to say in his reply what steps are being taken to tackle the lack of funding for drug misuse and mental health services, which deal with some of the most vulnerable people in our communities, particularly those with a dual diagnosis of drug misuse and mental health problems. Because I have the time, I shall also make one other point. I understood that the evaluation of the payment-by-results pilot studies was to be published either last year or early this year. Can the Minister update me on when publication will happen? I look forward to hearing from other noble Lords, and to the Minister’s response.
Baroness Walmsley (LD)
My Lords, I thank the noble Lord, Lord Patel of Bradford, for raising this important issue. The increase in the number of deaths from drugs poisoning is a matter of great concern, since every single death is an indication of failure—failure of individual services and failure of the system of health and care to look after that patient. I refer to “the patient” because my party has always believed that individual drug abuse should be regarded as a health issue, and is not always a police issue. The pushers and dealers, however, are a very different matter.
As has been said, although some are suicides, most of these deaths are accidental, caused by lack of knowledge of the strength of the drugs that people are taking, or someone’s lack of understanding of their own body’s ability to process the chemicals. I will return to that point later. Accidental deaths also occur when a person is not in full possession of his or her faculties and has a fatal accident. I have read the various reports that have tried to analyse the statistics, and that is clearly a very complicated and difficult task, because in many cases there are several causal factors and they are hard to untangle. Few of those who die from drug use have one single simple problem. About one-third of patients abuse alcohol as well as banned or prescription drugs, and many have mental health problems. There is clearly interaction between the various issues.
A recent report called “Solutions from the Frontline” by MEAM—Making Every Adult Matter, an alliance of mental health charities chaired by my noble friend Lady Tyler of Enfield—calculated that there are 58,000 people who face homelessness, substance abuse, mental health problems and offending behaviour, distributed all over Britain. Of course, not all of them are at risk of accidental death because of their drug problems, but clearly their risk rises because of their multiplicity of needs and the great difficulty that services find in reaching and helping them. The problems get worse because people experiencing multiple needs are also likely to live in poverty and experience stigma, discrimination, isolation and loneliness—and, of course, loneliness is a great mental health and suicide risk. Although the ONS report indicates a large protective factor when people are in treatment, which is encouraging to know, those services are suffering, as we have heard from the noble Lord, Lord Patel of Bradford.
I shall concentrate my remarks on dual diagnosis, and on offenders and ex-offenders. According to MEAM, people experiencing multiple needs often have ineffective contact with services, as in most cases services are designed to deal with one problem at a time and to support people with single severe conditions. This can mean that people with multiple needs are more likely to access emergency, rather than planned, services, such as going to accident and emergency rather than their local GP. Accessing services in this way is costly as well as risky: estimates suggest that costs for the 58,000 individuals nationally are between £1.1 billion and £2.1 billion per year. So it is absolutely vital that people who are registered as being addicted to drugs, especially the depressive opiates such as heroin, have their mental health needs assessed and addressed. This is not always happening, partly because of cuts and partly because of shortages of staff with the right experience. Many patients claim that mental health crisis services are not there for them and many have to wait far too long for routine therapies. I do not underestimate the difficulty of dealing with these patients but we must make more effort to do so, for their own sake as well as for the sake of the NHS budget.
The recommendations of the MEAM report include asking the Government to ensure that funding structures prioritise recovery and rehabilitation and allow local areas to develop a flexible response. As part of this, they should consider a new national focus on multiple needs. Locally, commissioners should be accountable for ensuring that local areas have joined-up services and identify where people with multiple needs could fall through the gaps. At the front line, services should involve staff and people with multiple needs working together in designing programmes and the environments where they are to be delivered.
As for drug-using offenders, of course there are a lot of treatment programmes in prison although we know that security in many prisons is poor and they say you can access any drug you like in most prisons. It should, of course, be easier to help addicts when you have them incarcerated in prison than it is when they are part of the general population, and a lot of good work is done. However, I am not convinced that the underlying mental health problems are always addressed in the same way. It is difficult for a lay person like me to understand whether it is the mental health problem that brings people to take drugs in the first place or the drugs themselves that cause mental health problems. I understand it can be either way round, but what matters is to accept that dual diagnosis is not always properly addressed; it is very risky, and we need to do something about it.
The other issue that I would like to raise is continuity of services after release. There is supposed to be a seamless transition into community services but too often that does not happen, perhaps because the services are not there, the person drops out, or the professionals concerned are too busy to work with each other and do not realise how important and effective that is. A very senior psychiatrist told me only yesterday that, if someone gets clean while in prison and then comes out and starts using again, they are at greater risk of dying. While they are under treatment their liver stops having to process the poisonous chemicals in the drugs, so it stops being able to do so. If an ex-offender then starts using again, they should be advised to start on a very low dose and build up, but actually they tend to go back on the high dose they were used to using before they went to prison. This is too much for the body to cope with and it kills them. The dose they were accustomed to before prison now becomes an overdose.
Obviously, we do not want ex-addicts to come out of prison to start again at all but, if they do, they should be made aware of the danger and they should have continuity of care until their rehabilitation is well embedded. Often a patient has very good motivation to keep off drugs but, if something goes wrong in their life, such as losing a job or becoming homeless, the mental health problems recur and they do not have the support or resilience to resist self-medication with drugs that make them feel better.
The mention of resilience brings me to my final point. The roots of mental illness often go back a very long way. We must address the issue we are debating today in the very long term. By that I mean that we need to focus on two things in schools: education about the harms of drug and alcohol use and prevention of mental ill-health among children and young people. We need schools to be able to recognise mental health problems and know how and where to get help. They should also positively promote good mental health and well-being and help their pupils to develop resilient personalities. Of course, we should also go even further back in life and provide mental health therapists in all maternity units and help new mothers bond well with their children, given the crucial importance of attachment to the child’s future mental health. I wonder whether the increase in deaths is not because more people are taking drugs—from what the noble Lord, Lord Patel of Bradford, said, that is not the case—but are we getting more mental health problems that push users over the edge?
Good mental health does not happen by accident any more than good physical health. Just as we need to foster good physical health through diet, exercise and avoiding risky behaviours, so we also need to be aware that good mental health can be fostered. This should be part of the healthy community plans of all local authorities as well as schools, but sadly it is often at the bottom of their priority list because they have the money to do only what is mandatory. But by ignoring this we are storing up problems for the future. I would ask the Minister to be kind enough to comment on the points I have made and let noble Lords know how the Government are dealing with them.
Lord Hunt of Kings Heath (Lab)
My Lords, I warmly endorse the comments of the noble Baroness, Lady Walmsley, and welcome my noble friend’s introduction to this very disturbing and important debate. We have all studied the ONS figures and noble Lords have already referred to the fact that the mortality rate from drug use has been recorded as the highest ever. My noble friend referred to how deaths involving heroin and/or morphine between 2012 and 2014 increased by almost two-thirds, while other figures from the ONS also show increases. It would be fair to ask the Government what their current analysis is of the reasons for that.
My noble friend has said that he is concerned that a change in government policy, because they felt that too many people were, as he put it, “parked on methadone”, has seen the introduction of an incentivised programme essentially to encourage drug users to complete their treatment more quickly and achieve abstinence. However, that has brought with it some perverse consequences. One thing it shows is that there are always risks in trying to incentivise clinical behaviour through some kind of payment or lack of payment, so we need to be very careful. What risk assessment was undertaken of the impact of this change, because it is important not only in itself but in relation to the future direction of government policy?
My noble friend asked two specific questions: whether the Minister will agree to set up an investigation into the causes of these drug-related and mental health deaths in order to see how many had been given a dual diagnosis and, as I have mentioned, a risk assessment of the decision to bring in, as he called it, a payment-by-results approach to discouraging the use of methadone. He asked for another risk/impact assessment of the overall current strategy, and I must say that I very much endorse his recommendations.
My understanding is that Public Health England is investigating the trends around drug misuse deaths. I have looked at its recent publication, but what I could not find was any reference to the issue raised by my noble friend—the policy change to payment by results. In the light of this debate, is PHE investigating that specific issue? Will PHE, which is after all a part of the Department of Health, explore that area?
My noble friend and the noble Baroness, Lady Walmsley, also talked about the issue of drug treatment funding and the role of local authorities. I was interested to see the NICE guidance, or at least the local government briefing it produced in May 2014, which provides a lot of good advice for local authorities. I know that advice to local government from NICE is not at all mandatory in the way in which a technology appraisal might be for the NHS, but what is the Minister’s analysis of how far local authorities are following that guidance? Do the Government or NICE itself have any responsibility at all to make sure that local authorities are doing the right thing here?
One then comes to the issue of funding. On Monday, the noble Lord again referred to the amount of additional money put into the health service. He will know that around half has come from other pockets of Department of Health expenditure, including of course the public health budget. Clearly, the concern is that there will be an impact on those services where we depend on local authorities for funding under a public health banner. Again, what assessment has his department made of the impact of the reduction in funding for public health on the kind of community services that are so much more important?
None of this can take place without echoing a concern around mental health issues more generally. We all signed up to parity of esteem. The Government have said that they are committed. I believe that they have issued instructions to clinical commissioning groups about mental health service funding, but word reaches us that the reality is somewhat different. My noble friend Lord Patel has raised an important, difficult specific point. It cannot be divorced from overall considerations about mental health policy. If one considers the four-hour A&E target that is not being met, we know that a lot of people who are coming to A&E one way and another have mental health issues. I cannot help wondering whether for CCGs to reduce funding to mental health services has not been counterproductive in terms of the pressure that it has put on other parts of the system. I accept that my noble friend has raised a specific, serious point. If the Government cannot answer the exact point today, I hope that they will agree to some kind of review so that we see the outcome.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, I thank the noble Lord, Lord Patel, for raising this issue. It is clearly hugely important. He said that this rise in deaths was a direct result of government policy. We should take that very seriously coming from someone who knows so much about the issue. I also thank him for warning me earlier about the likely thrust of his comments.
This debate is particularly timely as we are currently finalising our new drug strategy and thinking about what it needs to say in relation to this important issue. It will take a very close look at the impact of the current strategy. It is due to be published later in the year. The noble Lord’s comments today will certainly be taken into account.
We are especially concerned about the increase in drug-related deaths. Separately, Public Health England is now convening an inquiry into the reasons for the rise. I encourage noble Lords to give their views to PHE. A key part of its inquiry will be an in-depth analysis of the drug-death data. A national expert group will rapidly review the data, including the ONS data, and local experiences to better understand the causes of these deaths and how they can be prevented. That report is expected in a few months. This is not a Chilcot inquiry; it will be out in a few months, and it will include looking at dual diagnosis.
Although my comments today will largely cover England, since health is now a devolved matter, the PHE inquiry will look at experience in Wales and Scotland. Interestingly, both countries have widely differing results, so if there are lessons that we can learn from them, clearly we will do so. I will come back to the specific question about payment by results, if I can, towards the end.
As the noble Lord said, the ONS reports of 2013 and 2014 showed that registered drug-misuse deaths increased in England very significantly from about 1,500 in 2012 to 2,120 in 2014. They are a matter of huge concern and highlight the need for further national and local action. A small part of the increase might be explained by changes in the speed of registration of death. That is probably not significant, but it will be looked at in the PHE review. We are assuming that it will not be material.
Overall, fewer people are using drugs such as heroin. Those that do form an ageing cohort, which means that the health harms from the use of heroin are increasingly concentrated among older, more vulnerable users, particularly men aged between 40 and 49—the “Trainspotting” era, in a sense—and those who have not had recent contact with the treatment system. We may need to accept that because of their long-term drug use, the health problems associated with that and the recent availability of purer heroin, all of which can contribute to a much greater risk of death, deaths may still rise in future years, despite our best efforts to reduce them. Again, that is something that PHE will be looking at very carefully. This means that although overall drug use has declined in recent years and the treatment system has helped many more people to recover—some 70,000 in 2014-15—we need an enhanced effort to help these entrenched users and thus reduce the number of deaths.
Local authorities are best placed to be responsible for drug prevention and treatment because of their knowledge of the local population and its needs. They can approach a system on a place and local population basis, bringing together their experience of local employment, education, housing, social services and the like. That is the reason why this has been devolved to local authorities. Much improvement has been achieved, and the Government are determined to continue that improvement. We have therefore added a condition to the central public health grant which requires local authorities to further improve the take-up of the drug treatment services they provide and to achieve improved outcomes. I will turn to funding later on, if I can.
About half of the deaths involved opiate users. PHE analysis found that most of those who died from opiate overdose were not in treatment and, in most cases, had not been receiving treatment for some time. This emphasises the need to encourage drug users to engage with treatment services, because treatment has a protective effect, as the noble Lord referred to in his speech, and can help prevent deaths. It also emphasises the need for local authorities to ensure that vulnerable drug users outside the treatment system are given advice on how to reduce the risks from drug misuse and are encouraged into treatment—all the more so as heroin is becoming purer.
As mentioned earlier, Public Health England is convening an inquiry into the recent rise in drug-related deaths. The national expert group will rapidly review data and local experiences to better understand the causes of those deaths, how they interplay with other health issues such as mental health, and how those deaths can be prevented. We know that some parts of the country have much higher death rates than others, and PHE’s local centres are working with those areas to understand the factors contributing to those higher figures and what can be done to reduce them: for example, by spreading best practice.
We have also asked PHE to work with local authorities to make sure that services are available to anyone who needs them. So PHE is working with local commissioners and providing them with expert advice, evidence and management information, including outcomes and value for money data. This helps to ensure that services are evidence-based, effective, available, integrated with local health services and supported by local housing and employment policies.
In October 2015, we changed medicines regulations to widen the availability of naloxone. Naloxone is a medicine that almost instantaneously reverses the effects of opiates, and we have made it easier for drug services to supply naloxone to more people who might witness overdoses and could use it to prevent overdose deaths.
Turning to prisons, the thematic report by Her Majesty’s Inspectorate of Prisons, Changing Patterns of Substance Misuse in Adult Prisons and Service Responses, published in December 2015, acknowledges that substance misuse treatment provision in prisons has improved very significantly over the past 10 years. I am told that there is strong evidence that evidence-based commissioning by the NHS has had a positive impact on prison health more generally, as well as in this area.
PHE, NOMS and NHS England are working together under the auspices of the National Partnership Agreement to tackle the new challenges presented by new psychoactive substances and the misuse of prescribed medication. PHE recently published a toolkit for custody and healthcare staff to support their response to NPS and is currently delivering a national training programme across the prison estate.
PHE is working closely with the National Offender Management Service and NHS England to improve “through-the-gate” arrangements between prison and community services, including improved commissioning of services. It is also using new post-release supervision arrangements and licence conditions to make sure that prisoners are more effectively engaged in drug treatment after release. As the noble Baroness, Lady Walmsley, said, when people have been off drugs and then come out and go back on to drugs, that can have very severe consequences.
As I mentioned earlier, engagement with good-quality drug treatment has a protective effect. It stabilises people and helps to improve their physical health and well-being. For example, people in treatment for their opiate use are less likely to inject drugs, experience overdose or transmit blood-borne viruses such as HIV and hepatitis C. People in treatment are also more likely to be tested and treated or vaccinated for blood-borne viruses. There were nearly 300,000 adults in contact with treatment services in 2014-15. Over half of the 130,000 patients who left treatment in 2014-15 had successfully completed their treatment free of dependency. This is an improvement on past performance and is helping people to achieve their potential and live a fuller, more rewarding life.
We have commissioned and received advice from the Advisory Council on the Misuse of Drugs about the contribution that opioid substitution treatment such as methadone can make to helping people recover. This is not in the least at odds with long-term prescribing of methadone to protect the health of those who are not able, or not yet able, to achieve full recovery. A question was raised as to whether at the time the policy was implemented—in 2010, I think—an assessment was done of the potential perverse consequences of that policy. I am not aware of whether such an assessment was done, but I can revert to the noble Lord about that afterwards.
Over the last decade, treatment outcomes have steadily improved, but have slowed in the past couple of years, most likely because the people remaining in treatment are those with more entrenched drug use and long-standing and complex problems. This is why recovery remains at the heart of our approach, with the key aim to support people to free themselves from drug dependency for good. We have moved our focus beyond the treatment system, to look more holistically and to include factors that help people recover from drug dependency and fully integrate back into the community.
We know that mental health can be a particular issue for many drug users. Some may use drugs as a form of self-medication for a mental health problem. Some will find that drugs exacerbate or cause mental health problems. PHE is encouraging substance misuse and mental health commissioners to work together at a local level to ensure that the services they commission are responsive to the needs of this client group, and there are clear specifications and transfer arrangements that describe how they will be effectively co-ordinated and delivered. I do not have time to talk about prevention; I thought I would have more time but I have only two minutes left.
The issue of funding is an important area. The noble Lord, Lord Patel, mentioned that the number of specialist mental health care nurses was down 10%. This reflects a more fundamental problem that over the past five to 20 years so much of the budget has gone into acute care. Community and mental health care has unquestionably suffered over that time. It illustrates a much broader problem. It is clear from the mandate of NHS England that parity of esteem is a key part of our policy over the next five years. Each clinical commissioning group’s spending on mental health will increase in real terms. There will be more money available for mental health care.
However, it will still be tough. There is not a lot of money in the system, but we are prioritising mental health care, and I think that, together with the public health grant, which is ring-fenced in local authorities, there will be resources available to tackle what I accept is a hugely difficult, complex and, as we have seen from the figures today, tragic area in which society, not just healthcare, has so dismally failed.
Briefly on the PBR point, the DH has done an evaluation on the payment by results pilots for drug and alcohol recovery, which will be published later this year. The preliminary evaluation, which is already published, suggests that the pilots did not lead to inappropriate pressure to discharge people from drug treatment—but it is preliminary and the full results will be published later in the year. I was going to say a little more about prevention but we can discuss that at another time.
Further Education
(8 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Bakewell of Hardington Mandeville
To ask Her Majesty’s Government what assessment they have made of the impact on young people living in rural locations of the area review of further education colleges currently taking place.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I draw noble Lords’ attention to my entry in the Register of Lords’ Interests as a fellow of Yeovil College, and I thank noble Lords taking part in the debate. Those of us who hail from rural areas often appear to live in idyllic surroundings and enjoy much that those who inhabit urban areas do not. However, there are many challenges facing us, especially for young people. Last week, my noble friend Lady Sharp led an excellent debate on the future of adult education. Today, we look at the other end of the spectrum: the challenges for young people in continuing their education and training beyond 16. The aim of the current programme of area reviews of FE providers is to have,
“fewer, larger, more resilient and efficient colleges”.
I quote from the paper published by the Secretary of State in July 2015. I believe there are significant disadvantages to this approach, and I especially quail when I read further that,
“the status quo will not be an option”.
While the context of reviews can be adapted to take account of local circumstances and requirements, the statement does not appear to be bear this out.
The FE sector, colleges in particular, has been subjected to a series of significant cuts since 2011. Between 2010 and 2015, funding for 16 to 19 year-olds fell by 14%. The adult skills budget, which made up a significant amount of college funding, has been reduced by more than 40%, while public funding for adult learning is set to be removed completely by 2020. Spending on 16 and 17 year-olds is 22% lower than on 11 to 16 year-olds. It is a further 17.5% less for 18 year- olds, and adult education funding was cut by 28% last year alone.
Students, in particular, have been hit by the loss of the education maintenance allowance and the adult learning grant during the 2010 Parliament. These were weekly grant payments for FE students from lower income backgrounds. FE colleges appear to be hit from all sides. Some 72% of sixth-form colleges have reported dropping courses due to funding cuts, 33% have been forced to cut the more expensive to run modern language courses, and 24% have cut STEM subjects. What are we doing? STEM subjects are in great demand. I live close to the only remaining helicopter manufacturer in the country. It finds it difficult to recruit locally. Schools often take parties of pupils round, and teachers have been overheard saying to pupils, “If you don’t study hard, this is where you will end up”. This is appalling. We desperately need skilled and qualified engineers, and we need to fund colleges adequately to cover the courses their communities need. They know their students and can tailor the courses to fit.
Transport is a major factor which enables young people to access education and training. Young people in FE and sixth-form colleges often have to travel further than those who study at school because of the specialist provision that colleges offer. In a recent survey, the average learner travel time was two hours and 48 minutes per day at an average distance of 11 miles, 51% of FE students cannot always afford their travel costs and 40% of students spend £5 or more a day travelling to their college or place of training.
Across the country local authorities with transport responsibilities are cutting bus subsidies, and bus routes are, at best, less frequent than previously. In many cases, they are axed altogether. This is, of course, not a perverse measure but a reaction to the drastic budget reductions they face in the coming months and years. The Campaign for Better Transport has also highlighted the impact of funding cuts on local bus services. It says that funding for local authority-supported services has reduced by more than £78 million since 2010, meaning more than 2,400 essential bus routes and services have been cut. I live in a village, like many around the country, where there is no daily bus service but is an infrequent service that assists those without cars to go into the neighbouring town to do their shopping, get their hair done, visit the dentist or GP and have a cup of coffee. The timing of the return journey does not allow them to do all of those things on one visit. They have to choose which it will be.
For students attempting to access A-levels, apprenticeships and training, public transport is not an option. Often there are notices in the Post Office from post-16 students asking if anyone can give them a daily lift into town. For those students whose parents can afford to transport them to college, there is choice. For those whose parents are in straitened circumstances, there is no choice. I was lucky in that I lived just over two miles from the FE college of my choice. Even so, there was no transport allowance, and although my parents gave me the bus fare, I often walked in order to save the fare for other treats. If an FE college is 20 miles away, transport will be a major headache. Who is going to transport students across the countryside, even supposing they can find an FE provider running a course that suits their career prospects? Yet again, it will be those on low incomes who have no choice. Will the Minister say just how these young people are going to access the skills they need to achieve their aspirations and take charge of their lives? Will the costs of additional travelling be taken into account during the area review or is this going to be the student’s responsibility?
I note that the area review process has been tested in cities and in a rural area of Norfolk and Suffolk. I trust that the lessons learned have been carried forward, but each area will be different. The local steering groups include representatives from local enterprise partnerships. However, when an FE college is situated close to a LEP boundary, it will serve a very large area indeed and will stretch into the neighbouring LEP’s territory. Will the Minister say whether both LEPs will be represented on the area review in such cases and will the geographical spread of students be taken into account when deciding how the rationalisation is to take place? A distance of 20 miles from one FE college to the next is considerable. If an FE provider is to be closed, rationalised or have the curriculum it offers limited, students will have to travel.
The second principle of the review is:
“An open-mindedness to change for the greater good, irrespective of vested interests and personal preferences”.
That is very laudable. Will the Minister confirm that the personal preference of students will be taken into account as part of this open-mindedness?
I am indebted to the National Union of Students and the Association of Colleges for the extremely useful briefings they have sent me. I saw with interest the report of the Public Accounts Committee in the other place on overseeing financial sustainability in the further education sector which was published on 16 December 2015. Its summary said:
“The declining financial health of many further education colleges has potentially serious consequences for learners and local economies, but the bodies responsible for funding and oversight have been slow to address the problem. Too often, they have taken decisions without understanding the cumulative impact that these decisions have on colleges and their learners. Oversight arrangements are complex, sometimes overlapping, and too focused on intervening when financial problems have already become serious rather than helping to prevent them in the first place. The Department for Business, Innovation & Skills and the Department for Education appear to see area-based reviews of post-16 education as a fix-all solution to the current problems, but the reviews do not cover all types of provider and it is not clear how they will deliver a robust and financially sustainable sector”.
The Government would be wise to take note of this statement and act accordingly before the FE sector is altered out of all recognition and not to the benefit of learners and their communities.
Baroness Byford (Con)
My Lords, I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, for introducing this short debate. I do not wish to suggest for any reason that I do not understand the challenges that are faced, because clearly I do, but I am slightly more optimistic than she is. I, too, live in the village that I was born in, but ours is much more urban than the area she is from. Clearly, the number of students coming in for further education has been in decline, particularly since we increased the number of apprenticeships, so it is right that the Government are looking to get the best for young people coming through.
To start at the beginning, most of the children who go to school in rural areas actually come out with better results than their urban counterparts, so they are quite resilient. In the academic year of 2013-14, 70.7% of pupils living in rural areas left school with five or more GCSEs at A to C level, compared with 64% of pupils living in urban areas. That trend continues, with the rate of full-time entry to higher education institutions by 18 to 20 year-olds in 2013-14 being higher in predominantly rural areas, at 130 per 1,000, compared with 123 per 1,000 in urban areas.
I declare an interest as one of the patrons of Landex, which represents the land-based colleges. They, too, have clearly been going through challenging times—there are no two ways about it.
The review going on at the moment, as the noble Baroness touched on, is only at the start. Only three reviews have taken place; there is another tranche to come. The review in Leicester and Leicestershire, which is my home, is not happening until September. So the Government have a little while to wait before they can respond fully on the outcomes that we all are interested in.
The concern that the noble Baroness and I share, along with many people in this room, is for transport. My brother is a county councillor, and anybody living in a rural area knows very well that there is a great pressure on councils to provide or not to provide buses. The truth of the matter is that, in many places, buses sometimes run nearly empty, and to sustain them is not on. In some places, on some occasions, it is cheaper to pay a taxi to go and do it than it is to run a bus service. So to me, there are opportunities in the new proposed system. I came from Moulton agricultural college in Northamptonshire, and I have visited many other agricultural colleges. Moulton has its own bus service which goes around the villages picking up the students who want to come to the colleges. That is part of the deal; they know that that is going to happen. It will probably take them an hour to get there, sometimes an hour and a half, but they think that what is on offer at the college is worth doing.
So the question is: do we continue to have smaller colleges offering a more restricted curriculum or do we move to bigger colleges with a very specialist curriculum? Certainly, with the need that the noble Baroness rightly touches on to have more engineers and people with that sort of skill, the more we can do to encourage people, particularly women, to follow some of the STEM subjects and get involved in engineering the better. There is no reason why women should not be doing it. My niece became a mechanical engineer many years ago.
As far as I am concerned, it is a question of needing to reflect on what there is and where it is. I agree with the noble Baroness that there will be some areas that will do it very differently. I was interested to hear in the news this morning that Cumbria, for example, has looked to have a community bus area because there are no buses there. So while I understand the issues, and I thank the noble Baroness for introducing this debate tonight, I look forward to seeing the responses that we get. I hope that they will cover all the colleges, including the land-based colleges, because we all have a lot to offer. At the end of the day, it will be up to business and the review panels to come up with their suggestions as to the best way forward. I hope that we will return to this when the reviews are complete, in another year’s time.
Lord Young of Norwood Green (Lab)
My Lords, I, too, congratulate the noble Baroness, Lady Bakewell, because I regard this as a fundamental issue. Noble Lords know of my interest in apprenticeships, so they will not be surprised if I focus on them. I have mixed feelings about this issue because I think that it probably is time for a change. I must admit that, given my brief experience as a Minister in this area, I was somewhat disappointed when the Wolf report came out—and that is me using the gift of understatement. It made me think very carefully about how to invest money and outcomes. We should not imagine that simply pouring more resources into something will necessarily bring about a result. It was a disappointing report that made me ask about the quality that is being delivered. Although there are many extremely good colleges, some do not always measure up. Being the glass half full type of person that I am, I probably tend to agree with the noble Baroness, Lady Byford, that this is potentially an opportunity if the Government get it right.
I want the Government to recognise that this is a big challenge which they have created. Three million apprenticeships means a lot of training and so on. I keep reminding the Government that if they want to deliver on quality as well as quantity, it is a key part of that. One of the better and smarter policies we introduced was raising the participation age. That is important, and this review will obviously impact on that. We expect young people to be either in education or training, or in employment that encompasses training as well.
I listened carefully to the statistics quoted by the noble Baroness, but I still think that we are facing some challenges. It can be said that we are doing better, but what about the 30%? We need to ensure that those young people are not discouraged and that transport does not present too great an obstacle. I had to smile at the description of walking two miles, because I am a “four wheels bad, two wheels good” person. Two miles on a bicycle would get you there in a trice. More seriously, transport is clearly an issue. If all colleges are going to adopt the enlightened approach of Cumbria, perhaps we can pull it off. However, I do not feel that young people are getting a particularly good deal. We get the Freedom Pass and a triple lock on pensions. We are the people who have benefited from property price increases. What are young people getting? They have a ton of debt because they no longer get EMA, and the possibility of them getting on to the housing ladder is small. I hope that the Government will look at this carefully.
I have said previously to the noble Baroness, Lady Neville-Rolfe, that it is time that this was looked at in an integrated way. We have LEPs, colleges and local authorities, so we ought to be looking at the best performers, the ones that are creating the most employment opportunities and setting up the maximum number of apprenticeships. The Government ought to be monitoring and reviewing them because if they are doing it well, they are the success stories and we should be building on them.
I share the concern about the funding cuts, because it is worrying to see things like STEM courses being cut. Noble Lords should do as I do and work with the Lords outreach service. Go into schools and ask 15, 16 and 17 year-olds where they are going. Most hands shoot up and the response is “university”, although whether they are all fit for that route is another matter. When you ask them about the alternatives, you are lucky if even one individual mentions apprenticeships. We still have the problem that schools are not fulfilling their legal requirement to tell students about all the career path options. That is important. We will not get more women into engineering and similar occupations—a desire I share—until employers come into schools, some of which do not seem to understand the importance of links with business. We also need successful apprentices to come and tell students what a good opportunity apprenticeships are.
I understand why the Government are doing this review. If we get it right, it will be a great opportunity, provided that we listen to the words of caution.
Baroness Maddock (LD)
My Lords, I thank my noble friend for introducing this timely debate on an important issue for young people living in sparsely populated rural areas. For a long time, working and learning in the FE sector has been challenging. We have seen frequent changes in funding and in governance. Being a teacher, a leader, or a governor in this sector has been challenging for many years. I saw this at first hand when I served as a governor at Brockenhurst College in the New Forest some years ago. I sincerely hope that this review enables long-term planning in the sector and gives as much control as possible to local communities and the interested parties within them. I am thinking particularly of young people and businesses.
I want to highlight the issues of concern in the north-east of England, in particular in Berwick-upon-Tweed, my home town, which lies at the northernmost tip of England right up against the Scottish border. In the north-east, the proportion of adults qualified to national vocational qualification level 4 is 7% below the national average. The north-east LEP strategic economic plan highlights that by 2020, some 120,000 jobs will require that qualification. The last economic survey conducted by the North East Chamber of Commerce found that 71% of businesses in the service sector and 83% of businesses in manufacturing were experiencing difficulties recruiting staff.
In Berwick-upon-Tweed the sparsity of the population and of college provision only exacerbates the difficulties for young people and businesses. If you are a young person currently finishing your GCSEs in a school that is improving a bit but less than in other parts of the country, your options are very limited. In Berwick there is a high school with a small sixth form. Fifty miles away there is Northumberland College, the only college in Northumberland, which means a long journey by bus. Sixty-seven miles away is Newcastle, where there are many more opportunities. It takes 45 minutes by train but because it is 67 miles away, the journey is pretty expensive. It is clear that transport is a big issue that is preventing those in our area gaining access to education and training, and to a wide variety of it.
The history of paying for transport is mixed. I served for three years on Northumberland County Council and we campaigned to have youth transport paid for. My Lib Dem colleagues took minority control and we were able to do that. I regret that when Labour took over it took that away for the over 16s. I can partly understand why: the budget had gone up because so many people needed it.
Like others, we have had a lot of briefing on this subject, and I am particularly grateful to the Association of Colleges. It has provided statistics showing that the average distance travelled to college by 16 to 18 year olds in the Berwick constituency is 25.5 miles. That is the furthest in the whole of England—they top the league. It is slightly better for the 19 year-olds. When the review that we are debating was announced, the Minister said that he expected policy options to include rationalising the curriculum and considering opportunities for specialisation, merger, collaboration and closure. When there is only one college, there is not much scope in any of those areas.
It is even more difficult because the other providers in the area are not being taken into account: sixth forms. Indeed, my noble friend Lady Bakewell quoted from the 13th report of the House of Commons Public Accounts Committee:
“It is unclear how area-based reviews of post-16 education, which are limited in scope, will deliver a more robust and sustainable further education sector”.
The recommendation was that:
“The departments need to demonstrate that the area-based reviews are taking a sufficiently comprehensive look at local provision taking into account all FE providers and school sixth forms, that they are fair, and that they result in consensus on sustainable solutions to meet local needs”.
I sincerely hope that that is the case. I would like the Minister to assure me that there will be no one-size-fits-all solution when this review ends, and that the particular situation I have outlined in Berwick up in north Northumberland will be substantially enhanced by the outcomes of the very important exercise that we are debating this evening.
Lord Lingfield (Con)
My Lords, I also thank the noble Baroness, Lady Bakewell, for this important debate, and remind your Lordships of my registered interests, including the chairmanship of the new royal chartered Institution for Further Education.
During the last few years, I have had the opportunity of visiting many FE colleges, and I soon became aware of the extraordinary variety of provision among them; this is both a strength and, of course, a weakness. It is clear that there are many first-class institutions, as we have heard, which have quickly learned to adapt to the ever-changing requirements of employers in a high-tech environment. Others, although still good teaching centres, are pursuing courses that are no longer so relevant and not so attractive to students. There is still too much duplication of courses by colleges in the same area. That is fine if there is high demand, but our colleges really need now some closer co-operation among themselves if they are to deliver the best quality while making the most sensible use of resources.
The NAO’s report last year suggested that the financial health of the post-16 sector has, as we have heard, been declining. But many colleges have not been able to respond adequately to this and will face serious financial challenges unless they fundamentally reform their offer and their delivery of it.
Announcement of the area reviews last year, and their commencement in September, quite naturally caused anxiety within the FE sector. Would they recommend the closure or mergers of colleges, which would force redundancies? Would they appreciate the excellent work often done by quite small colleges? What about rural area provision, the proper subject of today’s concerns? I hope very much that, as the rest of the reviews take place in the coming year, these concerns will be alleviated.
The reviews will have to show sensitivity to the fact that FE colleges themselves, and this is an important point, are often significant employers of many people and thus considerable contributors to the local economy. It is particularly welcome that the Government recognise the need to support the sector in the implementation of structural changes that may result from the review by providing access to a restructuring fund. However, it seems plain to me, I am afraid, that the sector cannot go on just as it is. I hope that the reviews will give some valuable insight into how its provision can be improved.
It is helpful that the reviews are looking not just at the physical location of colleges but at how the imaginative use of modern technology can link learners in different ways to different places. There are innovative forms of curriculum delivery that can help provide a wider experience for students, and which could be of use in rural areas.
The reviewers must keep in mind that although they are operating within administrative boundaries, such as local authorities, business and commerce do not do boundaries, as the noble Baroness, Lady Bakewell, said. It is essential that the wider economic environment is considered. Some specialist colleges will have students from all over the country and could deal with several dozen local authorities.
Very importantly, from my perspective as chairman of the new royal chartered institution, the reviews are looking at quality—this was a point made by the noble Lord, Lord Young—and ensuring a strong focus on delivering the right outcomes for learners, including progressing students into high-grade apprenticeships and high-grade technical and professional skills which improve their employment prospects. It is worth remembering that construction-based skills vacancies have more than doubled since 2013, from 5,000 to 11,900, and that of the 900,000-plus job vacancies in England last year, 209,000 were the result of skills shortages.
We most seriously need to attain the Government’s target of 3 million apprenticeships in this Parliament, as the noble Lord, Lord Young, hopes, and to provide better and more advanced education and training to the volume of young people who must progress into these British industries, which in future years will drive our economic growth in ever-competitive world markets. I hope that the area reviews, if carefully handled and, very importantly, based on clear and sustainable factual evidence, will help colleges change to meet these needs now and in the future.
Baroness Pinnock (LD)
My Lords, I live in West Yorkshire, where the review has begun, and I am a councillor in Kirklees, which is a large metropolitan authority serving more than 400,000 people. That sounds as if it may be an urban area but it includes very large rural parts. Those of your Lordships lucky enough to have the time to watch “Jericho” or “Happy Valley” will have seen the very landscapes and areas to which I refer. Many young people in my part of West Yorkshire, despite it being largely urban, have similar challenges in accessing further education as do the residents in Somerset to whom my noble friend Lady Bakewell referred.
I have five concerns that I would like the Minister to consider. First, the review does not seem to be responding to the needs of business, which is telling us time and again that it wants the general skills of young people to be improved, as well as their particular skills —more learners and learning more often. Secondly, I repeat the point that others have made about accessibility. Without going into the detail, accessibility in my part of West Yorkshire is similar to that in Somerset, although the distances are not as great as they are in Northumberland. But if you live up in the Pennines in Marsden, which is featured in “Happy Valley”, it can take you a very long time to get to Leeds or Bradford, which is where the expertise in the FE colleges can be based.
My third point is about the rationalisation which is one of the aims of the FE review. I have no quarrel with that. From time to time, you have to have a look at what is on offer to see whether it can be improved for the benefit of all. While that is a rational approach on the surface, however, it does not necessarily take into account how students will react to it. From looking at post-16 access figures for the young people who leave the school where I am a governor, I know that they tend to select—this may sound ridiculous—the colleges which they can access. It is not the colleges that might meet their needs; they select by access. That is a rational approach from their end, but it may not be the best outcome for them or for society at large.
Fourthly, it is totally bizarre that sixth-form colleges are included in this review, but not school-based sixth forms. The post-16 landscape should be considered as a whole, if duplication is to be avoided, which is one of the aims. I have a letter from BIS and DfE to the West Yorkshire leaders. They requested that no more sixth forms in schools be opened because they were trying to do this review. The reply was that:
“There are no plans to prevent any schools from applying to do so … Following an area review,”—
and I find this a bit disturbing—
“we expect regional schools commissioners, local authorities and schools with sixth forms themselves to take into account the review’s analysis and findings when considering any decisions about future post-16 provision in the area. Therefore reports and area reviews may make general observations about opportunities for collaboration, improved progression and signposting and efficiency savings across all providers”.
As a councillor, I serve on a scrutiny committee looking into this review in West Yorkshire. What concerns me is that it is not engaging with other interested parties—high schools, sixth forms, students, parents and staff—whose views we ought to take into account. It is focusing on college estates, curriculum duplication and finance. They are all important, but the voice of learners, staff and parents ought to be heard.
This review is not taking into account the wider issues that are essential if post-16 education is to be accessible, meet students’ needs and enable and encourage participation. I hope the Minister will take these comments into account.
Baroness Stedman-Scott (Con)
My Lords, I, too, congratulate the noble Baroness, Lady Bakewell, on securing this debate. It is important because it affects our young people and their potential life. I declare my interest as I was CEO of Tomorrow’s People for 30 years, and much of what I have learned in this field has come from that. I am patron of the Rye Studio School, which serves a large rural area, and governor of a Bexhill Academy.
None of us would be here today if we did not care. I take great comfort from the fact that we all care that the right thing is done for our young people. However, even in better fiscal times, any business worth its salt will look at what it is doing and ask whether it is doing the best it can and whether there are things it should or should not do. I look on this review as an opportunity to do what anyone would to ensure that we are giving the best we can to our young people in colleges. I hope the review will enable us, within those confines, to give up the best to get the better for people.
Rural areas face a variety of issues, and depending on how rural they are, those issues are exaggerated to various degrees. Noble Lords have already raised the issue of the cost of travel, but is the transport going to the right place at the right time to enable people to get to their college? If it is not, how are we going to get them to work? We need to look at this. We have to make sure that people can learn and get to work, and that is where innovation and opportunity come in.
The other issue they face is in making decisions about their lives. Sometimes in a rural area it is all doom and gloom: “There are no jobs”. But in the areas I have been involved in, that is not what we found to be true en masse. I will come on to that more later.
What should young people study for? Is the right thing being laid on? That has already been referred to. What will help them secure work? Who is helping them understand the labour market in which they live to make sure that they undertake the right training? There is a place in East Sussex called Heathfield. It is not as remote as some of the places that the noble Baroness, Lady Pinnock, referred to, but there are issues there. A partnership between East Sussex County Council, the Heathfield Partnership, Tomorrow’s People and the business community has been a real eye-opener. It has been about local solutions and trying to sort the issues that each individual faces, rather than people telling you that you cannot boil the ocean. It is about people and local solutions. They told us that there were no jobs, but the minute we went round the rural community we found jobs. Then we were able to match young people to those jobs and, in all of that, to ensure that they could get to those jobs because there were distances to cover.
One way that was resolved was that the council, the police and crime commissioner and the Heathfield Partnership bought into the Wheels 2 Work scheme, where funding was made available to young people for the loan of a scooter to enable them to get to work. We had a young lad who wanted to become a landscape gardener. An employer took him on and taught him to drive—at his expense. The young lad now has his own van and goes round doing his work. When the boss met him, he took great delight in telling him that every time that van goes out for a day there is £60 in VAT for the Exchequer.
So these are challenging times. The review is challenging but it creates opportunities, including ways to do things in different ways, responding to the needs of young people. If noble Lords had been here earlier for the waste debate, they would have heard the noble Lord, Lord Young of Norwood Green, refer to sell-by dates. Too many young people have sell-by dates on them and I hope that this review will create opportunities and that we can overcome the challenges to make sure they can be at the right place at the right time and achieve their destiny.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very good debate and we are grateful to the noble Baroness, Lady Bakewell of Hardington Mandeville, for initiating it. It has been good in several ways. First, it covered the ground. Secondly, we all seem to be broadly agreed about the opportunities that the area reviews may present, provided that they are a genuine exercise aimed at revivifying a key sector. There are also issues that perhaps need to be built into this that are more than just to do with one area and reflect what was in the initial wording for this debate in terms of the rurality issue.
The key question that the Minister must answer when she comes to respond is the quotation that has already been given from the Public Accounts Committee about whether these reviews will actually achieve the laudable aims for the sector. My quote from that committee is slightly different from those already given, but it makes the same point. The committee states:
“With so many parties involved in running the reviews, there may be no clear process for making difficult decisions on the future of individual colleges”.
I think that fits into the general concern expressed both by those who have spoken today but also the PAC, that this is an interesting—others might say brave—way of conducting a review but it will not necessarily come up with results that are sustainable and robust.
The other side of that coin is what would constitute a more robust and sustainable FE sector. Those of us who are concerned about this—I had a job a long time ago in a further education college so I have some experience—worry that a haphazard and not very clear set of procedures has been adopted. As many people have said, those procedures deal only with FE and sixth-form colleges, and others may or may not be involved depending on their individual interests. There is no student voice and no consistent way of addressing that.
If those were not sufficient problems in relation to individual reviews or indeed to the totality of the review process, which of course is still ongoing, there are concerns at the end-point the Minister might wish to help with. Is this genuinely a review for the benefit of the sector and for the young people who will be a part of it or is there a hidden agenda about money? A Minister is on the record saying that the motivating principle is not to save cash. Then he covered himself by saying that it would be quite nice if it did result in reduced costs in the sector. It would be helpful if that could be brought out in more detail by the Minister here when she comes to respond.
Then there is a wider question. What is the Government’s intention here? It is quite hard to read in the Red Book what will be spent in the sector and I think it is probably beyond the capacity of the limited resources behind the Minister today to give a full explanation. Perhaps she could write to us to explain what the Government’s three-year to five-year projection is for spending in this sector as it is complicated, for reasons I want to go on to as well.
So much for the reviews. The rural transport dimension has been very well ventilated by noble Lords who have spoken, who live out in the country and have experienced it in real time. As the noble Baroness, Lady Stedman-Scott, mentioned, it is not just about FE and the provision of learning, it is also about future careers, jobs and prospects. These two must be seen through the same prism because if you can train but cannot get a job that is not going to be of any real effect.
There are other concerns, raised by the rather good report from the Commission for Rural Communities which was in the Library’s list of reading for this debate. There is the issue of what has happened to careers advice generally in the country but particularly in rural areas, small villages and towns with people not being able to access advice. There is the question of the Work Programme operated through DWP which does not have a rural component and perhaps needs to be better tailored for rural areas. There is the fact that most local authorities have had to abandon youth services because the funding is not there for that. That element is discretionary rather than a main centre and that will mean that there are not proper and appropriate approaches to youths living in rural areas. Underpinning some of the optimism that might be around this is the question of whether we could think about new routes for flexible learning but that heavily depends on broadband. The Minister gave a visual clue there; for Hansard, her eyebrows went up in agreement that there is still a problem with rural broadband. Perhaps she should be a bit more masked in future when she responds to debates but I think we all get the point that this is not working well. Although there may be investment on the horizon, rural areas are still crying out for the ability to operate to a standard which at least is better than dial-up and that is not happening everywhere.
I end by asking one question which is perhaps a little peripheral to this issue but was raised by my noble friend Lord Young: where do apprenticeships fit into this? The Minister may have read with interest the discussions we had when the Enterprise Bill was going through this House in relation to apprenticeships and the good decision by the Government to try to bring forward a gold standard for what constitutes a proper apprenticeship, getting away from some of what look like apprenticeships in name but are not in substance. That is to be applauded. However, we made many points about that in the debate—roundly rebutted by the Minister at the time—on what would actually be there to change the nature of what was being taught and delivered through the apprenticeships programmes. She felt that there was enough going on for that not to be required. However, she wrote to noble Lords yesterday:
“We need long-term governance arrangement which will support employers to uphold the high quality of apprenticeship standards and be able to respond to the changing needs of business. We intend to amend the Bill at Commons Committee to establish a new independent body; the Institute for Apprenticeships (IfA). It will operate in England, supporting employer-led reforms and regulating the quality of apprenticeships. It will also have a role in advising Government on apprenticeships funding. We expect the IfA to be operational by April 2017”.
That is bit of a U-turn because this was resisted entirely by her during the debate. I would be grateful if the Minister could add a bit to explain what exactly is the IfA, what its role will be and how it will impact the reviews we are assessing today.
Baroness Evans of Bowes Park (Con)
My Lords, I, too, am grateful to the noble Baroness, Lady Bakewell, for initiating this debate and to all noble Lords for their contributions.
The objective of the area review programme is to ensure that we have sustainable colleges which provide a strong offer to their learners and support their area’s broader economic strategy. Through encouraging greater efficiency, as mentioned by the noble Lord, Lord Stevenson, the reviews will create the capacity for colleges to reinvest in the offer for their students, so students and improving provision are at the heart of these reviews, driving better quality and greater specialisation. Colleges must be in the strongest position possible to achieve the right outcomes for their learners: outcomes that will enable them to go on to further training or to compete in the job market, confident that their training or apprenticeship has given them a firm foundation on which to build. The area reviews will also enable colleges to help deliver our national ambitions to support young people, including creating 3 million apprenticeship starts by 2020, which, as the noble Lord, Lord Young, rightly said, need to be of high quality. I will come back to apprenticeships later.
To get this right, it is important that the reviews are locally led. Each review will have as its starting point the needs of students and local economic objectives, so I can certainly reassure the noble Baroness, Lady Pinnock, that the business and economic needs of an area are indeed central to the reviews. The views of business will be taken into account. From there, we will examine existing provision and identify the most effective structures for meeting those needs. The review steering groups are composed of a combination of college chairs of governors and principals, local enterprise partnerships and local authorities.
Several noble Lords raised concerns about students. I reassure them that we are keen to engage learners, and the National Union of Students sits on the national advisory group for the programme. It has actively contributed in setting up round-table discussions to ensure that student voices are heard.
As we have already seen from the pilot reviews, which have informed the development of this approach, it will work. Colleges in Nottingham, Norfolk and Suffolk are in a much stronger position now to deliver good quality education to their learners based on the best evidence available to them. Because the reviews are locally led they are well placed to consider the needs of all learners, particularly those in rural areas where access to education is more likely to be impacted by wider factors, such as the availability of transport, which I think all noble Lords highlighted as a key issue, and access to broadband. Most reviews will include a proportion of learners who are considered to be living in rural areas. The first two waves of reviews, for instance, included Solent, Sussex and the Marches and Worcestershire.
The reviews will draw on the best available evidence in each area, including information on how current learners travel to study, the current and future demographics of each area, the potential role that technology can play and the future demand for skills and professional and technical education at all levels. They will develop recommendations about the future pattern of provision for the area based on that evidence. Any recommendations about future provision will take account of travel, access and the availability of the right courses for learners in the area now and in future.
In the north-east Norfolk and north Suffolk pilot review conducted in 2015, there was a significant challenge to meet the needs of learners dispersed across a rural area and dependent on limited travel. The options considered took account of this; accessibility was one of the criteria against which they were judged. For instance, while three institutions were merged no campuses were removed, ensuring that learners could continue to access the provision that they needed.
For students in rural areas this may mean that reviews include recommendations on improvements in the use of technology, as my noble friend Lord Lingfield highlighted: for example, to improve online curriculum and assessment or shared services such as information management. I can assure noble Lords that the reviews will examine how transport arrangements can be improved. This may well include the cost of travel. Because local authorities are also involved in the area review steering groups, they can consider how to align travel with the provision needed. Obviously, different reviews will result in different options, depending on the area, the needs of the students and the provision.
Where combined authorities assume responsibility for the adult education budget through devolution deals, successfully conducted area reviews will provide a firm foundation so that provision for adult learners can meet the future needs of local businesses and students, as determined by the local areas themselves.
The area reviews are being supported by an important review undertaken by Landex, as my noble friend Lady Byford will be aware, of the national offer of post-16 land-based provision in England. We expect Landex to report by early March and its conclusions will inform the wider programme of area reviews. This will ensure that land-based provision, which has an important role to play in supporting the rural economy and often has wider application than the area in which the college sits, is taken into account, to ensure that high-quality delivery is available to meet the needs of employers, whether in that area or more widely.
Yeovil College, in which the noble Baroness, Lady Bakewell, mentioned her close local interest, will be considered as part of the Somerset area review, which is currently scheduled to commence this November. This will provide the opportunity for the colleges in this area to consider the best provision for learners and employers across Somerset, and it will undoubtedly consider the impact of the rural nature of much of that county on current and future access to high-quality technical and professional education.
As I said, business and its needs are central to these reviews. The LEP is on the steering group and involved in the analysis of business demand. An important objective is to align businesses better with the improvement in delivery of apprenticeships. For instance, in Birmingham, as a result of the review, an apprenticeship company is being created with business leadership, drawing on the resources of all colleges. Apprenticeships are very much part of the thinking within these reviews.
Several noble Lords raised further education funding. The coalition Government indeed had to take difficult decisions to reduce the deficit, which included reducing the adult skills provision budget, other than apprenticeships, year-on-year. The Autumn Statement, however, provided a good settlement for FE. Through the new apprenticeship levy, we will see £2.5 billion being spent on apprenticeships by 2019-20: twice the cash amount being spent at the start of the decade. We are expanding our programme of advanced learner tuition fee loans for those over 19. On top of that, we have been able to maintain in cash terms a £1.5 billion per year adult education budget across this Parliament. I will need to write to the noble Lord, Lord Stevenson, with some of the further details he requested.
The combined adult education budget will provide colleges and training providers with the freedom and flexibility to determine how they use funding, working with LEPs and local commissioners to determine the appropriate distribution of funding to meet local needs best. These reforms represent an overall expansion of funding, meaning that total spending power to support participation will be £3.4 billion in 2019-20, which is a real terms increase of 30% compared with that for 2015-16.
We believe that the current structure of the post-16 education and training sector is unsustainable. We need to move towards a simpler and more financially resilient system which meets the needs of the economy. We recognise that there are circumstances particular to rural communities which the reviews need to take into consideration. Indeed, by referring to different areas, a number of noble Lords have highlighted that perfectly today. The pilot reviews provided an opportunity to test this in Norfolk and Suffolk. To reassure noble Lords once again, that is why we have been clear that the reviews must be tailored to meet local needs, based on the best evidence available and, most importantly, must have learners at the heart of the process.
Baroness Maddock
Will the Minister comment more fully on the reasons why sixth forms in schools in the areas are not included? It seems to me that that is absolutely crazy, particularly in rural areas.
Baroness Evans of Bowes Park
There is certainly an urgent need to ensure we have high-quality and resilient FE colleges. School sixth forms are included in the initial analysis and general findings but, practically, with more than 2,000 schools with sixth forms compared to 333 FE and sixth-form colleges, it is not going to be possible to cover them in the same degree of detail.
House of Lords
Female Genital Mutilation: Education in Schools
Baroness Featherstone
To ask Her Majesty’s Government how many schools are now using personal, social, health and economic education classes to inform their pupils on female genital mutilation.
Baroness Evans of Bowes Park (Con)
My Lords, female genital mutilation is child abuse and a crime. An effective multiagency approach is key to safeguarding girls from FGM and schools play an important role in this, as they do in safeguarding children from all forms of abuse. Schools have the autonomy to tailor their local PSHE programme to reflect the needs of their pupils, including teaching about FGM, drawing on the resources and evidence provided by experts and organisations such as the PSHE Association.
Baroness Featherstone (LD)
I thank the Minister for that Answer, but in a way she makes my case for me, because we have a safeguarding duty to the 60,000 girls who are at risk. If we do not inform them about the risks of FGM—what to look for and who to go to—then I believe we are derelict in our duty. Does the Minister agree with me that one of the best ways to protect girls is to make teaching on FGM mandatory, whether through PSHE or other means, and will she now commit to do so?
Baroness Evans of Bowes Park
My Lords, since 2014 FGM has been included in the PSHE programme of study so that is now an option for teachers, but we believe that it should be up to schools to have the autonomy to reflect the needs of their pupils. Of course teaching about FGM is one option that they can include, but we believe it is up to schools to think about the needs of their pupils and the communities that they serve, and it is for them to decide what best to cover and how best to cover it within their curriculum.
Baroness Massey of Darwen (Lab)
My Lords, would the Minister agree with me that, however good schools’ PSHE programmes are—and some are excellent—schools cannot mop up all the ills of society? Would she further agree that this is a highly sensitive issue, which is about the law and violence against women, and therefore needs delivering to teachers and pupils in a sensitive and expert way by people such as the school nurse or a doctor? It is not a case that can be taken very lightly.
Baroness Evans of Bowes Park
I entirely agree with the noble Baroness, which is why we shall be shortly publishing for the first time statutory multiagency guidance for front-line professionals on FGM specifically, which will apply to schools and children services as well as police and healthcare professionals. It is essential that everybody works together to support any young women who may be in this position and make sure that, as a community, all agencies are working together to help tackle this crime.
Baroness Jenkin of Kennington (Con)
Would my noble friend please update the House on the current state of protection orders?
Baroness Evans of Bowes Park
As noble Lords will be aware, protection orders were fast-tracked last summer to come into place before the summer holidays, so that any girls at risk could benefit from these new orders. Eighteen FGM protection orders were issued between July and September. That is the first set of data that we have.
Lord Morris of Aberavon (Lab)
My Lords, while individual prosecutions are matters for the Director of Public Prosecutions, are the Government satisfied that the law is adequate, and will they consider an investigation as to why there are so few prosecutions?
Baroness Evans of Bowes Park
As I said, we will shortly issue the statutory multiagency guidance, which we believe will help teachers, for instance, and other professionals to be able to identify this risk more easily and therefore to work with the police. The Serious Crime Act 2015 introduced a new mandatory duty on teachers, social workers and health professionals to report to the police known cases of FGM involving victims under the age of 18. Again, we believe that reports of these cases should assist the police; I have also mentioned protection orders. Therefore, we are building a framework within which professionals can work to help to tackle this crime.
Baroness Butler-Sloss (CB)
Does the noble Baroness know how much training the NHS gives to its front-line staff so that they are able to recognise this situation and deal with it?
Baroness Evans of Bowes Park
As I say, we are introducing a range of statutory guidance. Since April 2015, the NHS has collected enhanced data on women and girls seen by the NHS who have been subject to FGM. The second quarter of this data from July to September 2015 reported that 17 girls under 18 had come to the attention of the NHS. Therefore, with the enhanced data collection, the guidance we are introducing and our attempt to join up the NHS with schools and the police, we are starting to see progress in helping professionals identify this issue.
Baroness Corston (Lab)
The noble Baroness referred just now to the role of schools. When I represented a multicultural constituency in the other place, one of the things that used to concern me was the instance of girls being suddenly taken away for long holidays, and we tried very hard to raise this with schools to see whether they were being taken away for this purpose. It would be useful to know whether this is included in the guidance to teachers. I point out to those colleagues who have been in this House for quite a while that nobody here ever raised this issue for as long or as often as our late friend Baroness Rendell—Ruth Rendell. I suggest that we set up some initiative on FGM in Ruth’s name.
Baroness Evans of Bowes Park
I will be very happy to take the noble Baroness’s suggestion back to the department. As regards the question she raised about teachers being able to identify this, I went on to the PSHE Association website to have a look at the section on FGM, and the issue that the noble Baroness raised is mentioned there, as are a number of other useful elements of guidance. As I have said, with new statutory guidance coming in and the updating of the safeguarding guidance for schools, we are attempting to get as much information to teachers as we can so that they can play their role in helping to protect young women.
Lord Storey (LD)
My Lords, can I come back to PSHE? The Minister has highlighted its importance—indeed, the Government’s own website says how important it is. Will she confirm that PSHE has to be taught only in maintained schools, so that the 70% that are academies, as well as free schools, do not have to teach it? Does she not think, given the importance of PSHE and this issue, that it should be taught in all schools and that advice and guidance should be given to all schools?
Baroness Evans of Bowes Park
We state clearly in the introduction to the national curriculum that we expect all schools to deliver high-quality PSHE. Of course, the noble Lord will be aware that, when inspecting, Ofsted considers how a school ensures the spiritual, moral, social and cultural needs of its pupils. Ofsted inspects all schools—maintained, academies and free schools—so this enables PSHE to be considered in a proportionate and integrated way as part of their inspection.
Female Genital Mutilation: International Action
(8 years, 9 months ago)
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Lord Chidgey
To ask Her Majesty’s Government what assessment they have made of the effectiveness of current campaigns and programmes sponsored and executed by western governments and international non-governmental organisations aimed at eliminating female genital mutilation and cutting practices in African countries.
The Parliamentary Under-Secretary of State, Department for International Development (Baroness Verma) (Con)
My Lords, since 2008, the UN estimates that 13,000 communities representing 10 million people have declared that they will abandon FGM. DfID is the largest ever donor on FGM, investing £35 million over five years, and that support is accelerating the progress we have seen since the PM co-hosted the Girl Summit. Across Africa, women, politicians, young people and religious leaders are campaigning for a change, and we stand strong in our support.
Lord Chidgey (LD)
My Lords, I thank the Minister for that reply. Since 1965, 24 of the 29 countries in which FGM practices are concentrated have enacted decrees or legislation related to outlawing them. Yet nearly 50 years later in Guinea, for example, 96% of girls and women between the ages of 15 and 49 are still suffering FGM, while 80% are victims in a further eight countries. In all, some 125 million girls and women born since 1965 have been abused in this manner. Given the overwhelming case for the abandonment of these practices at all levels and recognising the legal, social and moral norms that control them, what specific action are the Government taking to support UNICEF and other in-country programmes with human and financial resources?
Baroness Verma
My Lords, the noble Lord will be aware that in 2014 we co-hosted the Girl Summit with UNICEF. At that summit we secured 500 signatories to a charter and more than 170 commitments from Governments, civil society and individuals. We are putting £35 million in place over the next five years, but this is a deeply bedded social norm. It has been there a long time. It will take time for people to come to terms with removing it. We have seen progress. Since our summit, there have been summits in Bangladesh, Ethiopia and Uganda, and last year there was an African Union-led summit in Zambia.
Baroness Cox (CB)
My Lords, is the Minister aware that I worked as a nurse in Sudan? I saw the horrific effects of the most radical form of FGM, with agonising complications. I saw how many women, offered some amelioration—for example, following episiotomy for childbirth—refused help in terror of their husbands’ and families’ reactions. What more can be done to ensure that these DfID programmes effectively reach local communities and families, who are critical to the eradication of FGM? At present, many of these programmes do not reach grass-roots level.
Baroness Verma
My Lords, I know of the experience of the noble Baroness and the work that she does in this area. It is right and proper that we work with the countries where this is prevalent. If we are to change social norms, we need local communities on board with us. All our programmes in all the countries in which we operate put girls and women at the centre of everything we do.
Baroness Gardner of Parkes (Con)
My Lords, I remind the House of the work done by the noble Baroness, Lady Trumpington, who introduced the first legislation on this issue. Baroness Rendell then picked up the fact that people were being taken abroad outside our jurisdiction. She did wonderful work and put through the next part of the legislation.
I followed the noble Baroness, Lady Trumpington, on the United Nations Commission on the Status of Women, which is where the work started. It is clear from the time that she and I spent there that it takes a long time to change cultural attitudes—even in this country, which was the first to pass an equal opportunities Act. It all takes time but we must not give up. The young Kenyan girls who took a court case in their own country set an outstanding example.
Baroness Verma
My Lords, I pay tribute to my noble friends Lady Gardner and Lady Trumpington, and to Lady Rendell. By raising these issues consistently we are able to achieve some of the changes and an acceptance that we must do much more to get rid of this heinous crime. My noble friend Lady Gardner is absolutely right; we must continue to try to change something deeply embedded.
Baroness Kinnock of Holyhead (Lab)
My Lords, does the Minister share my concern about the efforts made by UN member states to minimise the number of SDG indicators, possibly eliminate the FGM target altogether and retain the current restriction on measuring FGM in only what they call “relevant countries”? Does she agree that, if the FGM indicator is limited only to specific countries or eliminated completely, millions of women and girls will remain invisible? Data on the targets will not be collected and no one will know if states are making progress towards ending this vile process.
Baroness Verma
The UK fought hard for the universal acceptance of human rights—that they are for everyone—and this is a human right. The noble Baroness will therefore be aware that we will continue to ensure that there are indicators to reflect FGM.
Baroness Northover (LD)
My Lords, as the Minister will know, the Girl Generation was set up in 2014 by my noble friend Lady Featherstone, when she was a DfID Minister, to combat FGM in 17 countries—initially in Kenya, Zambia and Nigeria. What targets have now been set for the Girl Generation and how is DfID supporting them? What is DfID now doing to ensure that the targets are achieved given how important it is to protect these girls?
Baroness Verma
My Lords, I pay tribute to the noble Baroness, Lady Northover, for her work as a Minister to champion the issue of violence against women and girls. It is absolutely right that we continue to pursue this hard by monitoring, evaluating and finding ways of working to help Governments to enforce and put in place legislation, frameworks and policies. That will assist the work that was done by the noble Baronesses, Lady Featherstone and Lady Northover.
Airports: Expansion
(8 years, 9 months ago)
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The Earl of Glasgow
To ask Her Majesty’s Government whether they are fully committed to choosing either Heathrow or Gatwick for airport expansion, or are still considering other options.
The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)
My Lords, on 14 December 2015, the Government formally announced that they accepted the Airports Commission’s case for new runway capacity in the south-east, as well as the commission’s three shortlisted schemes; namely, additional runways at Gatwick or Heathrow, or an extension to the existing northern runway at Heathrow. The Government will not be considering any other options.
The Earl of Glasgow (LD)
My Lords, I thank the Minister for that Answer. Unfortunately I am disappointed by it. There is some confusion in my mind, and perhaps in that of the Government as well, as to whether this airport expansion is primarily to provide extra capacity for the crowded south-east or whether it is to establish an up-to-date hub airport to rival those in Europe. If it is to establish a first-class, international hub airport, surely it is better located outside the south-east. Will the Government not consider Birmingham, linked of course to HS2? That option presents far fewer problems than those facing Heathrow and Gatwick; it is much closer to Britain’s centre of gravity and is half way to the aspirational northern powerhouse.
Lord Ahmad of Wimbledon
As far as the expansion of south-east capacity is concerned, the Government are committed to the findings of the Airports Commission. That is in no sense to take away from the importance of our regional airports. Indeed, all regional airports, including Birmingham, mentioned by the noble Earl, are already benefiting from increased investment and are an important part of UK plc’s competitive global offering across the world.
Lord Skelmersdale (Con)
My Lords, given that this state of affairs has been arrived at after something like 20 years, is it now considered fairly urgent that we should think about a completely new airport?
Lord Ahmad of Wimbledon
I think that I have made the Government’s position quite clear. The commission was set up by the previous Government under the guidance of the current Prime Minister in 2012. It reported its findings. It was a comprehensive review. As I said in my earlier Answer, the Government are committed to its conclusions and the three options it presented, all being viable options. We will proceed on those. The commission also said that the decision needed to be made and the airport needed to be operating by 2030. That is certainly the timetable that the Government are committed to.
Lord Harris of Haringey (Lab)
My Lords, is it not the case that the Airports Commission was set up by the previous Government as a means of keeping this particular ball in the air because the Government were not prepared to make a decision? That was at a direct cost of at least £20 million. The ball has now been kicked firmly into the long grass and every so often the Transport Secretary kicks it further away from a decision. If the Government really believe that the decision to increase airport capacity is urgent and important, how much longer will they dither over this issue because they do not want to make a political decision?
Lord Ahmad of Wimbledon
The Government have been quite clear: the reasons for further consideration included environmental issues such as air pollution—a subject close to the noble Lord’s heart. This is not about keeping things up in the air. On the contrary, it is about getting those things in the air down on the ground.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, I think the House is calling for my noble friend Lord Tebbit.
Lord Tebbit
My Lords, should we not recollect that major international airlines cannot be compelled to fly into airports they do not wish to go to? Should we not all agree now that the alternatives to Heathrow are not Birmingham or Stansted, but Schiphol, Paris and Frankfurt? Either we can have the business in this country, in London, or it will go to the continent.
Lord Ahmad of Wimbledon
My noble friend raises an important point. On the first element, the commercial decisions on air slots are very much for the airlines to make. As for the competitiveness of London vis-à-vis competitors in Europe, that is one reason why the Government are committed to further expansion of air capacity in the south-east.
Baroness Randerson (LD)
My Lords, has anyone actually asked passengers what they want? Has there been a recent independent survey of the views of passengers in the north and the Midlands? There is considerable resentment among both business and leisure passengers about the problems they face in travelling so far to reach a hub airport in the south of England.
Lord Ahmad of Wimbledon
On the subject of specific surveys, I will write to the noble Baroness about those two areas. However, as she is no doubt aware, Manchester, for example, will also benefit from £1 billion of investment over the next 10 years—and there are other regional airports. Indeed, I was looking forward to a question from the noble Lord, Lord McKenzie of Luton—but I may pre-empt that if I add that Luton, too, has benefited. Further to the noble Lord’s previous question, I am glad to say that my right honourable friend the Secretary of State recently visited Luton and saw the excellent facilities there.
Lord Rosser (Lab)
My Lords, will the Government clarify the questions that they are now asking about extra runway capacity, and the options that they do not believe were fully addressed or answered in the Airports Commission report? Which bodies and organisations are they now asking to provide views and information on the questions that they are still asking?
Lord Ahmad of Wimbledon
As I have already said, some of the criticisms of the commission’s report were about environmental issues, particularly noise and air pollution—and those are part and parcel of the Government’s further considerations. All relevant bodies making representations will be part of that consultation process.
Baroness Tonge
My Lords, can the Minister promise us faithfully that we will have a decision on expansion at Heathrow Airport after the elections for London Mayor?
Lord Ahmad of Wimbledon
I can assure the noble Baroness—I speak for all my noble friends on the Front Bench and beyond—that we always seek to give answers faithfully from this Dispatch Box.
Lord Foulkes of Cumnock (Lab)
Will the Minister confirm that airports policy is now being co-ordinated by Sir John Chilcot?
Lord Ahmad of Wimbledon
That may be the noble Lord’s view; it is certainly not mine.
Health: Zika Virus
(8 years, 9 months ago)
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The Earl of Selborne
To ask Her Majesty’s Government what is their assessment of the World Health Organisation’s warning on the spread of the Zika virus.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, we welcome the WHO recommendations, and the Government are considering our response. PHE’s experts are liaising closely with WHO and other agencies to understand the developing evidence and give the best advice possible. Given the serious implications of a link with microcephaly, the current travel advice is highly precautionary. Those travelling to affected areas should review this advice, pregnant women should consider the need to travel and all travellers should take scrupulous bite avoidance measures.
The Earl of Selborne (Con)
I thank my noble friend for that reply. It is helpful to know that there is a rapid response call for research applications aimed at tackling the Zika virus. Does my noble friend agree that the immediate priority is to eliminate the species of mosquitoes which spread the virus? Will the Government support field trials with Latin American nations into the release of genetically modified non-replicating mosquitoes, as recommended by the Science and Technology Committee in December?
Lord Prior of Brampton
My Lords, I think we are the second biggest contributor of funds to WHO and have just contributed £6.2 million to its emergency contingency relief fund. I think that the work that we have done in the UK on developing genetically modified mosquitoes to combat this disease and other diseases spread by mosquitoes will almost certainly play a very major part as we go forward.
Lord Taverne (LD)
My Lords, since there is no prospect of an early vaccine to deal with Zika, is not the only show in town which could deliver an early answer to Zika the genetically modified mosquitoes to which the noble Earl, Lord Selborne, referred? This is a mosquito that has been modified so that its offspring die off before they can develop, and it is a mosquito that transmits both the dengue and the Zika virus. Since there has been astonishing success in the Oxitec company’s trials in parts of Brazil which, after the release of hundreds of millions of the modified mosquitoes, has virtually extinguished dengue, should the Government not support and fund extended trials by this company in Brazil? That would be extremely good not only for the reputation of British science but for the economy, since this is a field in which Britain leads the world.
Lord Prior of Brampton
There is no doubt that the work that we have done in this country on developing genetically modified mosquitoes will play a very large part in tackling Zika and other infectious diseases of this type. Sally Davies, the Chief Medical Officer, has convened a science committee which is meeting either today or tomorrow to assess the issues raised by the current outbreak. I am absolutely sure that she will be considering what the noble Lord has said as part of our response.
Lord Collins of Highbury (Lab)
My Lords, obviously effective control is essential, but since the WHO declaration we have had news of a sexually transmitted case of the virus. What lessons are the department taking, or what can they take, from this in terms of guidance and action in this country, particularly for travellers?
Lord Prior of Brampton
My Lords, there has been one case where Zika may have been sexually transmitted—I use the words “may have been” advisedly because it is not proven. Indeed, the link between Zika and microcephaly is not yet scientifically proven. There seems to be a strong probability that that is the case, but we should bear in mind that Zika was first identified back in 1947 in Africa and since then there has been no such connection with microcephaly, although in Brazil there appears to be a very strong connection now. There has been one case in Texas, where there may have been sexual transmission and the advice for men who are sleeping with women who may become pregnant is to wear a condom.
Lord Patel (CB)
My Lords, while absolutely agreeing that we should carry on supporting the science of genetically modified mosquitoes, it may be that mosquitoes that are already genetically modified for dengue can do the same job for Zika, but we do not know that. Much more important is the recent report and questions about the assessment of the spread of the Zika virus. The Minister has just referred to sexual transmission, but that applies to any bodily fluids, not just sexual transmission. The other worrying thing is that the common mosquitoes have now been found possibly to be infected by Zika. That is a much more worrying prospect, because they are much more widespread.
Lord Prior of Brampton
I understand that the common mosquito which we find in southern Europe could potentially carry Zika, which I think was reported in the Times today. There is as yet no evidence that it does carry Zika, but it is something that we need to watch very carefully.
Baroness Seccombe (Con)
My Lords, is the fever notifiable, so that a record is kept of this event?
Lord Prior of Brampton
My Lords, one of the problems of this illness is that four out of five people are asymptomatic—they have no symptoms. For many of the others, the symptoms are such that it is a very light cold or light flu. That is one of the problems with this illness.
Lord Hunt of Chesterton (Lab)
With the Olympic Games coming up, are particular precautions being considered and are you in contact with the organisations dealing with travel to the Games?
Lord Prior of Brampton
Comprehensive travel advice is on a number of different websites. The Royal College of General Practitioners and the Royal College of Obstetricians and Gynaecologists have been notified and the information has been cascaded down, so I think that there will be enough travel advice as we near the Olympics.
Baroness Tonge (Ind LD)
My Lords, is the Minister aware that in Brazil around 80,000 women die from unsafe abortion because of the lack of provision there? This figure will surely increase as a result of this terrible disaster. Is there any way that our Government can put pressure on the Brazilian Government to allow safe abortion in that country?
Lord Prior of Brampton
My Lords, that strays slightly away from the brief that I have on the subject today. May I take that on consideration? I will raise it with my honourable friend in the other House, the Minister for Public Health.
Baroness Masham of Ilton (CB)
My Lords, are the aeroplanes coming from the countries where there are these mosquitoes being sprayed?
Lord Prior of Brampton
My Lords, that is something that is under consideration at the moment. It varies from airline to airline—that is the truthful answer at the moment—but we are considering whether all flights from areas that have Zika virus should be sprayed.
Housing and Planning Bill
Baroness Williams of Trafford
That it be an instruction to the Committee of the Whole House to which the Housing and Planning Bill has been committed that they consider the Bill in the following order:
Clauses 12 to 22, Schedule 1, Clauses 23 and 24, Schedule 2, Clause 25, Schedule 3, Clauses 26 to 61, Clauses 1 to 11, Clauses 62 to 90, Schedule 4, Clauses 91 to 97, Schedule 5, Clauses 98 to 110, Schedule 6, Clauses 111 to 113, Schedule 7, Clause 114, Schedule 8, Clauses 115 to 117, Schedule 9, Clauses 118 to 122, Schedule 10, Clauses 123 to 133, Schedule 11, Clauses 134 to 136, Schedule 12, Clauses 137 to 142, Schedule 13, Clauses 143 to 159, Schedule 14, Clauses 160 to 163, Schedule 15, Clauses 164 to 169, Schedule 16, Clauses 170 to 176, Schedules 17 and 18, Clauses 177 to 182, Schedule 19, Clauses 183 to 186, Schedule 20, Clauses 187 to 193, Title.
European Union: United Kingdom Renegotiation
(8 years, 9 months ago)
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The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Prime Minister in another place yesterday. The Statement is as follows.
“With permission, Mr Speaker, I would like to make a Statement on progress with our renegotiation. The House has now had the chance to study the documents published by the European Council yesterday. I believe that this is an important milestone in the process of reform, renegotiation and referendum that we set out in our manifesto, and which the Government are delivering. We have now legislated for that referendum and we are holding that renegotiation.
Let me set out the problems that we are trying to fix and the progress that we have made. First, we do not want to have our country bound up in an ever closer political union in Europe. We are a proud and independent nation, with proud, independent, democratic institutions that have served us well over the centuries. For us, Europe is about working together to advance our shared prosperity and shared security; it is not about being sucked into some kind of European superstate—not now, not ever.
The draft texts set out in full the special status accorded to the UK and clearly carve us out of further political integration. They actually go further to make it clear that EU countries do not even have to aim for a common destination. This is a formal recognition of the flexible Europe that Britain has long been arguing for. In keeping Britain out of ever closer union, I also wanted to strengthen the role of this House and all national parliaments, so we now have a proposal in the texts that if Brussels comes up with legislation that we do not want, we can get together with other parliaments and block it with a red card.
We have also proposed a new mechanism to finally enforce the principle of subsidiarity—a principle dear to this House—which states that, as far as possible, powers should sit here in this Parliament, not in Brussels. Every year the European Union has to go through the powers it exercises and work out which are no longer needed and should be returned to nation states.
Secondly, I said that we wanted to make Europe more competitive and deal with the rule-making and the bureaucracy that can cost jobs here in Britain and, indeed, across the European Union. We asked for commitments on all the areas central to European competitiveness. We want international trade deals signed, the single market completed and regulation stripped back. All these things are covered in the draft texts. There is a new proposal for specific targets to reduce the burdens on business in key sectors. This will particularly help small and medium-sized businesses, and there is a new mechanism to drive these targets through and cut the level of red tape year on year.
Thirdly, we are absolutely clear that Britain is going to keep the pound—in my view, for ever—but we need to be just as clear that we can keep the pound in a European Union that will be fair to our currency. Put simply: the EU must not become a euro-only club. If it does, it would not be a club for us, so we called for a series of principles to protect the single market for Britain. We said that there must be no discrimination against the pound, no disadvantage for businesses that use our currency, wherever they are located in the EU, and no option for Britain ever again to be forced to bail out eurozone countries. All these principles are reflected in the draft text, which is legally binding, and, again, there is a mechanism. Britain has the ability to act to uphold all these principles and protect our interests. We should be clear: British jobs depend on being able to trade on a level playing field within the European single market, whether in financial services or cars or anything else, so this plan, if agreed, will provide the strongest possible protection for Britain from discrimination and unfair rules and practices. For instance, never again could the EU try its so-called “location policy”—that the settling of complex trades in euros must take place only in eurozone countries. These principles would outlaw that sort of proposal. These are protections we could not have if Britain were outside the European Union.
Fourthly, we want to deal with the pressures of immigration, which have become too great. Of course, we need to do more to control migration from outside the European Union. We are doing that and we will be announcing more measures on that front, but we need to control migration from within the EU, too. The draft texts represent the strongest package we have ever had on tackling the abuse of free movement and closing down the back-door routes to Britain. It includes greater freedoms for Britain to act against fraud and prevent those who pose a genuine and serious threat from coming into this country. It includes a new law to overturn a decision by the European Court which has allowed thousands of illegal migrants to marry other EU nationals and acquire the right to stay in our country. It has been a source of perpetual frustration that we cannot impose our own immigration rules on third-country nationals coming from the European Union, but now, after the hard work of the Home Secretary, we have a proposal to put that right.
There are also new proposals to reduce the pull factor that our benefits system exerts across Europe by allowing instant access to welfare from the day someone arrives. People said that Europe would not even recognise that we had this problem, but the text explicitly recognises that welfare systems can act as an unnatural draw to come to this country. Our manifesto set out four objectives to solve this problem. We had already delivered on two of them within months of the general election. Already EU migrants will no longer be able to claim universal credit—the new unemployment benefit— while looking for work, and if those coming from the EU have not found work within six months, they can now be required to leave. Now, in these texts, we have secured proposals for the other two areas. If someone comes from another country in Europe, leaving their family at home, they will have their child benefit paid at the local rate, not at the generous British rate, and, crucially, we have made progress on reducing the draw of our generous in-work benefits. People said that it would be impossible to end the idea of something for nothing, and that a four-year restriction on benefits was completely out of the question. But that is now what is in the text—an emergency brake that will mean people coming to Britain from within the EU will have to wait four years until they have full access to our benefits. The European Commission has said very clearly that Britain already qualifies to use this mechanism, so, with the necessary legislation, we would be able to implement it shortly after the referendum.
Finally, let me be absolutely clear about the legal status of these changes that are now on offer. People said we would never get something that was legally binding—but this plan, if agreed, will be exactly that. These changes will be binding in international law, and will be deposited at the UN. They cannot be changed without the unanimous agreement of every EU country—and that includes Britain. So, when I said I wanted change that is legally binding and irreversible, that is what I have got; and, in key areas, treaty change is envisaged in these documents.
I believe we are making real progress in all four areas—but the process is far from over. There are details that still need to be pinned down and intense negotiations will take place to try and agree the deal with 27 other countries. It will require hard work, determination and patience to see it through. But I do believe that with these draft texts, and with all the work that we have done with our European partners, Britain is getting closer to the decision point. It is, of course, right that this House should debate these issues in detail. So in addition to this Statement, and of course a Statement following the Council later this month, the Government will also make time for a full day’s debate on the Floor of the House.
As we approach this choice, let me be clear about two things. First, I am not arguing, and I never will argue, that Britain could not survive outside the European Union. We are the fifth largest economy in the world and the biggest defence player in Europe, with one of the most extensive and influential diplomatic networks on the planet. The question is not could Britain succeed outside the European Union; it is how will we be most successful? How will Britain be most prosperous? How will we create the most jobs? How will we have the most influence on the rules that shape the global economy and affect us? How will we be most secure? I have always said that the best answers to those questions can be found within a reformed European Union. But let me say again, if we cannot secure these changes, I rule nothing out.
Secondly, even if we secure these changes, you will never hear me say that this organisation is now fixed—far from it. There will be many things that remain to be reformed and Britain would continue to lead the way. We would continue to make sure that Europe works for the countries of Europe, for the businesses of Europe, for the peoples of Europe and, crucially, for the British people who want to work, have security and get on, and make the most of their lives.
So, if we stay, Britain will be in there keeping a lid on the budget, protecting our rebate, stripping away unnecessary regulation and seeing through the commitments we have secured in this renegotiation. This will ensure that Britain can truly have the best of both worlds: in the parts of Europe that work for us, and out of those that do not; in the single market; free to travel around Europe; and part of an organisation where co-operation on security and trade can make Britain and all its partners safer and more prosperous, but with guarantees that we will never be part of the euro, never be part of Schengen, never be part of a European army, never be forced to bail out the eurozone with our taxpayers’ money, and never be part of a European superstate.
That is the prize on offer—a clear path that can lead to a fresh settlement for Britain in a reformed European Union: a settlement that will offer the best future for jobs, security and the strength of our country; a settlement which, as our manifesto promised nearly a year ago, will offer families in our country security at every stage of their lives. That is what we are fighting for, and I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Smith of Basildon (Lab)
My Lords, I am grateful to the Leader of the House for repeating the Prime Minister’s Statement. I also thank the Government Chief Whip for extending the time for Back-Bench contributions. I know that the noble Lord understands the need for that and also for a more substantial debate on this matter in the near future.
Let me make it clear at the outset that we broadly welcome the Statement. I readily confess to some degree of relief that the Prime Minister is finally making at least some progress on his aim of seeking a new relationship with the European Union. I do not think I am alone in finding that the Prime Minister’s rhetoric has been, perhaps, the opposite of what one would normally expect from a good negotiator. This is not a game. This is not an issue in which internal party political divisions should have any role at all. The only objective must be the national interest: an interest that brings jobs, investment, prosperity and a continued influence in the world; greater protections for British workers and increased opportunities for our businesses; and that keeps us safer, both at home and abroad. What has been outlined so far appears to be a step in the right direction. However, as I think the Leader conceded, it is more of an agreement to agree than a detailed and finalised deal, but it is none the less welcome and we look forward to further clarification and expansion on the detail of how the proposed negotiation will work in practice.
We on these Benches welcome that important and hard-fought advances such as employment rights and improved environmental protections have not been negotiated away. They are tangible benefits for British citizens and it is right that they are protected. Whatever the future arrangements, I hope that the Prime Minister will ensure that British workers are never left behind in standards and rights at work.
I want to be clear that my party will campaign to keep the UK in the European Union, not least because we believe it is increasingly impossible for countries to be fortresses in our interconnected world. Many of the most serious challenges, including crime, terrorism and climate change, affect all countries and are best met by co-ordinated European and worldwide action.
Many noble Lords will recall the hugely informative debates we had on the coalition Government’s bizarre hokey-cokey of opting out then opting back in again on crime and criminal justice measures. It was clear then, and the Government had to concede, that meeting the challenges of serious and organised crime—drug trafficking, fraud, child abuse and paedophilia, and people trafficking—could effectively be tackled only through the EU. I remain of the view that one of the strongest cases for the European Union is the effectiveness of our co-operation on serious crime. The threats and challenges we face will not go away by voting to leave. That established co-operation means that we are better able to detect crime, bring criminals to justice and, therefore, protect our citizens.
It also illustrates one of the failures of politicians, and others, on this issue. There has been a complete inability to talk about the EU so that people outside Parliament know what we are talking about—even in the Statement today. For most people, an emergency brake is in a car. The language of EU directives, qualified majority voting and other terms that most people never normally use does not begin to explain why our membership is so important. We need to talk about the Europe-wide environmental measures that make our beaches and coastal waters cleaner and safer, about consumer protection to stop customers being ripped off, about rights at work, about jobs, about justice and about catching criminals. These are the issues that really touch people’s lives.
There is a huge challenge for all of us in this House and our colleagues in the other place, as well as our national media and opinion-formers. That challenge is illustrated by what could be described as the more colourful headlines, front pages and commentary that the Prime Minister has faced since his return. This debate is a once-in-a-generation opportunity for many millions of people, each with one equal vote, to have their say about our country’s future place in Europe and the world—although, sadly, not for the 16 and 17 year-olds whose future is dependent on the outcome of that vote. The debate should not be only one of persuasion. It should be one of education and providing straightforward, honest and accurate facts and allowing people to reach their own decisions.
Noble Lords will recall that during the passage of the European Union Referendum Bill, your Lordships’ House secured concessions from the Government on the importance of significant information provision in advance of the referendum, including agreement to report back on: the rights of individuals within the UK, including employment rights; the rights of EU citizens living in the UK; social and environmental legislation; law enforcement, security and justice; the effect of withdrawal on Gibraltar; the right to apply for financial support from EU structural funds; and support for agriculture and research—although, sadly, not our call for the Treasury to report on the financial impact of the UK voting to leave. That is such an important issue and I ask the Leader to raise this with the Prime Minister and the Chancellor in the interests of a balanced and informed debate. If I have one plea for politicians and the media, it is that this debate should provide more light than heat. As Thomas Jefferson said:
“The cornerstone of democracy rests on the foundation of an educated electorate”.
Finally, as my colleague the leader of the Opposition in the other place told MPs yesterday:
“The Labour party is committed to keeping Britain in the European Union because we believe it is the best … framework for European trade and co-operation in the 21st century, and in the best interests of people in this country”.—[Official Report, Commons, 3/2/16; col. 928.]
No doubt, many in your Lordships’ House—on all sides—are of the same view. I trust also that everyone in this House understands that, should the UK vote to leave the EU, our country, our companies, our universities and our people will still have to follow its rules when doing business with its institutions or when travelling to the remaining member states—all without any further say in making those rules.
Reform is a constant process. It is not an event. The most effective way to reform an institution is through patience, explanation, persuasion and the building of alliances—often across and outside the normal political boundaries. That is something that noble Lords understand well.
It would be helpful to your Lordships’ House if the Leader of the House could today provide some of the detail that so far is missing or set out the timetable in which that will be provided and your Lordships’ House given an opportunity to debate it. The sooner the proposed reforms are agreed and clarified, the sooner we can step up the campaign to keep Britain in Europe and end the damaging uncertainty that has been created around our continued membership.
Lord Wallace of Tankerness (LD)
My Lords, I, like the Leader of the Opposition, thank the Leader of the House for repeating the Prime Minister’s Statement and also for the arrangements for Back-Benchers to raise questions on this important issue. In his Statement, the Prime Minister said that a full day’s debate would take place following the Statement after the European Council later this month in government time in the other place. I hope that the noble Baroness will be able to make a similar commitment with regard to a debate in your Lordships’ House.
The draft plan before us represents meaningful reforms that can strengthen our economic co-operation with Europe, can bring jobs and growth to the United Kingdom and indeed, as the noble Baroness said in repeating the Prime Minister’s Statement, will provide strong protection for Britain from discrimination and unfair rules and practices. Indeed, the provision prohibiting discrimination on the basis of official currency or legal tender seems to be a particularly strong passage in the texts that have been released.
The Prime Minister referred to the legally binding nature of any agreement. Will the noble Baroness the Leader of the House amplify that when she responds? Would these agreements be legally binding and come into force when the United Kingdom notified the Council that there had been a decision in the United Kingdom to remain in the European Union?
While we on these Benches were somewhat sceptical of the political motives of the Prime Minister in seeking a referendum, it is nevertheless a reality. My party will use the campaign to deploy a positive case for Britain remaining within the European Union. We stand united against the idea that Britain should be isolated, sidelined or alone. We believe that, together in Europe, the United Kingdom will be a stronger and more thriving nation.
In the European Union, Britain is part of the world’s largest single market, allowing our businesses to grow and prosper. In the European Union, neighbours and allies support each other in what remains the world’s most successful project in peace. In the European Union, our citizens have more opportunities to work, to travel and to learn than ever before, ensuring that our children and grandchildren have ever greater prospects and opportunities. In the European Union, together we can protect the natural environment and tackle climate change more effectively. In the European Union, together we are stronger against terrorism and against those who despise our liberal and modern way of life, and we can together tackle more effectively the criminal gangs who peddle illegal drugs and weapons and engage in human trafficking.
These are important arguments that we need to deploy in the referendum. Does the noble Baroness the Leader of the House therefore accept that, while the reforms in this particular package are welcome, the referendum debate itself will need to go beyond the details of the renegotiation and take into account the wider benefits of European Union membership and the costs of leaving? Will the noble Baroness confirm that the Government’s message during the referendum campaign will not just be about the finer details of this package, but about the further and more important values that are at stake?
In the light of the changes made in your Lordships’ House to the European Union Referendum Bill, will the Government ensure that there is a realistic assessment of what Brexit would look like and its disadvantages for the United Kingdom? Can the noble Baroness assure your Lordships’ House that the reports on the consequences of withdrawal and alternatives to membership will provide a meaningful analysis?
Baroness Stowell of Beeston
My Lords, I was very pleased to repeat my right honourable friend’s Statement about this important issue of Britain’s role in, and relationship with, Europe. We were elected as a Government to lead a process of reform and renegotiation and to hold a referendum on the EU. Many said that what we had set out to do would be impossible, yet we have already legislated for that referendum and we now have a draft text on the table that puts forward significant reforms in each of the four areas that are of greatest concern to the British people. The important thing to stress is that this is about addressing their concerns and the things that they have highlighted, all too often, over a very long time about Britain’s relationship with the European Union.
Before I address some of the specific points that were raised by the noble Baroness and the noble and learned Lord, I would say that, contrary to the way in which the noble Baroness described my right honourable friend’s approach to his responsibility, he has been very careful in his approach and very diplomatic. He had a plan which he was keen to put forward, negotiate over, hopefully achieve agreement on and then implement. What he has achieved so far is something that no other British Prime Minister has yet achieved in terms of coming to this Parliament and saying that there is the chance now to bring back powers to the United Kingdom from Europe. That is incredibly important.
The noble Baroness referred to one of the things we already achieved in the coalition Government: the justice and home affairs opt-outs. That was unprecedented in terms of us renegotiating our agreement with Europe on something that was very important. Both she and the noble and learned Lord talked about the use of language and about putting forward the positive case for Britain’s membership of Europe during the referendum campaign. That is clearly an important aspect of any campaign. The Statement from the Prime Minister that I have repeated was very clear that there are real benefits to the United Kingdom being in Europe, which we would lose if we were no longer part of Europe. He was also very clear in his Statement that it would be possible for the UK to survive outside of the European Union.
The noble Baroness asked about details missing from the documents that have been published and put forward by the Commission. This is a live negotiation, and those details are still to be discussed and debated. The Prime Minister is hosting the Syria conference today, which he will take as an opportunity to talk to other Heads of Government. He is travelling to Europe at the end of this week, and there will be another European Council on 18 and 19 February. A lot of this is still very much in play and up for negotiation, so I am not able to provide more detail on anything that is missing.
However, I assure the noble Baroness and the noble and learned Lord that, after the next European Council, I will, as is customary, repeat the Prime Minister’s Statement in this House. We do not yet know whether the Prime Minister will reach an agreement at that European Council, but in his Statement yesterday he committed to a full day’s debate in the other place after an agreement is reached. I am quite confident that we will be able to secure some time, in government time, for a debate in this House to discuss whatever the Prime Minister is able to agree, although I stress that we cannot be sure that that will happen at the European Council that is taking place later on this month.
The noble and learned Lord asked me about the legal status of the documents. It is very clear, because Mr Tusk has made it clear, that these are legally binding documents; they are irreversible. If the Prime Minister reaches an agreement with the other member states that he wishes to put forward to the people of this country, for them to decide then that they want to remain in Europe, after that decision is made then they will take operational effect—they will become operative—immediately. There are some elements that will be legally binding straight away. The deal will take effect straight away.
There will be some measures that are identified in the draft deal that will require some secondary legislation, perhaps through the European Parliament, but because of the way in which the Prime Minister has approached his renegotiation with Europe, a lot of the different institutions and people involved in this process have already come out and said that they are ready to respond and to do what is necessary in this case—in that case, in the European Parliament. We are confident that we will be able to make full progress should that deal be made, should the British people decide that that is what they want, because of the way in which people have already responded.
Lord Taylor of Holbeach (Con)
My Lords, we are now into an extended period of Q&A of 40 minutes. I recommend to the House that we be succinct in the questions that we lay and that we go round the House in our customary fashion. This should enable everybody to make a point.
Lord Lawson of Blaby (Con)
My Lords, is my noble friend aware that none of the important objectives set out in the Prime Minister’s Bloomberg speech three years ago has been achieved? He committed himself then to securing a “fundamental, far-reaching” reform of the European Union. These inconsequential scraps are certainly not that. He committed himself to the process of returning powers from the Union to the individual member states. That has not been achieved. The principle of the acquis communautaire remains in place, as does the passerelle clause of the Lisbon treaty which entrenches it.
He promised full-on treaty change. No such treaty change has been secured. On ever closer union, is my noble friend aware that the Solemn Declaration on European Union agreed in Stuttgart in 1983 explicitly commits the European Union to the ever closer union of the member states of the EU? Did the Prime Minister seek to have the Stuttgart declaration revoked, and, if not, why not?
Baroness Stowell of Beeston
I have huge respect for my noble friend and for his position and views on Britain’s relationship with the European Union. He has been involved in lots of negotiations in Europe over a significant period of time. From my perspective as a relative newcomer to this kind of thing and as a member of the Government, I look at what the right honourable David Cameron, our Prime Minister, has achieved. Let us not forget that it is Donald Tusk who has published this set of draft proposals, not the Prime Minister. Let us look at what he has come forward with. The Prime Minister has achieved something that nobody before him has achieved. On ever closer union, we will see for the first time institutions in Europe that we have criticised time and again for using the treaties and their preambles to try to extend the scope and power of union no longer able to do that. I think that is a massive step forward.
Lord Boswell of Aynho (Non-Afl)
My Lords, as chairman of the European Union Select Committee, I shall focus on the role of national parliaments. The text proposes that the Council will discontinue consideration of draft legislation in the event that reasoned opinions are sent representing more than 55% of the votes allocated to national parliaments. That is certainly welcome, as far as it goes. How will the new procedure interact with the existing reasoned opinion procedure, which will be considered by the House in its next business today? How can it be ensured that this new tool is of practical as well as purely symbolic value? What steps will be taken to put in place an effective mechanism for national parliaments to work together?
Last week in evidence to my committee the Foreign Secretary stressed the need to establish a more effective support machinery to co-ordinate the work of national parliaments. Can the noble Baroness confirm that the Government will actively work on such developments alongside this draft agreement?
Baroness Stowell of Beeston
The noble Lord is right to point out that the next business of your Lordships’ House is on a reasoned opinion, using one of the mechanisms that currently exist for sovereign parliaments to make their views known. The draft text proposes that parliaments have much greater power, with a red card, than they have currently. Clearly, a lot of the detail is still to be sorted out on mechanisms that would be used and how the red card would interplay with the yellow card. I think it is safe to assume that having at parliaments’ disposal a power that they do not currently have to block legislation would be a strong incentive to them to be more active than they might have been when they had at their disposal only a yellow card. My right honourable friend the Foreign Secretary is right to suggest that there might be greater co-ordination between parliaments across Europe to ensure that they get to the minimum level to have real and dramatic effect with the use of this new power.
Lord Liddle (Lab)
My Lords, does the noble Baroness accept that many of us on this side of the House welcome the progress that the Prime Minister has made towards enabling him to argue the case for remaining in Europe in the coming referendum? However, if he is to win that case, would he take advice from Members of this House that he should not spend his time, as he did yesterday in the other place, trying to rally Eurosceptics against Brexit? Rather, he should make a positive and patriotic case for Britain’s membership of the EU. This should not be a “project fear”, but a “project hope”.
Baroness Stowell of Beeston
I am grateful to the noble Lord for offering his support to the Prime Minister, although I do not agree with how he described the Prime Minister’s approach to this. The Prime Minister has put forward a series of changes that address real concerns of the British people—British people who see real value in being a member of the European Union, but, quite frankly, are a bit fed up with it and the way it operates. The Prime Minister set out to renegotiate some of the terms that address those matters, whether it is around welfare or powers taken away from us. If he gets an agreement that he is satisfied is a good deal for the British people, then in the course of the next few months he will want to talk to those who are uncertain, a bit unsure and a bit undecided. Being successful in trying to persuade people requires any of us who seek to influence the views of others to be respectful of those who are currently unsure which way they might want to vote. We very much hope, whatever it is that the Prime Minister is battling for, that they vote with him.
Lord Tebbit (Con)
My Lords, can I ask my noble friend two precise and related questions? Yesterday the Prime Minister said in the other place that the emergency brake would be applied “shortly after the referendum”. First, does that mean that no combination of other member states can stop us applying that emergency brake in any circumstances? Secondly, he said that where benefits are paid in respect of beneficiaries not in the United Kingdom, they will be paid,
“at the local rate, not at the generous British rate”.—[Official Report, Commons, 3/2/16; col. 926.]
Will the computer at the department of pensions be up to doing that job?
Baroness Stowell of Beeston
I am happy to reassure my noble friend about two things on the emergency brake. First, the Commission has made it clear that in its view the emergency brake would apply immediately, assuming that the British people decide that they want to remain in Europe. It is worth reminding ourselves that not only has the Commission said that but President Juncker also said yesterday that this was a good deal in response to the failure of the previous Labour Government to protect the UK from an increase in immigration from the accession countries when they had opportunity to do so. This has been signalled as a ready-to-apply and will apply immediately if this is what the British people vote for.
Secondly, as far as benefits at local rate are concerned, the Prime Minister outlined our response and reaction to what is in the Tusk proposal. Clearly, we are confident that if that is what is in the deal and package we would be able to administer that arrangement.
Lord Foulkes of Cumnock (Lab)
My Lords, will the noble Baroness the Leader confirm that it is the United Kingdom that is the member of the European Union and that it does not matter if any principality, province or nation of the United Kingdom votes differently? It is the decision of the people of the whole of the United Kingdom that will be decisive in the referendum.
Baroness Stowell of Beeston
I want to take this rare opportunity to say to the noble Lord, Lord Foulkes, that I agree with him.
Lord Hannay of Chiswick (CB)
My Lords, I thank the noble Baroness the Leader of the House and the other two Front-Bench spokesmen for their statements. I agree that the Statement marks a significant shift on all four of the Government’s priorities in the renegotiation. I also welcome the noble Baroness’s statement about the legally binding nature of the package that the President of the European Council—not the Commission, by the way—has put on the table. This differentiates it very much from the Stuttgart declaration, which never was and is not legally binding nor does it have any legal force.
First, can the noble Baroness say that the use of the deposit at the United Nations of a legally binding text which was first introduced for Denmark at the time of the Maastricht treaty resulted in all the commitments in its renegotiation being honoured in the spirit and the letter? That is a very important point.
Secondly, while a good deal of mockery is sometimes unleashed on the complexity of this document, particularly in the pages of the press, it is not avoidable for a legal document of this nature not to be complex. If we look at any of the Acts passed by this House, we see that they are not light reading either. The reason is the same: they have to be legally applicable and deal with the legal complexities of the situation that they are set up to face. We should broaden the debate beyond this package when the campaign starts because there are far more important issues even than these to be discussed, but I welcome this Statement.
Baroness Stowell of Beeston
I am grateful to the noble Lord, both for his contribution and for picking up on my misuse of “Commission” when I should have been saying “Council”. He offers a great deal more experience of the European Union and its institutions, the European Council and indeed the United Nations. I am happy to confirm what he just said, particularly his comparison to Denmark. What is proposed in this document is very much in line with what is in place for Denmark, which has existed for over 20 years and remains absolutely legally binding.
Lord Spicer (Con)
My Lords, the Prime Minister says that we will never be part of a European superstate, but what about the acquis communautaire? It is intrinsic to the treaty and has to be addressed. What about the court, which always supports the acquis? What about the polemics of this? The draft agreement in front of us today has in it the objective of not only a single economic state but a banking centralised state, and therefore a fiscal centralised state, and therefore a federal state. The BBC hinted last night that there was a secret plan to deal with these issues, which are fundamental so would require major treaty changes. If that is true, I would be very interested to hear more about this, as I am sure the House would. Is such a plan being worked up on the side? If so, when will we hear about it?
Baroness Stowell of Beeston
What is recognised in the documents that have been published is that treaty change may be required in some areas but, until that treaty change occurs, the text will be legally binding; as the noble Lord, Lord Hannay, said, it will be deposited in the United Nations. This is not about avoiding treaty change but about legally binding irreversible decisions, acknowledging that, where treaty change is necessary, that will happen at the appropriate point. The decision document—the first and lengthiest of the documents published by Mr Tusk—makes clear that the European Court of Justice will be required to take account of that document when it is considering any of its judgments.
Lord Davies of Stamford (Lab)
My Lords, there have been quite a number of Eurosceptics who over the past 48 hours have criticised the Prime Minister for not bringing back a provision that would enable our Parliament to opt out of any EU legislation that it wanted whenever it wanted to. We should be absolutely clear about one thing: they are entirely and bitterly opposed to our being part of the single market, whether as a member of the European Union itself or by negotiating, if that proved possible, some access to the single market from outside. The single market is a single regulatory space. If individual members of the single market could pick and choose what they wanted at any time, it would not be a single market; it would be 28 separate and very fragmented markets. If we tried to negotiate access to that market from outside, not only would we not be able to pick and choose in that way—we would have to accept all the rules and regulations—but from then on we would have no role whatever in formulating those rules and in the legislative process.
Baroness Stowell of Beeston
The noble Lord is certainly right to point out that if the United Kingdom was not a member of the European Union, the way in which it would access the single market would be substantially different, because other countries with a different kind of relationship with the European Union might be able to establish the advantages but do not have an opportunity to influence the rules and how they apply. However, there are people in this House, the other House and the country at large who have long-standing principled views about the European Union that I very much respect. For the first time in over 40 years, we are giving everyone the chance to have their say and decide whether they want to vote us in or out of Europe. I do not want to diminish anyone who has a different view from someone else on this. As I said to the noble Lord, Lord Liddle, during any campaign on this it will be important that we communicate fairly and effectively with those who have yet to make up their mind about the benefits and otherwise of what is proposed.
Lord Pearson of Rannoch (UKIP)
My Lords, the Government assume that our membership of the EU single market has been good for our economy and that we benefit from the foreign trade arrangements that the Commission is able to secure because of its “clout”. I therefore ask the Government whether they have read a game-changing new analysis from Civitas entitled Myth and Paradox of the Single Market by Michael Burrage. If not, will they do so? It shows that four much smaller countries—Chile, Korea, Singapore and Switzerland—have done hugely better from their free trade deals than we have with the Commission negotiating our free trade arrangements on our behalf. Of course, if we left the political construct of the European Union we would keep our free trade with the rest of the single market—which is all we need—because we are its largest client. They need our free trade much more than we need theirs so it will continue.
I do not have time to deal with the shattering uselessness of the rest of the Prime Minister’s deal, which I understand we shall debate properly soon, but I thought I would ask this question in the mean time, and I look forward to the noble Baroness’s reply.
Baroness Stowell of Beeston
I am confident that those who are closely involved in this process have reviewed every text, document and so forth. I personally have not; I hope that the noble Lord will forgive me. The Prime Minister has made clear in his Statement that there are great benefits to being in the European Union that include access to trade. He is also clear that the United Kingdom could survive outside the European Union, but he wants to secure Britain’s membership in a reformed Europe—to negotiate something that would stack up for the people of this country and was then, in the end, for them to decide on.
Lord Howell of Guildford (Con)
My Lords, is not the fair and sensible verdict on this deal process so far that it is so far, so good? However, will the Minister accept that the really key word in the whole of this debate, and in the processes to discuss in the European Union, is “reform”, which lies at the centre of what I understand my right honourable friend the Prime Minister to be trying to achieve? Would it therefore not be best if London and the UK became—far more than at present—a strong source of ideas for the revitalisation and fundamental reinvigoration of the deeply troubled European Union rather than just a demander of concessions? Is that not the way we now want to go?
Baroness Stowell of Beeston
As always, my noble friend has spoken wise words, in that this is not just about trying to get concessions. It is about starting a reform process in Europe. I disagreed with what the noble Baroness said about the way the Prime Minister had approached this because, by starting this, he has kick-started within Europe a recognition that that institution has to change for all its members to prosper. More can be done. He hopes that he can achieve an agreement that will lead to us staying in a reformed Europe and for that to be the beginning of the process, not the end.
Lord Steel of Aikwood (LD)
I wonder if the noble Baroness is aware that, for those of us listening to the Statement today who were involved in the 1975 referendum, there was a strong sense of déjà vu as the same arguments went on after Prime Minister Wilson’s renegotiations? I am reminded of my great predecessor Jo Grimond saying, when we were haggling over the terms of entry into the European Community, that it was as though at the time of the Reformation people were not able to make up their minds until they knew what price the monasteries were likely to fetch. When we get to the referendum, can we operate at a slightly higher level?
Lord Howarth of Newport (Lab)
My Lords, is it not clear that the European Union is incapable of dealing with the greatest challenges which face it— monetary policy and migration—and that it is in decline relative to the global economy? Is it not also evident that supranational political institutions that disregard national sentiment do not endure and that the European Union fails to command the loyalty of its constituent peoples and can therefore be expected to disintegrate, just as did the Austro-Hungarian Empire, the Soviet Union and Yugoslavia? Should not British policy accord with the march of history?
Baroness Stowell of Beeston
That was an interesting lesson in history, but at the moment we are concentrating on trying to get a better deal for the British people as regards their current membership of Europe, which I will focus my remarks on today.
Lord Higgins (Con)
Will my noble friend agree that there is an increasing danger—I drew attention to it on Second Reading of what is now the European Union Referendum Act—that voters will express their views as to whether the negotiations have been a success rather than on the more fundamental issues, which will otherwise get crowded out of the debate, and that we will lose the vote in favour of remaining in as a result? Also, should we not be too preoccupied with the rhetoric about ever-closer union when the two main planks of European policy, the euro single currency and free movement of people, are tearing the Union apart? We ought to try to get reform on those matters. However, having said that, the Prime Minister is making progress and I hope it will continue.
Baroness Stowell of Beeston
I am very grateful to my noble friend for his comments and his support. I agree that people will consider how to vote based on their view of the success of renegotiation—although I keep having to preface my remarks by saying that the Prime Minister has not yet reached an agreement with Europe; as he said in his Statement, he has not yet ruled anything out as regards the next steps. Notwithstanding the remarks of the noble Lord, Lord Steel, about a higher level, I am sure that we will see lots of debates about the detail. Some things will be of particular concern to certain people, while for many others there will be an instinctive reaction to the debate rather than attention to the detail, and we will have to cover all people’s interests in this important matter.
Lord Hain (Lab)
My Lords, whereas British membership of the European Union costs in net terms about £10 billion now, if we left, presumably we would still want to be a member of the single market. After all, half our national trade is there, but on the Norway model—the only rational basis for that membership—that would cost about £7.5 billion. Will the Government explain that over the coming weeks? Admittedly it is less, but not that much less, and we would be bound by future rules determined in Brussels, without our Ministers accountable to our Parliament and our elected parliamentarians accountable to their voters in Britain being able to influence them. That does not seem much of a bargain—we would pay but have no say. Does the Minister agree?
Baroness Stowell of Beeston
I agree with the noble Lord’s analysis. When we get to the campaigning stage, it will be important to help people to understand that there are most definitely alternative models, but that they come with costs and disadvantages that people will need to be aware of if those are the routes they want to pursue.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend agree that the fact that our Prime Minister has had to spend months going all round Europe to secure a minor change to our benefit legislation indicates just how far we have lost the ability to determine our own affairs, which should be at the heart of the referendum campaign? Does she agree with Sir Stephen Nickell, from the Office for Budget Responsibility, that even the plan to stop access to in-work benefits would have “limited impact”? How far does she expect that plan to enable the Government to meet their target of reducing overall immigration to the tens of thousands from a net figure of 380,000? What is the Government’s estimate of the reduction in immigration that will be achieved by that benefit change?
Baroness Stowell of Beeston
The first thing I would say to my noble friend is that the Prime Minister has spent several months in Europe, negotiating a new deal for Britain. Some of the changes we have already made to welfare benefits and how they apply to people coming from European Union countries do not require any involvement of the European Union, so much so that we have got on and put them in place. Since the election, any European Union citizen coming to this country and who seeks a job will not be able to claim jobseeker’s allowance. If, after six months, they have not found a job, they will be required to leave. These are two of the four commitments that the Prime Minister made in our manifesto.
The other changes covered by the draft proposal set out in the documents address the remaining issues by introducing a sense of fairness that people in this country feel is needed. They are about ensuring that people are not able to take out before they have put in. My noble friend mentioned evidence that was given by Sir Stephen Nickell of the OBR about the effect on immigration. The value of these welfare payments to an average family is about £6,000, so people coming to this country get £6,000 immediately. This is quite a strong incentive for some. While I might not be able to provide a figure from this Dispatch Box today as to how many might be affected if this were no longer available, I am sure it would affect some people.
Lord Harrison (Lab)
My Lords, when will the Government support and promote the European Union and the single market which was a creation of this House and Lord Cockfield? We now have another finance commissioner in Brussels promoting the Capital Markets Union, which is the subject of the next debate. We could say to the British people that not only are we promoting small businesses having access to money and supporting British firms and the consumer by taking advantage of it, but we are also promoting the economy and the City of London for the benefit of all. For goodness’ sake, speak up.
Baroness Stowell of Beeston
I agree with everything that the noble Lord has said and I think the Prime Minister’s Statement reflects that. It reflects the fact that there is real advantage to the United Kingdom in being a member of the European Union and we will keep on saying so unless and until he gets to a point where he is not able to agree new terms with the European Union and he decides that it is not in the UK’s best interests to pursue it.
The noble Lord is right. If we are able to achieve what the Prime Minister hopes to achieve, then the noble Lord can rest assured that there will be a positive case made for the benefits of Europe.
Lord Tugendhat (Con)
My Lords, I, too, welcome the Statement. I believe that the Prime Minister and his fellow Heads of Government all deserve congratulations on having reached a position where the essential objectives of the United Kingdom Government are well on the way to being achieved, while the essential fabric of the European Union is maintained. This is a considerable achievement.
Does my noble friend agree that it is in the interests of the United Kingdom—whether we are in the European Union or whether we are outside—to have unrestricted access to the single market? Does she agree that this is an enduring British interest? If we are to have unrestricted access to the single market, this will have to be taken into account in relation to any agreement on free movement of capital or free movement of people. What has been achieved in relation to immigration is that a formula has been worked out which will enable Britain to do what it needs to do to restrict immigration while not undermining the essential principles of the single market.
Baroness Stowell of Beeston
Yes, I agree with my noble friend’s assessment. He is quite right that access to the single market is not just about access to trade. It brings with it many other benefits. To partly pick up on my answer to the noble Lord, Lord Harrison, my noble friend chaired one of the cross-party committees that reported on TTIP, which we know is ongoing. We do not have that trade agreement in place yet, but this House, cross-party, came out very much in support of TTIP. It is of huge benefit to all members of the European Union. I would point to it as a reason for us wanting to stay in the European Union and I very much hope that all sides of the House agree. I note that the leader of the Opposition in another place was very sceptical and indeed critical of TTIP, but I hope that it is something on which we can join together in promoting as a good thing for Britain.
Lord Jones of Birmingham (CB)
Does the Minister agree that in main street UK this debate and the whole issue of reform will be reduced to a grubby little debate about immigration instead of what reform of this amazing group of 520 million people should be, which is how to enable southern Europe to make enough money to compete with northern Europe, and how to enable the whole lot to be globally competitive in Asia’s century? Why does not reform from the Prime Minister mean that instead of using our taxes to subsidise someone growing olives in Greece we use the same money to skill them up so that they would be welcome immigrants in our country because they would qualify for a job, or they would be qualified in their own country to attract inward investment to work there? If we continue to base southern economies in Europe on exporting olives and importing BMWs, they will go bust.
Baroness Stowell of Beeston
I am not sure that I agree with the noble Lord that the debate on the referendum will resort to being purely about immigration. Indeed, we all have a responsibility to ensure that it does not. In the answers that I have given to other questions already today, I hope that I have highlighted and reassured noble Lords that there is a positive case to be made, and we would have to make it if that is what we were promoting.
However, while I very much understand where the noble Lord is coming from and the arguments that he had just made, it is important that we do not diminish the concerns of people of this country about the current situation on immigration from Europe to the United Kingdom by saying that it is not something that should be addressed. It is part of the package of measures that the Prime Minister sought to negotiate because it concerns people. It concerns them for good reason, because there is a sense of unfairness and injustice about the way that the benefit system works for those who come here from other countries. At the same time, I am also clear that the people of this country are very positive about the important contribution that is made by immigrants from wherever they come.
Lord Lea of Crondall (Lab)
Would the Minister agree that the debate will soon have to look at the historic aspirations of the British people? The Minister referred two or three times to the yellow and red card systems—a football metaphor. Taking that metaphor a stage further, would she not agree that the people on the terraces are not little Englanders—to take England for a moment, as opposed to Scotland, Wales and Northern Ireland? They want to be in the Champions League just as at the same time, they want to be in the Premier League. There is no contradiction between the two.
Lord Cormack (Con)
My Lords, as is clear from the exchanges today, and yesterday in another place, many parliamentarians want to play a vigorous part in the forthcoming referendum campaign. Can the Minister guarantee that the timetable of the two Houses will be arranged so that there are not impossible clashes, and there is a proper opportunity for parliamentarians on both sides to conduct an elevated and proper campaign?
Baroness Stowell of Beeston
We shall of course ensure what we can in providing opportunities for people to debate in this Chamber, but clearly it will be up to individuals how they use their own time during the referendum campaign.
Lord Taylor of Holbeach (Con)
My Lords, the noble Lord, Lord Wigley, has been trying to get in for some time.
Lord Wigley
My Lords, on the increased subsidiarity provisions that have been agreed, so that some decisions that have in the past been taken at European level will now be taken within the UK, can the Minister confirm that decisions on devolved matters will henceforward be taken in the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly?
Baroness Stowell of Beeston
I am afraid I shall have to write to the noble Lord on that one. It may be a bit of a technicality. Maybe we just have not got that far in the negotiations; I do not know. But if I can offer any more information in writing, of course I will.
European Union Subsidiarity Assessment: Electoral Law of the EU (EUC Report)
(8 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Kennedy of The Shaws
That this House takes note of the Report from the European Union Committee on the European Parliament Proposal for a Council decision adopting the provisions amending the Act concerning the election of the members of the European Parliament by direct universal suffrage (7th Report, HL Paper 87).
Baroness Kennedy of The Shaws (Lab)
My Lords, I shall speak to both the Motions in my name on the Order Paper. Before I begin, may I place on the record my thanks, and that of my committee, for the work of the incredible staff who serve the committee—particularly Tim Mitchell, a truly talented lawyer, who drafted this report?
In 2009 the treaty of Lisbon introduced new procedures that gave national parliaments the responsibility of policing the application to European Union legislative proposals of the EU’s principle of subsidiarity. It is a responsibility that I, and my colleagues on the EU Select Committee and its six sub-committees, take very seriously. The draft report that forms the basis of this debate was produced by the European Union Justice Sub-Committee, which I chair, and subsequently approved by the European Union Select Committee.
The report recommends that the House should submit to the European Union institutions, under Protocol 2 of the EU treaties, a reasoned opinion stating that it considers that the European Parliament’s proposal for reforming the EU’s electoral law does not comply with the principle of subsidiarity. This is a rather timely matter, coming just after the recent debate.
This is the eighth time since 2009 that the European Union Select Committee has recommended this course of action to the House. Unusually, though, this is the first time that the committee has recommended that a subsidiarity reasoned opinion be issued against a legislative proposal brought forward by the European Parliament. That has never been done before.
As the report explains,
“The principle of subsidiarity provides that, in policy areas which do not fall within the exclusive competence of the European Union, but where competence is shared with Member States, the Union can act”—
the following words are a quotation from Article 5 of the Treaty on European Union—
“‘only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States’”.
That, of course, is the principle of subsidiarity. In this way, in order to comply with the principle of subsidiarity, European Union action must be both necessary and add value, as compared to action at the member state level.
The European Parliament agreed this particular significant legislative proposal on electoral reform on 11 November, and sent it to the UK Parliament on 11 December. The intention behind the proposal is to reform the European Parliament’s electoral procedures before the 2019 elections. To this end, the European Parliament has proposed a number of new rules and a range of amendments to the existing EU legislation governing elections to the European Parliament. Somewhat surprisingly, given the power in the treaty under which the proposal has been brought forward, it also includes provisions seeking to clarify the Parliament’s role in appointing the President of the European Commission.
The proposed legislation has been brought forward by the European Parliament under a specific legal basis in the EU treaties calling on it to do so. In late November, as required by the treaties, the European Parliament sent its proposal to the Council. The member states must now agree to the proposal unanimously. Therefore, national vetoes will apply. Key aspects of the proposal are summarised briefly in paragraphs five and six of the report.
In addition to the committee’s two substantive subsidiarity concerns, to which I will turn in a moment, a number of important procedural requirements have not been followed by the European Parliament. These include a requirement to communicate legislative proposals to all national parliaments. This, in turn, sets the timetable for the issuing of reasoned opinions by national parliaments. But it appears that the Dutch Tweede Kammer, the House of Representatives in the bicameral Dutch Parliament, has only very recently received notification of this proposal—indeed, in the last few weeks. Therefore, the application of the usual eight-week window within which national parliaments can issue reasoned opinions is unclear. Does it date from then or back to the date when we, the UK Parliament, received it? Nevertheless, in the interests of issuing a reasoned opinion in the time, we are proceeding on the basis that the deadline expires tomorrow—5 February.
In addition, the European Parliament has failed to accompany its proposed legislation with a,
“detailed statement making it possible to appraise compliance with the principles of subsidiarity and proportionality”.
That detailed statement is a requirement by the subsidiarity protocol to the treaties. To our mind, that is a significant omission and makes it very difficult for individual national parliaments to undertake their treaty-imposed obligation to assess the compliance of EU legislative proposals with subsidiarity. I say that as someone who is supportive of the European Union, but it really does fail to live by the standards it has set itself. The absence of a detailed statement should be a matter of real concern to this House.
The assumption underpinning the principle of subsidiarity is that decisions to legislate should be taken as closely as possible to the European Union citizen. The report notes:
“Any departure from this presumption should, therefore, be justified with sufficient detail and clarity so that EU citizens, and their representatives in national parliaments, can understand the”,
reasons for EU action. The Parliament’s failure in this instance makes any assessment virtually impossible. That was the view taken by my committee and endorsed by the full EU Select Committee of this House.
The report argues in paragraphs 12 to 15 that,
“this omission constitutes a clear failure to comply with the essential procedural requirements in the Subsidiarity Protocol”.
The report notes that such a procedural failure is also,
“a ground for judicial review under EU law”.
The report addresses, further to these procedural matters, two aspects of the proposal that my sub-committee believes are difficult to justify in subsidiarity terms—a difficulty exacerbated by the Parliament’s procedural failures. The proposed rules governing the selection of candidates for election to the European Parliament, in particular the imposition of a gender balance requirement, have caused us some reflection. I should make it clear that most of us are wholly supportive of gender balance and want to see that come into being, but this is not the power in the treaty with which to do it. In our view, it really should not be done at the European Union level but by member states in a way that is appropriate for the different nations.
The other matter of concern is the proposed expansion of the existing right to vote in European elections for all EU citizens resident in the EU, to encompass all EU citizens regardless of where they live—in or outside the EU. This seems to be creating an unlimited right to vote in the European Union for citizens, wherever they live in the world, for ever. As we know, European Union citizens who are nationals of a member state are usually confined to a 15-year limit when living abroad to exercise the right to vote. We feel that that incredible extension should be taken at the national level.
The report argues that the European Parliament’s failure to produce the requisite detailed subsidiarity statement, taken in conjunction with the two provisions I have just mentioned, justifies this House’s conclusion that the proposal does not comply with the principle of subsidiarity. Once the preliminary issue of subsidiarity has been concluded, my sub-committee will soon begin its formal scrutiny of this proposal.
Lord Garel-Jones (Con)
What is the opinion of the noble Baroness—I am not sure of this myself, which is why I am asking the question—on the process of renegotiation the Prime Minister is currently involved in, whereby what is now called the yellow card would be substituted by a red card? Would it mean that national parliaments could block this proposal if they deemed it the right thing to do?
Baroness Kennedy of The Shaws
The situation is difficult to imagine. What should be happening here is very clear: a statement should normally be made explaining the justification, but subsidiarity is the primary principle that should be applied. Our concern was that not only was there a failure in terms of the normal proprieties, but that some of the proposals did not fit with subsidiarity at all in any event. We have not moved on to the second stage, but for the moment, I would rather leave the question of whether introducing a red card would somehow mean that one would be able to prevent it automatically. I am sure that my advisers would have an answer to that. We feel that this is precisely the kind of failure that gives the European Union a bad name. We are calling them on it, because if anything upsets citizens in the member states, it is the failure of the Union itself—here, it is the Parliament—to live by its own rules. Really, it is about conforming to the rulebook and that is the reason for this Motion today.
Once the preliminary issue of subsidiarity has been concluded, we will scrutinise the proposals in the normal way. But we are really concerned about the EU’s failure to live up to the standards it has set itself. That is the sort of thing that discredits the Union and causes alarm to many people within the United Kingdom just now—and I say that as someone who is a great supporter of the European Union.
I commend this report to the House and I beg to move.
Lord Davies of Stamford (Lab)
My Lords, I am a member of the European Union Select Committee. Unfortunately, I was not present at the Select Committee’s discussion of this proposal; if I had been, I would have said some of the things I am going to say now.
I, of course, do not in any way apologise for, accept, or try to defend what appear to have been administrative mistakes in not sending documents in time to this Parliament or to the Tweede Kamer in the Netherlands; I know nothing about that. Clearly, if people have been remiss in not meeting deadlines, they should be held to account. I totally agree with my noble friend’s comments on that point. However, I am much more concerned with the substantive point she makes, and particularly with the second resolution, which I oppose in principle. I hope that I will have a chance to vote against it but I do not suppose that I will. However, I certainly do not want it said that it went through this House without any voice of dissent at all.
In the Motion before your Lordships, the second resolution says that this proposal of the European Parliament should be set aside on the ground of subsidiarity. It seems to me that any democratic parliament worthy of its name is accountable to its own electorate. Any democratic parliament worthy of its name is responsible, and should be responsible, for its own rules and procedures. It should not be beholden to any organisation outside. It should not be under the command of any outside authority or it is not a democratic parliament. In this case, of course, the European Parliament was set up by the member states through the treaty—we all know that. All parliaments, by definition, have to be set up by somebody other than themselves. This Parliament, which we have the honour to serve, was set up by kings of England—Edward I and subsequent monarchs—who summoned it. That does not mean to say that we expect the monarch or, indeed, the politically elected Executive branch—the Prime Minister or the Cabinet—to fix our rules of procedure or our methods of operation. It would be scandalous for anybody to suggest that and everybody would quite rightly think that that was a threat to the democratic independence of this House. No one has, of course, ever suggested that.
On that basis, it is perfectly reasonable that the European Parliament should make its own proposals for its own future procedures, including for its own electoral system. That is totally right, and it is right that it should do it. Above all, the application of the subsidiarity principle against its doing so seems to me entirely absurd. Of course, only the European Parliament is in a position to judge the functionality of any set of rules or procedures in relation to itself. To ask 28 different national parliaments to make their judgment is crazy. It would probably take 1,000 years for them all to agree on the rules to be adopted and they would not be in a position to assess the functionality and merits of any proposals of that kind in the way that people sitting in the European Parliament would be able to do. Therefore, on both pragmatic grounds and grounds of principle, I oppose this resolution. The principle of subsidiarity—indeed, my noble friend has just cited that principle—deems that matters should be decided at the European Union level only when they cannot be better decided at the level of the member states. I think I have said enough to indicate that this matter certainly could not be effectively decided at the level of the member states—that would be an absurdity. It must be decided at the centre by the European Parliament itself. On that basis, I oppose the second resolution.
Lord Boswell of Aynho (Non-Afl)
My Lords, I thank the noble Baroness for the report which her sub-committee prepared for my EU Select Committee. I echo her words of thanks to members of that committee and to the excellent staff in drawing this together. It will already be clear from the exchanges that this is an interesting and, to some extent, unprecedented, coincidence in matters connected with process and substance. What we have heard so far has clearly shown deficiencies in a procedure in which, in fairness to the European Parliament—to which I will return in a moment—it has relatively new experience as a co-legislator. Therefore, we can perhaps condone the explanation relating to fault for this matter, although we should not allow it to go unchallenged.
I was not minded to speak in this debate—and will do so only briefly—had it not been for the contribution of the noble Lord, Lord Davies of Stamford. He and I have known each other for quite a long time. I have huge respect for him and very much enjoy and value his contributions to our Select Committee. As he rightly said, he was not available on the relevant occasion. However, it would have been more helpful had he shared his concerns and dissent with the chairman of the sub-committee and/or myself. With pre-notification, I am sure that we would have done our best not to warn him off but at least to have seen whether we could accommodate those concerns or reflect them in our report. As noble Lords present who have had experience of negotiation will know, we are in the position where in effect a late card has been played and it is a little difficult to handle it at this stage.
Lord Davies of Stamford
I apologise for any discourtesy but, as soon as I saw this resolution on the Order Paper, I mentioned to my noble friend my opposition to it and invited her to make any comments that she wished to make. She made no comments to me on that occasion and I therefore assumed that she did not wish to have a discussion with me on the subject, but I would have been delighted to do so.
Lord Boswell of Aynho
My Lords, we are now, as it were, in the Chamber and we need to take the argument as it goes. However, for the avoidance of doubt—I hope this reassures the chair of the sub-committee—if any noble Lord is minded to take the temperature of the House, I am very much inclined to defend the sub-committee’s recommendation. I put that on the record.
However, let us take that as past. I add two other points. We have a Motion for a reasoned opinion. We have good reasons for asking for that. Indeed, we made it clear in the report we prepared some years ago for your Lordships’ House on the role of national parliaments—that has already been touched on in relation to the current European negotiations—that a reasoned opinion deserves a reasoned response. In entering a reasoned opinion we seek to enter a dialogue with, and gain an explanation from, the European Parliament, not with the purpose of subverting this move but of getting it into the right order with the right conclusion—no more and no less than that.
That leads me to my final point. When we debated this matter in the Select Committee, I was concerned to make it clear to its members that I would not like it to be seen as an oblique or indirect attack on the European Parliament itself. Some people in these Chambers seek to downplay the role of the European Parliament and even, occasionally, to question its legitimacy. I do not share that view. My view of parliamentary sovereignty is that it is better to have two levels of application and scrutiny than only one. I think that we have a joint and complementary role. I would not claim any great virtue in it but I have laboured long and hard to try to dispel any illusion that we are in any sense at war with Members of the European Parliament and its leadership. This is, I hope, a friendly discussion about procedure and a slightly more substantive one about the levels at which we take this argument forward. It is not a declaration of war or an attempt to create difficulty. I very much commend our report to the House.
Baroness Falkner of Margravine (LD)
My Lords, I had not planned to speak in this debate but the intervention of the noble Lord, Lord Davies of Stamford, provoked me to add my tuppence worth. I should clarify to the House that I speak in my capacity as the chairman of another sub-committee of the EU Select Committee—the sub-committee on financial affairs. It is true that the noble Lord, Lord Davies of Stamford, holds original, interesting and enormously important views, from which certainly my sub-committee benefits every week—week in and week out—and we are very grateful for his presence there.
I, too, was not present when this matter was discussed and when I saw it on the Order Paper I took it upon myself to find out what it was about. I came to the view that—as the noble Baroness, Lady Kennedy of The Shaws, and the chairman of the EU Select Committee, the noble Lord, Lord Boswell, have said—it was not a provocative gesture but the utilisation of a mechanism that has been hard fought for by this Parliament. This mechanism should improve dialogue and make us co-operate better, because it is an early warning system. It allows us to say, “Hang on, there is an issue here and we need to discuss it”.
I am slightly disappointed that the noble Lord, Lord Davies of Stamford, did not suggest to me that he had opinions on this. I would, of course, have fed them into discussions with the noble Lord, Lord Boswell. Speaking only for myself, but as a member of the EU Select Committee, I absolutely support the noble Baroness, Lady Kennedy of The Shaws.
Baroness Neuberger (CB)
My Lords, I speak as a member of the EU sub-committee on justice. I, too, pay tribute to our chairman, the noble Baroness, Lady Kennedy of The Shaws, and to our advisers, who have been brilliant. There is very little to add to what has been said but I want to say something about why we felt this was so important.
One argument worth adding is an emotional one. A degree of irritation was felt at the report coming out just before Christmas at a time when parliaments were going in to recess around Europe and there was not time to respond. We have heard that both Dutch Houses did not get it, as far as we can see. We did get it but with very short notice, hence the rush to bring it to your Lordships’ House. So I think there is a degree of irritation.
This is a procedural issue. Like the noble Baroness, Lady Kennedy, I am rather sympathetic to the report—at least to the matters within on gender equality. I think that that is great but it is not the point we were looking at. It is important to emphasise that we all felt that at a time when there is considerable criticism of the European Parliament and of European institutions more generally, it would have been better—hence this iterative process we hope to engage in—had they stuck to their procedures so that we could stick to ours. We were unanimous on this and I think that for all of us that was the strong argument. Therefore, I think that this should be supported.
Lord Inglewood (Con)
My Lords, unlike the previous speakers I am not a member of the EU Select Committee or its sub-committee. But I was a Member of the European Parliament for 10 years and during that time served on the Legal Affairs Committee and the Constitutional Affairs Committee. It is a truism that it is very important that the European Union, and the European Parliament within it, works on the basis of conferred competencies. In other words, it can only do what it is permitted to do by the treaties that set the institutions up.
As I mentioned, I served a considerable number of years on the Constitutional Affairs Committee of the EP. It is one of its characteristics that in a chamber of enthusiastic pro-Europeans, it is one of the most enthusiastic parts. We saw only a few weeks ago, in the discussions on tax credits between this House and the other place, that parliaments are always angling to gain a bit of territory. You see this in a pronounced form from time to time in the European Parliament. But the important point about this proposal was mentioned at the outset by the noble Baroness: subsidiarity has nothing to do with the merits of the subject in question. The only issue is whether the European Parliament, in its proposals, which are after all not legislation but only draft legislation, has overreached itself. Having looked at it—although not at great length—I think there is a strong case for saying it has.
A separate but important aspect is whether the appropriate procedures have been adhered to. It seems pretty clear that they have not. Therefore, we are looking at a proposal from the European Parliament in the European legislative system, which, as currently drafted, breaches the principle of subsidiarity and which, in any event, has been brought forward in a flawed manner.
Lord Judd (Lab)
My Lords, I am a member of the sub-committee and I would like to put on record how good it is to serve on a committee chaired by my noble friend. She is a very effective chair and I think everybody on the committee recognises that and is rather inspired by her from time to time. It can be quite entertaining to watch her irresistible charm being put to the cruellest effect.
This report is very important. Of course, all of us who serve on committees that produce reports think that every report is important. But this is a particularly significant one because it touches on much wider issues, which are very close to the current negotiations led by our Prime Minister. I will touch on some of those wider issues.
History is a long process over many decades and centuries. It will examine the proposition that Europe might have had a more effective and powerful story had it gone for a confederal as distinct from a federal approach. Sometimes, what confederations produce has stronger meaning than top-down federal institutions. But that will be resolved in history. It just leaves me to say that I do not believe that the negotiations in which our Prime Minister is involved will be anything like the end of the story. This debate will go on for a long time. Indeed, in much of the evidence that we took this kept coming up as a reality.
I am totally convinced that strong parliaments come from struggle. If we look at our own Parliament, we see that a great number of struggles led to its evolution. We like to talk about it being the most successful parliamentary system in the world. We would do just as well to remember our forebears who struggled, and fought on occasion, to make that a possibility. There is an inevitable struggle going on within the history of the European Union. The struggle is for the kind of Parliament we want. That will go on. If the Parliament is to be effective and to mean anything, it will create awkward occasions. But that does not mean we have to succumb to everything it says. Its recommendations will always be stronger if they have been thoroughly tested. If they do not stand up and are rejected, in the long run that will be a good thing for the evolution of the Parliament itself. The distinguished chair of the EU Select Committee made the point—and I am very glad that he did—that we are not in a war but in a meaningful debate about strengthening institutions. So there our report is highly relevant and should be taken very seriously.
However, there is another issue. I do not know what the perfect description of democracy is and I always feel a bit concerned about people who think they do, because the whole concept of democracy is being tested all the time and going through evolution and change. But for democracy to be successful it must be about empowering citizens—empowering people to be part of the process of the formation of policy that affects their lives. That is what it is about, and that means accountability is very important. One of the fundamental weaknesses of the European Parliament is that it is too remote from people.
I therefore look at the proposition of the European Parliament itself and say that I do not think it is helpful. Should we not be looking instead at how we strengthen the indirect representation of parliaments at the European level? How can a hard-working Member of the European Parliament, many of whom work very hard and with great dedication—the noble Lord, Lord Inglewood, was no exception in this respect—on a whole range of issues at the European level with which they are confronted, be effectively part of the politics of the community in which they are living? The noble Lord, Lord Inglewood, was a very good exception because he was very much part of the politics of the community in which he lives—I know because I live adjacently to it. But it is asking a hell of a lot.
Similarly, how do you breed a sense of relationship to the big issues that are coming before Europe if national parliaments have no direct feeling of responsibility for Europe? They can have the luxury of being negative, rather than facing up to the responsibility of making a positive contribution. There is a lot to be thought through here. The European Parliament has been getting a bit ahead of the game on this one and may actually be kicking into its own goal—well, perhaps not its own goal as an institution, because it may have institutional ambitions, but in terms of what it is theoretically there to achieve.
I am very glad to have been part of this. It is always extremely challenging for somebody who is not a lawyer to sit on a committee on which there are so many effective lawyers arguing so well, but it is an extremely stimulating committee on which to serve, and our chairmanship is tremendous and has a great strength about it, and is all the time facilitating our work. I hope the House will take this report very seriously and endorse it.
Lord Cromwell (CB)
My Lords, I, too, have the honour of being a member of the sub-committee and I entirely agree with what the noble Lord, Lord Judd, said about our marvellous chair. I will spare her blushes and not repeat it—he put it far better than I would anyway.
As another non-lawyer on the committee, perhaps it is helpful for me simply to put succinctly what I believe this matter is about. A case for subsidiarity was not made. We are asking for one to be made. It is really that simple and if, rather to my surprise, this does test the mood of the House, I hope we will all support that proposition.
Lord Cashman (Lab)
My Lords, I speak on this subject for the very first time on behalf of the party. Having spent 15 years in the European Parliament, it is a great privilege. The European Union Committee is regarded very highly by the Parliament, the Commission and the Council. Therefore, I see absolutely no reason why a reasoned opinion should not be sent. It would certainly be welcomed by the Council and the Commission.
The noble Lord, Lord Inglewood, put his finger right on it. What we are dealing with is an own-initiative report of the Constitutional Affairs Committee. Like the Legal Affairs Committee and various other committees, when it is not taken too seriously it jumps ahead of itself and puts forward its wish list to the European Parliament. There are some excellent recommendations in the report and I urge your Lordships to read it, as well as the draft proposal, which is annexed. Interestingly, this wish list had to be deferred from going to plenary after it was voted on in committee because there was not enough widespread support for it to gain a majority. It therefore went to the Strasbourg plenary in November.
I congratulate my noble friend Lady Kennedy on her chairmanship of the committee and absolutely endorse her reference to the excellent work done by the staff of that committee and, indeed, by the staff who serve us throughout the House. I pay tribute to the noble Lord, Lord Boswell, for his chairmanship of the EU Select Committee. During my 15 years in the Parliament, whenever the European Union Committee visited, it was taken seriously by all Members across the political spectrum.
In this instance, we have an own-initiative report that was agreed at the plenary and was duly sent to the Commission, the Council and the President of the Parliament. There was reference earlier to whether a red card would apply after the Prime Minister’s completed negotiations. A red card operates now, not for the Parliament but indirectly because the Westminster Parliament can make its views known to the Minister and the Minister will then vote against or for in committee. This proposal, if it is to be amended, will have to be agreed unanimously. Interestingly, as I said, there are some good proposals and some that are perhaps indicative of the European Parliament jumping ahead of itself. One is to shift from unanimity to qualified majority voting.
I also advise your Lordships that under the leadership of Dame Glenis Wilmott, the Labour Member of the European Parliament voted against the report, for a number of reasons: ideas of transnational lists—not national or regional but pan-European; internet voting; pan-European party names and logos on the ballot papers; and issues over the single candidate for the EU Commission President. As my noble friend Lord Judd said, all parliaments—particularly the European Parliament and the European institutions, which are so defamed and misrepresented, certainly in the British media—need to make themselves less remote. Indeed, in the body of the report which goes to make up the amended Council decision, that is the stated intention.
Issues of gender equality were mentioned. But I should point out that the proposal calls for gender equality on the list and not in the make-up of Members going to the Parliament. That is to be decided by the voters, whether the lists are open or closed. It also calls for greater openness and transparency in how parties actually select their candidates. That is to be welcomed. It also recognises that as the Parliament, and indeed the Union, has grown in size, it needs to do more to connect with its citizens and the concept of European citizenship.
It is not my intention to detain your Lordships further but I want to make these closing points. As I said, it is an own-initiative report. The moment the clock starts ticking vis-à-vis consultation is when the Commission or the Council produces its draft and then sends it back to the European Parliament to be amended. Thus, the clock starts ticking on consultation and spreading the document further afield than the Commission, the Council and the Parliament.
I welcome the reasoned opinion. It is a good, proactive measure, again signalling the importance of this Parliament not just to subsidiarity and proportionality. Equally, it warns governments, including our own, about how we believe they should proceed when amending the Council decision on European elections. Therefore, I wholeheartedly endorse the work of the committees. I endorse both Motions before us and thank noble Lords for being so patient as I have rambled through my 15 years of experience. I hope I have put it to some good use.
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)
My Lords, the noble Lord, Lord Cashman, did not ramble at all. He was very eloquent. I thank the European Union Committee for its report and, much more importantly, for its work in the round. The list of your Lordships who devote time and energy to its work is long, but I thank them all, in particular my noble friend Lord Boswell and the noble Baroness, Lady Kennedy of The Shaws. This committee is a shining example of this House at its very best, picking to pieces legislation and exorcising the devil from the detail.
Before turning to the specific details of this issue, I shall put it in context—context of critical importance. Over the weekend, I reminded myself of public opinion of the European Parliament, since this seems to be the nub of the issue that the proposals are trying to address. The European Parliament is, according to the Parliament itself, suffering from a problem: declining participation rates in its elections. In the early 1980s, voter turnout was over 65%; in the last elections, it had fallen to beneath 42%.
It is worth noting, too, what voters think of the Parliament. Over the weekend I spent a few hours looking in the bowels of the European Parliament’s website. According to its November Eurobarometer survey, while seven out of 10 voters think that it plays an important role in running the EU, just one in four voters has a positive view of the Parliament. Those who do not trust the European Parliament outnumber those who trust it. The main reason given for not trusting the European Parliament is that it is,
“too far away from ordinary citizens”,
as the noble Lord, Lord Judd, said. I say this without any glee or satisfaction, but this is the worrying backdrop to the proposals for the reform of European law that the Parliament has itself proposed.
As has been said, these are proposals from some of those in the European Parliament. They believe that this voter apathy and mistrust can be tackled in part by changing how the elections themselves are conducted. They are perfectly entitled to their views and I do not wish to impugn their motives. It is always worth considering whether voter engagement might be improved by changing electoral processes. However, I question, gently, as did the noble Lord, Lord Judd, whether this should be the priority of the European Parliament now, with all the other enormous problems that we are facing.
Consider what voters across Europe have told the European Commission are their priorities. According to polls conducted for the Commission itself last year, immigration, the state of the economy and unemployment are voters’ top three priorities. A relentless focus on identifying credible solutions to these problems in a way that respects national sovereignty is the way to increase public engagement and trust in the European Union.
This brings me to the proposals themselves. As I was reading them, the wise words of the Dutch Government,
“European where necessary, national where possible”,
were ringing in my ears. It is not necessary for Europe to micromanage the system for European elections, whereas it is both possible and desirable for national governments to do so. Unsurprisingly therefore, the Government do not agree with these proposals as they stand. For example, there is no public support for details of European political parties to appear on ballot papers, or for harmonised quotas of women candidates at European elections. Such provisions on electoral law should be a matter for national parliaments and individual political parties.
The Government therefore share the concern of the committee that the proposals do not comply with the principles of subsidiarity and that the issues that they are designed to address should be decided at a national level and not at European level. As the members of the committee have pointed out, there are concerns with the level at which the action is proposed, concerns on whether the measures suggested are proportionate to the issues being addressed and concerns as to their added value.
I shall focus briefly on two particular proposals that the committee has highlighted. The European Parliament has proposed that the lists that the political parties put forward at European elections should ensure gender equality. Like the noble Baroness, Lady Kennedy, the Government believe that democratic institutions make the best decisions when they have a mix of people with different skills, backgrounds and experiences from across the country. We must ensure that women are better represented across all walks of life. The proportion of women in the British MEP group and that among MPs at Westminster have risen steadily over the years and I hope and expect that they will keep rising in the future. The Government do not, however, consider that it would be right to mandate a legal quota in order to effect change. Nor would it be right to install a one-size-fits-all solution for all countries and all political parties within them.
It is also proposed that EU citizens, including those living or working in a third country, should be able to vote in European elections. Of course, UK law already provides that British citizens living abroad—whether in another member state or otherwise—may register to vote in European elections in the UK for a maximum of 15 years after they were last registered to vote in the UK. The same time limit applies to voting in UK parliamentary elections. The Government are committed to scrapping the rule that bars British citizens who have lived abroad for more than 15 years from voting and will introduce stand-alone legislation to deliver this as a permanent change in due course. However, the Government share the committee’s concern that this sort of issue should be decided at a national level.
I shall also comment briefly on the European Parliament’s proposed changes to the way that the President of the European Commission is selected—the so-called Spitzenkandidaten process. The position of President of the European Commission is obviously important, so changes in this area need to be forensically scrutinised. If there are to be changes to the way the President of the Commission is selected, these changes must be seen as wanted and necessary by all member states. Consensus among member states is absolutely vital. The Government remain of the view that selection of the Commission President should remain a European Council decision and based in current EU law. The European Parliament has the right to draw up proposals under Article 223(1) of the Treaty on the Functioning of the European Union regarding the election of its members and it is within its rights to propose measures relating to that. However, it is the scope of these measures, both individually and as a whole, that is problematic where they breach subsidiarity.
Finally, there is the issue of the veto. All member states would need to approve the proposals in order for them to take effect. Perhaps anticipating some nations’ opposition to these proposals and their tenor, draft Article 14 proposes to remove the veto for these matters. This, too, is unacceptable, as it would be wholly inappropriate for issues such as these to be decided by QMV.
Therefore, the Government wholeheartedly share the committee’s concerns on subsidiarity, both in terms of the content of the proposal and as regards procedural aspects. An important part of ensuring compliance with subsidiarity is the requirement for EU institutions to provide a robust assessment and justification for why an objective can be better achieved at EU level. As the committee has highlighted in its report, the case has not been made.
It is worth noting that the UK Government are not alone in having reservations regarding these proposals. During early discussions, other member states have expressed concerns on these proposals. Some 16 chambers from 10 member states have signed a letter to the European Parliament expressing their concerns on procedure regarding national parliaments. Similarly, a number of parliaments are considering issuing reasoned opinions on these measures.
All too often, the EU has exercised power in areas where decision-making could and should be done at a national, regional or local government level without interfering with the operation of the single market or the effective functioning of the EU. The EU must respect the layers of government that are closest and most accountable to European citizens, and national parliaments have a key role to play in ensuring that happens.
In conclusion, politicians across Europe wish to increase political engagement and trust in politics. This Government believe that the way to do this is by strengthening the role of this Parliament and of all national parliaments. Europe should focus on advancing our prosperity and security—the issues that citizens care about. For these reasons, the Government cannot and will not support the draft proposals that the committee has so expertly scrutinised.
Baroness Kennedy of The Shaws
My Lords, I thank all my noble friends for their participation in this debate. We have learned a lot about the importance of dialogue, which is the message that comes through from the Motion.
My noble friend Lord Davies mentioned to me last night that he would be opposing the second Motion. We did not have any discussions about it, because I was speaking to amendments to the Immigration Bill and it was not a time when I could enter into a discussion with him. However, I hope that, having been absent from the discussion in the Select Committee, he has been persuaded after having had the benefit of hearing the good reasons why we reached the conclusion that there should be a reasoned opinion and why the report was created in the way that it was.
As the noble Lord, Lord Boswell, said, this is not about being antagonistic towards the European Parliament but about pointing out why procedure matters. It is very important for the relationship between member states and the Parliament in the European Union. These ways of working are important and it is how you inspire trust. I hope that the House will support the Motion and that my noble friend Lord Davies will, too.
European Union Subsidiarity Assessment: Electoral Law of the European Union
Baroness Kennedy of The Shaws
To resolve that this House considers that the European Parliament Proposal for a Council decision adopting the provisions amending the Act concerning the election of the members of the European Parliament by direct universal suffrage does not comply with the principle of subsidiarity, for the reasons set out in the 7th Report from the European Union Committee (HL Paper 87); and, in accordance with article 6 of the Protocol on the application of the principles of subsidiarity and proportionality, instructs the Clerk of the Parliaments to forward this reasoned opinion to the Presidents of the European institutions.
Baroness Kennedy of The Shaws (Lab)
My Lords, I beg to move the second Motion in my name.
The Deputy Chairman of Committees (Lord Colwyn) (Con)
The question is that the second Motion on the Order Paper in the name of the noble Baroness, Lady Kennedy of The Shaws, be agreed to. As many as are of that opinion will say content.
Capital Markets Union: A Welcome Start (EUC Report)
Lord Harrison
That this House takes note of the Report from the European Union Committee Capital Markets Union: a welcome start (11th Report, Session 2014–15, HL Paper 139).
Lord Harrison (Lab)
My Lords, I am delighted to introduce this EU Committee report, Capital Markets Union: A Welcome Start. A year and a day ago, the noble Lord, Lord Hill of Oareford, gave evidence to the EU Economic and Financial Affairs Sub-Committee—which I then had the honour of chairing—in advance of the publication of the European Commission’s Green Paper Building a Capital Markets Union on 18 February 2015. We undertook a short inquiry into the Green Paper, of which this report is the result. The report is based on our evidence session with the noble Lord, Lord Hill, and on a discussion among interested parties on 10 February. Incidentally, Jonathan Faull, who was then the right-hand person of Commissioner Barnier, participated in that discussion. I thank Katie Kochmann, who was our policy adviser, for convening that very important discussion, and John Turner and Stuart Stoner, who have been the clerks of the committee. I am also grateful to the noble Baroness, Lady Falkner of Margravine, for allowing me to speak today, and to the noble Lord, Lord Boswell of Aynho, who I know cannot stay for the whole debate because he is going to another part of Europe—deepest Northamptonshire.
Capital markets provide, among other things, an alternative to bank lending for business. The Green Paper stressed that the market was fragmented, leading to overreliance on banks and problems for small businesses in accessing funding. Indeed, the noble Lord, Lord Hill, told us that,
“the purpose of Capital Markets Union is to make it easier to link savings to growth and to channel savings from anywhere in the EU to be invested in businesses anywhere in the EU. The goal is a true Single Market in capital”.
The Green Paper makes many references to the fact that, in the United States, capital markets make up a higher proportion of the borrowing and lending market. By contrast, in Europe, bank-based funding makes up the majority of those channels into the economy. The key theme of capital markets union is about rebalancing and generating greater diversification of funding channels. As indicated by the noble Lord, Lord Hill, from the beginning the process would be legislation-light and involve reviewing legislation, proposing it only where necessary. Might the Minister reflect on whether that has been achieved, as we are in midstream? Perhaps he could also think about the Dutch presidency, which has made this a focus of its six months. I would be grateful if the Minister could tell us of any discussions he has had with his Dutch friends.
As well as suggesting ways to diversify financing sources, the CMU Green Paper suggests methods to reduce fragmentation in the financial markets, to strengthen cross-border capital flows—incidentally, only 6% of capital flows at the moment are encouraged by cross-border financing—and to improve access to finance for businesses, especially of course for small businesses. I wonder again whether the Minister will reflect on the importance of small businesses, which I think we have not always permitted, allowed or released into the workings of the European Union single market.
The paper identifies challenges such as the fact that investment in Europe remains heavily reliant on banks—something like 80% of finance in Europe is drawn from banks, whereas in the United States more like 80% is drawn from the capital markets. That is a very important difference. What more has been done to reduce the barriers and make the rules and market practices, which differ for certain financial products across the European Union, more helpful? There is also of course the inhibiting cultural element in that shareholders and corporate debt buyers rarely invest across borders. Again, what more can we do about that?
As the title of the report suggests, the committee welcomed the proposal of the noble Lord, Lord Hill, and, later, the Green Paper. We concluded that the proposals could,
“provide an opportunity to create a … Single Market in capital by diversifying funding and improving investment opportunities across the EU”.
We also noted that:
“The proposals aim to spread and mitigate risk throughout the financial system, while at the same time tackling … regulatory and administrative barriers and the cultural obstacles to growth”,
which I have talked about before. We also said:
“We particularly welcome the commitment to ensuring that Capital Markets Union is for all 28 Member States”,
which is very important for us now, especially in the Government’s negotiations, which are coming to some kind of fruition, and not just for the eurozone countries. In addition, we noted that a fully developed capital markets union would help to absorb any future asymmetric shocks across the union that might be prompted, thereby, of course, reducing the vulnerability of the European Union economy.
The Commission advocated a bottom-up rather than a top-down approach, consulting so-called shareholders widely. It also advocated a gradual process over a number of years, with the first stage being introduced through a capital markets union action plan later in 2015. That action plan was indeed published in October last year on the basis of responses made to the Commission’s consultation, among which our report figured.
I will not enumerate all the actions proposed in the plan but will talk briefly about some of those which have been introduced. Again, I encourage the Minister perhaps to reflect on the many actions of those he would seek to enhance and endorse. The action plan recognises that banks are lenders to a significant proportion of the economy and act as intermediaries in capital markets, and therefore will play a central role in capital markets union. The Commission has therefore introduced a securitisations regulation with the aim of creating a framework for simple, transparent and, indeed, standardised European securitisation to free up capacity on banks’ balance sheets and provide access to investment opportunities for long-term investors.
When we took evidence last February, we heard from the noble Baroness, Lady Bowles of Berkhamsted. I am so pleased that she is contributing today, as she has spent five years saving British bacon in her role as the chair of the appropriate European Parliament committee. She told us that securitisation had not been particularly problematic in the European Union but had suffered reputational damage because of the US subprime crisis. I look forward to her comments on that. The European securitisation market had regrettably shrunk in terms of issuance volume from €367 billion in 2009 down to €156 billion in 2014, with barely half of that volume placed with investors.
We therefore welcomed the priority placed by the Commission on building a high-quality securitisation market on the grounds that these markets had a key role to play in managing and transferring risk in the financial system and lowering the costs of funding and restoring growth and jobs to the top of the agenda. We cautioned, however, that there were obstacles to achieving greater standardisation and transparency for small business securitisations thanks to the intrinsic informational asymmetry. We need a more common and recognised system across what is actually being offered.
The proposed securitisations regulation was the first legislative action emanating from the CMU action plan to be introduced, and a general approach was reached in Council before Christmas last year. I understand that trilogues are taking place between the European Commission, the European Council and the European Parliament. I am particularly alive to concerns that fragmentation could occur between those securitisations which are indeed standardised and transparent and those which are not—again, perhaps the Minister might reflect on whether he shares concerns in that area—and between the EU and other international regulatory regimes. Under securitisation, there are 29 criteria which it will be very important to comment on.
Alongside the CMU Green Paper, the Commission launched a review of the prospectus directive. The noble Lord, Lord Hill, told us at the time that it was important to review the prospectus directive to see if it was possible to reduce burdens on issuers, to make it easier and more affordable to raise funds. The consultation paper noted in particular the lengthy, complex and expensive process of getting a prospectus approved by the national competent authority, and that practices at a national level differed considerably.
We welcomed the review, noting that it was important to ease the burden of issuers, particularly small-business issuers, and to increase the consistency of approach to liability and sanctions across member states. However, we did warn that consumer protection must not be weakened, as doing so might reduce the demand for any new financial instruments that might be devised. A balance needs to be struck to ensure that markets are attractive, both for issuers and investors.
The action plan included a proposal to modernise the prospectus directive. What has emerged is a new regulation to replace it and, again, I look forward to action to help small businesses publish a prospectus. Again, the Minister might like to reflect on that. He also might like to reflect that of course we mention in our paper peer-to-peer lending, which is not my lending him five bob for a cup of tea, and crowdfunding, both of which have enormously increased. The finance firms have doubled their lot in terms of peer-to-peer lending from last year, from €2.2 billion. Christine Farnish, the chair of that section of funding, said that that industry is a real alternative to the traditional lenders, which are typically the banks.
I will conclude by briefly touching on the implications for the role of the United Kingdom. We concluded that the CMU project was a significant opportunity for the UK positively to promote the importance of capital markets, benefiting not just the UK economy but the EU as a whole. We encouraged the Government and the UK financial sector to share best practice with other member states while recognising that the United Kingdom could itself learn from others; I look forward to hearing from the Minister in a minute.
I did take the opportunity, when the Statement was repeated by the Leader of the House just now, to make a suggestion about capital markets union. The single market was the creation of Lord Arthur Cockfield in this House when he was the British Commissioner 20 years ago. I wonder whether the Government might become more positive about what they are intending to do by holding this referendum, get on the front foot and say that there are benefits from the single market which are considerable for the European Union and for the United Kingdom. In collaboration with the Dutch presidency, why not invite the noble Lord, Lord Hill, to be a chair or at a meeting which promotes and reports on the capital markets union, something where the Prime Minister might actually stand up and say, “This is why we are in the single market and in the European Union, because it helps the City of London, it helps small businesses, it helps consumers, and it helps us become abuzz and alive again as a trading nation”? I beg to move.
The Earl of Caithness (Con)
My Lords, first, I thank our late chairman—if I call him that it is in the right sense—the noble Lord, Lord Harrison, for his huge contribution to the work of the sub-committee, which I am privileged still to sit on. He did an enormous amount of work. This report is another testimony to the success he achieved, but he would not have done it without the support of the backroom team. I also give my personal thanks to Stuart and Katie for their hard work, and to John Turner, who is now filling that role.
At the seminar we held about a year ago on 10 February, Hugo Dixon said of the CMU that it is,
“a slogan in search of a policy prospectus”.
What an indictment. The principles of the free movement of capital were enshrined in the treaty of Rome, which is 59—nearly 60—years old. It shows how little has been achieved in those 59 years and how much has yet to be achieved to meet the aim of the principles of the treaty of Rome.
In that respect, we are extremely fortunate to have the present Commission. It is a vast improvement on the previous one, but they will not all be like this. In particular, we need to look at the role of my noble friend Lord Hill. His title is worth bearing in mind and is very relevant to the debate. He is the European Commissioner, Financial Stability, Financial Services and Capital Markets Union. For the first time, the Commission has given the right title for somebody to get on and do the job.
The noble Lord, Lord Harrison, mentioned some of the needs for a capital markets union. It is quite clear that the banks are struggling and not meeting their objectives. It is worth remembering that new lending in the eurozone is lower today than it was 10 years ago. That is a terrible indictment of our financial system in Europe and bad news for all our companies.
The collapse in lending has now got to the state, as the noble Lord, Lord Harrison, said, where roughly 80% of companies’ debt comes from the banks, whereas in America it is under 20%. That is a huge area that the EU needs to improve on. We must retain our banks. The capital markets union must complement how the banking system works, but the figures I have given show that a huge structural problem needs to be addressed. A good capital markets union will address not just that structural problem but others, such as the pensions problem in Europe, which is grossly underfunded and needs finance, and the infrastructure problem. With the banks pulling back from infrastructure problems, how will Europe raise the €2 trillion of investment that it needs in telecoms, transport and energy infrastructure by 2020?
Europe needs to build bigger and better capital markets. According to figures that have been given to me, there has been a shortfall of more than $1 trillion a year between what European companies raised in capital markets and what they could have raised if we had operating in Europe a proper system of capital markets, as developed in the US. On 26 different measures, European capital markets are only half as big and deep as they would be if they were in the US. That is the size of the problem we face.
The action that the EU has already taken has been good. There has been substantial progress and I hope that my noble friend the Minister will update us. A regulation on securitisation and an amendment to capital requirements has been proposed, but perhaps more importantly, it is worth stressing that the drafting of the prospectus directive has been revised. This shows that the Commissioner is prepared to return to a problem to try to get a better solution. In evidence to us, which noble Lords can find on page 50 of our report, Jonathan Faull showed how difficult it was to get agreement on the prospectus directive. It was about getting the balance and what was required for the SMEs, and keeping investors interested without imposing excessive burdens. The fact that this has been revisited—we hope that progress will be made on it—shows that the Commission is more interested in listening to the concerns and in trying to get a sensible solution.
A number of problems still remain, some of which the report drew attention to. I highlight the first one in particular. In paragraph 90 we refer to the fact that significant obstacles remain, and to the problem of the financial sector being treated as silos. Has any progress been made on this? If no progress is made on that front, the capital markets union will never be the success it should be.
Paragraph 11 addresses a more difficult area that the Government alone cannot tackle: the problem of culture. There is a big difference between the culture of the EU financial market and the UK financial market, as was pointed out to us by a number of experts. There are differing “entrenched cultural norms”, and saving trends tended to be “compartmentalised” within different member states. The attitude to business failure is very different and insolvency laws are different, as are cultural and legal traditions. I was particularly struck by comments made during our seminar by Sharon Bowles—now the noble Baroness, Lady Bowles—who, luckily, is with us today. It shows the advantage of this House that she is back in a legislative Chamber. She raised exactly these points, and I look forward to hearing what she has to say and hope that she will expand on them. Unless the culture can change, it poses a serious hazard to sensible implementation.
There are also problems, as I said, surrounding insolvency law, security laws and tax. I ask my noble friend: is the Commission being too slow in tackling this? Do we expect a speedier response in future? Is the Commission doing enough to protect the retail investor and the consumer? There has been limited progress on this front. These are difficult issues. It is quite natural for the Commissioner to tackle the easy problems first, but as you start to dig deeper these are the problems that need to be addressed. I would like an update from my noble friend on that.
Another problem area is the Government’s response, which was one and a half sides of A4. That in itself was not so bad, as they had given a full reply to the CMU Green Paper; my concern is that the Government are so in agreement with the committee. That makes me think this is quite an easy ride. It is not. This will be a long, slow, drawn-out process. Given the amount of enthusiasm shown, we have to pay twice as much attention to the detail—I see the noble Lord, Lord Harrison, nodding. I am reminded of the financial transaction tax: not until our report came along did the Government wake up to the hazards. We will need to be very certain that the Government are alive to any pitfalls before us.
I want to return to one other matter before I conclude. These are the problems in Europe. There have been a number of different measures assessing how the market works throughout Europe and the relative depth of the capital market across Europe. As I said, it is not even. In fact, on every measure the rest of Europe is behind the UK. Therefore, to a lot of the countries we are talking a language they do not understand. We take it for granted. We have been brought up with it in this country. We know what the financial sector is. For many in Europe, it is not as easy as we think it is: it is much more complicated. I ask the Government to make certain that when the Prime Minister is doing his rounds, he explains in words of one syllable what the differences are and how important this is.
I wish the CMU well. Industry has to play its part. The Government cannot do this alone. Industry has to change, adapt and be very proactive to get these measures, which will bring so much benefit, on to the statute book.
Lord Davies of Stamford (Lab)
My Lords, it is a pleasure to follow the noble Earl. I agree with the points that he made and agree particularly warmly with his very generous but justified tribute to our chairman, my noble friend Lord Harrison, in the previous session. He was a really perfect chairman and there was no day when we felt that we were not extraordinarily well chaired. This report is just one of the accomplishments of the committee under his chairmanship. I thought at the time that he would be an impossible act to follow, but we now have a new, very effective chairman, the noble Baroness, Lady Falkner, who is taking part in the debate this afternoon. Both these chairmen have the four qualities that seem to be essential for the role. They are always enthusiastic, they are always conscientious, they are always decisive and they are very fair. They may have differences in personality—they are well-known and respected Members of the House—but they have those qualities very strongly.
There are three important considerations in this issue of a capital markets single union. One is a central and obvious one for this country: we have a great deal of human and financial capital invested in the City of London. We stand really better than anybody else in the European Union to benefit from the emerging capital markets union, if it is in fact a real success. That has obvious implications for growth in this country, and for the generation of employment. This is of considerable—indeed, exceptional—national interest within the single market for this country.
Secondly, my noble friend Lord Harrison has made the point well that there is general agreement that it is necessary to try to provide a wider source of finance in the form of both working and long-term capital for British industry and commerce, as well as for continental industry and commerce. The 80% market share in the field of the banking system in the single market is a healthy state of affairs neither for business, commerce and industry, nor for the banking system. To introduce a greater measure of competition and greater sources of finance of this kind is an important undertaking. Again, there is strong welcome for it from both sides of this House and across the whole of the European Union. The noble Lord, Lord Hill, has a task and is being looked to by many people to accomplish it successfully, and I trust and hope that he will.
The third important consideration in this context is that there has been much talk about the relative inadequacy in the euro area of mechanisms allowing for some stabilisation in the event of asymmetric shocks. As the House knows, there is a lot of controversy about the degree of transfer payments that ought to be provided for to make a successful euro area. Whether or not we are members of the euro, we all obviously have an interest in the success and stability of that area.
What is immediately apparent to any observer is that in the United States, which is obviously a successful currency union by whose experience we ought sensibly to allow ourselves to be guided, the capital markets play a major role in that stabilisation process. That is not to say that there are not elements in that process played, importantly in the United States, by federal funds and federal government money, but it is clear that the capital markets play the major role there. That is because in a single-currency area, you eliminate exchange risk for investors within the area, which is one of the automatic results in creating the currency area in the first place. One of the advantages of creating the euro in much of the European Union has been that that effect has been generated. People are therefore naturally inclined to hold more widely diversified portfolios, going across the whole of that area. If they want to buy a pharmaceutical, automotive or retail share for their portfolio, they will not be limited by what is in their own country—previously they would have been, because they would not have wanted to incur foreign-exchange risk in many cases—but they will look equally well at a share or bond in one of those particular sectors in any other country that is part of the same currency union. That process takes some time to develop. It would be unrealistic to expect that we would have achieved the same levels of diversification in the euro area as has been achieved in the United States, but the process is ongoing and it is an important one.
The United States is working very well at present. Texas and Oklahoma lose out from the fall in the price of oil, but California, New York and Massachusetts gain. At the same time a lot of people in Texas have shares and bonds in or other claims on companies in California, New York or Massachusetts. They gain that way. Equally, a lot of investors in those three states will have claims on Texas and Oklahoma; they will share in some of the losses. There is a sharing of risk and a stabilisation mechanism there, and it is desirable that these should develop in the European Union. It will do so pretty much automatically if we can make real progress in creating a capital markets union.
I would like to make two further points to add to the considerations in our report. One is a matter that has become more serious since we published the report. In many ways I am sorry that it has taken us so long to have this debate. Nevertheless, it gives me an opportunity to talk about a new threat. On a recent visit to Brussels I was informed that the Commission may well not be pursuing the idea of an insolvency directive, whose objective would have been to create a common insolvency law throughout the European Union. If that is the case it is regrettable, and a serious reverse for the prospects of the capital markets union. If the point does not appear immediately obvious, I shall explain why. Any investor is concerned with the claims that he or she will have in the event of insolvency. Insolvency does not preoccupy many people if they buy a AAA-rated bond or a blue-chip share, but logically it becomes a disproportionately important issue at the riskier end of investment. For example, private placements, peer-to-peer lending—that has already been referred to—and venture capital are precisely the areas that we want to see expand and where we are at a competitive disadvantage to the United States, where those sources of funds are much more developed. So that is quite serious.
If an investor is confronted with the possibility of such an investment in another country with whose insolvency laws he is not intimately familiar, or not as familiar as he is with his own, he probably will not spend tens of thousands of pounds or euros on getting legal advice on the regime and jurisprudence in insolvency in the country in which he is thinking of making an investment. He probably will just not make the investment there. He will probably make it in his own country, and will not therefore get the single market or the capital markets union effect that we are trying to go for. Insolvency is very important and in my view that objective must be pursued energetically. I hope that the Minister can tell us in his winding-up speech that the Government are committed to an insolvency directive and whether they are doing anything to push the initiative forward. That is very important. The Government appear to have quite a lot of influence in the European Union, if the events of the past two or three days are anything to go by, so I hope that they will add that to their agenda.
My other point is that at present there are two initiatives in the EU in the capital markets and financial area that currently are separate, but that separation is not sustainable, viable or logical. There is a project of banking union and a project of capital markets union. It so happens that we are part of the capital markets union—a very big part, I hope—but not of banking union. I do not quite understand why we are not a part of banking union; in our sub-committee, presided over by the noble Baroness, Lady Falkner, I have asked many experts why we are not and I never get a very respectable answer except “politics”, which in my view is not a respectable answer to an important issue affecting the national interest. First, if we are not members of banking union, it seems that we shall face higher compliance costs in this country because banks operating across the EU will have to have compliance operations covering their activity in the euro area, or in the banking union area, and different compliance arrangements in this country, which is not part of the banking union. That is very undesirable.
Secondly, there will be the inevitable temptation to go in for regulatory arbitrage, which is bad from an economic point of view because it is distortionary and, of course, makes a mockery of the whole system. Thirdly, I do not think that the distinction is robust, viable or sustainable. Take, for example, shadow banking, money market funds, securitisation and indeed the development of a secondary market in securitised bank loans: are those to do with banking union or with capital markets union? The answer could be both as they could be categorised as either, so it is not a very sensible distinction to make. If we try to make it again, we will have regulatory arbitrage, costs, confusion and a lack of transparency and certainty—all the things that we are trying to avoid by creating a capital markets union in the first place. That would be very perverse and unfortunate, and I hope that people will think very seriously about that because this is an area where there is unfinished business and which is very important to this country.
Baroness Falkner of Margravine (LD)
My Lords, it is a great pleasure to follow the two senior members of the committee, the noble Lord, Lord Davies of Stamford, and the noble Earl, Lord Caithness, who I am delighted to see is on the road to recovery after his recent illness.
Listening to what the committee says about the noble Lord, Lord Harrison, it feels, sitting in the chair as I do now, as if he is a very hard act to follow. However, it is a stellar committee served by a stellar secretariat, and I have great pleasure to be leading it at this point in time.
The noble Lord has covered the main elements of the proposals that foreshadowed the subsequent action plan launched by the noble Lord, Lord Hill, in late September last year to bring about an improvement in capital markets in the EU. Given the wide spread of issues that other noble Lords have spoken about, I shall confine my remarks to one or two current issues that have come to light since the report was published.
In commenting on the publication of the committee’s report, I express the committee’s frustration that the business managers of this House do not seem able to schedule business in any sort of timely manner. I am sorry that the noble Lord, Lord Boswell, is not here to hear this. That is a widely repeated refrain across the sub-committees yet just the other night we rose at 7 pm, and there have been many similar previous occasions. So we come to a situation where, by the time we finally discuss matters covered by a report as long ago as 20 March 2015, a lot of water has passed under the bridge regarding things that are of huge import to this country’s financial sector.
I should add that the UK’s financial sector does not hold back. On the Commission’s Green Paper consultation on capital markets union, which is the subject of this report, 95% of the responses came from the United Kingdom, with 65% from Belgium—presumably because organisations based there have an interest in it—and 57% from France. This demonstrates that the UK not only engaged actively but did so because it will be a huge beneficiary of the proposed changes, as we were told across the board when we visited Brussels last week.
To quote the noble Lord, Lord Hill, in the Financial Times last September when he launched the Action Plan on Building a Capital Markets Union:
“This is a good example of the practical benefits that membership of the single market can bring. But to make the most of it, and to help influence the rules which will set the terms of engagement for years to come, the UK needs to be shaping the system—not looking on while others set the rules”.
These are very wise words in the now excitable atmosphere of the UK renegotiation.
We have seen over 40 legislative and non-legislative measures in the area of financial regulation since the crisis of 2008. Many of them have been necessary, but it has taken some time for the scale of the problem of illiquidity in capital markets to become apparent, for the rigidity of national insolvency laws regarding capital markets—something commented upon a moment ago by the noble Lord, Lord Davies—to be overcome, and for the retail financial services sector to be kick-started across the EU, which is sorely needed. The EU economy is roughly the same size as that of the US but its equity markets are less than half the size. I think that the noble Lord, Lord Hill, estimated that if European venture capital markets were as deep as those in the US, over the past five years EU companies could have raised an extra €90 billion of badly needed investment.
I said I would update the House on one or two of the measures, and the House has already heard from noble Lords on both of them. One of them concerns securitisation, the first major piece of work undertaken under this heading. It is intended to create a simple, transparent and standardised framework for the regulation of securities in order that a prudent and diligent investor in asset-backed securities will be better able to analyse and price the risk involved. This should considerably reduce the capital charges imposed on banks and insurers when they invest. It will also bring much-needed transparency to the pricing of risk through standard templates and require originators, sponsors and original lenders to retain risk of not less than 5%. In other words, it will ensure that those investors and insurers have a dog in the fight, albeit a very small dog at 5%. That shortcoming was exposed during the sub-prime mortgage crisis in the US in 2008.
The UK has a significant interest here: it accounted for 22% of European securitisation issuance in 2014 and 46% of the investor base. However, the proposals have come under fire as they do not envisage an overarching regulator determining whether a securitisation meets the criteria required. This criticism is mainly from France, I should add, where the concern is that only the biggest investors would have the expertise and resources to enter the market, but this remains a valid concern, as the urgent need is also to enable SMEs to access capital markets more readily. I hope that in due course, as the proposals bed down, the secretariat of the noble Lord, Lord Hill, will have another look at this.
A further change has come about with agreement on Solvency II, which came into force on 1 January and will impact the insurance industry hugely as it revises and updates the current solvency framework in the EU. It does this through reducing the risk of insolvency, reduces losses to policyholders and gives an early warning to supervisors so that they can intervene promptly if capital falls below the required level. It intends to promote confidence in the financial stability of the insurance sector though creating a more level playing field. It has taken a long time to get here—its origins go back to 2002—and its effects will undoubtedly take some time to work through, but overall, despite the reservations of some parts of the UK insurance industry, I argue that it can only be a good thing to level the playing field.
We are in the middle of scrutiny of the Prospectus Regulation and it is too early to say where this will end up. However, since the Minister is here, I hope that he will take on board the following thoughts: that we as a committee find it a little frustrating that we do not receive more feedback from relevant Ministers as to their consultation with stakeholders. This regulation will considerably impact on the SME sector raising the threshold definition of an SME from €100 million to €200 million in market capitalisation. It would be important for us—particularly in the case of regulations where we are the backstop of scrutiny—to hear what industry voices have said and what their discussions with the Treasury have revealed in terms of our scrutiny function.
Finally, let me turn to the issue of economic governance as set out in President Tusk’s detailed proposals on Tuesday. The section on economic governance says that eurozone members should respect the rights and competences of non-participating member states. He goes on to argue that facilitating the coexistence between different perspectives within a single institutional framework is important and that the equality of member states before the treaties should be upheld.
I accept that it is still early days but there is a need for clarification on a number of fronts. Mr Tusk refers to discrimination in the text but goes on to say that different treatment must be based on objective reasons. The question arises as to how we define objective reasons and whether it is to be left to the court to adjudicate between objective reasons on the one hand and action arising on the basis of financial stability on the other, an area where differential treatment is allowable. I suspect that differential treatment will be allowable but only up to a point, and the question will be: which point? I hope the Minister will be able to relate these concerns back to the negotiating team.
Today’s Financial Times says in its headline that the safeguards’ impact on the City remains unknown. This is not a party political point; it is imperative that we gain clarity on this before the European Council and its final conclusions on the negotiation on 18 and 19 February.
To conclude, the sub-committee’s report is titled Capital Markets Union: A Welcome Start. The noble Lord, Lord Hill, has started on this exercise. We wish him all success in delivering the capital markets that Europe so badly needs.
Lord Dykes (Non-Afl)
My Lords, I am not so sure that the noble Baroness, Lady Falkner of Margravine, will actually get an answer to the question she has just posed in time for the onset of the referendum campaign and the declaration from the European Council negotiations, but I hope she will. I hope the Government will be able to respond because it is a very pertinent question.
Despite the fact that it has taken a long time for this debate to be held—I agree with the complaints about that—I add my thanks to the noble Lord, Lord Harrison, for opening this debate and for having been such a successful chairman of this sub-committee. I do not want to embarrass him but I am reminded of that famous joke about a human cannonball who was injured—not seriously, I hasten to add—in a circus in Britain some years ago, and the ringmaster wrung his hands in panic and said that it would take him years to find another man of the same calibre. We thank the noble Lord, Lord Harrison, for having been such an excellent chairman of this committee. In this case there is another person of the same calibre—in this case a woman—namely the noble Baroness, Lady Falkner of Margravine, so we welcome her and wish her well in this committee.
It is not an easy task to promote this document and these recommendations because the timetable is long, and that is likely to mean that it is going to be depressing as well, but we have to really press hard, particularly with our natural authority as one of the leading marketplaces of the European Union and the strength of the City of London, where as we know the biggest dealers in the euro are found. It has to be pressed very hard and I hope the Government will do so, perhaps in contrast to their rather restricted enthusiasm about being an integrated member of the single market syndrome for financial markets as we are for the single market in physical products. They are not so keen on other aspects of the European Union membership obligations that we have in respect of the items that have been enunciated in the negotiations for the referendum campaign.
I regret that very much because I think we need to maintain our enthusiasm for the European Union anyway. In this field it is much more difficult because, as other speakers in this debate have said, the level of development in other countries is much lower. This is one where we are ahead; while Britain has improved in recent years, none the less we sadly find that we are behind other member states in industrial performance and behaviour. The Government talk in the referendum negotiations about the need for enhancing competitiveness in Europe, and I agree entirely. They mean different aspects of course but it is amusing to reflect that we are the only large member state that has a huge trade deficit of rather ominous size, whereas the other large members states—Germany, Italy, France and, I think, Spain—have a considerable trade surplus with Britain. A little bit more modesty in that context would come in handy, but in this particular area we are ahead.
I was a long-standing practitioner many years ago in the stock markets in the City of London. It is interesting to see how we have always maintained that lead by bringing size, capacity and influence of operation together; then the big bang really enhanced that. To some extent this is a kind of European-wide big bang exercise, not promoted just by private enterprise but also by legislation, as was the case in Britain. France followed with its own big bang a year after Britain and other countries followed suit. However there are still areas of lack of development. For instance in Germany, the biggest and most successful economy, surprisingly we find that financial markets are much less developed, notwithstanding the promulgation 14 years ago, I believe, of the Finanzplatz Deutschland scheme which helped to open up German stock markets. They opened up quite considerably at the margin but only a little bit proportionally. Therefore Germany also needs to take an interest in this field, because there are very strong beliefs there in the single market aspects in general and there should be on financial things as well. Their industry and smaller, Mittelstand companies are dominated by their relationships with the banks.
That is an aspect of how the culture takes a long time to change and patience is needed for that to happen. In other countries it can be quicker, particularly in the new member states where these matters may be much less developed, and therefore are more likely to be able to operate on the basis of new proposals coming from the Commission, which would gradually integrate these markets more and more.
I was delighted too when the noble Lord, Lord Hill, went to be the Commissioner for Financial Services and Markets. We were sad to lose him as Leader of this House—a very capable Leader with a sense of humour, which you need in that position—and he is now becoming a very successful Commissioner with exactly the right portfolio from the point of view of this country. We wish him well on his very hard-working and patient track to success, which will take some time.
I agreed with the noble Lord, Lord Davies of Stamford, when he was referring to the advantages in the United States of the open market system, the vast amount of money raised in the capital markets and the various desirable and productive effects of that. However, perhaps he should not get too carried away because in contrast to that the worrying problem in the United States is the level of debt that has been accumulated in the public sector and by Government, as well as elsewhere. The level of debt in the United States is a very serious problem and we need a balanced view of that. As long as everybody in the world is prepared to accept the greenback as the world’s leading reserve currency, then it is all right, but as the federal debt alone in the United States is $17 trillion, and half the states and 40 American cities are technically bankrupt, then that has to be held in check because one day it might collapse if an alternative reserve currency comes along. Lo and behold, look how close the euro is getting to the US dollar in terms of international banking payments transactions—the measurement of all transactions throughout the world every day. It is now six points behind the US dollar whereas a few years ago it was miles behind. The euro, therefore, is in reality not like it is in the view of the chauvinistic British press; it is a very successful currency in general, with three or four members who find it difficult to keep in recently, and most of them are solving their problems—now even Greece, with eight parliamentary votes in favour of the strict measures, has been able to do that.
I therefore hope that the Minister will reply to the various questions he has been asked. This is an excellent report, and I wish the Government well in pursuing this portfolio.
Lord Flight (Con)
My Lords, I add my great appreciation of the noble Lord, Lord Harrison. I spent four years on the EU Economic and Financial Affairs Sub-Committee, which he chaired. There were, shall I say, widespread views among the members of that committee, but we never had any problems in putting together sensible papers, and it was very much due to his most courteous and constructive chairmanship. I am sure that the noble Baroness, Lady Falkner, his successor, will be an equally good chairman. I always thought that it was wrong that the committee should just be a sub-committee of the EU Committee, because it is an incredibly important committee. It is at the front line of looking at all the stuff that comes through, such as whether we will have a financial transaction tax, and goodness knows what; it is a crucial part of our interface as a member of the EU. I also add my congratulations and appreciation that my noble friend Lord Hill got the job—he is a decent and sensible person and will cope with some things that urgently need doing.
To me, the “EU” bit of the capital markets is in fact not so fundamental; Europe needs more capital investment—it does not matter where it comes from. London has been the key place for channelling international capital, much of it into Europe, and America is probably the largest private equity and venture capital investor in Europe already. As we know, the problems are that the banks cannot lend more and that there is a super-rated dependency on banks anyway, but debt problems and so forth limit what the banks can lend to SMEs anyway, and the euro crisis killed cross-border bank lending within the EU. Therefore what is left, which is crucial, is the need to get more equity money to SMEs. I think my noble friend Lord Hill described his task as channelling savings from anywhere in the EU to be invested anywhere in the EU; I would amend that to say “to channel investments from anywhere to be invested anywhere in the EU”.
I pick up the point which the noble Lord, Lord Harrison, made, which is that there is a pretty strong lack of willingness within the EU to invest in other countries; I think 94% of EU citizens very much shy away from any sort of financial involvement in other countries. That task of just increasing capital flows in the EU will very much come from London, and on the back of the US. I hoped that I would learn today about how my noble friend Lord Hill has been getting on in achieving the action plan that he drew up last September, and indeed, I have learned some quite important points. However, something slightly disappointed me.
I remember when we had our session with my noble friend Lord Hill, I made the point to him that the enterprise investment scheme—I declare an interest as chairman of the EIS Association—has raised a lot of high-risk equity capital for SMEs: about £12 billion or £13 billion. France wisely came over to look at what the UK was doing, copied us and put in a similar scheme, which is gaining some momentum. I suggested to my noble friend Lord Hill, “Why don’t you try to persuade each of at least the main economies within the EU to put in their own EIS-type scheme?”. However, not only has nothing happened, but, unfortunately, the EU Competition Commissioner has decided to attack the UK’s EIS schemes, holding a sort of pistol to our head in terms of state aid approval, and has required a great deal of complications and for money which a company can raise under EIS to be significantly reduced. Worst of all, she has required us to put in a 2025 date for ending the enterprise investment scheme. Who knows whether that will happen? I thought it quite extraordinary that, where the EU desperately needs more capital flows for SMEs, you have the Competition Commissioner of all people deciding that she wants to get rid of the EIS arrangement for raising risk equity for small companies. As regards the measures, a small company—the size is determined by the number of employees and the size of the balance sheet—could raise up to £5 million a year under the EIS scheme, but now it has a cap it cannot raise more than £12 million over its lifetime, whereas it was £5 million a year unlimited.
I do not know how successful things such as peer-to-peer lending or crowdfunding have been on a cross-country basis. Mostly, what has happened has been organised through London and some of it through Guernsey. However, I have some reservations about such arrangements, because I cannot help feeling that, when a bad economic period inevitably comes, there will be significant losses on peer-to-peer lending; for some people it does not matter if rich people lose money, because “They can afford it”, but if it is not rich people, people will claim that they were misled and did not know what would happen. I also got a huge shock when I noticed that peer-to-peer lending had been exploited in China to develop a Ponzi fraud that has involved 880,000 people and £5.3 billion, so there is some vulnerability to fraud there.
The Government have not exactly shouted from the rooftops but have been realistically supportive of the capital markets initiative. They have been keen to kick-start securitisation, develop the private placement market and to enhance SME credit information through non-legislative means. The UK Government have been strongly opposed to any attempts to establish a system of pan-EU supervision on the grounds that this would be prolonged unhelpful distraction, which is probably true.
To come back to London and its importance and contribution, just yesterday afternoon I spoke at a conference on the most esoteric subject imaginable: the difference between what is known as NPPR—the old, historic rules, under which if a fund wanted to market itself in Europe, it got permission from the Government directly—and AIFM passporting, which is supposed to enable you to market a fund across EU members. To my amazement, 350 people turned up at this seminar, not to hear me in particular but because of the subject. That is a classic example of what London is doing. In this case, London has a mixture of UK, US and other nationality funds raising money and marketing themselves in Europe and then very much investing the proceeds in Europe, so the middleman role in London is actually happening loud and clear. I ended up thinking that it is motherhood and pie. Of course we want a much bigger and more effective capital market across Europe. We want to have as effective a market as the USA. What the EU could do to improve things is limited—quite a lot of the constraints are cultural—but it is happening slowly and London is completely at the centre of it.
Going back to my comments about EIS and the Competition Commissioner, the EU can shoot itself in the foot and, by what it has been doing, damage the very objective it is seeking, which is more capital flows for SMEs. Let us hope that we do not get any more of that. Otherwise, let us get a move on and do things.
Baroness Bowles of Berkhamsted (LD)
My Lords, I declare my financial services interests as entered in the register, in particular as a non-executive director of the London Stock Exchange Group and Prime Collateralised Securities ASBL.
I welcome this report. It is now some time since it was published and events have moved on, as envisaged and suggested in the report. I have been widely quoted in it, including a contribution from the seminar on pages 31 and 41, so I feel somewhat as if I am being given a fourth and fifth bite at the cherry.
I thank the previous sub-committee chair, the noble Lord, Lord Harrison, the new chair, my noble friend Lady Falkner of Margravine and all noble Lords who have served on both the former and present committees for their interest and attention when I have given evidence on this and other reports.
The most frequently asked questions about CMU, especially in the early days, were “Why?” or “What’s changed?” or “What’s new?” I will dwell on those for a moment because I think they answer some of the questions about culture that were raised earlier. As has already been pointed out, CMU is founded on the freedom of movement of capital set out in the Treaty of Rome, so one way or another we have been aspiring to it for rather a long time. There has always been deep envy of the liquid capital markets in the United States. To try to emulate those, we had the financial services action plan which was a big step in the right direction.
More recently, the financial crisis and major international initiatives on systemic risk, coupled with the review of that financial services action plan, stimulated the 40 or so pieces of financial markets legislation between 2009 and 2014 which I had the privilege of negotiating. Consumer protection, culture, systemic risk and limiting both contagion and arbitrage were key objectives in that legislation.
One might ask what is left; in one sense the answer is “Not a lot”, other than getting all that legislation fully functioning and tweaking it where necessary. A stocktaking consultation has just closed, but quite a lot of what has been legislated still awaits secondary rule-making. It will not be operational until 2017 or 2018, in just the same way as the UK’s own legislation on ring-fenced banks is taking a while to get fully functional. So stocktaking needs to be an ongoing story.
However, the response to the great financial crisis—to give it its historic name— shifted shape over time and eventually turned to incentives for increasing capital markets rather than just worrying about them. It could be seen that the same old factor of deep markets had helped the US to be less reliant on banks and to recover more quickly. On top of that was the policy response to bailing out banks, which made rules to protect national balance sheets—usually rendered as protecting taxpayers. That was done through a process of bailing in bondholders—that is, converting them into equity—which means they are no longer let off the hook.
That then raises the question: who are the bondholders? They are, of course, investors, many of them institutional investors looking after the savings and pensions of ordinary individuals—workers and taxpayers. The situation where a failing bank causes knock-on failures has to be avoided. So spreading the “bail-inable” bonds in a wide market is an important corollary to rules about sharing out a failed bank’s losses.
There are some who suggest that capital market union is more relevant for the eurozone. This is an interesting point which is both true and not true. It is true that the monetary union’s construct, without mutualisation of sovereign debt, urgently seeks to decouple banks and sovereigns and to have mechanisms to spread risk. So it is not surprising that the European Central Bank was first in the recent calls for a financial markets union, later renamed the capital markets union. Even though the ECB says that it does not want to be the supervisor of the capital markets union, it has a big influence on the culture and thinking around the whole project.
I said that it was not true in one sense. It is not true also in the sense that the logic of having better capital markets to stimulate jobs and growth, to have less reliance on banks and to be able to spread risk to the market rather than a national balance sheet applies outside the eurozone as well. To spread it wider than the local shock is better for stability; institutional investors have multi-currency exposures anyway.
All this drove the CMU proposals and, despite some mutterings, it is jolly useful to have mood music from all sides that capital markets are good. Some of us have tried really hard to create that. Until now it has been countries from within the eurozone that have been far more sceptical about the benefits of markets, had underdeveloped markets themselves, and have held back market-opening proposals or simply have not understood what it was all about. That has made legislative negotiations on markets matters excruciatingly difficult—although, despite the pain, the UK did rather well. However, this shows again that there is a change in culture and that the future looks brighter on this horizon.
Does eurozone enthusiasm mean that it would try to do things for itself? Would this stimulate attempts to rival the City and construct different rules about what had to be done in the eurozone? Any suggestion of that was jumped on very quickly, even as there was the turnaround in mandate from the old Commission and Parliament to the new. Common sense has broken out all around in accepting that the UK and the City are a major asset and central to the CMU project. The current Commission President, Jean-Claude Juncker, made bold statements to that effect at a very early stage.
Whether the eurozone countries choose to have a single supervisor is still being touted around, but it is a trickier project than banking union due to the number and diversity of market participants and with no substantial organisation to bolt it on to. This assumes it is true that the ECB does not want it.
However the eurozone might choose to share supervision or not, the economic governance section of the draft EU reform documents clarifies that the UK can retain its own supervision. The answer to those who wonder why we are not part of a banking union is that it is the link between supervision and sovereignty, rather than the link between rules and sovereignty.
How much the eurozone might need a subset of rules for itself will depend a lot on attitudes after EU reform, but I cannot see it as constructive for the eurozone to be overly clubby or for the UK to be overly aloof. Neither leads to an effective capital markets union. I referenced the draft EU reform document and I must say that, on balance, what is in the economic governance section is very good in its intent, but I am pretty desperate to get my hands on some of the drafting.
As the report highlights, it is a good start to do those things that will not get bogged down: the simple, safe securitisation that has been referred to. But of course it is not always that easy to do things simply. You fall between self-certification—can you do due diligence?—and having outside certification. So we are back to something that might be criticised, such as rating agencies, or do you ask a regulator to do it? Most regulators do not want the liability. That is one conundrum that awaits to be resolved.
On adjustments to the Prospectus directive, I recall the discussion about whether it could be more than €100 million in the last revision. The point is, if we put it up to €200 million that might be SMEs in some countries but all they have in some other countries, so they would not have a main market; they would have only a small market. In desperation, I suggested that they use a purchasing power parity multiplication factor, which seems to be the sort of thing that we are now agreeing for benefits that go to other countries. Maybe someone could do something useful around purchasing power parities if the size of markets in some of the smaller member states or less-developed markets becomes an issue.
We definitely need to mend insurance regulation that has militated against long-term investment, and I cannot say that without pointing out that it was the UK that drove Solvency II and its mistakes, and is still overzealous in its application. Now is the time to stop the warring over French, German and UK preferences and get it fixed.
Longer term, there will be other measures and here are some thoughts. Can we build a better insolvency regime? If we cannot do it for insolvency, can we do it through pre-insolvency and presumptive paths for what happens in a failure, which is akin to what has been done in the recovery and resolution work? Can we get to grips with the unfair tax advantage given to debt? As an aside, I worry that while everyone says that it is a good idea to encourage equity, international banking regulation requires an increase in debt instruments to meet bail-in targets. There are no calls for major new legislation, but it is a fact that changes to legislation have to be legislated for. If you have some good industry standards that you want to use cross-border, the only way you can get that in force without arbitrage or barriers is, alas, to have legislation.
It is very easy to say in prose that there must be a balance of simplifying or enabling and consumer protection. It is rather harder to legislate for it when everyone wants their own protections kept. Finally, it should be appreciated that disclosure requirements, which are disliked by industry, are often what keeps heavier-handedness at bay. That is often the deal. You can put in a disclosure requirement instead of trying to ban something.
CMU is actually a mix of passion, policy and pragmatism. The passion is to provide jobs, created through more opportunities for business to find funding and a passion to buffer the national balance sheet and the services that we cherish from future banking collapse. The policy is the universal awareness that jobs will come from stimulating capital markets; it is not about doing down banks because they will be involved, but not all things belong in banks. The pragmatism is the basic theme that this is far more about “Let us make this work” than “Let us get regulating”. Of itself, the EU is moving in our direction. That is a backdrop that I dreamed about.
Lord Davies of Oldham (Lab)
My Lords, I, too, express my appreciation for the work of my noble friend Lord Harrison in presenting the last of his significant reports on behalf of the committee. He is used to delayed government responses, which sometimes means that if the report is not entirely overtaken by developments, a substantial part of it has certainly led to action being taken that obliges the committee to consider further matters. We certainly had that experience today.
I am still trying to absorb the last contribution, from the noble Baroness, Lady Bowles. Although the noble Lord, Lord Hill, made such a favourable impression on the committee—and we would expect him to extend his duties so seriously and constructively—she must have destroyed any illusion that he can see an easy road ahead of him. That was ably demonstrated by the contributions to this debate about the formidable challenges that lie ahead. He, the community and all of us are just in the foothills of dealing with these problems; the greater heights are some distance away. The noble Lord indicated that he regarded this as a five-year project, but aspects of that verge on the optimistic. What is clear is that the committee is agreed on advances that can be made, and it believes that the noble Lord is eager to take advantage of any opportunity to progress the capital markets union.
We on these Benches totally endorse that objective. I sympathise with the Minister regarding the number of definitive and difficult questions that emerged from all sides in this debate. I can make his task easier in one respect: I will not present any significant area of disagreement. But reference was made to the issue of the culture of different institutions in different countries. By heavens, we all recognise what a challenge that is. The country expects us to change the culture of our own financial institutions but we are all in the foothills of that issue, too, in terms of the challenges it presents.
I assure the Minister that I will not disagree with him on any progressive steps that he indicates the Government support in promoting the capital markets union, but I have one obvious anxiety. The noble Lord, Lord Hill, appeared before the committee and his subsequent document presented a position of constructive endeavour, built on the fact that an awful lot of persuasion is needed and there are challenges from very different perspectives across Europe. He is not helped by the Government’s present position of threatening the Community, rather than co-operating with it. Of course, we will all support the Prime Minister in his attempt to get a yes response to the referendum—if that referendum duly takes place. But this report, consideration of it and all the contributions this afternoon have identified the difficulties in making progress while there are such obvious problems as far as the British attitude is concerned. I hope that when the committee reports again under its new chairman—the noble Baroness, Lady Falkner—it will do so in a climate of greater co-operation, in which the United Kingdom can put forward proposals that fit rather better with the grain of European thinking than its present stance.
Let us be clear: there is quite a challenge before us. What we seek to do—the European Community is well aware of this—is to foresee the way in which the European Union as an economic unity, as a trading bloc and as a single market will develop. But we tend to compare it with other units that are, largely, nation states. The United States, to which we compare ourselves, has a totally different framework of political institutions with which to deal with this issue. We must therefore recognise just how much more of a challenge it is for us than it is for the US.
We know what the targets are. We know that the success of the American economy is partly based on the fact that 80% of its finance is raised in capital markets and only 20% from its banks. The situation in the UK is almost the reverse of that. The challenge is one that the noble Lord, Lord Hill, has both the capability to recognise and—in due course, I hope—the competence to tackle.
The Minister has been offered no doubts today that this is a major challenge, and that action needs to be constructive and forthright. Thus far, time has passed with good intentions being expressed but relatively little achieved. The Minister has today been given some clear indications, largely from members of the committee, as he would expect, because they have developed their expertise as they have looked at these issues. They have asked questions which I hope he will set out to answer, because they are pertinent to the challenge before us. The Minister is not a member of the committee, any more than I am, but I hope he will recognise that the debate has identified clear issues relevant to the challenge of the capital markets union. Some progress has been made, and we are fortunate in the qualities of the Commissioner responsible for taking this forward in Brussels. He is very well known to us, and we know about his competence, his ability and his commitment. The Minister now needs to answer some of the forthright questions that have been asked this afternoon.
The Earl of Courtown (Con)
My Lords, I thank all those who have contributed to the debate, particularly the erstwhile chairman of the committee, the noble Lord, Lord Harrison. I am grateful for the report that he and his committee members and secretariat have produced.
The noble Lord, Lord Davies of Oldham, requested me to answer the questions posed in the numerous speeches in the debate. I shall make every effort to do so in my speech, but if perchance I cannot give the full detail, I will write to noble Lords.
The noble Baroness, Lady Falkner, and the noble Lord, Lord Dykes, and other noble Lords talked about the timeliness of the debate, and I am sure the business managers who scheduled it will have taken note of the noble Baroness’s comments.
As has been outlined in the debate, on 20 March last year this House published its report entitled Capital Markets Union: A Welcome Start. It was based on the European Commission’s Green Paper Building A Capital Markets Union, which was published in February 2015. Since those documents were published, the capital markets union project has seen significant developments.
At the end of September last year, the European Commission published its action plan for a capital markets union, based on its review of the many consultation responses to its Green Paper. I am pleased to note that the reforms proposed in the action plan are strongly aligned with the recommendations of the committee report from March. The list includes measures that the noble Lord, Lord Harrison, highlighted in his speech, such as reforms to modernise prospectuses and to revive securitisation in the EU, and other actions covered in the committee’s report, such as improvements to credit information on SMEs.
More broadly, the committee report called for a pragmatic approach to reforms across the CMU that would benefit all 28 member states—an approach which I believe has been reflected in the Commission’s action plan. My noble friend Lord Hill has made it clear that creating CMU will be a step-by-step consultative process, and that decisions on the design of reforms will be evidence based and subject to rigorous economic impact analysis.
I shall use my time today to set out briefly the Government’s views on the action plan, highlight the action the Government have been taking and respond to some of the issues that have been raised in the debate today. The CMU action plan has the full support of the Government: we think it represents the sort of work the European Commission should be undertaking.
Building on the substantial financial reforms following the financial crisis, the Commission has shifted its focus to strengthening Europe’s economic recovery by generating jobs and growth in the European Union—an agenda I am sure we all support. As part of this, it has identified further integrating and deepening Europe’s capital markets as a key priority. Developing Europe’s capital markets will help bring greater balance, improve the range of options for firms seeking finance, and enhance risk diversification by ensuring that market-based finance is strengthened as a complement to bank finance.
The CMU action plan sets out the initiatives the Commission will pursue. My noble friend Lord Hill has succinctly described the project’s aim as linking savings more efficiently with growth. Importantly, the Commission is not just tackling a problem, as the United Kingdom Government have been advocating for some time, but is doing so in a way firmly rooted in the better regulation agenda that the Prime Minister and others have been calling for.
Delivery of CMU forms part of the Government’s agenda for a more competitive European Union. If we are to make Europe more competitive, we need to create a true single market in capital, by breaking down the barriers that stop flows between member states and prevent businesses accessing the finance they need to grow and succeed.
As noble Lords will have seen, the action plan is thematic, identifying six key areas for reform. These include: financing for innovation, start-ups and non-listed companies; making it easier for firms to access and use public markets; measures on long-term infrastructure and sustainable investment; fostering retail and institutional investment; leveraging bank capacity; and facilitating cross-border investing.
As the noble Lord, Lord Harrison, noted in his speech, the Commission has made swift progress on a set of priority measures. These include proposals and live negotiations on securitisation, and the rules around prospectuses. Consultations have also been launched on venture capital rules, and a call for evidence on the cumulative impact of current EU financial services legislation. The Government support these priorities, and have been actively engaging in negotiations and responding to consultations.
The action plan features a range of reforms that will help SMEs, particularly high-growth innovative businesses, get access to the finance that they need. CMU will help by giving them access to more investors across the single market—by pooling investment resources, by helping venture capitalists and angel investors, and by making it easier to list on public markets.
From a UK perspective, it is not just our smaller firms that will benefit. Breaking down barriers across the single market will help British firms diversify their investments at lower cost, and offer our competitive products to savers across the single market. The Government have been heavily engaged in the CMU work to date, and will continue to strive to influence these reforms as they develop.
The noble Lord, Lord Harrison, in his excellent speech, said how important it was to ensure that the capital markets union delivers for small businesses. Helping small businesses grow and prosper is a key priority for the Government, both as part of the capital markets union and more widely. We want to ensure that growing and innovative companies are key beneficiaries of the CMU.
We call on the Commission to make a number of reforms to help small businesses in particular, and this has been reflected in the Commission’s approach. Examples include improving small businesses’ credit information, supporting crowdfunding and business growth funds, and lowering the cost to small businesses of listing on public markets, as well as reviving securitisation. The Commission has committed to delivering these reforms and we will continue to engage with its work to make sure that capital markets union delivers for small businesses.
The noble Lord, Lord Harrison, also asked what discussions had taken place with the Dutch presidency. As the noble Lord is aware, discussions have taken place with the Dutch presidency, as with all member states and the Commission. Any more information on the actual discussions I will pass on by writing to the noble Lord on those issues.
The noble Lord also talked about the benefits for the United Kingdom of the single market. As my right honourable friend the Prime Minister set out in his Statement to the Commons yesterday, and my noble friend the Lord Privy Seal reaffirmed today, the draft text published by Council President Tusk earlier in the week set out clear mechanisms to deal with the rule-making and bureaucracy of the EU, complete the single market and sign international trade deals.
There is also a stand-alone competitiveness declaration that spells out that more can be done to exploit fully the potential of all strands of the single market. We need to breathe new life into the internal market, and Europe must boost its competitiveness in key areas, such as energy and the digital market.
Baroness Falkner of Margravine
I did not want to interrupt the noble Earl’s flow, but I asked a very specific question about concerns that have arisen in the light of the Prime Minister’s Statement. I wonder whether the Minister will give us a reassurance that he will take those concerns back to the Treasury.
The Earl of Courtown
My Lords, of course I will. The noble Baroness makes a good point. All concerns of noble Lords who have asked for reassurances, as the noble Lord, Lord Harrison, did, will go back to the department for further thought.
As my right honourable friend the Prime Minister has said, these changes will make sure that Europe works for all the British people who want to work, have security, get on and make the most of their lives.
My noble friend Lord Caithness talked about the financial sector operating in silos. The capital markets union is intended to further integrate capital markets and to strengthen the linkages between the various agents and consumers—the intermediaries and recipients of investments.
My noble friend also talked, as did other noble Lords, including the noble Lord, Lord Davies, and the noble Baroness, Lady Bowles, about the cultural obstacles in the CMU. It is right to identify the cultural obstacles. Evidence shows that 94% of EU citizens have never bought a financial product outside their home member state. Encouragingly, the CMU seeks to tackle these issues. My noble friend Lord Hill has recognised these challenges. Examples of the steps taken include a special working group established to look at specific national barriers of this nature, with plans being drawn for those member states with more experience in tackling these cultural issues to share experience and best practice with others.
The noble Lord, Lord Davies of Stamford, raised the subject of insolvency. The Government welcome the Commission’s proposals around improving the effectiveness of insolvency frameworks, and the intention of promoting business recovery and returning capital to creditors. Reform should be targeted at those member states currently without suitable laws for the rescue of viable businesses in distress. The Commission should also seek to address the underlying gaps in capability and infrastructure in some member states, and any proposals should be evidence based and take into account any regimes that already successfully support business rescue.
Lord Davies of Stamford
I am grateful to the Minister for that response to my questions. I was not so much concerned with the important issue he has just mentioned of trying to reduce losses to creditors from insolvency and the cost of the insolvency process, which we all know can be prohibitively high sometimes, including in this country. I was concerned much more with establishing a capital markets union and the importance of insolvency in that context, which I set out in my speech, so I will not repeat it now. Does the Minister have any thoughts on whether that can be advanced further?
The Earl of Courtown
I do not have the details in front of me but I will write to the noble Lord on that issue. I hope he will accept that.
I thank my noble friend Lord Flight for raising the issue of the enterprise investment scheme, which I will bring, along with the whole debate, to the attention of my noble friend Lord Hill. That will be a very useful exercise; I know how important he considers the work of the committees of this House. If there is anything more I can add for my noble friend, I will do so.
The CMU is an important part of the Commission’s financial services agenda over the coming years, and if it is successful it will have long-term benefits to businesses and investors here in the United Kingdom and across the European Union. We will of course keep noble Lords updated as appropriate, and I welcome their continued interest in this important issue.
Lord Harrison
My Lords, I am grateful to all Members who have contributed so positively to this debate. We can see that the noble Baroness, Lady Bowles, is going to be a considerable addition to the House. The noble Lord, Lord Dykes, reminds us as ever that the euro’s position as a reserve currency is breathing hot breath behind the greenback. It is a joy, as ever, to box and cox with the noble Earl, Lord Caithness, in a debate on financial affairs, as we have done so well in the past. To the noble Lord, Lord Flight, I have to say, I would go 500 miles to hear him among 350 eager citizens dilate upon the AIFMD. I dwell, though, on my noble friend Lord Davies of Stamford’s characterisation of the chairs of the committee and I thank him for those compliments to both me and the noble Baroness, Lady Falkner of Margravine.
I will tell a little story in conclusion. Many years ago—some 20 years ago—the editor of the Wirral Globe, improbably called Robin Bird, followed me to Strasbourg when I was an MEP and then wrote a piece about me, highlighting the fact that I was born and brought up in Oxford, and characterising me by putting “Morse” at the top of the story that followed in the Wirral Globe. I am very happy to be a prequel to the noble Baroness, Lady Falkner—the prequel, of course, is “Endeavour”. I look to the Minister: show some endeavour on this. Use the capital markets union to go on to the front foot and say that the United Kingdom is pre-eminent in financial affairs, with the City of London, with small businesses for which we have always had a strong concern. Ensure that the opportunities arrive, either, as I say, under the Dutch presidency or through some long-term planning for the British presidency, which will arrive at the back-end of 2017. We can do something; we can go on the front foot.
I am very grateful to all those who have contributed not only to the capital markets union but on that theme, which now becomes so vital for this country.