Grand Committee

Thursday 9th February 2017 Grand Committee

Thursday 9 February 2017

Arrangement of Business

Thursday 9th February 2017 Grand Committee

Announcement

13:00

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, I should remind your Lordships that if there is a Division in the Chamber the Committee will adjourn for 10 minutes.

Historical Statues and Memorials

Thursday 9th February 2017 Grand Committee

Question

13:00

Asked by

[Lord Oates]

To ask Her Majesty’s Government whether they will publish guidance to encourage the protection of existing historical statues and memorials and promote the establishment of new memorials that reflect the broader history of the United Kingdom.

[Lord Oates (LD)]

My Lords, I am grateful for the opportunity to open this debate. In doing so, I declare a non-pecuniary interest as a patron of the charity Memorial 2007. I thank in advance all noble Lords for taking part in this debate.

The history of our country is passed down to us through many different channels—in the content of the history books in our libraries, in the syllabuses taught to students in our schools and universities, in the events we choose to commemorate and in the events we choose to forget. Its physical embodiment is found in the statues and monuments that stand in every city, town and village across the country. In many cases the judgment that history makes on the people commemorated by these statues and monuments is less favourable than the view that their contemporaries took or that they themselves sought to propagate.

In other countries, as history has turned, there has been wholesale destruction of monuments that no longer found favour. It was true in France after the revolution, in Germany after the Second World War and in many parts of Europe after the collapse of Soviet communism. Lacking a violent domestic upheaval in our own recent history, there has been no great disruption of our monuments. Inevitably, therefore, a fair number of history’s villains, rendered in stone or bronze, are scattered across our towns and cities. There are those who argue that the most egregious of these villains should be removed. When I first tabled this Question, a debate was raging over whether the statue of Rhodes at Oriel College, Oxford, should be removed. The controversy that followed exemplified the emotional significance afforded to these physical manifestations of our history.

I am no fan of Cecil John Rhodes; I have spent enough time in southern Africa and read enough of its history to be in no doubt about the greed-fuelled violence he unleashed on that part of Africa, the legacy of which, tragically, remains to this day. But we cannot pretend he did not exist, or that his actions were not ultimately backed by British arms and sanctioned by British law. He is part of history; he cannot be wished away any more than any other cruel period in our history can be wished away. He is of course not alone. At the public entrance to this building stands a statue of Oliver Cromwell, whose violent suppression of the English Levellers, the royalists and the Catholic Irish is well documented. London and other cities are littered with statues to slave owners. They stand alongside buildings constructed with the riches accumulated through the slave trade and close to monuments to assorted imperialists and racial supremacists of the 19th and 20th centuries. The truth is that our history is so closely entwined in these things that to pretend we can disentangle it by removing a statue or two is to delude ourselves.

We should not try to deny our history in that way but we seem determined to deny it in another. Ten years ago, a national service of remembrance was held in Westminster Abbey to commemorate the bicentenary of the Act that abolished the transatlantic slave trade. The service culminated in the Queen laying flowers, first to honour all who worked for the abolition of the slave trade and afterwards to honour those who were enslaved. The flowers to honour the abolitionists were laid at the statue of William Wilberforce that stands in Westminster Abbey, but there was no statue or monument to honour the millions of enslaved Africans—to bear witness to the vast numbers who died in appalling conditions in the camps on the African coast, on the slave ships crossing the Atlantic or at the hands of brutal overseers in the plantations. There was no statue to the millions more who survived the horror of the slave ships to suffer the unspeakable physical and psychological violence of slavery, and no statue to the courage and fortitude of those who survived and resisted. Instead, the Queen had to step outside the abbey and place her flowers on a paving stone in the forecourt, which is inscribed with generic words in tribute to the innocent. I was struck by this at the time: why was it that 200 years since abolition, there was no national memorial in our capital city to honour the millions of African people enslaved or murdered in the transatlantic slave trade? Why was there no monument to remind us that the capacity for unspeakable brutality towards innocent people is not reserved to one nationality, or to one time in history? It is in all of us and it must be guarded against by all of us at all times. History teaches us that lesson, but we have to be willing to learn.

When I was appointed to this House, I tried to find out why this part of our history seemed to have been passed by, and in doing so I came across two formidable women who are here today. They are trustees of a charity called Memorial 2007, which was established to bring into being a monument to honour the countless millions of enslaved African people and their descendants, to give voice to their history and to gain recognition that it is also all of our history. Through their fortitude and determination and against many obstacles, they secured a site for a memorial garden and sculpture in Hyde Park. They held a design competition, commissioned a sculptor and—just recently—gained planning consent for the project from Westminster City Council. They are now raising funds to make the enslaved Africans memorial a reality. The project got its inspiration from a pupil of one of the trustees. On a visit to the Tower of London, the pupil asked, “Where is our history, Miss?”. Nowhere is that absence truer than in the history of the transatlantic slave trade, for while there are statues and monuments to slave owners and white abolitionists alike, there is no representation of the history of the enslaved African people. There is no representation that testifies to the determined advocacy of black abolitionists, such as Olaudah Equiano. In all the self-congratulation over abolition, we lost sight of the real story: the central part our country played in 300 years of the brutal enslavement of millions of our fellow human beings. In losing sight of that story, we failed to learn the lessons that history has to teach us.

The Question we are debating today is a wide one and I recognise that noble Lords will want to raise a range of issues relating to this subject, but I hope the Minister will be able to address some specific issues regarding the enslaved Africans memorial in her response to this debate. First, I hope she will be able to put on record her and the Government’s support for this long-overdue monument. Secondly, I would be grateful if she could indicate whether the Government are willing to provide the sort of technical assistance to Memorial 2007 that was afforded to recent projects, such as the Ghandi statue. Thirdly, the Minister may be aware that following the difficulties with the Diana memorial, the Royal Parks now require a maintenance endowment over an extended period. In the case of the proposed enslaved Africans memorial, this amounts to nearly £1 million. I would be grateful if the Minister could look at this and consider whether the Government might be able to review this requirement, or take on this part of the cost. Finally, I hope the Minister can give guidance to public authorities and grant-giving bodies that they should consider the diverse historical experiences of our country in their decisions.

I do not believe that we should attempt to deny our history by tearing down existing statues and monuments, but we should bear true witness to that history by ensuring that the monuments of our capital city and our country begin to reflect a rather wider and more inclusive history. In 1682, as the historian Madge Dresser notes, William Goodwyn proposed a public statue in London which would have prominently acknowledged the injustice suffered by enslaved Africans under British rule. Some 335 years later, that call has not been answered. It is now time—well past time—to put that right.

13:09

[Lord Cope of Berkeley (Con)]

My Lords, my involvement with memorials is as a trustee of the War Memorials Trust. First, I want to wish a fair wind to the proposals that the noble Lord, Lord Oates, and his colleagues are working on. I hope they are successful.

There are a number of museums about the slave trade, particularly in various port cities in our country, which tell people about the appalling effects of the trade in considerable detail. They are in their way memorials to what took place and to those who suffered. A discussion about memorials versus museums echoes the discussions, particularly after World War I, when local people thought about whether they wanted a war memorial carved in stone in their area or whether an amenity of some kind was more appropriate. Different communities took different decisions. We all know of war memorial hospitals, playing fields, village halls and so on.

I come originally from Leicester, where we have not only a fine memorial arch, designed by Edwin Lutyens, but also the University of Leicester, which was founded as a college in 1921, specifically as a war memorial. It proudly proclaims in its motto, “Ut vitam habeant”—so that they may have life. Its website describes the university as,

“a living memorial for those who lost their lives in [the] First World War”.

The War Memorials Trust supports war memorials that are in need of restoration, both of the stone kind and of an amenity kind—although not the University of Leicester, simply because it is outside our scope. We are assisted in this now by the Government’s First World War Memorials Programme, which we run for them with Historic England and the equivalent bodies in other parts of the UK. If any noble Lords or others know of a war memorial of either kind that seems in need of a bit of TLC, please let us know and we will do what we can to help, with both advice and, sometimes, grants.

Unfortunately the memorial suggested by the noble Lord, Lord Oates, would not qualify, both because it is a new memorial—we are specifically about the conservation of existing memorials—and because I do not think it could exactly count as a war memorial under the definition used for legal purposes. Nevertheless, I wish his project well. It deserves the support of all in this House.

13:13

[Baroness Lawrence of Clarendon (Lab)]

My Lords, I thank the noble Lord, Lord Oates, for organising this important debate. Memorialisation is possibly the most eternal form of art. Whether it is of events or ways of life, it has for millennia been used to capture the essence of who we are. In part, it is historical record, but it is also the presentation of history—the source of our common understanding of where we come from. This understanding underpins the foundation of our society and, as such, has a dynamic and forward-looking impact. This is especially important in a country such as the United Kingdom, which through its connections to far-flung places has a particularly complex history that combines a wide variety of actors, communities and cultures, not all of which are acknowledged.

Like the noble Lord, Lord Oates, I should like to set out the importance of memorialisation in the context of the enslaved Africans memorial, which I wholeheartedly support. A few years ago, I was born in Jamaica; or—and not to age myself—the British colony of Jamaica, as it was known then. When one thinks about Jamaica, one thinks of its vibrancy, spirit and honour, and the strength of the people. All that is true, but what is also true is not often recognised in this country, which is that Jamaica is a country born out of suffering. In 1655, when British forces captured Jamaica from the Spanish, the population of the island was just 2,500. Between 1670 and 1680 the slave population never exceeded 10,000, but the British could see the potential of sugar cane to generate enormous wealth for the Government. However, labour was needed. By 1800, only 120 years later, more than 300,000 Africans had been enslaved and forced to work on the Jamaican plantations. Thousands of British families grew rich on their backs and hundreds of great homes were built using the wealth generated by slavery. Ports and cities were developed on the spoils of the slave trade. The work of the enslaved generated the prosperity that made the Industrial Revolution possible. We are also enjoying the benefits because modern Britain is built on the legacy of the slave trade.

The scale of the wealth created for Britain by the transatlantic slave trade is matched and exceeded only by the suffering it inflicted, yet while we rightly celebrate its abolition and those who campaigned for it, we do not recognise or honour the people who were ripped from their homes and enslaved. This is hugely important to our country. We may think of slavery as part of history, but the attitude that it embedded in the mindset of all people continues to follow us to this day, and its legacy is felt in the systematic racial discrimination that continues to feature in our society. Yes, we have made great progress, but until we face up to our past and discuss it openly and without blame, we will struggle to heal fully.

Memorialisation is particularly important for the descendants of the enslaved. Marcus Garvey once said—

[Baroness Seccombe (Con)]

I must remind the noble Baroness that this is a timed debate and the allocated time for speeches is three minutes.

[Baroness Lawrence of Clarendon]

I shall just finish. I recommend the proposed enslaved Africans memorial in Hyde Park because it would become a vital part of this country’s self-perception and history. It would honour those who have been missing from our history for too long and help us to recognise the complexities on which our society has been built. We would also return roots to a group of people who have not known their history. In doing this, together we will create a society that is more cohesive and just in the future.

13:18

[Lord Addington (LD)]

My Lords, I congratulate my noble friend Lord Oates on bringing this matter to the attention of noble Lords. Creating new memorials to reflect our broader history would be a very good thing. As I walked through London on my way here today, I looked at the various memorials because I knew that I would be speaking in this debate. I saw a great many men who had had fairly undistinguished military careers gazing heroically down roads, either on horseback or on foot, and they seemed to reflect when the buildings behind them were put up. That tells us quite a lot about the people who built them but only a little about the people represented. I would hope that our new memorials will reflect people who do not have the money to support the building of memorials rather than more statues that are about paying off a relative and the wish to impress someone. We should be encouraging people who are not in that position, and in doing so we would be doing ourselves a service.

The noble Lord, Lord Cope, mentioned war memorials. They are probably an incredibly good example of where we should be going because they represent groups. Individuals may be recorded on them, but they represent groups. If we concentrate on groups and stop trying to reflect the “great men” school of history, we can do no better than look to our war memorials. Then we will be approaching this in the right way. If the Industrial Revolution changes a place, it changes the way a group and a society are structured. If we say that the slave trade affected groups, memorials to them should show how that group was affected.

Such statues are slightly more difficult to put up than those of one person standing on a horse and looking heroically down a shopping precinct, but we have to start thinking about this. We should really start thinking about it when we start building. That is the easy time to do it, when there is money around. I hope the Minister will be able to indicate that anybody building a new project might be encouraged to think about what they would like to record.

13:20

[Viscount Falkland (CB)]

My Lords, I have been looking at statues in various countries and cities for many years. I apologise for using a French word, but I am what is known in France as a flâneur; in other words, I wander around with no particular aim looking at things, and statues are among my favourites. The theme of my speech in the brief time I have at my disposal will not exactly follow that of the noble Lord, Lord Oates, but I thank him for the opportunity to talk about statues. I will talk uniquely, because of the time, about London and the House of Lords.

As a flâneur, one realises that those who commission statues and monuments and those who create them put great thought into them. Generally, they have to be attractive; they have to be historically relevant, which they are normally are—they are mostly historical in London. I doubt whether any of your Lordships would be able to guess how many people in one normal day stop and look at a statue at all. Statues are quite inappropriate now to the way in which people conduct themselves in streets and public places. Most young people are now connected with some electronic device. They pass by; traffic moves very quickly—it was not intended when a lot of statues went up.

However, there are some marvellous statues. Before I move on to the House of Lords, I urge everybody to become a flâneur for a moment and cross the road to look at the statue of Churchill. It is a remarkable and exceptional statue, because not only does it remind us of that great man but it has energy and it is about art as well as anything else.

As you come into the House of Lords, you will pass the statue by Marochetti—it is a bravura statue—of Richard the Lionheart. Why it should be Richard the Lionheart I do not know. I think Marochetti rather preferred the Black Prince, but that never happened—although I think a model was made of the Black Prince and I think the Queen has one of the several copies that remain. As you come into the House of Lords, you will see numerous statues—just under 300. Some of them are outside; some of them are inside. Most demand attention and indeed they get it. You might say that in the House of Lords the statues that we have are working statues, because every day we have people going down the route allotted to them, so the statues are examined on a day-to-day basis, quite unlike anything outside.

I think I have probably reached the end of my three minutes and that is really all I have to say. I hope the noble Lord will again put down this subject for debate when we might have a little more time for it, allowing for something relatively flippant compared with the noble Lord’s speech and we can all indulge ourselves on our particular line. It has been refreshing to have an opportunity to speak on the subject.

13:24

[Lord Finkelstein (Con)]

I thank the noble Lord, Lord Oates, for holding this debate and for his eloquent and persuasive speech, backed equally eloquently and persuasively by the noble Baroness, Lady Lawrence. It was a compelling case that he made.

I start with a quiz question: what do General Smuts, Winston Churchill, Viscount Palmerston, David Lloyd George, Nelson Mandela, George Canning, Abraham Lincoln and Mahatma Gandhi have in common? There are two possible answers, neither of which will win you the points. The first is that they are all commemorated by statues in Parliament Square. The second is that they are all men. Every statue in Parliament Square is of a man. The fact that this point is very simple and very obvious does not rob it of significance. In my view, it is simply wrong. I would go so far as to say that it is a national embarrassment.

I want to make a simple proposal. I am proud that we should commemorate outside our Parliament the end of apartheid, the fight for Indian independence and victory in the American civil war. We should pay tribute to the great struggles for freedom and it is an appropriate place to do so. But let us also pay tribute in an appropriate place to our own great struggles for democracy. Of these, surely one of the greatest is the struggle to win votes for women. Let us have a statue in Parliament Square for Dame Millicent Garrett Fawcett. Let us have a statue for the woman who led the peaceful democratic campaign for change; the woman whose leadership of the National Union of Women’s Suffrage Societies changed minds and won votes—its work was the heart of the movement, with 25 times the membership that Mrs Pankhurst boasted. Let us have a statue for the woman who was there from the first petition to the final victory for the cause; who took up campaigns to curb child abuse by raising the age of consent; who fought to criminalise incest, combat cruelty to children within the family, end the practice of excluding women from courtrooms when sexual offences were under consideration and to stamp out the “white slave trade”. How can this country have no proper monument to celebrate the life of one of its greatest pioneers and leaders? How can it be that so many people are unaware of one of our most successful and important political leaders, somebody who produced work of real consequence that has changed the nature of Parliament, and rightly so?

The feminist campaigner Caroline Criado-Perez has launched a drive to see justice done in Parliament Square and justice for Millicent Fawcett. I proudly join my cause to hers. On Millicent Fawcett’s statue, let it say, “This is Dame Millicent Fawcett, champion of the weak, defender of children, tribune of the great women’s campaign”.

13:26

[Lord Bilimoria (CB)]

My Lords, I am proud to be vice-patron of the Memorial Gates on Constitution Hill, an initiative spearheaded by my noble friend Lady Flather, who pioneered and persisted in raising the funds, helped by others, to make this memorial possible. It was inaugurated by Her Majesty the Queen in 2002. Every March, we have a commemoration ceremony on Commonwealth Day. I chaired that ceremony for six years and continue to be a member of the Memorial Gates Council. To quote Her Majesty the Queen’s Commonwealth message to the 53 member states:

“We are guardians of a precious flame, and it is our duty not only to keep it burning brightly but to keep it replenished for the decades ahead”.


The Memorial Gates have flames burning above them. On one of the pillars of the gates is a quote from the poet Ben Okri:

“Our future is greater than our past”.


Inscribed on the roof of the pavilion next to the Memorial Gates are the names of the VC and GC recipients from the countries that are represented there. Five million people from what was then India, south Asia, Africa and the Caribbean served in the First and Second World Wars. We would not have our freedom today without their service and sacrifice. On that roof are the names of three recipients of the Victoria Cross from my father’s battalion, the 2nd 5th Gorkha Rifles Frontier Force. My father became commander-in-chief of the Central Indian Army. He was president of the Gorkha Brigade and he led his battalion, the 2nd 5th Gorkhas, in the liberation of Bangladesh in 1971. I was proud to have been brought up with two of those Victoria Cross winners, Gaje Ghale and Agansing Rai. The third, Netrabahadur Thapa, was awarded posthumously.

Memorials are there to inspire the future and our youth. It gives me such pleasure to see schoolchildren attend our ceremony every year. What are the Government doing to encourage, promote and support education programmes in schools on all our memorials. I thank the noble Lord, Lord Oates, for initiating the debate and I wish him well in the creation of the monument to enslaved African people. There is a Sikh memorial at the National Memorial Arboretum, as there is a Gurkha one. But although there is a Gurkha memorial in London, there is no Sikh memorial in London. Does the Minister believe we should have a Sikh memorial here?

Before I conclude, one of my proudest achievements as a Member of your Lordships’ House for the past 10 years was being a member of the Joint Committee of both Houses that put up the statue of Mahatma Gandhi in Parliament Square. It is only the 11th statue. I never cease to find people in front of it when I walk through or drive around Parliament Square, because Mahatma Gandhi’s message is for the world. Once again, what are we doing to promote the message of Mahatma Gandhi and the individuals there to educate, because memorials are there to commemorate, to remember and to inspire? I conclude by reading those famous words on the Kohima war memorial:

“When you go home tell them of us and say for your tomorrow we gave our today”.

13:30

[The Lord Bishop of St Albans]

My Lords, I add my thanks to the noble Lord, Lord Oates, for this debate, and in particular for the work he is doing on the memorial to those who have been enslaved. We look forward to hearing more about it as it develops. I am pleased that he has focused our minds not just on existing memorials, but on what we ought to be doing as we look to the future, especially for the urgent need to celebrate the wide diversity of people and events that have contributed to our national life, many of which are underrepresented in our public spaces.

As levels of social capital and civic engagement continue to decline across communities in western Europe, there is an urgent need to think about how we can retell, reboot and celebrate our common stories and our public spaces through memorialising and celebrating people and events. For example, St Albans, where I live, is where the first meeting of the bishops and barons took place in 1213, which was to lead two years later to the sealing of Magna Carta. Yet this seminal event is not celebrated in any public space in the city. I have been encouraging people to think about how we might do that. I hope we may be able to. This is a great lost opportunity to educate and talk about the roots of our human rights, which started in very early stages there.

A second example in the city is Samuel Ryder, the mayor of St Albans, businessman and lifelong Methodist who set up the Ryder Cup, which was invented in nearby Hertfordshire. In 2011 our local district council agreed planning permission for a statue to commemorate him, but five years on, as is so often with these projects, funding is difficult to secure. Our experience is that a lot of these projects take a long time to get going. You have to build groups of people to get support, planning and so on. While I commend the existing memorials grant scheme, would the Minister encourage Her Majesty’s Government not only to extend it beyond 31 March 2020, when I think it will come to an end, but see whether we can extend its remit to help local community groups as we think about how we develop this area further?

13:32

[Lord Suri (Con)]

My Lords, it is a pleasure to speak in this debate, which is extremely important, especially given the large number of upcoming services that will commemorate and respect those who laid down their lives for our freedoms in the two world wars.

When I walk around the ancient area of London, where we are fortunate to work, both inside and outside the Palace, I have numerous memorials and statues to pay my respects to. From the square outside to the memorials on Whitehall and through to Trafalgar Square, I can pay my respects to men who built up this country. However, I have noticed what I feel is a glaring omission. Empire builders—men such as Churchill and Montgomery—are well represented, but there is very little recognition of those who fought for the UK from certain parts of the empire. I wish specifically to talk about the Sikh community, to which I am privileged to belong.

After the defeat of the Sikh Empire in 1849, Sikhs were recruited en masse into the British Army and formed its elite fighting forces, becoming heavily represented in the officer class. One early incidence of their extreme valour came when 21 Sikhs of the 36th Sikhs fought 10,000 Afghans at a border post for several hours, fighting till the last man and allowing other troops to regroup and retake the fortress. All troops received the equivalent of the Victoria Cross in India—the Indian Order of Merit—and established the reputation of Sikhs as a fearless martial race. This House and other places rose to pay homage to the fallen—as rare an occurrence then as it is now.

The bravery and sacrifice of Sikh communities continued through the world wars, when they had voluntary conscription rates higher than any other community across the empire. In World War I, Sikhs constituted some 20% of the Indian army, despite being just 1% of the Indian population at the time. Some 83,000 of these men became casualties during the fighting in France and north Africa, with a further 109,000 being seriously wounded. Earl Mountbatten of Burma, who commanded Sikh regiments, said, “In a fight, a Sikh will go on to his last breath, and die laughing at the thought of Paradise, with the battle-cry of ‘Khalsa ji ki jai’ as he falls”.

The first Viscount Slim, commander of the 14th army, also expressed reverence for the Sikhs he commanded, saying, “It is no exaggeration to record that the armies which possess the valiant Sikhs cannot face defeat in war”.

At the extremely bloody Battle of Neuve Chapelle some Sikh regiments lost 75% of their men during a single engagement, which was important in testing German defences and formulating a new tactical plan for trench warfare.

[Baroness Seccombe]

My Lords, I fear the noble Lord has exceeded his allocated time, so I ask him to conclude.

[Lord Suri]

I shall say just one thing more. We must move on with the knowledge that the greatness of this country was achieved by a wide array of communities and resolve to create a proper memorial here in London, the former imperial capital. They deserve nothing less. It is a great shame that significant memorials exist in India and France but not here. As the noble Lord, Lord Bilimoria, said, if the Minister is committed to the establishment of new memorials that reflect the broader history of the UK, this is the right place to start.

13:36

[Baroness Lane-Fox of Soho (CB)]

I, too, thank the noble Lord, Lord Oates, for initiating this debate. As always when I do not know a noble Lord, I went to Wikipedia to see what I could find out—the collective wisdom of the internet always impresses me. The noble Lord is the fifth most influential Liberal Democrat, he may be interested to hear. I also learned about the people he went to university with. The depth of information never ceases to amaze me on that website. Noble Lords may not realise that Wikipedia, the internet’s main historical resource, is 90% created and curated by men. I am going to build on what the noble Lord, Lord Finkelstein, said, because we do not do much better IRL, as my godchildren would say—in real life.

My friend, the campaigner Caroline Criado-Perez, already mentioned by the noble Lord, Lord Finkelstein, did an incredible audit of the statues of this country and created a database. Of 925 statues, 71 were of women, 29 of which were of Queen Victoria. There were 498 statues of non-royal historical men and only 25 of non-royal historical women. There were 43 statues of men called John. How do you become a statue if you are a woman? It helps if you are naked and it helps if you are an allegorical figure, although the allegorical figure of History was ripped down because somebody decided that she should be a bluestocking, heaven forbid, and it was decided that that was not a good idea. Half of all female statues are allegorical figures, such as Justice, nine represent Art, while there are 45 male allegorical figures.

This, to my mind, is unacceptable. You cannot be what you cannot see. Quite apart from not reflecting our broad and wonderful complex cultural history, it is depressing to think that young women walking around our country cannot see the pinnacles of achievement that have been reached by people from all walks of society and all parts of life. Men dominate all the statues of scientists, businessmen and politicians. Why not start with my own heroine, Ada Lovelace, the computer engineer? I support the noble Lord, Lord Finkelstein, 100%, but I would go further. I urge noble Lords to sign Caroline’s petition to put Millicent Fawcett in Parliament Square but I also urge the Minister to consider a profound redressing of the gender imbalance at a time when it feels so crucial that we give more examples of different ways of being to young women all over the country.

13:39

[Baroness Berridge (Con)]

My Lords, remembering is an important but undervalued part of life. As technology causes us to live in moments of distraction and being elsewhere, memorials help us to value the past and be in the present, and to reflect. They are statements of who we are, what and who has shaped us and what we value.

I am grateful to the noble Lord, Lord Oates, for bringing to my attention the memorial for enslaved Africans that thankfully now has planning permission from Westminster City Council. It is so long overdue in London, as that grotesque trade is part of the history of this city. The British Museum and the National Gallery, which attract so many visitors, were begun with collections from families who had profited from plantations worked on by African slaves. For many that I have met, their family history—their own “Who Do You Think You Are?”—ends with a ship that had left Elmina Castle in Ghana. Records end, but soon they will have a place to go once this memorial is built.

I pay tribute to the role of the BBC and its recent history project and accompanying series “Black and British”, written and presented by historian David Olusoga and with an imaginative original score by the young up-and-coming black British composer Segun Akinola. The history of black people goes back to Roman times, with black soldiers guarding Hadrian’s Wall in the third century, and the project placed plaques in various locations recognising the black British people who had lived there.

Historic England maintains the National Heritage List for England, the apparently only official and up-to-date database of all nationally protected historic buildings and sites in England. Could the Minister, taking on a theme from this debate, outline whether an assessment has been made of this list to ensure that any other gaps, such as the enslaved Africans memorial, have been identified? Do we, and should we, have a proper memorial to the “Windrush”, which arrived in Tilbury 70 years ago next year? Whatever happened to Danny Boyle’s replica that was used in the 2012 Olympic opening ceremony, to great effect?

We need to think about what new memorials we need but also which need taking down or delisting. Perhaps we need some temporary memorials on appropriate anniversaries, the equivalent for memorials of the fourth plinth in Trafalgar Square—perhaps a plinth here in Parliament or Parliament Square.

Some of the most important memorials in the UK are war memorials, both local and national. The Commonwealth War Memorial Gates at Hyde Park Corner are majestic, as the noble Lord, Lord Bilimoria, outlined, but the contribution of the Commonwealth and today’s black and minority ethnic soldiers is in my view not prominent enough at the annual Cenotaph service, when the nation comes together publicly. I hope the Minister will consider that point and look at reviewing that as well.

13:42

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a very good debate. I cannot reflect all the views in the very limited time I have, so I will leave it to the Minister to sum them up.

There are three points that I should like to make. First, what we are talking about is very often the old adage that history is written by the winners and that therefore somehow the memorialisation of that history is also what we are arguing against. Secondly, it is clear from those who have argued already today that there are gaps—the suffragettes and suffragists, for example; slaves, as pointed out by the noble Lord who introduced the debate; and women more generally. Maybe your Lordships’ House should take on the responsibility of carrying out a regular and critical review of those gaps and making recommendations that might be taken up by everyone, including the Government, and how we might do that. That is possibly a thought for the usual channels to take forward.

I support the noble Lord who moved the Motion in getting answers to the questions that he asked, with particular reference to the question of what the Royal Parks might do about the request for £1 million to ensure that a memorial, once built, is maintained. Under the new structure the Government will have a lesser role in this, and I would be interested to know what the Minister thinks about what will happen to that request because it is genuine.

Thirdly, the HLF is probably the agency that has most responsibility in this area. It would be interesting to know what proportion of the grants it currently gives goes to memorials. I am also personally interested in our taking up some of the ideas that the noble Baroness, Lady Lane-Fox, mentioned, about how intangible memorials might be supported. That might be a way of getting out of always focusing on statues, because they are not always the right way forward.

I understand from my quick research that the HLF has already funded the Gomersal Colliery Memorial Project in Yorkshire, which centres on miners’ sculptures, complemented by personalised paving slabs and opportunities for former miners to get together to recall memories, but I do not think—although I would have thought there was a case for it—it supports the memorial, run by Carousel, to the history of the Paralympic Games, which would be another way of trying to pick up an issue that has not been given sufficient regard. Also, the Tolson Memorial Garden in Huddersfield celebrates the work of service men and women who have lost their lives since the end of World War II. It is part of a museum but, again, it is intangible work. Then there is the work of the Woodland Trust, which is thinking imaginatively about ways to memorialise using the natural environment. That is something that might slip between the various agencies. Perhaps the Minister might respond on that.

At the end of the day, the need to fund these operations is only as strong as the ideas that come forward. There is a broader context here about who drives it. I have suggested that the House of Lords might have a role but we will need to think very widely when we do that and get across the issues that have been raised today in this good debate.

13:45

[Baroness Buscombe (Con)]

My Lords, I thank all noble Lords who have taken part in this interesting and far too short debate, particularly the noble Lord, Lord Oates, for introducing it. I have also learned a new name to describe myself: like the noble Viscount, Lord Falkland, I am something of a flâneur. I have always loved looking at statues. The sad thing about life today is that we walk around with our heads down a lot of the time, not necessarily on the phone but we do not look up and there is so much to see in all our cities.

This nation’s many great statues and memorials form an increasingly studied and enjoyed aspect of the public realm. There are more than 1,300 mentions of statues on the National Heritage List for England, which gives a sense of their ubiquity. They are the embodiments of our great history and include some of the highest examples of the sculptor’s art. The recent dispute over the statue and plaque in Oxford to Cecil Rhodes, referred to by the noble Lord, Lord Oates, shows that some statues are capable of generating a great deal of controversy. Historic England’s next exhibition, “Immortalised”, in 2018, will be on the subject of who is remembered in monuments and why. It is a topic attracting more and more attention generally.

The listing system ensures that proper care and protection are afforded to buildings and structures, including statues and memorials, of special architectural or historic interest. Policy on the listing of buildings is currently being revised and will shortly be published as the updated Principles of Selection for Listing Buildings. It will be complemented by Historic England’s range of listing selection guides. These set out its approach to the identification of buildings for consideration for listing and include its Commemorative Structures Listing Selection Guide.

Historic England’s first exhibition at Somerset House in 2016, “Out There”, was on the topic of post-war public art and was very well received, coming just days after the unprecedented grade 2 and grade 2* listing of 41 post-war public sculptures. Several of these pieces are by well-known sculptors and include: Henry Moore’s “Knife Edge Two Piece” near the Houses of Parliament, Barbara Hepworth’s “Winged Figure” on John Lewis in Oxford Street, and Elisabeth Frink’s “Horse and Rider” in Piccadilly.

Historic England built on this by the publication of new guidance on the care of public art. In considering whether to grant listed building consent or planning permission for development which affects a listed statue or memorial, local planning authorities are required to have special regard to the desirability of preserving the structure or its setting or any features of special architectural or historic interest that it possesses. In addition to receiving statutory protection through inclusion on the National Heritage List for England as listed buildings, statues and memorials can also be locally listed by local planning authorities.

As well as publishing guidance on the selection of statues and memorials for listing, Historic England has produced guidance on caring for cemetery monuments and war memorials. As part of the four-year First World War centenary commemorations, the Government have made funding of £4.5 million available to conserve and protect war memorials. Here I pay particular tribute to my noble friend Lord Cope, who does fantastic work as a trustee of the War Memorials Trust. Led by Historic England, in partnership with Imperial War Museums, the War Memorials Trust and Civic Voice, the project is working with the public to record, research, conserve and list war memorials across Britain to ensure that they are protected and the people they commemorate are remembered.

Historic England has pledged to nominate an additional 2,500 war memorials for inclusion on the National Heritage List for England. This campaign will potentially triple the number of listed memorials, which are thus ensured long-term protection. They include many with fine sculptures by noted artists such as Charles Sargeant Jagger and Eric Gill. Civic Voice is running workshops in local communities, teaching local people how to record the condition of a memorial, how to apply for grant funding and how to get the memorial protected, ensuring a legacy of trained volunteers. Communities and schools across the country are getting involved in this important project and I entirely agree with the noble Lord, Lord Bilimoria—we need to encourage schools and young people in general to get involved in this work and to understand the meaning and value of our memorials and statues. Since the 1990s, there has been a surge in the number of new memorials and statues erected. Recently, attention has been drawn to the imbalance in the number of statues of women. I am happy to say, particularly in response to the noble Baroness, Lady Lane-Fox, and my noble friend Lord Finkelstein, that Historic England is engaged in discussions with the Greater London Authority about a proposed new statue of a suffragette in Parliament Square, so there is progress.

Recently, several statues in London with resonance for the black community were listed, including the statue of Nelson Mandela in Parliament Square. However, it must be said that some areas—particularly in London—are becoming anxious that the number of recent memorials is leading to an overcrowding in public spaces. The City of Westminster is one such area and has issued guidance about the process that applications for new memorials should go through. There is a desire to encourage the erection of any new statues outside the core zone of Westminster. Removal of the requirement to seek approval from the Secretary of State for Culture, Media and Sport before erecting a statue in London places local planning authorities firmly in control of this process.

It is right that many organisations, trusts, charities and commercial organisations are able to freely propose, fund, develop and deliver memorials and statues marking a great variety of historical moments. It would be quite wrong for government somehow to orchestrate and curate which memorials should be proposed. Government does not have sole responsibility for the many new memorials that are rightly created. Of course, government supports memorials to mark particular events. We are delivering a new national memorial in honour of British victims of overseas terrorism, as well as a memorial to the victims of the 2015 attacks in Sousse and at the Bardo museum in Tunisia. Memorials have also been created in honour of the victims of 9/11, the 7/7 bombings in London and the 2002 Bali bombings.

Government also supports a new suffragette memorial, and a memorial is being created by the independent Iraq/Afghanistan Memorial Project charity to honour those who served in the Iraq and Afghanistan wars. So, in some circumstances, government supports new memorials, but it is not for it to determine which memorials go ahead, and it is certainly—with limited public funds—not possible for central government to fund all new memorials. There is a tradition of funding new memorials through public subscription. Government supports this and experience has shown that there are often other funders—including the private sector—who are happy and willing to fund new memorials. That said, the Government offer support through the Memorials Grant Scheme, which allows charities and faith groups to claim a grant that is equivalent to the VAT paid on the eligible costs of erecting, maintaining or repairing public memorials. The scheme is administered by the DCMS for the whole of the UK.

On the proposed memorial to commemorate enslaved Africans, the idea of a permanent memorial in London to remember the enslaved and their descendants was first mooted in 2002. We have heard all about this from the noble Lord, Lord Oates, and the noble Baroness, Lady Lawrence. As a result, the charity Memorial 2007 was formed. Its goal was to erect a memorial on a site in the rose gardens of London’s Hyde Park. Following the success of Memorial 2007 in securing planning permission for the proposed memorial from Westminster Council in November 2016, the Royal Parks has indicated that it is open to discussion about locating it in Hyde Park, should Memorial 2007 raise the necessary funds, including those necessary for the memorial’s maintenance.

Since the establishment of Memorial 2007, the Government have taken some important steps to mark the bicentenary of the abolition of the slave trade, including the opening in August 2007 of the International Slavery Museum in Liverpool. The Government provide funding to the museum, which examines aspects of historical and contemporary slavery and is an international hub for resources on human rights issues. My noble friend Lord Cope talked about the different ways in which events that have taken place in our lives are remembered, such as by the creation of amenities and museums. That museum has a focus, as referenced by the right reverend Prelate the Bishop of St Albans, on human rights and the Magna Carta.

The Government also support the National Maritime Museum in Greenwich, which also includes a permanent exhibition, and we are delighted that the St James Heritage Quarter of Toxteth, Liverpool, is recognising its historical connection to the transatlantic slave trade. Both the Prime Minister and Home Secretary have endorsed their campaign to establish a living memorial to the victims of this dishonourable and abhorrent chapter of our history. The Government fully appreciate the tremendous efforts of Memorial 2007 over the past decade, and in particular those of its chair, Miss Oku Ekpenyon MBE, with whom they continue to work.

I also pay tribute to those in the Sikh community and what is perhaps still outstanding in that regard. I assure my noble friend Lord Suri and the noble Lord, Lord Bilimoria, that the Government fully recognise the outstanding military contribution of Sikhs. We very much welcomed the construction of a permanent memorial to Sikh soldiers at the National Memorial Arboretum, the year-round centre for the remembrance for the whole of the UK. I understand that government was approached for assistance in identifying a central London site for this new memorial. However, as a great many people and organisations are interested in establishing memorials, the general rule is that it is for those bodies to raise the funding and work with the local planning authority to identify a suitable site.

That said, there is of course the National Memorial Arboretum, which brings me to the point referenced by the noble Lord, Lord Stevenson, and something which I personally feel quite strongly about. Living amenities and living memorials—also referenced by the noble Viscount, Lord Falkland—are in a sense for the future. The Woodland Trust has been working to create a new generation of living memorials, which not only commemorate and celebrate the past but contribute to the future. Like the noble Baroness, Lady Lane-Fox, I too have done some digging with the Woodland Trust on this. There have been a number of debates in your Lordships’ House recently about the loss of ancient woodland and the loss of more trees as demand for housing grows. Perhaps the planting of trees is a brilliant way to respond to that, in memoriam of different things that have happened. For example, there is the Wilberforce Oak, under which it is said William Wilberforce met the Prime Minister, William Pitt, to take up the case for the abolition of slavery. Back in 2007, there was a rather special example. Two schools in Portsmouth planted trees to remember the blood that was shed to ensure that slaves remained free after the abolition of the slave trade.

An amazing number of things are going on across the United Kingdom by which we mark different events in different ways. However, I assure all noble Lords that the Government take very seriously their continuing commitment to the historic built environment, including its statues and memorials. Again, I thank all noble Lords, and particularly the noble Lord, Lord Oates, for taking part in this important debate.

13:58

Sitting suspended.

Mental Health: Young People

Thursday 9th February 2017 Grand Committee

Question

14:00

Asked by

[Baroness Massey of Darwen]

To ask Her Majesty’s Government what action they plan to take in the light of the Association for Young People’s Health briefing There for you which discusses the role of parents in supporting young people with mental health problems.

[Baroness Massey of Darwen (Lab)]

My Lords, I am delighted to have secured this debate on the very important and pressing issue of young people and mental health, and the importance of parental support. The report is called There for You—an apt title, as I shall discuss. I am grateful to the Association for Young People’s Health, of which I am a proud patron, for presenting the results of its recent survey so cogently.

I am very happy to see that the noble Lord, Lord O’Shaughnessy, is responding to the debate. I am aware of his interest in young people and we have often discussed their well-being in relation to character education and the links to personal, social and health education and life skills education. My noble friend Lord Patel also has a fine track record in supporting the development of initiatives in mental health. Many noble Lords speaking today have a variety of perspectives on this, so I look forward to a lively debate.

I will talk about some of the report’s background and proceed to repeat points made by parents. I will then seek the Minister’s acceptance of these points and his support. I recognise and appreciate that much has been done in recent years in recognition of young people’s mental health needs. I salute Norman Lamb MP for his tenacity and excellent work on this. The Prime Minister, of course, mentioned mental health last week.

I hosted the launch of this report. There, I talked to many parents who have the experience of supporting a son or daughter with mental health needs. They expressed agonies of feeling helpless, guilty, angry and sad at the lack of support. Many had sought private counselling as there was nothing available in the state system. The report estimates that 36% of parents are in this position. We must remember that young people are not just teenagers, but include children of primary school age and younger. These children may show disturbing behaviour—I do not mean just naughty behaviour, which is perfectly normal, but distress, which needs deciding upon and doing something about if it is not to become more serious.

Some of the parents had formed local parent groups. The question occurred to me: what if you cannot afford to get help? What if you do not have, for whatever reason, the initiative to set up a group? It seems that you just get left behind, feeling more and more distressed. I will give two moving quotations from the report. First, a parent said:

“It must be incredibly hard for a young person who’s in crisis themselves to then look at the one person they trust, who is sitting on the floor sobbing … thinking I have no idea what to do, and nobody’s helping me”.


Secondly, a young person said that,

“if they were to empower my mum … then I would feel more empowered too”.

These are real cries for help.

The report is part of a wider parenting project and reflects a survey of parents’ networks co-ordinated by Young Minds, which also does excellent work on the broad aspects of young people and mental health. A thousand parents were involved—not parents who had no voice at all, or those who are perhaps less engaged with their young person’s mental health problems, but it is a starting point for finding out what parents think. A fuller profile of the parents taking part is given in the short report.

The need for such research and action is clear. Half of all adult psychiatric disorders start by the age of 14. Only a quarter of young people referred to specialist services will be seen. Only 0.7% of the total NHS budget is spent on mental health services for the under-18s. Things are simply not changing fast enough, despite all the excellent recommendations and reports. I ask the Minister: how might this be improved? Self-help is good, but it is not sufficient. Parents and young people need a better deal. It is so much better to treat such problems early, rather than wait. Costs, as well as human misery, inevitably increase the longer there is lack of support.

Parents say that there is a problem of waiting times for treatment. They are often left alone to cope. They may have to take time off work, or go part-time or give up work. They struggle to find help or they may feel that they have something to offer but get sidelined. Many parents I talked to said that they needed more guidance on how to offer help to the young person in need. Dealing with a young person in crisis can leave a parent feeling helpless, guilty and under-confident. Parents and families—such problems affect the whole family—are desperate. Parents in the survey made suggestions about how things could be improved.

I will recount some of their ideas. The first is the development of parent support groups. Parents are dealing with the stresses of their children’s lives constantly. Of course, parenting has its joyful aspects, but come a crisis, parents and families often need help rather than having to cope on their own. Support groups are one way of helping. When I was chair of the National Treatment Agency for Substance Misuse some years ago—the noble Lord, Lord Patel, will remember that—support groups for users, parents, grandparents and families were prominent in aiding recovery and, frankly, keeping people sane. Some of those groups were supported by local authorities. Support could include practical advice, with a dedicated worker to provide support. Would that not be a way of helping parents with children and parents struggling with crises, especially mental health crises? Support could include practical advice on where to go next in finding a CAMHS worker, for example, or other consistent key workers. Consistency is really important here. Having someone with professional expertise alongside them would be a boon to parents.

Secondly, parent support workers attached to schools were suggested as another means of helping parents. Such a person might, for example, manage the interface between services such as CAMHS, the school and the home. I certainly advocate a role for schools here. I have long been convinced that much stress is created in schools by overtesting and overpressurising. That is what children say. There is still no requirement for schools to develop coherent programmes for delivering ways of coping, such as personal, social and health education, character education, life skills—whatever we call it, children need it.

Thirdly, parents stressed the need for and importance of early intervention—help before the breaking point. A triage-based service for all levels of mental health issues is important, not just when they become crises. Parents also suggested that out-of-hours support such as telephone helplines could be important. They thought that parents could help design services and delivery. Involving those dealing with problems is always a better way of getting things right—my words, not theirs.

In reflecting on the results of this extremely helpful and powerful survey, I do not underestimate factors such as socioeconomic status, poverty and family situations. But any child, from any stratum of society or any family, can develop mental health problems. We must recognise that, and act on developing the valuable role that parents can play as partners in such situations. There may be some costs involved, but nothing extraordinary. In pure cash terms, the savings would be enormous in the long run. In terms of distress, they would be even more enormous.

Will the Minister reassure us that the Government have their eye on this, and will he personally intervene to encourage initiatives to help parents and young people? I know that he knows it makes total sense.

14:09

[Baroness Chisholm of Owlpen (Con)]

My Lords, I thank the noble Baroness, Lady Massey, for initiating this debate. Mental health is coming out of the shadows and into the light. This generation will benefit from the greater awareness that their parents and grandparents were denied. It is a largely taboo subject for older generations, and because of this, physical health is talked about far more openly than mental health—for instance, we talk about children’s allergies but not their self-harming.

Conversations about mental health issues should be about hope and support, not shame and confusion. As parents, we recognise when a child is physically unwell, but mental health is far more complicated. Differentiating between normal problems experienced by children and the kind of behaviour that could be the first signs of a mental disorder is difficult, yet we know that early intervention is the first step towards effective treatment. As the noble Baroness, Lady Massey, said, half of all lifetime cases of mental illness begin by the age of 14. Parents have a vital role in contributing to support and solutions for successful outcomes. Those who develop good communication skills are more likely to pick up problems.

However, for parents to be able to give the support required, they in turn must be listened to and supported. Parents can feel sidelined. Building resilience in the family brings a better chance of helping a young person in the long term. Making parents part of the solution can help reduce the need for crisis intervention. They have a critical role to play in joint decision-making. It can be devastating and bewildering to realise that something is seriously wrong, and that can be after parents have been struggling for months. Their first port of call is usually the GP. Here they should find heightened awareness, information, advice and options available so that the right decisions can be made about supportive treatment, yet most GPs have very little mental health training. Is this going to change?

Schools have a vital role. Teachers are a large part of a young person’s life. Some 65% of primary school children were in contact with NHS mental services for the year ending June 2016. We must focus on prevention, and parents and schools are central to that. Studies have shown that school-based counselling services have a positive impact on learning. Will the Minister confirm that funding for this counselling will continue?

Oliver Goldsmith Primary School in Peckham is delivering a new programme, funded by the South London and Maudsley NHS Foundation Trust, called CUES-Ed. The programme teaches children to recognise the signs when things are not right, and behavioural techniques to help them to manage their mood. However, this is rare. What training are teachers getting in dealing with mental health problems among schoolchildren? The time has come for joined-up decision-making and care between healthcare professionals, parents and teachers. We must ensure that there is access to effective treatment, that services are tailored and responsive to their communities, that children get the help they need and that parents are included so they are part of the solution. Our children have the right to timely treatment, just as they would get with a physical health problem.

14:12

[Baroness Lane-Fox of Soho (CB)]

My Lords, I too thank the noble Baroness, Lady Massey, for her leadership on this issue.

There is no greater advocate for the change that the internet has enabled than me. I see its benefits on a daily basis and have worked my whole working life within the sector. However, even I do not believe that we have yet understood, and developed the frameworks to help our children deal with, both the benefits and the destruction of this incredible revolution.

There is so much to be positive about. I see my nephews playing multiplayer games and building incredible things, connected to children they have never met before across the world. I see my godchildren playing chess in complicated ways with players they have never seen before in countries all over the world. However, it is hard to ignore some of the data and studies that also show how this technology is affecting children in a negative way. The BBC says that 62% of children on its websites are looking for mental health-related data. I look at this issue from a different angle: the number of children who are using some of the networks that were never intended for them. I declare an interest as a director of Twitter. Although we do not have so many children on our network, Facebook says that 52% of eight year-olds sign up to Facebook, despite an age limit of 14. I am not against social networks—quite the opposite—but there are reasons why they are age-appropriate.

The positives of this amazing technology must be countered by an understanding from parents and teachers about what their children are really doing. I had a small absence from your Lordships’ House as I now have seven-month-old identical twin boys, and this issue is front and centre as they see me with my iPhone or my iPad—probably too much—and immediately their faces turn towards it. I find this world hard to navigate; how it must be if you are living in one of the 1 million families in this country who do not have basic digital skills, I dread to think, let alone if you are a teacher who may themselves be struggling with understanding this complex new world, yet you are responsible for a class of children who may be at varying degrees of usage and attention in the classroom.

I feel strongly that we must create new ways of thinking about this problem. It starts with schools but it must also be led by parents. I pay tribute to my noble friend Lady Kidron who has done a lot of work on children and their rights, but we need to go further. I am keen to understand how we could use more creative thinking and I urge the Minister to consider this. Some amazing people around the world are looking at the issue, and I cite Danah Boyd, who is based at Stanford, as a world-leading expert. I would love to see how parents can be given comfort and reassurance in these uncertain times so as to make sure that the benefits continue to outweigh some of the dangers.

14:15

[The Lord Bishop of St Albans]

My Lords, there are few more urgent issues in modern Britain than the state of mental health among our young people, and I thank the noble Baroness, Lady Massey, for tabling this important debate. Referrals to specialist mental health services have risen dramatically in recent years as increasing social pressures on our young people threaten the mental health of a generation. Issues around body image are one area of particular concern, fuelled in part by the rise of social media. I want to take this opportunity to pay tribute to my friend the right reverend Prelate the Bishop of Gloucester for her important work around body image and self-worth.

One statistic that has caused me concern, and which I have already mentioned in the House, is the rise in self-harm among young boys and girls. Some 20% of British 15 year-olds report some form of self-harm, while in the past five years hospital admissions associated with self-harm have gone up by nearly 93% among girls and 45% among boys. It is notable that of the parents who participated in the report mentioned in the Question put by the noble Baroness in tabling this debate, 59% said that their child self-harmed.

The charity selfharmUK, located in my diocese, does amazing work helping parents, youth workers and teachers understand and respond to the issues around self-harm. But for many who do not have access to such resources, parents in particular, knowing how to respond can be very difficult. It is all too easy to panic and thereby sometimes make the situation even worse. What seems to me to be absolutely essential is readily available support and training for parents, teachers and youth workers about how to help children who are struggling with self-harm and similar mental health conditions. I was very moved, as I am sure were other noble Lords, by the comments made in the past week by the broadcaster Mark Austin in the Times about his struggle to understand his daughter’s anorexia. Can the Minister therefore inform the House what steps, in addition to the welcome mental health training for teachers announced by the Prime Minister last month, Her Majesty’s Government will take to make sure that parents and youth workers are able to access proper resources and support when it comes to understanding mental health in young people?

14:18

[Lord Farmer (Con)]

My Lords, our young people live in a culture that seems to value them for their outward appearance, their achievements and eloquence on social media and, grotesquely, their sexual allure at an even more tender life stage. They are under a significant amount of pressure and need reliable, loving foundations to thrive. Parents have a primary and indispensable role to play in providing these, so I thank the noble Baroness, Lady Massey, for securing this important debate.

As a sponsor-governor of the Ark School in Camberwell, I know about a whole-school approach where anti-bullying policies are not just words on a page but part of a culture that prizes nurture, encouragement and mutual support, all of which are vital. Equally, on-site counselling and therapy when children are clearly struggling with specific issues is needed. However, my heart sinks when the solutions to young people’s mental health problems are deemed to begin at the school gate given that much support, and in many cases the underlying contributors to their difficulties, is to be found at home. While there is an important parenting dictum that says, “Don’t take all the credit, don’t take all the blame”, another aspect of our culture which erodes so many young people’s sense of well-being and good mental health is the pervasiveness of contingent commitment in adult relationships—the sense that, “I will be there for you only as long as my needs are being met”.

The noble Lord, Lord Giddens, who will contribute to the debate later, describes how this transition in the ethics of personal life flows from living in a society with a high divorce rate, yet the toll this takes on our children’s mental health means we must not treat current levels of instability in parental relationships as inevitable. In the past, many children had to face the world alone because of the death of one or more of their parents, but today’s high level of family breakdown can feel like a much more intentional wound. Professor Brad Wilcox’s new research shows that we have more children living in unstable families than anywhere else in the developed world. Researchers at the Institute of Psychiatry showed that experiencing family fracture and separation from a parent in childhood are risk factors for later serious mental health disorders. Finally, US research found that low-conflict separation can also cause great harm. Children blame themselves and assume that relationships are fundamentally unreliable. Strong, stable families lay the foundations for life. Family breakdown has implications for population-wide mental ill health—we ignore this at our children’s peril.

Will the Minister let us know what the Government are doing to strengthen and stabilise families? Does he agree that every government department has a role to play in tackling our big cultural problem of family breakdown?

14:21

[Lord Cashman (Lab)]

My Lords, I too wish to place on record my thanks to the noble Baroness, Lady Massey. I welcome the briefing There For You. It is eloquent, and the parents involved in the survey are hands-on, informed and know how to connect. But what about those who do not? What about those who are not connected and who, in fact, feel disconnected from where to seek help or advice? These are the groups that we need to target and, I would argue, prioritise—those who are unable to recognise or cope with the reality that their child may have a mental health problem. We need to remove the stigmas and barriers around discussion. In that respect, some of us need to come out and admit how all of us, to a greater or lesser degree, battle with mental health problems that our friends and colleagues so rarely understand or acknowledge as a health issue. We need to deal with the causes of mental health problems, both physiological and psychological.

In that regard, I wish to say a few words about young people who are overlooked and often fall through the safety nets we try to construct: lesbian, gay, bisexual, trans and intersex youths. The 2014 What about YOUth? survey of 15 year-olds presents deeply worrying facts that have, sadly, been overlooked by the Department of Health and the Department for Education. The research revealed that 31% of lesbian and gay 15 year- olds and 39% of bisexual 15 year-olds had low life satisfaction, compared with 12% of heterosexuals. Of those who had been bullied in the period under question, 74.5% were lesbian and gay and 81% were bisexual, compared with 53.4% who were heterosexual. These are 15 year-olds, crying out for help but help is not coming their way. These young people are crying out to be understood, especially among their own community and within their social structures. That is why we need comprehensive sex education that is mandatory, not something that schools or religious organisations can opt in or out of, so that people are not bullied or mistreated but are understood.

We need action plans to prevent the damage that is inflicted upon young children from a very early age. That harm affects us all. Parental support is not always there for LGBTI children because, for that to happen, the child would have to come out to their parents or teachers, and sometimes they are not ready or able to do so. If you put religious adherence in to this mix, the damage is toxic. Young people are shut out from families and religious communities and cast aside. There are some organisations doing great work in challenging circumstances, such as FFLAG, of which I am a patron. However, they are underresourced and always in demand. Schools Out is another, and is working hard to educate, particularly in this LGBT History Month. I urge the Minister to work cross-departmentally with these organisations and others to ensure that no child suffers.

14:24

[Lord Hastings of Scarisbrick (CB)]

My Lords, I, too, am deeply grateful to the noble Baroness, Lady Massey, for allowing us to debate this issue. I am very grateful to the noble Lord, Lord Farmer, for framing the very remarks I would have made myself so I shall admit to needing to refer to similar matters.

This debate has given me the opportunity to reflect on what it means to be the parent of an adopted child who came from a severely drug-disabled parent and therefore spent the early months of his life in an incubator without contact with adults and then developed significant distress disorders, which we live with now in his adult years. That led me to look at the detail of the research and to realise that mental disorder is often picked out as being about the distress that a young person or individual may feel, rather than necessarily being about a strict form of behaviour. Anxiety and distress lie behind the statistics from Young Minds, which I found very painful, of the high levels of male and female suicide—tragically, the girls are slightly beaten by the boys. That led me to reflect on how as parents we have responded to the needs of our youngest son.

In my son’s distress and confusion, and very often in his pursuit of answers, more than just parents have been necessary to assist him. As I looked at the report, I realised that there may well be a limitation on how we understand the role of parenting as defined as those who have a direct birth or adoptive responsibility. In our case, the wider community of parents—those from the church community, the local garden centre, the café and the Outward Bound community; those connected to the school; those who have been adoptive uncles and good friends in the wider area and those whom he can drop in on in the shops—those people do not fit the category of “parent” but they are parenting. They are providing a context of security, a relationship and a place of identity, and it is that network of identities that gives security to young men and women who long to find a place in which they can reveal their minds and hearts and release their distress. I hope that we will begin to move away from the liberal consensus that defines security only in relation to those by whom a child is cosseted for their protection to a more open approach to allow our communities, as would be the case in more traditional societies in other continents, to love a child in a community.

14:27

[Baroness Redfern (Con)]

My Lords, I thank the noble Baroness, Lady Massey, for securing this debate. I declare my interests as in the register.

Parents and carers play a huge part in supporting any young person, especially, as we have heard, one who is struggling with mental health difficulties. Parents have more personal, intimate knowledge than a professional would, and therefore can greatly support their child’s recovery. Maternal instinct can quickly pick up changes in a young person that the young person may not be aware of. Motivating a young person even to take their medication can be very challenging in many instances, as can supporting them in attendance of classes. Attendance at school or college offers greater independence in managing their mental health and providing continued support as they become an adult.

It is important for parents to be able to take time to care for themselves, too, and they need help, support and reassurance that they are doing the right thing. The question is: where would we be without our carers in the NHS system? Many parents and carers have no mental health qualifications. They are not mental health professionals. Sometimes it is hard for them to know when they, too, need extra support. In many cases they can feel isolated. That is where organisations such as Young Minds come into play, as well as other organisations such as parent support groups.

Time is of the essence for assessments and referral times. As we know, in many cases early intervention prevents a young person falling into crisis. This debate provides an opportunity to raise the profile of and highlight our young people’s mental health issues, keeping them to the fore. Mental health training for teachers and staff is to be welcomed but I would like to see a much more co-ordinated approach to training, developing strong links with schools, communities and mental health staff, and hope to see a reduction in rollout time.

I shall give two brief examples. The first is of a young person’s esteem using Snapchat. She took 15 images before she could make a choice. She self-harmed and wanted to change her body image so she enhanced the snap chosen, giving herself a tan, using soft focus, et cetera, giving a much better outward appearance until she felt better about herself. The second example is of a young person suffering from loneliness, sleeping intermittently, desperately wanting to answer a text quickly if sent very late at night, or even during the night, so as not to miss out or be left out the next time.

Finally, I feel that by debating issues of young people suffering mental health problems we are making sure that mental health problems are everyone’s problems. Much more needs to be done.

14:30

[Lord Giddens (Lab)]

My Lords, I shall make some remarks about anorexia and obesity in children and young people, subjects that I have spent a chunk of my academic career studying. Anorexia has the highest death rate of any psychiatric disorder. Childhood obesity, as we all know, has taken on the characteristics of a huge epidemic: 20% of children aged 10 and 11 are obese in England and Wales. They seem separate conditions, almost opposites, but they are very closely linked. Both should be categorised as in some part mental disorders and are becoming so. The link is obsession-compulsion in relation to food and the body. Bulimia is like a bridge between the two in the experience of some young people.

There is a kind of unbelievable historical reversal going on here. Being fat was a characteristic of rich people and affected a tiny proportion of people in history. Anorexia was not even diagnosed until the late 19th century and was only known in the activities of saints fasting for the glory of God. Then about 50 years ago we had an amazing generalisation, not just in this country but across the world, of these linked conditions. To me, the main driving force is the advent of supermarket culture from about the 1950s and 1960s. This was the time when one had to decide what to eat in relation to how to be and we found an invasion of the body by compulsions and addictions.

I became interested in anorexia one weekend when I picked up two colour supplements of the Sunday papers. One had a starving teenager in Africa and the other had a starving teenager in the United States in the midst of an abundance of food. I thought that these conditions must be totally different, and so they are. We can be sure that these do not have genetic origins and the family and the peer group are plainly important influences. The family has a double role, obviously, because it can be causative in mental disorders as well as therapeutic. The work of the AYPH, which we are discussing today, is valuable here and slots into wider academic research.

I have a couple of quick questions for the Minister. Are the plans to combat eating disorders announced in January 2016 still on track? What happened to the waiting time targets for teenagers with eating disorders? Finally, what progress has been made with the conclusions of the document Childhood Obesity: A Plan for Action, which also came out in 2016?

14:33

[Baroness Fall (Con)]

I thank the noble Baroness, Lady Massey of Darwen, for securing this important debate and for drawing our attention to the pivotal role that parents play in supporting young people with mental health problems. We bring our children into a complex and difficult world, in which the lines between private and public are blurred and which operates 24/7 in 360 degrees through the likes of Facebook and Instagram. Our children never get a day off. Of course, older generations have always gazed with incomprehension at their children, bemoaning the lost values of their youth, and we are no different. Nor are we unusual in wanting to do our best for them, not just because as parents it is our duty, but also because we have an obligation as a society to care for our young. They are, after all, our future.

I am deeply troubled by the serious rise in mental health issues among children and young people in Britain today and the often inadequate help they are receiving, which puts enormous strain on them and their families. A lightning review by the Children’s Commissioner in May last year stated that as many as one in 250 children were referred to what is known as CAMHS by professionals. Of those, 28% were not allocated a service at all and 58% went on a waiting list. These are children in desperate need of help, who are often being turned away or asked to wait a long time for treatments, left with no one else to turn to but their parents. Parents often try to do all they can to help, but they are not trained specialists and can feel alone and overwhelmed by the responsibility and at times frightened for the safety of their child.

The recent paper “There for you” says:

“The practical impact on parents can be extensive. In order to care for their young people, many have to take time off work, go part-time, take unpaid leave, or resign from jobs entirely”.


There seems to be a corrosive combination of factors at work: a rising demand for help; frozen health budgets; a system of tough thresholds, which means that many referrals are turned away altogether; and long, painful waits for those who are lucky enough to get referred. Too often, by the time help is at hand the situation has deteriorated and the child may face no other option than being admitted to hospital. That is a terrible outcome for everyone. Taking the child out of their social environment, away from their families and friends, can make recovery times far longer and more painful and puts enormous pressure on parents, given that many of these places and sought-after beds are in hospitals miles away.

We have a serious problem, but one that I hope we are finally waking up to. I commend the Government’s recent intervention in this area and look forward to hearing more when their Green Paper comes out later this year. I especially welcome their focus on training teachers in schools, although I hope that that is extended to primary schools, where mental health issues so often begin.

However, diagnosis is one thing; treatment is another. We will never get to the heart of this problem while there are still rigid thresholds, rejected referrals and unacceptable waiting lists. We must try to intervene earlier and more aggressively. I also wonder whether we should not be looking for more creative solutions, working together with schools and the voluntary sector—perhaps in setting up drop-in clinics where parents and children might seek support from outside the system.

I welcome the concerns echoed across the Committee today and ask that we keep our eye on the ball, for we cannot afford to let things go on as they are.

14:38

[Baroness Tyler of Enfield (LD)]

My Lords, I congratulate the noble Baroness, Lady Massey, on securing this vital debate. Parental and family relationships have a huge impact on children’s mental health. This debate is all the more timely, taking place during Children’s Mental Health Week. Recent research revealed that up to two-thirds of children aged 10 and 11 worry all the time, with concerns about family and friends topping the list of causes of anxiety. Figures released last week show that more than 50,000 young people turned to ChildLine last year because of a serious mental health problem. In the light of these very worrying figures, it is hard to overstate the importance of the role of parents in supporting children with mental health problems.

In the time available, I can make only two key points. First, parents are a vital support and often a lifeline to children with mental ill-health. Given that parents spend more time with their child than anyone else involved, they have a crucial role in advocating on behalf of and supporting their child through difficult times. However, as the results from the “There for you” survey show, too often parents feel unprepared and ill-equipped to support their child and consequently struggle to play the vital role that they would like to. Indeed, the YoungMinds parents’ helpline found that 41% of parents said that they felt excluded from their child’s treatment, with other parents saying that they felt confused and isolated. We have to acknowledge that for a variety of reasons, some already mentioned, some parents are simply unable to provide the support that their children need. Obviously, there is a particular issue for children in care. Another specific concern that I want to highlight is perinatal mental health. More than one in five mothers develop a mental health illness during pregnancy or in the first year after birth. The knock-on effect of a mother’s perinatal depression on the mental health of her child can be severe.

My second point is that, as the noble Lord, Lord Farmer, reminded us, the quality of parental relationships has a significant impact on children’s well-being. Children growing up with parents who have low parental conflict, whether together or separated, enjoy better physical and mental health, better emotional well-being and higher educational attainment. Conversely, research indicates that parents who engage in frequent, intense and poorly-resolved conflict put their children’s mental health and long-term life chances at risk. In a recent survey of more than 4,000 children, family relationship problems were reported by CAMHS clinicians as being the biggest presenting issue.

We must promote greater involvement of children and parents in children’s treatment and do all that we can to ensure that effective resources are available to parents. I pay tribute to the free confidential parent helpline run by YoungMinds and its Parents Say network, bringing together parents to form a vital support network. Policy solutions and interventions need to take account of the wider family relationship in which children live and are supported. I urge the Government to prioritise support for parental-couple relationships in wider government policy, to reduce one of the often unspoken root causes of children’s mental health problems.

14:41

[Lord Patel of Bradford (Lab)]

My Lords, I am grateful to my noble friend Lady Massey for giving us the opportunity to debate this important and pressing issue. She has great expertise in the care and welfare of children and young people, which is evident in all the contributions that she makes to the House. It has been an interesting debate and noble Lords have raised a number of important questions. I look forward to the Minister’s response; given the challenging environment, I do not envy him.

The Government pledged £1.25 billion for improving children’s mental health services and £250 million to improve CAMHS provision for each year of this Parliament. However, in spite of these commitments at a national level, those funds are not reaching children’s mental health services and disinvestment is taking place at local level. The Government would argue that there have been no reductions in funding; in essence, that is correct, as there have been no direct cuts from central government. However, we know that the NHS is underfunded and social care is in crisis. The cuts to CAMHS budgets are the result of reduced funding to the NHS and local authorities, which then make cuts to local services and staffing levels. The impact of all this, as so graphically highlighted by a number of noble Lords, is that children and young people and their parents are unable to access services when they most need them.

In January this year, the Government announced that they would be publishing a Green Paper on children and young people’s mental health. Will the Minister give us an indication of when this will be published? I understand that the Green Paper will contain new proposals for improving services across the system and increasing the focus on preventive activity across all delivery partners. I warmly welcome this, but with a note of caution.

I have four questions for the Minister. First, will he assure us that the proposals will be adequately funded? Secondly, as the Government will not interfere with local decision-making or ring-fence money, how can he assure us that any national funding is used as intended by the local commissioning groups? Thirdly, I welcome the focus on preventive activity across all delivery partners—education, health, social care and the voluntary sector—which I believe is a crucial part of the solution to developing a good quality of care, a point echoed by the noble Baroness, Lady Chisholm. Are the Government proposing to issue guidance that will direct these partners to develop new ways of delivering children and young people’s mental health services that are collaborative and integrated? They should look at innovation, given the point raised by the noble Baroness, Lady Lane-Fox, around technology—I think that the noble Baroness, Lady Fall, mentioned that, too.

Fourthly, any new proposals must involve service users. Will the Minister assure us, in the spirit of the report “There for you”, that the people who use services and their families are placed firmly at the centre of any plans in a meaningful, not tokenistic, way, in order to ensure that their voices are listened to, heard and acted on, especially those very vulnerable young people whom my noble friend Lord Cashman highlighted in his speech? It is vital that we build a sustainable future for children and young people’s mental health services. To do anything less risks failing an entire generation of children and young people.

14:44

[The Parliamentary Under-Secretary of State, Department of Health (Lord O’Shaughnessy) (Con)]

My Lords, I pay tribute to the noble Baroness, Lady Massey, both for bringing about this debate and for the work she has done over many years in promoting the issues of mental health and mental well-being. I am extremely grateful to all noble Lords for this well-informed and passionate debate, and will try to respond in my speech to as many questions as possible.

I also welcome the report from the Association for Young People’s Health, and thank the parents in the YoungMinds network for their courage and honesty in discussing the very difficult issues they face in raising children with mental health problems. Parents deal with so much, often under the radar, and they deserve our praise and admiration. As the noble Lord, Lord Hastings, said, the concept of being a parent, in the sense of parenting as an activity, goes much wider. As my noble friend Lady Redfern said, mental health problems are everyone’s problems.

We must be clear, as noble Lords have been very clear today, that there is a real and growing problem with mental illness among young people in this country. It is estimated that around one in 10 children and young people have a diagnosable mental health disorder. That is three children in every class, a fact worth reflecting on for a moment. A new report out today from the Varkey Foundation paints an alarming picture of young people’s mental well-being in this country as compared to other countries.

When I was growing up, self-harm was a problem, but on a very small scale. However, over the last 10 years the figure has increased by 68% and, as the right reverend Prelate the Bishop of St Albans, said, it now affects boys as well as girls. Around 8,000 children under the age of 10 have severe depression—another heart-rending statistic—and the number of 15 and 16 year-olds with depression nearly doubled between the 1980s and the 2000s.

As the noble Lord, Lord Giddens, said, eating disorders are some of the most dangerous mental illnesses, and their prevalence continues to rise. There are multiple, sometimes competing, explanations for why this might be so, which several noble Lords have discussed today, whether family breakdown, as my noble friend Lord Farmer mentioned, the increased use of drink and drugs, the appalling rate of mental illness among children in care, or the effects of consumerism, as the noble Lord, Lord Giddens, set out. This means that a broad-based approach is needed. There is, unfortunately, no silver bullet. But there is hope.

While the trends have largely been negative in terms of the prevalence of mental illness, a sea-change in attitudes is taking place. As the noble Lord, Lord Cashman, described so eloquently, this has particular impacts on certain groups, particularly on minorities, whether according to sexual preference or ethnic minorities. Through concerted efforts by medical professionals, parents, young people themselves, campaigners, politicians and even the Royal Family, we are at last confronting the stigma of mental illness. It is finally becoming acceptable to admit mental health problems without it connoting some kind of personal weakness, as my noble friend Lady Chisholm, pointed out.

Government policy has both led and evolved in response to this change. I am very proud to serve a Prime Minister who is deeply committed to ending “burning injustices”. What greater injustice could there be than to receive inferior healthcare because your needs are mental, not physical? The previous Conservative and Liberal Democrat Government legislated to create parity of esteem for mental and physical health in 2012, and since then the Government have introduced the first mental health waiting time targets and have begun to roll out a series of initiatives—supported by an additional £1.4 billion—to support those suffering from mental illness, including support for young people suffering from eating disorders and to support perinatal mental health, which the noble Baroness, Lady Tyler, highlighted as being so critical.

However, it is important to acknowledge that there is much more do to. There are concerns that funding is not getting through to the front line, as the noble Lord, Lord Patel, said—and as other Peers have said in other debates—and it must be admitted, as my noble friend Lady Fall pointed out, that the performance of child and adolescent mental health services is patchy. Care also needs to be delivered closer to home wherever possible, as my noble friend pointed out. The Government are aware of these criticisms and are working hard with NHS and local authority partners to address them.

The report we are discussing today revolves around the role of parents, and some of the quotes in it are, quite frankly, heart-breaking. They lay bare the helplessness and frustration that many parents feel. As some noble Lords may know, I have spent the last few years working in education and in schools we always talk about parents as being the “first educators”. That is relevant here because in health we can think of them as the “first carers”—the first line of both defence and action, as the noble Baroness, Lady Tyler, pointed out. Government policy must be geared to strengthening parents’ ability to provide the love and support that makes young people more resilient, and to arming them with the skills and knowledge needed to identify and respond to the signs of mental illness when it occurs. The noble Baroness, Lady Massey, asked for my personal support in making sure that there is increasing support for parents through government policy and I am happy to give it.

There are some good examples of government policies that are working in this area. The Department for Work and Pensions supports parenting classes aimed at reducing family conflict, which has been raised as an issue. The Department for Education supports the YoungMinds Parents’ Helpline and the MindEd website, which provide parents with guidance on a range of parenting issues related to mental health. There is also the Family Test, which was introduced by the previous Government and which my noble friend Lord Farmer was instrumental in bringing about.

The NHS England Five Year Forward View for mental health has put mental illness at the forefront of NHS reforms. The noble Lords, Lord Cashman and Lord Giddens, asked about waiting time targets for eating disorders; these will be in place from April 2017. There is more funding, but there are challenges, as we know, in getting it through to the front line. I will respond to the question of the noble Lord, Lord Patel, later.

I think we have also launched today the next stage of piloting the single point of contact, which will benefit children in 1,200 more schools. The voluntary sector is doing pioneering work in this area, whether through Place2Be’s counselling services or through the proposals for a new national parenting trust emerging from the Legatum Institute, where I used to be a senior fellow, and which will provide parent support groups to help parents in a very challenging time of life.

I am delighted that the Government have committed to creating a joint Department for Education and Department of Health Green Paper on children and young people’s mental health. The aim is to publish it this year. I am also clear that this will succeed only if it boosts parents’ ability to support their children to deal successfully with mental illness. It is essential to involve parents in that policy-making. Mental health is being transformed in this country through local transformation plans which have parents and young people themselves taking part in the design of policies.

I take the opportunity to respond to some of the specific questions noble Lords have raised. My noble friend Lady Chisholm asked about mental health training for GPs. That is something NHS England is working on actively with the Royal College of General Practitioners. She will also be aware, I hope, of the Prime Minister’s really important and signal announcement, which outlined that there would be mental health training for mental health first aid in secondary schools. However, I very much take the point of the noble Baroness, Lady Lane-Fox, who talked about that going into primary schools too.

The noble Baroness, Lady Lane-Fox, also talked about the impact of social media and social networks. My oldest child is nearly nine years old and I am frankly terrified by the prospect of her joining social media. There is a kind of fascination with devices and everything that goes beyond it. You try to explain to them that there may be more bad out there than good, but they are desperate to be part of it.

The Prime Minister announced initiatives on digital mental health services, but clearly there is much more that we can do through the Green Paper and she was quite right to point out that businesses need to take responsibility, too, whether that means the social media businesses themselves—I can imagine that she is a forceful advocate for that on the board of Twitter—or other businesses. The Prime Minister has asked the noble Lord, Lord Stevenson, and Paul Farmer from Mind to carry out a review on mental health in the workplace.

The right reverend Prelate the Bishop of St Albans asked about support for parents. Some 90% of the local transformation plans that I have mentioned have parenting and early years programmes. Clearly, for this to be an effective strategy, it must involve getting to parents and families early, before problems arise, so that parents and young people, as they get older, have the skills they need to spot and deal with mental illnesses as they arrive.

My noble friend Lord Farmer asked what else the Government are doing to support families. There is a troubled families programme and, since 2010, there has also been the healthy child programme, which provides health visitor support in the home. As well as that, there is the Family Nurse Partnership, which provides targeted support for young mothers who are vulnerable.

The noble Lord, Lord Cashman, highlighted the issue of LGBTI people suffering from worse mental health. I admit that is something I was not aware of prior to this debate. I am grateful to him for raising it. I understand that in general there is a problem in mental health, in both prevalence and treatment, when it comes to equalities issues, which fall under my brief. That is something I will certainly look into. It is critical that we reflect that in policy.

The noble Lord also raised mandatory sex and relationships education and PSHE. That is a debate I engaged with when I was on the Back Benches. I do not want to reprise the whole argument now, not least because I am in a rather different role, but the issue is one of quality, not necessarily making something compulsory if it is not very good. We need to focus on making it good, then the argument to make it compulsory may be easier to make.

I hope I have answered the questions asked by the noble Lord, Lord Giddens, on waiting times targets. I apologise: it was my noble friend Lady Fall who made the point about this applying to primary schools. She also asked about drop-in centres. I hope she will have noticed that in the Prime Minister’s announcement on mental health there was rather an interesting and innovative idea about supporting crisis cafés and drop-in centres, which are precisely the kind of informal setting that it might be easier for a young person to access to get the support they need.

There is so much more that could be said on this subject. I hope I have given noble Lords confidence that the Government are taking this seriously. We have this wonderful opportunity of a Green Paper. We have to develop it. I do not know what a pre Green Paper is called, but we are in that phase. It feels to me that there is a large and important bucket that can be filled with brilliant ideas. I have some more ideas for how we might do that, but I hope this is the first of many debates on this issue. I am absolutely open to all Peers to discuss ideas they may have to make that a real milestone in mental health services, mental health treatment and building resilience in this country. I look forward to working with noble Lords to make sure parents play a central role in that strategy.

14:57

Sitting suspended.

Syria

Thursday 9th February 2017 Grand Committee

Question

15:00

Asked by

[Baroness Cox]

To ask Her Majesty’s Government what is their assessment of recent developments in Syria.

[Baroness Cox (CB)]

My Lords, I am profoundly grateful to all noble Lords who are speaking in this debate and to those, such as my noble friend Lord Wright of Richmond, who have expressed their support but are unable to be present. I am also grateful to another former British ambassador to Syria, Peter Ford, who has provided invaluable briefing.

My concerns arise from a visit last September in response to invitations from the Melkite Patriarch, the Grand Mufti and leaders of Christian and Muslim communities in Aleppo. Our programme was arranged by friends in Syria and was not organised by the Government. We met many Syrians in Damascus, Aleppo, Maaloula and Latakia, including representatives of Muslim, Christian and Yazidi communities; members of government and internal opposition parties; civil society organisations such as the senior council of doctors in Aleppo; IDPs in Latakia who had fled for their lives from ISIS and ISIS-related militias; and survivors of ISIS attacks in Maaloula.

We also met President Assad, a meeting for which we received vehement criticism in the media and by the FCO. We stand by our decision to meet the President, not because we are uncritical but because only by meeting can one raise concerns and learn about current and proposed policies.

Many noble Lords will have seen newspaper coverage this weekend condemning Assad for atrocities—including the killing of 13,000 people in Saydnaya prison—citing a report attributed to Amnesty’s Beirut office. Time permits me only briefly to address three issues related to those allegations.

First, the fact of torture in Syrian jails is well known, is cause for genuine concern and is in no way condoned, but there is a serious asymmetry in these reports. There is no mention of the conditions under which Syrian soldiers and many civilians are held by Islamist militants or of the atrocities perpetrated by those militias, including torture, beheadings and slaughter of civilians by suicide bombs. When we were in Syria, a suicide bomber attacked the checkpoint at Homs, killing more than 30 people, presumably including families burned alive in their cars in the queues. Secondly, these reports are accepted uncritically as true. However, in 2014, photographs of an oddly similar number of corpses were proven to be a farrago of half-truths. The third issue is timing. The report, apparently a year in gestation, emerges now, when it can do maximum harm to the chances of success of the peace process emerging out of the recent talks in Astana.

The report by our group which visited Syria is widely available and I want to highlight our priority concerns, which are still relevant despite the seismic changes which have taken place since September. First, everyone to whom we spoke in Syria was deeply disturbed by the UK Government’s commitment to regime change. But Her Majesty’s Government retain their unabashed commitment to a transition culminating in the departure of President Assad. Transition is therefore just a euphemism for regime change.

Leaving rights and wrongs to one side, it is delusional to pretend that Assad will have to step down. Following the recovery of eastern Aleppo, he is now in a commanding position on the battlefield, with domestic and external support bolstering his position. HMG should realise that were Assad to do as they wish, the first to suffer would be the Syrian people. Everyone whom we met was deeply afraid that Assad’s departure would cause implosion of the regime, leading to catastrophes similar to those in Iraq and Libya. I ask the Minister why Her Majesty’s Government are not listening, for example, to the faith leaders in Syria, both Christian and Muslim, almost all of whom are urging the international community to engage with the Syrian Government.

Secondly, there is widespread, understandable dismay and anger over the UK continuing to provide opposition Islamist militias with practical assistance, including training, equipment, help with propaganda and diplomatic support. Helping to sustain the armed opposition can only prolong the suffering of the Syrians to no purpose whatever. So many people told us: “War is terrible. People die from shelling on both sides. But here, you die from shelling or you die from shelling and beheadings. And we don’t want the beheadings”. I therefore ask the Minister why the UK is continuing to support the Islamist “rebels”, when the consistent word from the Syrians, who have suffered under their brutal tyranny, is that the “moderates” no longer exist and the vast majority of these groups have extreme ideologies and no intention of creating a democracy in Syria.

Thirdly, there has been widespread dismay over the long-standing reporting by the BBC and other Western media which is perceived to be very biased, focusing on the suffering resulting from military offences by the Syrian and Russian armies, with no comparable coverage of the suffering inflicted by ISIS and other Islamist military offensives, including the use of cluster bombs and chemical weapons. The latest case of indiscriminate abuse of an innocent population has been largely ignored by the western media. It is the month-long poisoning by diesel fuel, and later the complete cutting off, of the water supply to Damascus by so-called moderate jihadists between late December 2016 and late January 2017. Water supplies were restored only after the Syrian military diverted significant forces from other fronts and retook the Wadi Barada springs from the jihadists in a major military attack.

The bias in media reporting seems to be intent on demonising President Assad and his Government and drawing a veil over the atrocities perpetrated by the Islamist forces. On 13 December the House of Commons held an emergency debate on Aleppo. The Foreign Secretary underlined condemnation of the offensive against eastern Aleppo, the importance of protecting civilians and an ongoing commitment to bring about a political settlement in Syria. That statement by the Foreign Secretary raises many questions. Why do the vast majority of civilians from east Aleppo chose to flee to government-controlled areas if they are all so terrified of the Government, apart from a small minority who joined the evacuation of terrorists to Idlib? Why, after months of lamenting the plight of 300,000—a grossly exaggerated figure, by the way; it turned out to be 130,000—civilians in east Aleppo, has there been so little media coverage of what had actually been going on?

Reverend Andrew Ashdown, who organised our September visit, was in Aleppo as the city was liberated. He visited areas of east Aleppo including the Jibrin registration centre and other reception centres, as tens of thousands of refugees from east Aleppo fled to government-controlled areas. I quote from his report:

“The voices of the civilians emerging from ‘rebel’-controlled East Aleppo were absolutely consistent—of the brutal murder and execution by the ‘rebels’ of anyone who opposed them; the killing of men, women and children who tried to flee; regular torture and rape of civilians; the withholding of food to civilians, or selling food at exorbitant prices; the withholding of medical aid to those in need even when they begged for assistance; telling civilians that they would be killed by the army if they fled to government-controlled areas; and, that if they did not adhere to the ‘rebel’ ideology, they were not real ‘Muslims’ but were ‘infidels’ and deserved to die. Also those refugees who fled from East Aleppo who knew of the widely acclaimed ‘White Helmets’ (many didn’t) repeatedly said that ‘they only helped the terrorists’. They were all visibly delighted to be free, and were being given food, medical assistance and shelter on arrival. The narratives of these people directly contradict all that the western media were reporting for months previously”.


In the last month, efforts at restoring facilities, opening schools and making areas of eastern Aleppo habitable have already begun. Many people are asking why no one is reporting these positive developments in post-conflict situations in east Aleppo.

Her Majesty’s Government’s position is coupled with an insistence on maintaining sanctions. These greatly harm Syrian civilians, who cannot obtain medical supplies such as prostheses, more than they harm the Government. It is also sometimes claimed that Assad is not really fighting ISIS. To that, I say: tell that to the brave defenders of Deir ez-Zor, the people of Palmyra or the inhabitants of Damascus and the Homs countryside, for whom all that stands between them and beheadings are the government forces.

I take this opportunity to record that the people of Syria are profoundly grateful to Russia for taking ISIS seriously and assisting them by defending their people against its barbarities. I ask the Minister: what is Her Majesty’s Government’s position with regard to the Astana talks, which appear to be the only current initiative likely to deliver a policy capable of defusing the present situation?

In conclusion, I open this debate with a heavy heart and with deep sadness because I have seen a glimpse of the suffering of the people of Syria under the onslaught of ISIS and related Islamist jihadists. I am all the more sad because I have seen that suffering exacerbated by UK polices of support for the jihadists, and I am deeply saddened by Her Majesty’s Government’s continuing commitment to regime change, by whatever name, which is profoundly dreaded by the people of Syria. Will Her Majesty’s Government reconsider their entrenched position, which has exacerbated the suffering of the people of Syria, and allow the people of Syria the democratic right and the dignity to choose their own future? If that involves re-electing President Assad, that is their right to do so and a right that we should respect.

15:10

[Lord Risby (Con)]

My Lords, I congratulate the noble Baroness, Lady Cox. She is absolutely right to highlight the extent of the humanitarian horror of the Syrian crisis. I applaud her for her efforts on behalf of the Christian community that is left there, and in essence agree with her vision. I personally mourn the death of a great friend, the Archbishop of Aleppo, who disappeared and was presumably killed.

In 2000 I attended the funeral in Damascus of President Hafez al-Assad, representing the Opposition. It was the first time that I met his son Bashar, and there were great hopes that he would modernise the economy. Indeed there was some progress, and the new President fully protected the minorities. However, when minor demonstrations broke out in Syria, and after some hesitation, President Assad ruthlessly cracked down, and the rest is history. It was a grotesque misjudgment and wholly unnecessary. Had we and others taken out his capacity to rain cluster bombs, barrel bombs and chemical weapons on his population by bombing his airfields, he would have been forced to the conference table. We never did, though, and our support for opposition groups was limited and sometimes wholly counterproductive.

As a result of the Russians moving in substantially in 2015, Assad is now on his way back to controlling the country. It is a tragic and ironic situation that the man who had so much to do with the destruction of his country should now be seen as part of the solution. It now appears to be recognised even by us that he is there to stay, as expressed by the Foreign Secretary. However, I immediately praise Her Majesty’s Government, who have so generously committed money to good humanitarian efforts to alleviate the plight of the refugees. We can be truly proud of the generosity, added to by private funding and care. I was very pleased personally to help in raising money for relief.

However, we are where we are, and we have to face the clear reality. When a recent meeting took place in Astana, it was essentially led by Turkey, Iran and the Russians, whose influence and role in Syria is now decisive. I therefore ask the Minister if she is in a position to clarify what the next stage will be. I understand that additional meetings in Geneva were planned, but may have been postponed to cement a ceasefire. Do we know if the anti-Assad opposition is to be involved? This would be appear to be essential to make progress, and of course it would be under UN auspices. President Trump has advocated, with the support of Saudi Arabia, the establishment of safe zones to provide some degree of security for refugees. Do we agree with this? I understand that he has commissioned a report to be ready by April.

Of course there will simply be no progress without the agreement of Russia and indeed President Assad himself. The Foreign Secretary reiterated his view that President Assad ideally should go, but we now have to accept the new reality of his staying. Indeed, all I can say in retrospect is that all of us should pray and yearn for this unspeakable horror and heart-breaking situation to end.

15:13

[Lord Alderdice (LD)]

My Lords, I also thank the noble Baroness, Lady Cox, for tabling this debate. She spoke about her concerns that arose both during and subsequent to her visit to Syria. My own interest and concerns with Syria go back considerably longer, and long before the war. When I went to see if there was at the time any possibility of rapprochement between Israel and Syria, it was clear that there was. I came back and told the Prime Minister, Tony Blair, but when he sent out Sir Nigel Sheinwald, what was engaged in was the kind of finger-wagging diplomacy that informed the President that if he did not do what Britain wanted, it would be the worse for him. I mention that because it seems to me that the attitude of Her Majesty’s Government to Syria and the regime there has been part of the problem rather than part of the solution, going back a very long way. To come to the view in almost any conflict, particularly in the Middle East which I know quite well, that there are good guys on one side and bad guys on the other, simply lines you up with one side or the other so that you become part of the problem rather than part of the solution.

When the war itself broke out subsequent to a failed attempt at revolution—indeed, apart from in Tunisia, none of the attempted revolutions in the Middle East has been positive and successful—I urged Her Majesty’s Government not to engage militarily or make any intervention. Of course, the House of Commons subsequently made doing so impossible. However, I agreed that support should be provided for our allies on the front line, Turkey, Jordan, Lebanon and Iraq, because without supporting them the situation would get worse. The Government were not able to engage militarily because of the decision of the House of Commons, but that did not mean that we have not engaged through military training, materiel and intelligence operations which have merely made the situation worse. I recall having discussions in 2012-13 with some of my Liberal Democrat colleagues and one of them saying to me at the time, “John, you say it could be worse, but I don’t believe it could be any worse if we were to intervene”. I replied by saying, “Not only could it be worse, it will be much worse because what we are seeing is a descent into chaos that will not be restricted just to the Middle East”.

We are already some years into a third global conflict and we are merely contributing to the difficulties around it. It is not really a Sunni-Shia fight because there are Sunnis on both sides. We are contributing to something which, if we are not careful, will ensure that Christians who have been living in communities in the country for two millennia will be driven out.

My question for Her Majesty’s Government is in many ways a simple one. When will the Government understand that the policy they have been following through several Governments has failed? Continuing with it is not going to help the situation either for the people in the region or for this country because of how it is perceived in the wider region and indeed by some within our own communities. I have just a little hope, given the Statement made recently by Prime Minister Theresa May that it was not for the United Kingdom to engage with the use of force in order to change the way other people run their countries, that perhaps some reflection is beginning to take place in Her Majesty’s Government.

15:17

[Lord Hylton (CB)]

I was an eyewitness in Jazira in north-east Syria in May 2015, Diyarbakir in Turkey in November of that year, and in government-controlled Syria in September 2016. I met the Jazira canton administration, all the political parties, young people learning democratic theory and practice, as well as refugees from ISIS. In Diyarbakir I saw military damage to the historic mosque at Sur and learned of the bulldozing of cemeteries where militants were buried. Since then, MPs, mayors, lawyers and journalists have been arrested and tens of thousands of state employees dismissed. Last September, along with others including my noble friend Lady Cox, I visited the four main Syrian cities. I am amazed that Her Majesty’s Government refuse to visit Jazira and Kobane. How can they understand the political and humanitarian situations without direct contact? In Turkey, they fail to address the causes of civil unrest and armed uprising, which have lasted with only short intervals since 1984. Our Government have asked for proportionate measures, and Turkey has replied with field guns and bulldozers, besides aiding and abetting Islamist fighters in Syria.

Of course there have been atrocities on all sides, yet the western media still place all the blame on the Assadists. No one can deny that outside states have helped many foreign jihadis to enter Syria and provided arms and explosives in large quantities. For these reasons, I welcome the ceasefire agreed by the Assad Government with Russia, Turkey and Iran, although of course it leaves the war against ISIS quite unresolved. I would urge the Minister when she comes to reply to say all she can on that subject.

The conclusion I draw is that all have lost the war, though Assad and his allies have won most of the battles. He has the support or the acquiescence of most Syrians. All the religious and ethnic minorities prefer him to a possible extreme Islamic Government. All are war-weary; they want to get on with their lives and fear chaos or Islamist dictatorship. For those reasons I urge our Government to re-establish at least some level of diplomatic representation in Damascus.

15:20

[Baroness Morris of Bolton (Con)]

My Lords, I also add my thanks to the noble Baroness, Lady Cox, for giving us the opportunity to discuss the recent developments in Syria. Whatever the Government’s assessment of what is happening there, in a country of shifting alliances and international power play there are no easy or simple answers. There is one constant, though: the misery being endured by the proud Syrian people. I will confine my remarks to the efforts being made to secure as meaningful and sustainable a future as possible for those dispossessed by this awful tragedy.

Just over a year ago, the world met here in London for the second Syria donor conference, where the huge generosity both in hard currency and in spirit towards those fleeing terror was enormously welcome and much needed. One of the key objectives of our Government, whose commitment to this appalling situation is something of which we should all be proud, is that alongside aid and refuge we need to put in place practical solutions that give Syrian refugees and their families not just hope, but a sense of purpose and a chance to rebuild their shattered lives, and which supports the countries in the region to which they have fled.

One of the ways we are doing that is through the Business Taskforce, set up by David Cameron and being not just continued but actively supported by the Prime Minister and her Government and chaired by two Secretaries of State, my right honourable friends Liam Fox and Priti Patel. Here I declare my interests as a member of that task force and as the Prime Minister’s trade envoy to Jordan. The task force is charged to secure,

“an ambitious package of measures that would spur economic growth and enable … Syrian refugees across the region to work”,

and study. Those are the very people that are needed to rebuild Syria, when this tragedy is one day—soon, I hope—over.

As well as the enormous sums of money being donated by the Government—to date, £2.3 billion—and the generosity of the British people, so rightly highlighted by my noble friend Lord Risby, a great deal of time, effort and innovative thinking is being put into practical solutions to further these aims. If we support refugee families in the region—who are the very people needed to rebuild Syria, as I said—that will not only build economic capacity in the countries that have so generously offered them refuge, but reduce the risk of too many people gambling their lives in hazardous journeys to Europe and, if they make it, an uncertain future.

15:23

[The Lord Bishop of Coventry]

My Lords, I thank the noble Baroness for securing this debate. My main reason for speaking is to draw your Lordships’ attention and, especially, Her Majesty’s Government, to a recent report by the World Council of Churches, The Protection Needs of Minorities in Syria and Iraq. It is a serious piece of field study that has gathered the first-hand views of some 4,000 people, over 2,000 of them Syrians from minority communities: Christians, Yazidis, Druze, Turkmen and many others. I was in Baghdad and Irbil last month as part of a World Council of Churches delegation to test the findings of the report with community leaders and members, as well as with UNAMI and locally based NGOs, and confirm the soundness of its recommendations. I have every reason to believe that the report’s analysis of the Syrian situation is as credible as we found its Iraqi analysis to be. Therefore I ask the Minister that the Government engage with this robust report.

It was quite an uncomfortable visit for a British person to take part in, because of the great sense among the minority communities of our own culpability in the chaos in Iraq. I can well imagine the strength of feeling that was expressed in the noble Baroness’s visit to Syria. The research showed that despite the manipulation of sectarian tension in Syria by government and armed opposition, there still remains greater confidence among minority communities—including even Christians—in Syria than in Iraq that they have a future in their land, although that confidence is diminishing. The report argues that protecting the minority communities and preserving their place in Syrian society needs to be mainlined into the humanitarian response. This requires a differentiated approach to the particular security, economic and social needs of diverse communities, based on accurate assessment tools that capture distinctive ethno-religious vulnerabilities.

Those needs are large and complex; critical among them is housing. It is not only the horrific damage to the property that is the problem but the loss of property, either through being forced into selling at low prices by stronger communities or by confiscation by malign activities. Sensitive processes of property reallocation will need to be found. That is only one example of the restoration of the diversity of Syrian society that will be needed in the years ahead—a task too great for its own resources to bear. Will the Minister therefore confirm that Her Majesty’s Government are committed to the long-term pursuance of a just peace for all Syria’s people, forging an international coalition of reconstruction—physical and psychosocial—to work with whatever political settlement emerges to ensure a safe Syria for all?

15:26

[Baroness Berridge (Con)]

My Lords, whatever the position of Her Majesty’s Government vis-à-vis President Assad, I hope it is uncontentious to say that a future for Syria that protects and respects religious minorities is essential. This should be part of Her Majesty’s Government’s strategy overall, and of our refugee policy in particular.

In 2010, the population of Syria was 21 million. According to the US State Department’s international religious freedom report, Sunnis made up 74% of the population, other Muslim groups 13%, the Druze 3%, and various Christian groups constitute the remaining 10%, although there were estimates even at that time that due to migration it may have dropped to 8%. There were also around 100,000 Yazidis and a small population of Jews. Five years later, in 2015, the same source reported there are now just under 18 million people in Syria; 74% of the population remains Sunni Muslim, the other Muslim groups still amount to 13%, and the Druze are still there at 3%. However, reports of Christians fleeing the country as a result of the civil war suggest that the Christian population is considerably lower than 10%. There is no reliable information to confirm the continued residency or the current size of the Jewish population. Media reports suggest that the figure for Yazidis is higher, as many Yazidis from Iraq have fled into Syria.

There is therefore a disproportionate decline among Christians in the population of Syria. Accordingly, among Syrians outside of the country there will be a proportionate increase in the number of Christians. That is not surprising, as they have no regional ally. Sunnis have the support of Turkey and Saudi Arabia, and Shias the support of Iran. In addition, the attacks on Yazidis, Christians and Mandaeans by Daesh have been of particular ferocity, and there is a growing intolerance in the local population. This is why it was not religious preference but a statement of particular vulnerability when the 2015 Conservative manifesto pledged to defend freedom of religion or belief for all but made a specific commitment to support persecuted Christians in the Middle East.

The United Kingdom statistics on the Syrian vulnerable person resettlement scheme state that between September 2015 and September 2016 we have taken 64 Christian Syrians out of a total of 4,175, or 1.5%. The United States has taken 19,336 Syrian refugees over the last three years: 108 Christian Syrians and 46 Yazidis. That is 0.55% Christians and 0.24% Yazidis.

Her Majesty’s Government rely on the Office of the United Nations High Commissioner for Refugees to assess refugees against the vulnerability criteria. However, at the end of last year, DfID produced its own assessment of the effectiveness of that UN agency. The categories are very good, good, adequate and weak. DfID rated it as good on matching the UK priorities index, but only adequate on the organisational strengths. Will the Minister at the very least confirm that this agency has tracked the religious minorities in the region so we know where they are, and will she please invite the new commissioner for this office to come to the United Kingdom Parliament to explain the disparity within these statistics?

15:29

[Lord Alton of Liverpool (CB)]

My Lords, representatives of the international charity Aid to the Church in Need, of which I am a trustee, have just been in Aleppo. They learned that the Christian community there has fallen from around 250,000 to barely 30,000, and that in Syria as a whole from around 1.8 million before the war to an estimated 300,000 now. As my noble friend Lady Cox said in her eloquent and compelling speech, ISIS has waged a bestial campaign of genocide against Christians and other minorities for nearly three years. The terror group has carried out its slogan: “We will break your crosses and enslave your women”. As His Royal Highness the Prince of Wales warned in his Christmas broadcast, such ancient communities face total annihilation. I ask the Minister: how can we make the protection of minorities and the re-creation of the plural, diverse communities that existed in places such as Aleppo in Syria and Mosul in Iraq before these events a greater priority?

In April 2016, by 278 votes to zero, the House of Commons officially designated ISIS as responsible for genocide against various religious minorities. I press the Minister to say what specific actions arose from that resolution of Parliament to help those who are cruelly suffering. In particular, on an issue that was raised with the noble Baroness yesterday during Questions, is the United Kingdom willing to encourage the chief prosecutor of the International Criminal Court to investigate fighters not currently being prosecuted from signatory nations to the treaty of Rome? Has there been any progress concerning the role that the Iraq Government might play in pursuing an investigative mechanism for crimes committed by or against their people in Syria? Will the Minister also tell us what progress has been made in severing ISIS supply lines to Raqqa and in securing its liberation?

My first visit to Syria was in 1980, as a young Member of the House of Commons. Our ambassador was Patrick, now the noble Lord, Lord Wright, and we met the previous President Assad. If we can have a diplomatic presence in Pyongyang and Sudan, the leader of which has been indicted for genocide by the International Criminal Court, why, as my noble friend Lord Hylton asked, do we not have a senior diplomatic presence in Damascus? Why is that still the case, in the light of the changed policy position of Her Majesty’s Government following the evidence that the Foreign Secretary gave last week, referred to by the noble Lord, Lord Risby? Prioritising persecuted religious minorities such as Christians and Yazidis, and upholding our highest ideals in offering refuge to genocide survivors—as I proposed in an all-party amendment in your Lordships’ House exactly a year ago—will serve justice and ensure that the perpetrators of these crimes face their Nuremberg moment.

15:32

[Lord Naseby (Con)]

My Lords, I pay tribute to the noble Baroness, Lady Cox, and support her views. I start by asking my noble friend: when will Her Majesty’s Government recognise the reality of the situation after six years of war? Assad, his Government and his people dominate all the cities, towns and most of the countryside. They are, of course, assisted by their long-term ally, Russia, and by Iran and Hezbollah, because they are Shia Muslims. Our Government have failed from the start to understand and recognise that this was, frankly, no more than the fourth Shia-Sunni war in that troubled country.

On top of this is the policy of the Arab spring, which we all know and recognise. In my judgment, the failure of that policy in Libya, Egypt, the Maldives and now Syria shows that we should never have interfered in the first place. Do Her Majesty’s Government recognise that France, our closest ally on so many issues, now has an embassy in Damascus? The information I have is that it is not just one man and a dog but a full technical support team. Is it ready for the rebuilding of Syria? From what I can see, we appear to be sitting on our hands, thinking of war crimes and worrying about what our allies in the Arab world would think of us. Are we going to go back to Damascus? If not, the whole of the United Kingdom’s Brexit approach in the Arab world will be somewhat undermined. If our policy is to deal with Daesh—my colleague on the other Benches clearly raised this issue—surely we have to have the Syrian armed forces alongside, at least working or communicating with us. Are we once again waiting for somebody to say something? Are we waiting for President Trump to give his views on what we should do? Surely we have enough experience of the Arab world to decide for ourselves.

We all know that peace is coming. We all know Assad is staying and, yes, we all want to see elections. Above all, we also want to see Syria rebuilt again. Frankly, Her Majesty’s Government should take the initiative and look for the equivalent of the Marshall plan, as in Europe after the Second World War. That way, we can bring back these poor refugees from the Middle East who are sitting in the cold and get them out of the camps and back into their own country. If we do not, Syria will be a living hell, just like Libya is today. Surely, we should let the Syrians themselves settle their own structure and we in the West should stop interfering, but we should give some generous aid in rebuilding and have that presence in Damascus—on the ground—so that at last, for once, our English and United Kingdom firms will also benefit from any Marshall plan equivalent.

15:36

[The Earl of Oxford and Asquith (LD)]

My Lords, I welcome the comments of the noble Baroness, Lady Cox, on the facile narrative that underlies much of the western media reporting. As she has noted, in Syria, we have for several years collectively promoted a demonised portrayal of one side and a highly romanticised version of its opponents. That leads to my general theme—that of legitimacy.

For several years, the British and the United States political leaderships have maintained that this war is largely a matter of a dictator killing his people. It is the accepted line whereby western Governments have sought to promote the policy of regime change to their public. By contrast, what has most impressed me on my visits to Syria recently is the overwhelming and objective evidence of deliberate programmes of assault by ISIL or Daesh, by al-Nusra, as it was, and by other, largely external, forces. It is an assault aimed at dismantling the Syrian state, and the very concepts of Syrian society, identity and culture. This is why it is so crucial to focus on getting hold of genuine facts, evidence and contributions from Syrian citizens and representatives of civil society. They know, none better, what destruction has been inflicted by the militants on their educational infrastructure, for example, deliberately to ensure that ignorance and illiteracy prevails in what is being called a lost generation of students. They know and have seen what is being done to their women, who are carted around the streets of Aleppo in cages for public humiliation—and worse—by the groups we call moderates. They know that those moderates seldom control or influence an area or constituency larger than the extent of this debating Chamber, whatever they may claim in Geneva as they negotiate with our diplomats.

This assault on the structures of the state is, for Syria, an existential war for its identity. The British Government have repeatedly said that Assad can have no legitimacy among his own people. That is a judgment that I believe history will show to be suspect and one which will in due course be put to the test, if there are elections. I have seen little evidence of a craven personal loyalty to Assad in Syria, but there can be no doubt that where the Syrian Government and army have established enduring control, there is order, health provision, schooling and none of the takfiri horrors that the armed militants impose. These are public goods that are welcomed with respect and command large support.

It is often said that Assad would not survive were it not for Russia, Iran or Hezbollah. I myself have seen no evidence that either Russia or Iran has an unshakeable, personal loyalty to President Assad. They support the existence of a coherent Syrian state. If another figure, hypothetically, were to replace Bashar al-Assad, Russia and Iran would undoubtedly continue to uphold the state. But what we have really been implying all along is that we want not simply Assad’s departure but some kind of popular movement—fomenting a resistance to illegitimacy that we endorse—that will effect regime change. This is not going to happen. It is an illusion we should not continue to entertain. I think of Ariel Sharon’s warning to President Bush after the last Iraq war that if Bush intended to go about the same dismantling of Syria as he had effected in Iraq, he would create an explosion throughout the Middle East.

I have gone on too long already. We need to engage in a thorough, probably painful reappraisal of what the structures of Syrian statehood should be, which we will support, and the conditions of their legitimacy that we can recognise.

15:40

[Baroness Nicholson of Winterbourne (Con)]

I thank the noble Baroness, Lady Cox, most warmly for giving us a chance to mourn for Syria. This war will end, yet I suggest the conflict will remain. As the right reverend Prelate said, this is a very difficult war. It is very unlikely that, when the bombs stop, the people’s minds will change immediately and become peaceful towards each other. We will have a society where the torturers and the tortured perhaps live side by side. Physical reconstruction begins immediately. That is the easy bit. But the conflict remaining is the thing we should think about.

I turn to Mr Attlee’s noble words in the preamble to UNESCO’s constitution, and remind colleagues that,

“since wars begin in the minds of men, it is in the minds of men that the defences of peace must be constructed”.

I offer a model that has been proved to work. Next door to Syria, not far away in Baghdad in the middle of the war in 2004, the AMAR Foundation, which I have the honour to chair, began to work on health for all. Why? Because this is the opposite of the inequality of men and races in ISIL’s doctrine. We go for the common welfare of mankind here today. Peace in the minds of men can be best reflected by helping the tortured person in physical and mental pain.

We began immediately in July 2004 in Al-Suwaib, where there had been no health anywhere ever. It was a completely confused society—violent, bullying, war, nothing at all. By February 2005 we had 12,000 patients. We moved on to the next centre, keeping that one going. By 2010 we had 30,000 patients. The second was Al-Jahadi. In June 2005 we had another 30,000 patients. They were all new builds—25 across the whole of Baghdad, with 500,000 medical consultations every year by 2010. We worked closely with and were financially supported by the 1st Cavalry Division, General Chiarelli, General Joe Anderson, General Odierno, General Mattis and General Petraeus. There was no interference, just support and understanding. The US military, like the British military, understands that at the end of the story it is hearts and minds, not bullets and bombs.

The creation of a peaceful and productive society has resulted in this. Compare Baghdad with Mosul and tell me that all these revolutions in Baghdad are just not happening. All those medical centres are still working. Indeed, the AMAR Foundation now has 1 million patients over the whole of society. On top of that, you add all sorts of other things as you build, train and replicate. You add culture, the education of humanity, the wide diffusion of culture, chess, music, dancing and writing. You train, teach and enhance. I tell noble Lords that by building on the base of terror and destruction, you can create peace, love, harmony, smiles and joy. I recommend this model.

15:44

[Lord West of Spithead (Lab)]

My Lords, civil wars are dreadful. We lost 800,000 in the English Civil War. To put that in context, that would be 9.1 million people killed if we had a civil war like that today. UK policy has prolonged the Syrian war. It has failed. It needs a rethink. Assad is loathsome, yes, but he is a fact of life on the ground. The other players are just as bad. There are no good guys in this sort of situation. At least Assad’s regime was secular. Our failure has allowed the Russians to become the powerbrokers in the region. We absolutely must change our policy or the war will go on and people will die.

15:44

[Lord Collins of Highbury (Lab)]

My Lords, I will be brief, as I want to leave as much time as possible for the Minister to respond—and obviously in three minutes we have time to ask only a few questions. I thank the noble Baroness, Lady Cox, for initiating this debate. It is our responsibility to try to create the conditions for the people of Syria to decide their own future. Every act of genocide or crime against humanity needs to be investigated and the people responsible to be held to account for their actions. Impunity must be challenged; we cannot have a situation where years and years of crimes against humanity are ignored. I accept that there are two sides to this equation but, as we have heard in the debate, the sides are very complex—it is not just the people of Syria who are involved in this crime.

I have heard coverage on BBC Persian news and in the Afghan media about Iran coercing Afghan refugees to fight on behalf of—and in favour of—the Assad regime in Syria. Many are young children; the youngest I have heard about was 16. The Iranians promise these Afghan refugees citizenship and money and then send them to fight in Syria. Can the Minister tell us whether these claims have been investigated by the British Government?

I am also very aware of the need for humanitarian support, and I have supported the Government’s actions in the region. I particularly want to hear from the Minister about what more we can do to support the host nations and to save their economies and societies from collapse from the weight of refugees currently in those countries. One obvious matter on which we need to hear the Government’s assessment is the progress of talks and the parties being brought together—we know that there can be no settlement without the Russians and the Iranians, but the Saudis need to be involved as well. We know that this conflict has wider implications.

However, at the end of the day, we cannot allow this situation where the crimes that have been described in this debate go on without action—we cannot allow impunity to be the watchword for the future in the Middle East. I hope that the Minister can assure us that work will continue to collect and retain evidence so that we can ensure that justice will be done in the end.

15:47

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, I congratulate noble Baroness, Lady Cox, on securing this debate. Working for a solution to the crisis in Syria remains a top priority for the Government. We recognise the realities of the situation across the whole of the Middle East and the implications of the displacement of so many millions of people, as well as the generosity of counties such as Lebanon and others which have hosted those forced out of their own country. The conflict has now lasted nearly six years and caused appalling human suffering, as noble Lords have graphically set out today: over 400,000 people have been killed, half of the country’s pre-war population has been displaced and millions of Syrians are in need of urgent humanitarian help.

The military offensive against eastern Aleppo before Christmas was one of the worst episodes of this terrible conflict. For over five months, more than a quarter of a million people were besieged and cut off from food and medical supplies as the Assad regime and its Russian and Iranian backers blocked access to humanitarian convoys. I was asked about Iran and the way that it recruits people to fight in Syria. I will certainly follow that up—I had not seen that particular newspaper report, but I will make inquiries. In Aleppo, every hospital in the eastern part of the city was put out of action by air and artillery strikes—it is only the Assad regime and its backers that have access to air and artillery strikes. Hundreds of civilians were killed. As the UN has shown, in October last year, there were 400 casualties in that one month alone.

That is across the range; I am not picking out particular groups, rather I am adding to the descriptions given by noble Lords about the impact of what happened. Ultimately, tens of thousands of people were forced to leave the city. All this was justified by the regime and its backers in the name of fighting terrorism. We reject that explanation, and indeed even Russia’s own figures show that terrorists accounted for only a tiny fraction of Aleppo’s population. The real targets were the moderate opposition forces. Far from combating terrorism, the actions of the regime, Russia and Iran have served only to fuel it and worsen the suffering of the Syrian people.

In reality, the regime and its backers are responsible for the vast majority of deaths and civilian suffering in Syria. I am not going to go into the detail of what happened in the prison highlighted in the Amnesty report, but any form of torture is wrong. Tens of thousands of people disappeared from their families and the streets into Assad’s clutches, and goodness knows what happened to them. The fact is that the UN and the Organisation for the Prohibition of Chemical Weapons have confirmed that the Assad regime has used chemical weapons. I understand that Daesh may have done so as well, but it is wrong for anyone to use them.

Even after the fall of eastern Aleppo, some 700,000 people remain in besieged areas across the whole of Syria, the vast majority of them trapped by pro-regime forces. The UK’s policy has always been to support a sustainable, Syrian-led political settlement to the conflict while doing everything we can to help and protect civilians in the country. We are not and never have dictated to the Syrian people what they should decide as to the outcome and what should happen to Assad, rather we have expressed our view that he has failed to protect his people. He has military backing from Russia and Iran, and without it he would be nowhere. Moreover, he does not care for his people as a leader should. That is our view and it is what we have always said. Any process to rebuild the country must be Syrian-led. I also take very much to heart the words of my noble friend Lady Nicholson. She said that even after a treaty has been signed, conflict remains afterwards, so it is about rebuilding. I agree with her that conflict remaining is what we should be thinking about today. There can be no military solution to the conflict; you can win a war, but you do not win a peace.

Recent developments have confirmed our assessment that the only way to bring back stability to Syria and thereby address the terror threat which is here and present with us today in the UK, and to allow the millions of refugees to return home, is a political settlement which ends the civil war so that we can then start to rebuild. As the Foreign Secretary has consistently said, it is our view that there can be no sustainable peace in Syria while Assad remains in power. Strange things have been said in the debate about the Foreign Secretary saying that Assad must stay. No, he has not. He has reaffirmed our belief that Assad cannot lead the country but that it is for the people of Syria to decide. That has underlined all our work throughout the peace negotiations. Those negotiations would include, in our view, the right of the 11 million people who have been displaced as a result of conflict to take part in free and fair elections. It may be some way off, but let us hope that we can all help Syria to reach that point.

My noble friend Lady Berridge raised in particular the question of displaced Christians and minorities. We are not in a position to track exactly how many and from which minority or faith have been moved and to where, mostly of course because as people have travelled and their groups have fragmented, no records have been kept either in the refugee camps or indeed where they have now settled in western Europe and beyond. As some noble Lords have reminded me on previous occasions, some people are scared to reveal their ethnicity and their minority status. We should think of that very carefully indeed when we think about rebuilding. I understand why my noble friend raises these points. It is right for noble Lords to ask about Syria surviving as an entire country. If Syria is to survive as an entire country, not with a little bit picked off by Assad because he likes that bit and does not like the rest but as a country in which Syrians are able to determine their own future, it needs to continue to adhere to its history of respecting different ethnicities and different religions. Over the last few months, it has been my privilege to meet senior faith leaders who represent a wide range of orthodox Christian faiths. They are very brave people. Having come here to give their views, they go back to Syria to tend to their flocks.

At the UN Security Council, we have consistently advocated for action to bring about an immediate ceasefire and enable humanitarian access for all those in need in Syria. At the Human Rights Council, the UK has led efforts to monitor human rights violations and abuses committed in Syria and to call for accountability for those responsible. My Whip is very kindly saying that I have only two minutes left. I think that I have a little more, but not much more. As she is my mentor, I normally obey her immediately.

In October we proposed, and secured the adoption of, a Human Rights Council resolution which mandated the UN commission of inquiry to investigate and report on violations and abuses during the siege and offensive against eastern Aleppo. We continue to support the important work of the UN commission of inquiry.

Humanitarian support was raised by many noble Lords. I say merely that it is vital that we all support that. I was very interested in what my noble friend Lady Morris said about the Business Task Force. That is a very practical way forward.

As regards recent progress, it was right for noble Lords to concentrate their minds on Astana and the progress that has been made there with the ceasefire. The ceasefire is not a political solution. It is valuable in itself. It would have been so much more valuable if, as a result, Assad had allowed humanitarian access, but still people are being starved. Those taking part in the Astana process recognise that the real progress is to be made by the Geneva talks. I welcome their recognition of that. The UN special envoy, Staffan de Mistura, has announced that he plans to reconvene talks between the Syrian parties in Geneva this month. We fully support those efforts.

I was also asked whether we should have an embassy in Damascus. I have answered that question in some detail on the Floor of the House. The simple answer is that we have no reason to trust Assad. To establish such an embassy would be a sign that we felt that he was the way forward. Our view is that he is not and that we must allow the Syrian people to make that decision. What decision the Syrians reach, we should then follow. It is as wrong to dictate to the Syrian people that they must keep Assad as it would be to dictate to them that they should get rid of him. We should listen to the people. We are a democracy. Let them be one.

15:58

Sitting suspended.

Sudan

Thursday 9th February 2017 Grand Committee

Question

16:00

Asked by

[Lord Hussain]

To ask Her Majesty’s Government what is their assessment of the situation in Sudan in the light of the threat posed by Islamic extremists in the surrounding countries.

[Lord Hussain (LD)]

My Lords, I have had the opportunity of visiting Sudan and South Sudan a couple of times in the last few years. During my visits to Khartoum, Darfur, Merowe, Juba and Rumbek, I had an insight into Sudan’s environment and culture. It is a vibrant, open culture with males and females working side by side in schools, colleges, universities, the media, politics and all other aspects of life. A visit to the Republic of Sudan completely changes the perception held by many in Europe and other western countries. I was particularly impressed by the large female representation in the parliament and the education from diverse cultures. The role of the arts and music in Sudan’s culture shows a moderate face of contemporary Islamic society that is unique to Sudan.

However, Sudan has long been beset by conflict. Two rounds of the north-south civil war cost the lives of 1.5 million people, while the continuing conflict in the western region of Darfur has driven 2 million people from their homes and killed more than 200,000. Sudan is taking significant steps to improve its relations with the breakaway state of South Sudan. The presidents of both countries are talking to each other more often. Both countries are co-operating with African Union efforts to resolve the outstanding disputes between them. The Government of Sudan are engaged in a process of national dialogue with more than 100 political parties and rebel groups and are committed to developing understanding and consensus among all the parties on national issues. We learned that armed confrontation between the rebels and government forces has reduced significantly.

African Union-United Nations Mission in Darfur representatives in Al-Fasher were not able to verify any aerial bombardments by the Sudanese air force taking place in the six months prior to our visit to Darfur. That does not mean that they did not take place, but UNAMID could not confirm any. In an answer to a specific question about getting access to reports of aerial bombings, the UNAMID representative said after a careful calculation that approximately 2% of the time, access is denied by government forces.

Decades of civil war have resulted in the breakaway of South Sudan into a separate country and the loss of 75% of oil revenue to Sudan. Oil was the main source of income for the country. Despite huge potential in the exploration and production of oil, gas and minerals including copper, silver and gold, the people of Sudan have suffered enormously under sanctions imposed by the United States which effectively barred Sudan from carrying out any trade with most European countries. The effects of those sanctions are visible in health, education and many other sectors.

On the question of extremists and the terrorist threat, one of the challenges Sudan currently faces is how to interrupt the networks and cells of groups which operate across the region and prevent them using the country as a transit area or destination for their operations. The Horn of Africa is one of the most unstable regions in the world because of war and civil conflict. Somalia suffered from a long and devastating civil war that left the country very underdeveloped. Ethiopia and Eritrea fought a bitter war over their border which resulted in tens of thousands of casualties on both sides and the situation yet to be resolved. South Sudan, the world’s youngest country, is in a real crisis with a bloody ethnic conflict still going on.

A number of terrorist groups are quite visible and active in the countries around Sudan. To the west, Boko Haram’s activities are increasing in Nigeria and other west African countries; Daesh has a highly visible presence in Libya; al-Qaeda is active in the Maghreb region, and Daesh and other extremists operate in the Sinai peninsula in Egypt. The Somali Harakat al-Shabaab al-Mujahideen movement is roaming the Horn of Africa, although Kenya and Uganda witnessed the deadliest attacks by al-Shabaab several years ago. Conflicts and political instability produce an atmosphere conducive to the growth of extremism, but factors such as underdevelopment, lack of access to education and employment, and marginalisation can all fuel the tendency towards violent extremism.

Sudan has been the victim of terrorist attacks in the past. An extremist group attacked and killed two US embassy staff in Khartoum in January 2008, and several Sudanese police officers were killed in a raid on a terrorist training camp in eastern Sudan in December 2012. Sudan was one of the initiators and founders of a very important regional structure comprised of security agencies on the continent known as the Committee of Intelligence and Security Services of Africa. Among other things, CISSA is tasked with strengthening co-operation in countering terrorism and extremism by providing information and analyses on the security threats posed by extremist groups and suggesting possible courses of action.

Since 2000, Sudan has engaged in close co-operation with the United States in countering terrorism. This co-operation has been acknowledged and appreciated by the US itself in an annual report issued by the Department of State on international efforts to counter terrorist activity. Sudan has constantly featured in these reports as working closely with the United States in combating terror. More recently, the executive order issued on 13 January by the then President Barack Obama, in which he announced the easing of US economic sanctions on Sudan, referred to the actions taken by the Government of Sudan in addressing regional conflicts and jointly countering the threat of terrorism as one of the main factors behind the decision. Sudan’s experience in combating religious radicalisation through rehabilitating and reintegrating extremists into the mainstream has attracted much attention as being effective in addressing some of these issues.

Christopher Shays, a former Member of Congress who chaired the National Security Committee of the Government Oversight Committee, and Richard Swett, who is also a former Member of Congress and former US ambassador, attested to this fact in their article “Enough already on Sudan sanctions”, published on The Hill website on 23 January 2017. They stated:

“Sudan has been among the most stable and consistent partners of the U.S. intelligence community in the war against terror in this century as the State Department has annually reported”.

One of the factors Sudan counts on in its counter-radicalisation efforts and in fighting extremism is to invoke the Sufi background from which Islam in Sudan derives its moderation and tolerance.

I am glad that in recent months the British Government have taken some positive steps towards a policy of engagement with the Government of Sudan. We have seen senior-level exchange visits, most recently by the Foreign and Commonwealth Office and the Department for International Development led by FCO Permanent Under-Secretary Sir Simon McDonald and DfID Permanent Secretary Sir Mark Lowcock. I was pleased to hear Sir Simon say:

“Relations between the peoples of Sudan and the UK are deep and historic, and our meetings over the last two days reflected that breadth. In addition to Sudan-UK bilateral interests, we also discussed human rights, conflict, migration, humanitarian and development assistance, economic matters, and the situation in the region. I am confident that our bilateral relations have a positive future”.


On that note, I have two questions for the Minister. First, in the light of the positive engagement by the Government of Sudan with regional countries and the USA in relation to deradicalisation and rehabilitation of extremists, will our Government use their good relations with the new American Administration to lift permanently the remaining sanctions imposed on Sudan? Secondly, what are the Government doing to establish stronger economic ties with Sudan?

16:09

[The Earl of Sandwich (CB)]

I will be the first to extend thanks to the noble Lord, Lord Hussain. I also declare an interest as a long-standing member of the All-Party Group for Sudan and South Sudan. I have come to respect the Sudanese people over many years, since working with NGOs back in the 1970s, mainly visiting refugee camps and health projects. I have also been on formal parliamentary visits.

Sadly, the country has been torn into pieces by three civil wars for most of its independent life. As a group, we get regular information from intrepid travellers, including our own noble Baroness, Lady Cox, and many other contacts in Sudan, on the tragic effects of aerial bombing and attacks on civilians. We are currently preparing a report on the UK’s relations with Sudan, and I propose to touch on one aspect of this relationship.

Although I am a critic of some of the policies of the Government of Sudan—the GOS—I am also encouraged that the GOS can take criticism, and on occasion even listen to it. We should not judge other nations too much, because they too have to follow their own traditions. I recognise that Sudan has to defend itself from enemies, but at the same time there are international rules prohibiting human rights abuses and violence against people who correctly choose to follow those rules. Clergy, students, journalists, activists and individuals who speak out are always at risk of imprisonment and even torture.

I have long worked with NGOs, and I feel it almost personally when Sudanese or any other NGOs are persecuted. They are part of the fabric of civil society, and to me they belong to the future of any nation, working to promote the rights of women, the role of students and improved conditions for the poor and the oppressed. Every religion understands this as charitable work, and in Sudan there are many voluntary agencies and faith organisations.

To their credit, in the last three years the GOS have made a new attempt—for the benefit of the outside world as much as that of Sudan—to set up a national dialogue, theoretically to draw in the many groups that might be termed the opposition. Even four neighbouring heads of state, with varying experiences of democracy, were invited to a recent conference. But the dialogue has consistently failed to attract key opposition parties such as the National Umma Party, which, along with the international community, insists that any dialogue must depend on a peace settlement in Darfur and the Two States.

The Government of Sudan’s disregard for the work of the United Nations over many years is astonishing—witness the most recent report from the UN panel of experts, which conducted 10 missions but was unable to obtain visas to enter Sudan. The panel complained about aerial bombardment in Jebel Marra, which is primarily against the Abdul Wahid branch of the SLA, but it was unable to investigate allegations of crimes against civilians and displaced persons.

Washington may be softening its approach to Sudan, but it still maintains economic sanctions and insists on progress with peace negotiations. The EU takes a similar stand, and the UK can hardly do less. In their own strategic dialogue with the GOS, we all expect Her Majesty’s Government to ensure that standards of human rights are maintained, and the views of civil society are fully taken into account. I am sure we will hear about that in the reply to the debate.

The Khartoum process, on which we intend to report fully in two weeks’ time, is a labyrinthine EU exercise, which the Brexiting UK may ultimately prefer to avoid. Intended to rein in so-called terrorism and migration towards the Mediterranean, it may have the unexpected consequence that our country will be more closely identified with police, border guards and soldiers than with the Sudanese people, or the migrants.

16:13

[Lord Ahmed (Non-Afl)]

My Lords, I thank the noble Lord, Lord Hussain, for securing this timely debate. Undoubtedly some noble Lords will address the threats posed by Islamic militants in the countries that surround Sudan. Its physical location places it at the heart of Africa.

The importance of an ally such as Sudan in the war on terrorism has always been clear. It was Sudan that identified, arrested and extradited Ilich Ramírez Sánchez—Carlos the Jackal—to France in 1994. It is also a matter of record that Sudan offered to arrest and extradite Osama bin Laden to Washington—an offer refused by the Clinton Administration, with disastrous consequences. Sudan has signed and enforced all relevant international anti-terrorist protocols. Sudan has co-operated on counterterrorism issues for two decades. As early as November 2001, US Deputy Secretary of State Richard Armitage stated that Sudanese co-operation on counterterrorism was “really terrific”. Sudan’s importance in the war against terrorism has intensified in the past few years. In 2012, Jean-Claude Cousseran, the former head of the French equivalent of MI6, said:

“Africa will be our neighbourhood Afghanistan”.


It is right that we look at the threat posed to Sudan by extremists in the surrounding countries, but we must also address the elephant in the room. We must look at the role played by British foreign policy in enabling the terrorist threat faced by Sudan and other African countries. British foreign policy in this respect has been nothing short of disastrous.

In 2011, the new coalition Government chose to unpick one of the few foreign policy successes of the Blair years—the containment of the Gaddafi Government in Libya, the abandonment of their nuclear programme and Tripoli’s wholehearted co-operation on counter- terrorism. Her Majesty’s Government chose to wage war against the Libyan Government in support of several anti-government Islamist militias with al-Qaeda affiliations.

In an article in the Guardian, I warned at the time that it was a dangerous assumption to believe that the Libyan rebels were all Facebook idealists. In their more candid moments, Western political and military leaders admitted at the time that they knew next to nothing about the gunmen for whom NATO was acting as a de facto air force and whom they were militarily equipping.

As clearly documented in Paul Moorcraft’s 2015 study, The Jihadist Threat, Her Majesty’s Government’s Libya policy demonstrated another clear contradiction. The United Kingdom has some of the most draconian anti-terrorist legislation in the world. While it is illegal for a young Briton of Pakistani descent to as much as look at a jihadist website in his bedroom, the British authorities turned a blind eye to the hundreds of young Britons of Libyan descent travelling from Britain to undergo jihadist military training and political indoctrination in training camps in Libya, Egypt and eastern Tunisia that were no different from those in Afghanistan. Many of those British citizens then went to fight with al-Qaeda-aligned militias against Gaddafi forces. The Daily Mail ran an article with the headline:

“Why do so many Libyan rebels seen on TV speak with British accents?”.


When I asked in a Written Question in mid-2015 whether Her Majesty’s Government were aware of any British Libyans who took part in overthrowing Colonel Gaddafi, and whether any of them had since returned to the United Kingdom, the Government stated that,

“we do not hold any information on this matter”.

The reality is that British foreign policy continues to create and enable not just our enemies but extremist forces that Governments such as that of Sudan will have to confront.

[Baroness Goldie (Con)]

Can the noble Lord move on so that I can answer the Question?

[Lord Ahmed]

We must learn with regard to British foreign policy toward Syria.

16:18

[Lord Sheikh (Con)]

My Lords, Sudan lies at the heart of a troubled region. A number of terrorist groups are visible and active in the region, including Daesh, Boko Haram, al-Shabaab and al-Qaeda. It is of course imperative that we do all we can to support the Sudanese in this respect. However, we must also build our relationship with Sudan more widely. Issues such as poverty, lack of education, lack of employment opportunities and wider community underdevelopment can fuel the marginalisation and frustration of young people, which can lead to the formation of extremist ideology. It is therefore only right that we seek to help Sudan improve its stability and provide opportunities for its people.

Last year, I led a delegation from your Lordships’ House to Sudan. Following our visit, we have established the APPG for Sudan, and I am the co-chairman of the group. The APPG has met Tobias Ellwood and formed an excellent connection with the FCO and our ambassador in Sudan. As someone who regularly promotes bilateral trade, I believe that much can be gained by both sides from increasing trade links with Sudan. I am pleased that a trade mission from the Middle East Association visited Sudan in December, and that a further mission, organised with the co-operation of our ambassador to Sudan, is scheduled for April. However, our Government should now send a trade mission to Sudan. There is also a keen interest in Sudan in establishing educational links between academic institutions. Following our delegation, Sudanese links are already being established with two major universities in England.

I welcome the fact that the United States has now agreed to lift the economic sanctions previously applied to Sudan. This is due to Sudan’s progress in improving humanitarian access, ceasing hostilities and enhancing co-operation on counter-terrorism. On that note, we must bear in mind the steps that Sudan has taken, and continues to take, towards combating the extremist threat. Sudan has developed an effective re-education and rehabilitation programme to reintegrate former extremists into mainstream society.

We should also acknowledge some of the good work already taking place between the United Kingdom and Sudan. We are the second-largest humanitarian donor to that country. We support health and medical programmes, many of which help children and displaced persons. Our APPG is sending a delegation of women parliamentarians to Sudan to look at issues relating to the health of women in Sudan.

Sudan still faces a number of challenges to do with extremism and other matters. We must, however, acknowledge the progress already made and help Sudan advance further. Adopting a hostile and isolationist policy towards Sudan will only make the country more vulnerable, threatening its people and the wider region. We should engage with Sudan and establish greater links, to the benefit of both countries and to help establish peace and stability in the region. Finally, I ask the Minister: what progress is being made on trade links with Sudan?

16:23

[Lord Alton of Liverpool (CB)]

My Lords, like my noble friend Lord Sandwich I am an officer of the All-Party Parliamentary Group for Sudan and South Sudan, and a former chairman of that group.

The implication of the Question from the noble Lord, Lord Hussain, is that Sudan is an island of moderation surrounded by Islamists. In reality, the reverse is true. In 2015 the report by the United Nations Panel of Experts on Sudan warned that the regime was providing “fertile ground” for Islamist extremists in neighbouring nations. For 30 years the regime has waged war on its own people. That is why the International Criminal Court has indicted Field Marshal Bashir on charges of genocide, war crimes and crimes against humanity. It is a scandal that he can travel with impunity and without fear of arrest to face those charges.

When I first visited South Sudan 20 years ago during the civil war, I saw schools, clinics, homes and churches that the regime had bombed, where between 1.5 million and 2 million people perished. That is why the country was torn in two. Later I travelled to Geneina in Darfur, where I saw a fraction of the 2 million who have been displaced and met the loved ones of some of the 200,000, mainly Muslim, people murdered. This is not history: last year there were more than 100,000 newly displaced people in Darfur and 3.2 million long-term displaced nationwide. Meanwhile, the aerial bombardment continues in South Kordofan and Blue Nile, and humanitarian access is still denied. Furthermore, I have sent the Minister Amnesty International’s report on the alleged use of chemical weapons in Darfur. I hope that the noble Baroness will address both issues in her response.

Consider also the life sentence and other lengthy sentences given to three Christians only last month. Will the Minister tell us what we are doing about this travesty of justice? What have the Government of Sudan done to implement the recommendations in the 2016 universal periodic review? What have we done to urge the Government of Sudan to implement the religious freedom protections codified in their interim national constitution, especially in the light of the 2016 USCIRF report listing Sudan as a “country of particular concern” for engaging in systematic and egregious violations of freedom of religion or belief? In this context, unlike the noble Lord, Lord Sheikh, I am appalled. However, according to the noble Lord, Lord Price, in answer to a Written Question from me earlier this week,

“the UK will consider opportunities to promote trade with Sudan”.

He should recall Churchill’s warning that it is dangerous to feed crocodiles if you hope that they will eat you last.

There are two faces of the Government of Sudan. They claim to have disavowed the worst forms of extremist ideology but, as academician Suliman Baldo said, the Sudanese Government have become adept at engaging in intelligence sharing with important international partners while tolerating Salafist groups internally. The International Crisis Group says that Sudan tolerates radical Islamists and, most recently, supporters of IS when it is politically advantageous to do so. Extremism comes from within Sudan and from the highest levels: Field-Marshal Bashir has said it is his ambition to turn the entire country into a sharia state. Extremist groups operate with the approval of Sudan’s religious scholars committee, while the journalist Gill Lusk says the regime uses,

“the Salafist … and other splinter groups both as deniable policy instruments and as bargaining chips”.

In the long term, the fight against extremism in Sudan will depend on an inclusive, democratic transformation that is sustained by a free and active civil society. It is that development we should be supporting, rather than propping up an indicted regime. Sudan is playing a dangerous double game, to which the international community should be wary of falling victim. Beware the crocodiles.

16:27

[Baroness Tonge (Non-Afl)]

My Lords, I congratulate the noble Lord, Lord Hussain, on securing this debate and declare an interest as a founder of the All-Party Group for Sudan and South Sudan, along with Hilton Dawson MP. I am now a member of the All-Party Group for Sudan.

My first experience of Sudan—indeed, my first experience of a developing country—was as a very new MP in 1998. In south Sudan, I lay on the floor of a tent in a village compound at night and listened to the sound of drums, which I was told were warning of another attack from the north by militia who travelled down on the train to Wau to terrorise the south, sent by the Sudanese Government. They were the “baddies”, I was told. The message I got was that it was a simple fight for independence. I think not. I have since learned that the Sudanese Government were right in their scepticism that the south could form a stable government —I shared that view, and the Nuer and the Dinka have demonstrated that in recent years.

That is not the only problem for the Sudanese Government, with rebel tribes and individuals trying to wrest power from the Government all the time. It is a huge and diverse country. Sudan has problems to face both within its own country and from neighbouring countries and the terrorism they export—others have pointed that out during the debate, so I will not repeat it. I add only that there are other counties that deserve our censure, far more than Sudan perhaps. These are countries we happily trade with and enjoy friendly relations with—Saudi Arabia heads my list at the moment, currently causing famine in Yemen and hundreds of thousands of deaths. Why is the Foreign Office not speaking out about this?

I want now to say something completely different, as a tribute to Professor Hans Rosling, the Swedish statistician who made statistics fun and bearable. He died two days ago. It was he who first explained to me, with his wonderful graphics and bubblegrams, the clear link between maternal health, family planning, smaller families, and more girls accessing education and being able to contribute to their country’s economy, which then grows. The clear link has been made between women’s reproductive rights and economic progress. Sudan has indeed listened to Han Rosling’s message and, for this reason, should be encouraged. According to the World Health Organization, maternal mortality has more than halved in 10 years, and the under-five mortality rate and neonatal deaths have also declined. All these rates are, of course, still very high—they started from that high level—but the plan to further reduce them was devised by the Sudanese Government in 2013 and it is to be encouraged and commended. Despite laws in the Sudan banning both FGM and child marriage, they still contribute to maternal deaths and morbidity but the Sudanese Government are trying hard on these issues. Led by the wonderful Ahfad University for Women, which is near Khartoum, and many women parliamentarians—I think their percentage is in fact higher than we have here—a lot of progress is being made for women in the Sudan but, as I say, there is a long way to go. We should be helping Sudan in every way we can, not condemning the Government.

16:30

[Baroness Cox (CB)]

My Lords, I too thank the noble Lord for this opportunity to discuss issues related to Sudan and the relation of Islamist extremist nations with Sudan, and vice versa. Given that it is widely believed that neighbouring Islamist regimes support President Bashir because of his commitment to make Sudan a unified Arabic, Islamic nation, it is not irrelevant to focus on his Islamist extremist policies of the ethnic and religious cleansing of indigenous African peoples and Christians, traditional believers and Muslims who do not support his Islamist ideology. I would also mention that in Nigeria, it is widely believed that Sudan supports the Islamist Boko Haram.

I have recently returned from a visit to Sudan, and obtained first-hand evidence of the implementation of its genocidal policies. The Government of Sudan are blatantly violating conditions required by the United States for the lifting of sanctions by their total disregard of the ceasefire with continued fighting in Darfur, including the attack in Nertiti by the Sudanese Army under the command of Colonel Mohamed El Tayeb. The best estimate is that in that attack, 16 civilians were killed and some 72 to 75 civilians were wounded.

This is an intentional policy. On 22 December 2016, President Bashir delivered a speech at the military Merowe archery festival, in which he vowed to continue seeking a military solution for the internal conflicts and bragged that the unilateral cessation of hostilities would terminate within a week, irrespective of Khartoum’s declaratory policies. That has been proven true in Blue Nile, with the fighting in January 2017 a direct continuation of clashes started in early December 2016. There was no pause or reorganisation of Sudanese armed forces—that is, the ceasefire did not exist for them operationally. On 9 January, while we were in the region, the Sudanese army launched a major offensive on the SPLA-North forces in Arum, Blue Nile state, and villages were bombed sporadically.

In the Nuba mountains, there are numerous reports of continuing missile attacks on civilians, creating such terror that families have been forced to flee their homes and live in snake-infested caves with no medical care and acute shortages of food. Three weeks ago, I climbed one of those Nuba mountains to meet families hiding in those caves. I met a girl who had been bitten by a cobra; a woman dying of malaria with no treatment; and a man whose five children had been burnt alive when a shell hit the place where they were sheltering. People would not be living and dying in these appalling conditions in Sudan unless forced to do so because of continuing military offensives by Khartoum.

This highlights the crisis of humanitarian need: UN officials acknowledge that because of the ongoing disagreements over humanitarian access points,

“the civilians in the war-affected areas continue to suffer”.

The UN now estimates that over 600,000 people are in dire need of humanitarian assistance in the southern and western parts of the Nuba mountains and in Blue Nile state. This raises the issue of the continuing, urgent need for cross-border aid, an issue I have raised repeatedly with Her Majesty’s Government. But nothing has happened so far and people continue to die because of a lack of food and healthcare.

The international community has the responsibility to protect and to provide. It is manifestly failing on both counts by allowing the Government of Sudan to continue to slaughter their own civilians with impunity and by failing to ensure the provision of life-saving medicines and food for hundreds of thousands of civilians. Will Her Majesty’s Government at last take urgent action to ensure cross-border aid, and to end the impunity with which the Government of Sudan are continuing military offensives despite their alleged commitment to the ceasefire?

[Lord Sheikh]

My Lords, before the noble Baroness sits down—

[Baroness Goldie]

Order.

16:35

[Baroness Uddin (Non-Afl)]

My Lords, I thank my noble friend Lord Hussain for initiating this debate at a time when our own Government are rephrasing their relationship with Sudan. I express my gratitude to my noble friend Lord Ahmed for his remarkable and long-standing commitment to the people of Sudan and for introducing me to that beautiful country with immeasurable potential. We have a long history with the Sudanese people that they have not forgotten. During our visits, we met a number of women parliamentarians and, together with the noble Baroness, Lady Hussein-Ece, who is not able to take part today, through the wonderful team at IPU we were able to organise a successful visit of six powerful women parliamentarians to our Parliament. I do not need to labour the importance of such exchanges to noble Lords but both these visits provided a great insight into women’s presence in the political, business and education sectors. While we cannot overstate the impact of international sanctions as barriers to women’s equality and well-being, women across Sudan are successfully working within those constraints to advance women’s rights. The impressive work of the British Council should also be noted here.

On our last visit we were able to see staff and students at the University of Khartoum, meet families in Darfur itself, witness an architectural excavation in Jebel Marra and meet UNIMID peacekeepers. On neither of these visits did we witness an Islamic state; clearly the President of Sudan has failed for 20 years to Islamise the whole country. What I was not prepared for was the effect of the crippling sanctions on the Sudanese people themselves, with basic healthcare not available, from maternity provision and eye drops to diabetes drugs and asthma pumps. I visited a hospital unannounced, having chosen it out of three or four, and I was utterly shocked—I was almost in tears— at how empty the building was. It did not lack patients, thousands of whom lined its corridors, but the medicine cupboards in the treatment rooms were bare. I therefore welcome the latest pathways to lifting international sanctions. The people of Sudan deserve to be free of these constraints and suffering that are not their fault. After two decades, it is time.

Britain should take a lead in this new era of co-operation as China and Saudi Arabia are already present in the region with investment. Crucially, the increasing threat of terrorism in Africa and the Middle East, with the presence of Daesh, al-Qaeda and Boko Haram among others on Sudan’s border, have rendered compelling the need for international actors to encourage Sudan in its anti-extremism drive and its threat against its neighbours. Sudan is now at the forefront of countering irregular migration and human trafficking, and we can achieve peace and reconciliation and the protection of human rights only if we assist Sudan post-sanctions with the necessary skills and resources.

Given the current theatre of conflict and wars, which as we have witnessed have brought nothing but death, destruction and enmities, I no longer believe or accept that continually and complacently adding further to these conflicts does any justice to the people of Sudan or our own regional presence and interest. Sudan is an important strategic partner in fighting terrorism and radicalisation, and is managing significant numbers of incoming families from South Sudan, Libya and elsewhere. It does not call them refugees. Let us not be self-righteous about individual countries when we so often suffer from selective amnesia about the impact of our own history. Today we know what has happened to minorities in many Gulf and Middle East conflicts.

As negotiations progress, I wish to see us work with the Sudanese Government to ensure that they embody human rights and the rights of minorities at their core. We can do that only if we are at the forefront of the partnership to rebuild Sudan. We should do so alongside the impressive Sudanese diaspora, many of whom see this as a glimpse of hope. I am glad that through the APPG on Sudan we aim to continue to strengthen our ties with the many professionals who are willing to utilise their talents and skills for a safe and secure Sudan.

16:40

[Lord Collins of Highbury (Lab)]

My Lords, I thank the noble Lord for initiating this debate. Sudan is a country that has a more or less constant history of civil wars, military coups and human rights abuses. As the noble Lord, Lord Alton, pointed out, President Bashir has been indicted under the International Criminal Court. We all hope that Sudan is on a road map, and we have of course heard about the African Union’s road map. Can the Minister tell us more about how that road map might lead to greater peace and security in a country that deserves far better?

We have heard in the debate about the recent visit to Sudan—just a few weeks ago—by Sir Simon McDonald from the FCO, who was accompanied by the DfID Permanent Secretary, Sir Mark Lowcock. In their exchanges with the Government of Sudan, and also with opposition leaders whom they had the opportunity to meet, we are told that they raised the question of human rights and migration, and humanitarian and development assistance. What is the Government’s assessment of those discussions in relation to human rights abuses? What assurances did they get on how these might be addressed?

We have also heard in the debate about bringing Sudan back more formally into the international community. We heard recently that President Trump had included Sudan in his ban on visitors to the US; what is the Government’s assessment of the impact that the ban might have in terms of giving succour to the terrorists? The Home Secretary described the ban as a “propaganda opportunity” for ISIS. As we have also heard, DfID spends nearly £50 million a year in Sudan. I hope that the Minister can tell us what the Government’s assessment is of the impact of that aid in transforming the country economically and, more importantly, in terms of civil society and defending human rights.

16:42

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, I also join in congratulating the noble Lord, Lord Hussain, on securing this debate. As he made clear, extremism is a global problem. In all its forms it attacks the fundamental values that bind us together as a global community and undermines our efforts to build a better, more tolerant world. The UK Government are committed to working with our international partners to tackle the threat posed by extremism both here in the UK and overseas. Today I will therefore reflect on the current situation in Sudan and the region, which has been set out by noble Lords—I would say set out clearly, but there is disagreement among noble Lords about some of the major parts of the detail, but hearing these differences is part of the importance of debates such as this. I will also reflect on the work of the UK Government as we try to help that country tackle extremism.

Sudan forms part of the fragile Sahel region, which is blighted by internal conflict, weak governance, violent extremism, and the spillover of conflicts outside its borders—most notably, as we were reminded, from Libya and Nigeria. Continued instability there poses a threat to security in the wider north and west Africa region. Currently, the main terrorist threat in the Sahel is from al-Qaeda in the Islamic Maghreb. A number of other terrorist groups also operate in neighbouring Egypt, primarily targeting Egyptian state and security officials, and in Libya. In particular, of course, we have to mention Daesh.

In Sudan itself, the long-running conflicts in Darfur and the Two Areas have created a dire humanitarian situation across the country, with approximately 5.8 million Sudanese in need of humanitarian assistance. I pay tribute to the work of the noble Baroness, Lady Cox, in this respect. She has been consistent in the assistance she is trying to give to the country. It is important for the Government of Sudan to be committed to the international proposal for improving humanitarian access to the Two Areas. They most recently expressed support for that when the Foreign Minister, Ghandour, spoke in a meeting with the UK special representative to Sudan on 24 January. We continue to urge the SPLM-North to agree to these proposals to guarantee medical supplies brought directly to the areas under its control as a way to unblock the whole system and obtain a broader agreement for long-term access. As I have mentioned recently in the House, there was an opportunity for an agreement whereby USAID would have delivered humanitarian support, but it was SPLM-North that walked out of the talks, which was disappointing.

There has recently been a reduction in the level of armed conflict between the Government of Sudan and armed movements. That is encouraging, but I understand the concerns of noble Lords. We fully support the peace process led by the African Union High-Level Implementation Panel. It is vital that all sides reach agreements on the permanent cessation of hostilities and unrestricted humanitarian access to the conflict areas. Sudan’s national dialogue has the potential to solve this matter. We were pleased to hear that the next stage will remain open and inclusive for all Sudanese political parties, and we urge all sides to commit to it fully.

We are concerned, however, by the arbitrary arrest and detention of human rights defenders and opposition party members in Sudan. We have raised our concerns with the Government of Sudan and will continue to do so. The noble Lord, Lord Alton, rightly raised concerns about the three Christian men who were sentenced on 29 January. We continue to work closely with human rights lawyers working on cases relating to freedom of religion or belief, and we will continue to raise cases of concern directly with the Government of Sudan as part of our ongoing human rights dialogue. It will not surprise the noble Lord to hear that we are in contact with the Czech Republic, because of course it is one of its nationals who has been sentenced. Clearly, we are extremely concerned by the results of those trials.

Sudan’s central position between east and west Africa means that it has historically been a crossroads between these two regions, as well as Libya to the north. It is not just a crossroads for ordinary traders; it is a key facilitation hub for organised criminality, such as smuggling and trafficking in people. These routes are highly susceptible to exploitation by terrorist groups. We have been working with our international partners and other regional Governments to help to defeat terrorism and bring stability to the Sahel. In the past, the Sudanese Government have failed adequately to co-operate or confront the problem of Islamic extremism and human trafficking. That is why it is crucial that the UK engages with the Sudanese Government to encourage them to work more closely with the international community. I believe that progress is being made.

Questions were asked about the lifting of US sanctions. It is clear that progress has been made—national dialogue is an important development and no one should ignore it, and the ceasefire is holding to the main part. There is an issue about Nertiti—I understand that—but there is a problem with getting evidence on it. In the Two Areas, we are hearing from the SPLM-North that there is no breach of ceasefire. So let us recognise the progress made by the Government of Sudan when we can. The fact is, however, where the Government of Sudan have begun to show that they are willing to co-operate with the international community to counter violent extremism, the international community has to re-evaluate its position. The previous US Administration did that and made progress with temporarily lifting some of its more damaging economic sanctions. If made permanent, the lifting of US sanctions is considerably likely to strengthen Sudan’s economy, which in turn could increase the resilience of the country to violent extremism.

I am advised that yesterday, the United Nations Security Council unanimously extended the mandate of the UN sanctions regime on Sudan, including the panel of experts. I say again that there is some sign of progress. While the panel has faced obstacles from the Sudanese Government, it has now received visas to travel to Sudan to monitor the implementation adherence with sanctions. We will continue to urge the Government of Sudan to co-operate fully with the panel of experts and to adhere with the UN sanctions regime. I feel that it will not only be the Government watching that—noble Lords here will monitor it very carefully with some of their excellent contacts.

We can also play our part, but we have made it clear to the Government of Sudan that the current conflicts, human rights abuses and business environment remain obstacles to a sizeable increase in interest from British companies. We continue to urge the Government of Sudan to make progress on all the issues raised by noble Lords today around threats to the human rights and security of all people in Sudan. It should not be some ethnic groups that have the ability to prosper—it is for all.

I assure my noble friend Lord Sheikh that we are working towards promoting and protecting good governance, the rule of law and human rights as the best way to ensure our collective security. Our work is focused on two areas. First, on ending conflict and, secondly, on improving resilience. In that way, there must be room for us at some stage to work further with the Government of Sudan to make sure that the national dialogue works, is open to all and that we see an improvement in human rights. It is only that improvement that will enable further engagement. Our strategic dialogue provides an important platform for us to discuss areas where we would like to increase co-operation with the Sudanese Government, such as countering violent extremism and migration. We will continue our conversation on these issues at the next dialogue in Khartoum in March.

Radicalisation within Sudan is another issue of concern. Extremist groups could seek to exploit vulnerable communities in order to incite political unrest and anti-western sentiment. Here too we are taking practical action. We are working with staff, students and graduates at the University of Medical Sciences and Technology in Khartoum to raise awareness of the issue and suggest options for tackling the risks. As part of our engagement with the university and its alumni, we have also continued to provide outreach material on countering violent extremism to students, staff and parents, and supported the visits of expert speakers to Sudan from the UK, including the imam to the British Armed Forces.

In conclusion, violent extremism is a growing concern in many parts of the world. That includes the Sahel and extremist groups operating in the region which continue to pose a threat to Sudan. It is important that the noble Lord, Lord Hussain, worded his Question for Short Debate to put Sudan within the wider context of threats around the region, so that instead of focusing only on Sudan, we consider the Question against the background of threats that Sudan faces and how we need to build resilience across the region. We are encouraged by the new willingness of the Sudanese Government to co-operate with international partners on these vital issues. Through our strategic dialogue with the Government of Sudan we will continue to promote further co-operation. By working together, we will overcome intolerance and build peaceful and prosperous societies for all our citizens. It takes all of our energies in government to do it; I know we can count on the energies of noble Lords here to join in that work.

16:54

Sitting suspended.

Education: Maintained and Independent Schools

Thursday 9th February 2017 Grand Committee

Question

17:00

Asked by

[Lord Lexden]

To ask Her Majesty’s Government what assessment they have made of the progress of partnership work between maintained and independent schools.

[Lord Lexden (Con)]

My Lords, I declare at the outset my interest in the subject of this debate. I am a former general secretary of the Independent Schools Council—the ISC—which both accredits, and works on behalf of, some 1,300 of the 2,500 independent schools in our country today. Although more than 80% of pupils being educated in the independent sector attend ISC schools, it should be noted that there are more than 1,000 other schools in the sector which prefer to go their own way. I am also president of the Independent Schools Association, one of the ISC’s constituent bodies. I thank all noble Lords who will be contributing to this debate.

I sought this debate primarily to provide an opportunity for the further discussion of partnership work between ISC and maintained schools, which featured quite prominently in the debates in 2015 on what is now the Charities (Protection and Social Investment) Act. At the Report stage on that measure, which took place on 20 July 2015, important commitments were given on behalf of the ISC and the Government by my noble friend Lord Bridges of Headley. I thought it would be useful to revisit those commitments and review progress.

I would also like to comment briefly on the proposals relating to independent schools in the Government’s remarkable consultation paper, Schools that Work for Everyone, which was published last September, and on the ISC’s response to it. The document’s remarkable features include poor drafting that invites stern rebuke from the nation’s English teachers. Its opening sentences embodies a tiresome party political catchphrase:

“This consultation sets out the Government’s ambition to create an education system that extends opportunity to everyone, not just the privileged few”.


The Government cannot possibly believe that the aim of education reformers since the 19th century—Liberal, Labour and Tory—has been to fashion a system that serves the interests of only a privileged few.

Partnerships between the two sectors of education have existed for a long time. When I arrived at the Independent Schools Council in 1997, exactly 20 years ago, I found a well-established tradition of encouraging work with maintained schools and local communities. An annual audit was published. It occasionally got a small paragraph in the press. For the first time, the Government started to show interest. In 1998, the then Labour Minister of State for School Standards, Stephen Byers, established an advisory group on independent/state school partnerships which awarded modest grants to specific projects involving schools in both sectors.

I circulated a paper in 1998 on behalf of this group. It stated: “The general perception has been, for far too long, of two education sectors working separately towards the same goal—the success of their pupils. Since all schools are in the business of trying to secure the best education for their pupils, each sector has a wealth of skills and expertise from which the other could benefit”. The stress that was laid on the value that both sectors can derive from partnership was—and remains—crucial. It became one of the themes of Labour education policy.

What we lacked over the years was really authoritative, detailed information about the extent of partnership work. The need for it emerged clearly during the debates in 2015, to which I have referred. Some noble Lords, who felt strongly that not nearly enough was being done, pressed for legal compulsion, particularly in the spheres of music and sport, where much is now being done in partnership but where undoubtedly still more could be achieved. Facts were required. As Dr Mark Bailey, High Master of St Paul’s School, has said recently:

“It’s an area of education that is particularly vulnerable to wide generalisations and a lack of full understanding”.


In July 2015, the ISC committed itself to developing a website which would, for the first time, provide a platform where partnership work could be exhibited, and to which schools in both sectors could contribute. The website, entitled Schools Together, was launched in January 2016; 1550 projects now appear on it. Furthermore, the ISC is, as it promised in 2015, now gathering fuller information than ever before from member schools—information that it is sharing with the Charity Commission. For its part, the commission has produced fuller guidance on public benefit and now requires partnership work to be reported to it in greater detail.

In all this, it is essential to bear one point above all in mind: independent schools vary so greatly in size, in income, in areas of particular expertise and much else besides, that uniform obligations in respect of partnership work could not be laid equitably upon them. As the ISC has put it in its response to the Government’s consultation paper:

“We have found that successful partnerships rest on strong local relationships and freedom for schools to support them according to their particular circumstances and capabilities”.


That has always seemed to me the right approach. I hope this Government agree with it.

One further commitment was given in July 2015. My noble friend Lord Bridges announced that the Charity Commission would carry out a research project so that discussion could be based,

“more solidly on a better understanding of what is actually the case”,—[Official Report, 20/7/15; col. 974.]

where partnership work is concerned. He added that the research would be published and debated in the House. The Minister will no doubt report on the progress of this important work when he comes to reply.

I have spoken disrespectfully about certain aspects of the Government’s consultation paper. I do not have undivided admiration for the section of it which sets out proposals for independent schools. Though proper acknowledgement is given to existing partnership work, the proposals are expressed in the language of intimidation, not partnership, which is astonishing from a Tory Government. The message is unambiguous: work hard to add,

“extra capacity to the state sector”,

and create masses of free places in your own schools, or your charitable status will be at risk. Nowhere is there any recognition of the fact that the total annual benefit arising from charitable status is some £150 million, while ISC schools, some of which do not even have charitable status, devote over £850 million to means-tested bursaries and fee remission.

The ISC has replied to the Government in the language of partnership. It has proposed jointly funded free places and consortia of schools to help create more good places in the maintained sector. Discussions between the ISC and the Department for Education are in progress. I hope they reach a satisfactory conclusion.

Back in 1997, the Labour Government set out three guiding principles: first, “the high standards being achieved in independent schools must not be compromised”; secondly, “change must be voluntary”; and thirdly, “there must be no imposition from above”. The Government should stick to those well-tried principles.

17:08

[Lord Parekh (Lab)]

My Lords, I thank the noble Lord, Lord Lexden, for securing this debate and for introducing it so well.

The Prime Minister has spoken often about creating a meritocratic Britain. By this she means that a good education should be within the reach of all our children. It is therefore a scandal that nearly 90% of our independent schools are rated good or outstanding and 80% of them outstanding, but only 20% of state schools are regarded as outstanding. This leads to a waste of talent because state schools do not produce outstanding children. It leads to a shortage of skilled labour and, more importantly, to resentment and frustration among a large number of state school pupils who feel that they are not getting their due for their talent.

It is striking that it is the threat of Brexit that has alerted us to the enormity of this danger and, as the Prime Minister said, now that Britain is about to embark on a new adventure it is time to rethink all the old certainties. It is unfortunate that a question of this magnitude should come up in this context, which is polemical, polarises the country and does not allow us an independent assessment of the two concepts of schools.

When we talk about independent schools it is also worth bearing in mind that there are about 2,300 and 50% of them are pretty small—with fewer than 150 pupils—which educate between them just under half a million pupils aged five to 15. The partnership between state schools and independent schools has to be seen in that context. So how do we improve state schools? Various Governments have come and gone and floated all kinds of ideas and we have more or less agreed that if we are going to improve state schools we will have to think in terms of allocating more resources to them, with better teachers, greater autonomy and leadership at the top, and increasing parents’ say in how they are run. Independent schools can and do contribute to this, but not for the reasons that are generally cited. The reason cited is that independent schools get charitable status; they get relief from business rates and therefore, as a kind of contractual quid pro quo, they should give something back to the state which has given them so much.

I do not think that argument particularly works or is even particularly valid. The independent schools if pressured could say that they are not interested in accepting the business rate relief and the charitable status. What do you do then? Go back to square one? They might say that the concession they are getting by virtue of not having to pay business rates is so small that it is not worth the bother. What do we do then? Are they completely exempted from all the obligations that they have to state schools? I suggest that to couch the argument in terms of a contractual quid pro quo is dangerous for both independent schools and state schools.

We should rather think in the following terms. First, independent schools by virtue of the fact that they are outstanding and getting wonderful results have certain moral obligations to their fellow citizens. I emphasise the importance of moral obligation because it cannot be denied that those schools that have the resources and the capacity ought to be able to contribute to those which have fewer resources and less capacity.

I also think of the argument articulated in the language of enlightened self-interest. If the distance between state schools and independent schools remains as large then there is going to be resentment and constant hatred for independent schools, and that is not the climate in which independent schools will be able to function. There is also crude self-interest, because independent schools are increasingly becoming homes for the children of foreigners. I was told recently that the number of overseas nationals, especially Chinese and others, whose children are admitted to our schools, either here or in their campuses abroad, is much larger than it used to be—about 33% larger over the past five years. If this is the situation they are going to be reduced to then it is rather important that they should think in terms of collaborating with state schools in our country.

The question therefore is to articulate why it is important that the two sets of schools should be able to co-operate. I think they can co-operate at various levels, as the noble Lord, Lord Lexden, pointed out, and I want to add one or two other ideas. They can lend their staff, especially in minority subjects; provide access to facilities—for example, in science labs, sports facilities, or music; extend a larger number of scholarships than they have done so far; provide teaching, coaching and career advice; and share best practices. These are some of the ways that independent schools can help state ones; there are many others.

Let us remember one important thing. The two sets of schools are never going to be complete partners. Rivalry is built into their structure. Independent schools are in the business of recruiting fee-paying pupils, and fee-paying schools are decidedly what state schools are not. Given that there is this rivalry and that independent schools are going to be looking for children who are prepared to pay, why should they raise the standards of state schools? If the standards are raised to a high level, why would anybody want to go to independent schools? On the continent of Europe, in France and Germany, very few students go to independent schools, because state schools are considered sufficient. I am not saying that it is in the interest of independent schools to impoverish or keep state schools parasitic on them, but I emphasise that there is a relationship of patron and client. It is not a relationship of equals, but has an element of rivalry. Consistent with that, we should certainly think of collaboration between the two, but not raise our expectations too high.

17:16

[Lord Addington (LD)]

My Lords, when I put my name down for this debate, I wondered whether I was getting into very deep water. I can now confirm that I am at least up to my waist. When we talk about independent schools assisting the state sector, we are talking about something that has happened, or where there has been a far higher degree of interaction than most people realise. I do not know whether it is an advantage, but I have the experience of knowing how, for instance, the private, independent providers have assisted in things such as provision for those with special educational needs. It is also worth noting that certain independent schools have been a resource that has been used, even though that was often in state boarding schools, for those with severe problems who are identified and can get through—and have done a pretty good job in many cases. That is probably because the state system has not provided for those problems.

How do we develop a relationship where somebody is providing a service—and charging, to an extent—for somebody not doing so? As has already been mentioned by virtually everybody today, there is a degree of clash here. Many of the smaller schools that did it have disappeared as provision got slightly better in the state sector. That is a conflict. More specialist providers, for people who have failed within the state system, still have a role—the recovery centre, effectively. How do we take that expertise and use it?

Another subject is sport, although the noble Lord, Lord Moynihan, has beaten me to that. It is something of a scandal that, if you want to win an Olympic medal, you can up your chances by going to an independent school. It might be that most of the sports that are attracting the mainstream and are easy to access do not have very high Olympic status—football being the classic with rugby league following rapidly. If you have schools that are not going on to that pathway, how do we provide support and help? If we are not going to start sending people on sporting excellence education pathways, how do we provide the assistance? Asking the independent schools, “What are you doing that identifies here?”, and trying to bring that identification process into the state system would be very interesting. We also need to identify that some of these answers will not be readily available if you are in a state school. In the sporting world, you will be much better off if that independent school talks to the school and the local sports clubs. You are not identifying someone with raw talent; technically, you are identifying someone who enjoys training. That is much more important in the modern sporting environment. Roy of the Rovers kicking a ball around the pitch has gone, certainly if he wants to be an international-quality sprinter.

How can we bring the expertise in this environment forward to help in this sector? If we are to take over and help to run schools, which from what I have read has not been a totally successful experience so far, how can we get this expertise brought in? To go back to special educational needs, for instance, are those with less severe needs better dealt with by the independent sector? What if they go to a state-run school that is bigger, with more people, and is being told to be more flexible, perhaps by allowing better technology into the classroom? How does that fit into a classroom? I will not go into a diatribe about SATs and the English-language testing that goes on for dyslexics at the moment—I shall save that delight for the Minister on another day—but how do you build flexibility into the current very regimented system? How do you apply that?

These are difficult tasks. If we find a way forward, that is great, but if we cannot, what are we doing? Are we encouraging the independent sector simply to offer more bursaries? That might help some individuals, but will it help the majority of schools? No. How are we to get that interaction and expertise through? If the Minister has good examples of pathways that bring in expertise in general fields to the places where we know we do not do that well—in the state sector especially, as the independent sector does better—I am all ears.

It is the identification of how to apply the extra information and expertise to these schools that will be very interesting. If we do that, I hope we will establish a path that in a short time does not need the independent sector. That brings us right back around to the competition level. I speak with some knowledge on this: you do not go to the independent sector if you think you will get the service in the state sector. Good state schools often have very careful application processes for getting you in there—that is, where you live and house prices. If we can ensure that we have this identification pathway going through, we are doing something good here. If we do not, it will be window dressing.

17:22

[Lord Lingfield (Con)]

My Lords, I thank my noble friend Lord Lexden for instigating this debate. I remind noble Lords of my education interests in the register.

I entirely support independent schools giving assistance and advice to schools in the state sector. My noble friend and other noble Lords have given examples of good practice in this area. However, I have several concerns. I would want to be sure that independent schools did not feel under pressure to join in. My noble friend’s speech today has caused me some anxiety, because charitable status could be in danger if schools do not co-operate with the Government’s wishes. Some are fearful that the reporting procedures could lead to the construction of a league table of achievement in the help they are able to give to the state sector.

At the moment, in principle, the removal of charitable status means that a school’s assets could be sequestered and given to another charity. That is unlikely to happen, as we know, but such a threat is still felt by independent schools to be in the air.

Charitable status brings with it certain fiscal advantages—usually cut-price local taxes, exemption from corporation taxes and the ability to obtain gift aid on donations towards certain charitable ends, although not of course on fee income. However, that is not the huge subsidy that some newspapers seem to imagine; independent school governors estimate that those tax advantages account for about 3% of income. There can be few schools which do not spend this on pupils from homes that cannot afford fees. Nationally, charitable status brings independent schools an annual notional tax saving of some £100 million; however, research suggests that they spend more than £260 million on bursaries—bringing it to the sum that my noble friend mentioned.

Independent schools have to tread carefully when assisting state schools. First, they have to reassure fee-paying parents that such a charitable effort is worth while and the cost of it unlikely to diminish their own children’s education; secondly, they have to be extremely careful not to give the appearance of patronage. However, if handled carefully, all this can be extremely beneficial. I have seen wonderful projects involving the teaching of reading by independent school sixth-formers at local primaries, from which the older students gained as much as the younger ones. A good number of cadet units in independent schools have been instrumental in setting up CCF companies in local secondaries. In several cases these now meet as joint forces.

We have heard a great deal in the past, although little today, about charitable independent schools being able to prove public benefit. A landmark judicial review quite properly defined such benefit rather more liberally than the then chairman of the Charity Commission had promulgated. It is true, however, that the modern conception of charity somehow sits uncomfortably with independent schools, which are often seen, usually unfairly, as the preserve of the wealthy. This was guyed really rather well by Ian Hislop in a spoof charity appeal in which he said, “A gift of only £50 will buy a boater for Henrietta”.

On 12 September last year, I asked the Minister whether independent schools that wish to do so will be able to opt out of charitable status and thereby demit the 3% or 4% of their income. His reply was that they will. This is good news, and I suggest that the law could assist those who so wished to opt out by allowing them to keep their current assets and be given the status of what I believe in Scotland are public trusts with no tax advantages. I asked because the governing bodies of independent schools—I was for some years the chairman of one—tend to take a very long-term view. Many of them have survived for hundreds of years by so doing. Threatened in the not-too-distant past by the Charity Commission, some have told me that they fear that threat will someday come again and that they would value being able to opt out, even if it meant the loss of fiscal advantages. Most charitable schools in the independent sector will doubtless wish to remain as charities, with the advantages and possible disadvantages brought by this, but those that do not should, in my view, have the option.

There is one great gift that schools in the private sector can give to the state sector, a gift that costs them nothing. It is the example they set, especially in the use of their independence. Each is a separate, autonomous corporate body; even those schools in groups such as the Woodard Foundation retain their clear individuality. Decisions about financial priorities, staffing, curriculum, buildings and plant are made by the governors and professionals on the spot, without reference to any local or national bureaucracies. This was the freedom that first the grant-maintained schools movement of the 1990s and then its successor, the academies programme, promised state schools and there is no better way of raising standards in them. There is every possible good reason for state and independent schools to work closely together, but it must be made very clear that such arrangements are purely voluntary on both sides.

17:29

[Lord Wallace of Saltaire (LD)]

My Lords, I declare my interests: I am chair of a musical education charity, Voces Cantabiles Music, and my wife is a director of a multi-academy trust in Bradford.

I became involved in this issue partly because I had to answer for charities and I worked with charities when in the coalition Government, but I also followed the noble Lord, Lord Moynihan, in tabling an amendment to the charities Bill in 2015. The noble Lord, Lord Moynihan, has asked me to give his apologies today as he is unfortunately not able to be with us as he has to leave for a foreign visit this afternoon.

Since then, the situation has moved on. The Prime Minister made an astonishingly strong speech last September:

“Through their charitable status, private schools collectively reduce their tax bills by millions every year. And I want to … enact a tougher test on the amount of public benefit required”.


She noted that,

“these schools have become more and more divorced from normal life”,

with a rapidly rising percentage of pupils with rich parents from overseas countries.

Paragraph 7 of last September’s consultation document, referring to independent schools, states:

“We should expect these schools to assist the state-funded sector more directly … by building capacity in the sector”.


A later paragraph states that,

“these requirements will be built into existing agreements, so that … the ability to … maintain the key benefits associated with independent schools’ charitable status, is explicitly linked to doing more”.

If a Labour Government had said that, the Daily Mail and the Daily Telegraph would have been all over it, but I note that this was a Conservative Prime Minister, and I agree with her. The Independent Schools Council has depicted this as a threat: I would call it much more a reminder. If a school is a charity, it should be fulfilling charitable purposes. A great many of our best independent schools were founded as charities and have moved some way from their original objectives at their foundation.

Independent schools have responsibilities, apart from being charities, to the well-being of this country—their corporate social responsibility, if you like—and to their communities. The best independent/state school partnership I have seen, in York, is partly because the independent schools in York are Quaker and have a very strong sense of their social responsibility and of their responsibility to their community in particular.

I am conscious that there is a great deal of variation across England. The situation of independent schools in London and south-east is very different from that in Yorkshire and the north of England. I am also conscious that the partnerships I have seen and heard of depend very much on individual leadership. A good person pushing something does extraordinarily well and then when he or she retires things very often fall away. It is a patchy record, but I welcome the Government’s encouragement of more active engagement. I hope the Minister takes that fully on board.

There is resistance on both sides. We have seen that, and I have heard from people in independent schools about unfortunately or unintentionally giving the impression of being patronising. I have heard from left-wing teachers in state schools that they do not want anything to do with the independent sector, et cetera, but in a number of places, partnership now works extremely well. The one I know best is Westminster Grey Coat—a foundation of two state schools and three independent schools—in which the director of the foundation says very strongly that they have mutual benefit and learn from each other all the way across. I was at Emanuel School the other week for the foundation’s sixth-form essay prize, in which the boys from Westminster City School, a state school, won more prizes than any other school. It was very impressive and pleasing. That is precisely the sort of thing one should be citing.

Social awareness and social integration within our divided national community are part of what this is all about. There is no single model. Different forms of co-operation will fit different communities and different circumstances. The best model is certainly not to sponsor academies or to offer free places, although in some areas where sixth forms are in short supply, experimenting with providing free places for sixth-formers might be part of the way forward. Jointly funded bursaries are not a priority either, although, again, in rural areas for able students one might perhaps experiment. Fundraising for bursaries at independent schools is part of the way forward. Those that have endowments are, in a number of cases—Eton College being the most striking one—funding a number of scholarships of this sort and perhaps more should be done in this way.

There is excellent best practice from, for example, Rugby, Eton, York and Wimbledon: specialised teaching; extra subjects and topics, such as “masterclasses” in York, which I have sat in on; shared music, drama and sport; shared school governorships, as in the model of Rugby and others; and sharing of teaching best practice. This could develop further, with shared careers advice, shared attachments to local employers for work experience, and so on. But, as the noble Lord, Lord Lingfield, said, there is resistance from parents and governors in what one might call the second division of private schools—I will not name the schools where I have heard this. They say that they have paid good money to buy educational advantage and they do not see why others should share it for free. It is a sentiment that I have heard particularly in Yorkshire, which would probably not surprise noble Lords.

There is a schools partnership across Bradford, but when I was talking to head teachers at state schools there, they said, “That’s fine; if a private or grammar school wants to come and join us it is welcome—but it had better ask first”. In fact, independent schools in the north of England are not as well plugged into this network as one would like. I regret that we do not have as much evidence as possible on what is going on— I look forward to the ISC survey coming out.

I was upset, I have to say, when talking to the head teachers of a number of state schools, to hear them saying things such as, “If I had the spare capacity or the spare money for this, I would love it, but I am more concerned about how I prevent my school going bankrupt in the next three years and how I avoid losing half a dozen teachers because of the squeeze on our budget”. Of course, there are similar pressures on a number of independent schools, particularly those outside the south-east, and boarding schools.

I conclude from this that we are in a changing situation—the structure and situation of independent schools are themselves changing—but we nevertheless want to encourage partnerships of this sort as much as possible. I am glad to see that the Government are doing this and that charitable status—charitable schools—is a part of this. But it is not the only part, because we expect all schools to share the responsibility for what happens in their communities and in our society as a whole.

17:37

[Lord Watson of Invergowrie (Lab)]

My Lords, I too thank the noble Lord, Lord Lexden, for sponsoring this debate and pay tribute to him for the pithy way in which he introduced what has been an interesting debate. I may surprise quite a few people, not least in my own party, when I say that I believe that independent schools are currently doing quite a good job in terms of partnership work with maintained schools. That is not to say that more cannot be achieved because it always can, but given that 1,112 schools out of 1,280 members of the Independent Schools Council are already engaged in partnerships in varying forms with state schools, then that at the very least demonstrates a willingness to engage. That engagement is of course by both sectors because, as the noble Lord, Lord Lexden, said, there is value that both can derive from these partnerships.

The facilities that private schools have can be of particular benefit; by that I mean not just the recreational facilities referred to by noble Lords, but teachers specialising in the creative arts, from the performing arts to fine art, music tuition to film and media. All too rarely do maintained schools, or academies for that matter, have anything like the range of subjects available in the independent sector and it is right that in return for the benefits of charitable status, private schools should make a contribution in whatever way they can. It is to be hoped that the traffic is two-way in a physical sense also. While there are benefits for state school pupils attending classes at independent schools in subjects that are perhaps not available in their own school, it must also be of value for teachers in independent schools to visit publicly funded schools not just to impart knowledge and skills but to gain a better understanding of the conditions under which their state sector counterparts operate.

There has been an increase in the amount of crossover activity since the passing of the Charities (Protection and Social Investment) Act 2016, referred to by both the noble Lord, Lord Addington, and the noble Lord, Lord Wallace of Saltaire. That legislation has led to an increase in the extent to which independent schools engage with local communities and state schools to share resources, expertise and facilities. It has also resulted in the development of a website called Schools Together which promotes and encourages partnership working between schools. It now has the added benefit of being a resource to which any school, state or independent, can refer if they want to gain a clearer impression of what kind of joined-up activities can be established.

That was then, but it is fair to say that to a significant extent the landscape changed with the publication last September of what the noble Lord, Lord Lexden, pointedly called the Government’s “remarkable” consultation paper, Schools That Work for Everyone. He talked of the paper’s stated ambition to create an education system that serves not just the privileged few, and I think he exposed the vapidity of the document’s title. I agree with him, but I have a more fundamental complaint about the consultation paper—its very title. I have raised this with the Minister before: to name it Schools That Work for Everyone is a cruel deception because not once in its 36 pages do the words “special educational needs and disabilities”, appear. So whoever it works for, it is not everyone.

The consultation paper was remarkably strident about the independent sector in referring to what was expected of it, adopting a tone that I think everyone noticed was markedly different from that of the aforementioned Charities Act, when the Government were much more sympathetic to private schools. Perhaps the change in approach had its roots in the fact that for the first time ever we have a Prime Minister and a Secretary of State for Education who were both educated at comprehensive schools. Yes, the Prime Minister attended a grammar school, but she was in the privileged position—even though I suspect it may not have seemed that way to her at the time—of experiencing a school making the change from a grammar school to a comprehensive.

While acknowledging that partnership working was under way, the consultation paper came up with the hitherto unknown idea of telling independent schools with the capacity to do so to sponsor academies or set up new free schools and be responsible for ensuring that they were rated good or outstanding within a certain period. Alternatively, they could offer a proportion of places with fully-funded bursaries to those whose families are unable to afford the fees. The Independent Schools Council showed an ability to think outside the box and proposed the creation of up to 10,000 free places in independent schools every year for children for whom those schools would not otherwise be an option. As in many similar situations, though, there was a catch: it would be a jointly funded bursary scheme to which the Government would contribute no more than the cost of a state school place. The independent school places will be available across the age groups and will be non-selective except in terms of ensuring that a child can cope with the independent school’s expectations, although what that may mean was not explained.

Sceptical as to its ability to establish new schools, which of course is not an area in which it has expertise, the ISC offered to,

“work with ministers, regional schools commissioners and others in putting together consortia of suitable and willing independent schools to help co-sponsor new state-funded schools”.

On the basis of the ISC’s proposal, the cost to the taxpayer would be £5,500 per child, roughly the amount that state schools receive annually for a pupil. However, average private school fees are around £15,500, so funding would be subsidised by the private sector by around £80 million a year. That is a sizeable amount to target at state-educated children and should not be dismissed lightly, but it raises the question of just who would benefit from the plan. It sounds remarkably similar to the assisted places scheme in the 1980s and 1990s which required children to pass ability tests. As a result it did not help poor children so much as bright children who happened to be poor. The ISC claimed that the scheme would be non-selective, but if so, how will children moving from the state sector to the independent sector be chosen? Bright children tend to do well wherever they are educated, and creaming off the top of the state sector, as grammar schools do, achieves little more than those left behind being denied the benefit of learning beside and gaining from their more able classroom colleagues. That is why comprehensive education was introduced and despite its current problems, many of which I remind the Minister could be solved by adequate funding, its benefits far outweigh the disadvantages.

We recognise that the Independent Schools Council has made meaningful proposals in this regard, but we remain sceptical about the contention that independent schools can have much of a direct impact on standards of education in state schools. Private schools are academically successful largely because they educate the children of the wealthiest section of society who have enormous social capital. Private schools can afford to sustain small class sizes, have the benefit of substantial resources to support their pupils’ education, and pay staff salaries with which the state sector often cannot compete. There can be no comparison with the challenges that state comprehensive schools face, particularly those serving the most disadvantaged communities.

For that reason, while it is understandable that the Prime Minister and the Secretary of State believe that the independent sector should be asked to justify the benefits of their charitable status, we believe that establishing new schools or sponsoring academies is not the way to do so. On the other hand, partnership working should continue to expand, to the benefit of both sectors.

17:45

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, I am very pleased to answer this Question for Short Debate. It is timely that the Committee considers this matter. There has been considerable progress, but the Government want a lot more partnership between state schools and the independent sector. We want that growth to reflect a new attitude towards the role that the independent sector can play in educating our nation’s children. As a Minister, I have seen many excellent examples of such partnerships, and the successful ones always contain some key ingredients: enthusiasm on both sides; staff willing to play their part; mutual benefit, as the noble Lord, Lord Wallace, said; and a focus on outcomes for pupils. Although partnerships can have other benefits, such as helping a school to meet its charitable status and its public benefit test, the primary aim of partnership must always be improvement in pupil outcomes.

We live in a highly divided and immobile society. Alan Milburn tells us that we live in the most socially immobile society in the developed world. As the Sutton Trust has told us repeatedly, 7% of the population is educated privately and gets nearly 60% of the top jobs in our country. As has already been mentioned, they are massively overrepresented in sport, in our Olympians, in music and in many of the top professions. What is more, because those pupils have these top jobs when they grow up, they are much more likely to exercise their perfect right to send their own children to private schools. It means that the vast majority of the people at the top of our big employers in this country have no direct or indirect experience of the state sector at all. This has undoubtedly contributed to a situation where, historically, our state sector has lagged behind, because a considerable proportion of customers who would otherwise have been highly demanding, vociferous and influential have been absent.

It cannot be right that we have such a divided society. This is not just, or mainly, about money. It is about all of us—independent schools, universities and employers—doing more to build a much more integrated and united society, as the noble Lord, Lord Wallace, said. That is why our consultation paper, Schools That Work for Everyone, starts from the expectation that all children in England will have a good school place, and that the independent sector, among others, will play its full part in achieving our aim, both by improving access to schools for those unable to pay full fees and by widening its partnership activity. In the consultation paper we put forward some suggestions as to how that should be encouraged and achieved. We have had an enthusiastic response. We will be publishing a full analysis of responses and setting out the Government’s preferred way forward in the spring. I cannot anticipate what the document will say. However, I shall identify some of the themes we intend to pick up from the responses. It is only right, however, that I acknowledge the degree of partnership which is already taking place.

What we include in the term “partnership” is very wide. At one end of the spectrum are small-scale partnerships, sometimes fired by a single teacher’s enthusiasm, which might allow for pupils from a maintained school to take a subject otherwise unavailable. We funded start-up costs for several of these at primary level in 2014-15. Many partnerships are much more ambitious—for example, the wide-ranging and highly impressive partnership I have seen for myself at King’s, Wimbledon. At the other end of the spectrum are initiatives which affect or create whole institutions—for example, the creation by Eton College of Holyport free school, which is partly boarding; the support by Brighton College of the London Academy of Excellence in Newham, and now by Highgate for LAE 2 at Tottenham; and Harris Westminster. Only this morning I visited Lancot Challenger Academy, Dunstable, in the Challenger MAT. To champion character in the state sector, it has been working with schools such as the Royal Grammar School in Newcastle, Ashford School and Shrewsbury School to build capacity in this vital area of school life. Many academy sponsors, to pick up on the point made by the noble Lord, Lord Addington, are bringing many of the curricular and extra-curricular practices of the independent sector to their schools.

As my noble friend Lord Lexden said, independent schools provide many bursaries. I saw this myself when for many years I was a trustee of the Eastside Young Leaders Academy in Newham, an after-school club looking after, at any one time, more than 100 black boys and now some girls right on the edge of exclusions from school. We were approached by Patrick Derham, who was then the head of Rugby School, to take two of our boys as boarders. We initially thought that this was a bit of mission creep but we thought, why not? It was a great success and the academy has now sent more than 100 boys and girls to private schools around the country.

I am very keen to encourage local authorities to use both independent and state boarding schools for pupils on the edge of care. We have an active programme under way in the department, very ably run by Colin Morrison, called the Boarding School Partnerships. It encourages local authorities to do this because they can often be fully funded by bursaries. On the point of the noble Lord, Lord Addington, we have approved nearly 50 new, special state schools, backed by good sponsors under the free schools programme.

As my noble friend Lord Lexden and the noble Lord, Lord Watson, have mentioned, so greatly has the Independent/State Schools Partnership grown that it now has its own website. With seed corn funding, we set up this website so that information on projects would spread and help generate further initiatives. As my noble friend has said, as of last week, the Schools Together website has nearly 1,600 projects on it. Although not all are involved in both state and independent schools, we welcome them all.

Each year, however, the Independent Schools Council conducts its census and asks its member schools, which educate around 85% of pupils in the independent sector—although they are only about half the schools, as my noble friend mentioned—about the partnership work they do. The results of the 2017 census are not yet available, but I imagine they will show a further advance on the 1,100 ISC schools that in 2016 were in some form of partnership with the state sector.

As my noble friend Lord Lexden and the noble Lord, Lord Watson, mentioned, the Charity Commission will have access to the ISC’s 2017 census data about the extent of partnerships later this year. These data will enable analysis of whether partnership activity has increased since the guidance was revised and the Schools Together website was created. Before commissioning research, the Charity Commission will review its plans in the light of any changes made by the Government following their consultation on the document Schools that Work for Everyone.

The partnership between state and independent schools is alive and well. Some people have understandably asked why, in that case, Schools that Work for Everyone not only asked independent schools to do more but suggested that if they do not various sanctions might be deployed.

It is worth setting out some of the principles on which we are considering responses and the best way forward. First, it remains our position—set out in debate last year on the charities and social investment Bill—that a partnership works best when it is the result of genuine enthusiasm, co-operation and willingness on both sides, and meets needs on both sides. This means that in taking forward the consultation proposals, we are looking for ideas and responses that will encourage and support partnership to make it grow in volume and effectiveness. Secondly, although many independent schools are engaged, that is not always the case. We want to ensure that whatever system we arrive at brings pressure to bear on those schools that have the capacity and capability to do something but, for whatever reason, do not see it as part of their role. Despite the excellent work already going on and what my noble friend Lord Lexden said, there clearly are schools that could do something or more but do not. The independent charity sector enjoys many freedoms and privileges and it is only right that all schools within it should recognise their wider obligations to society.

Finally, my noble friend Lord Lexden said that independent schools vary considerably in size and capabilities. We are naturally conscious that some independent schools genuinely do not have the capacity to enter into useful partnership with a state school. They may have poor standards or facilities or could be under regulatory action designed to improve them. It is right that such schools concentrate on putting their own house in order and we do not intend to do anything to push them into pointless partnership arrangements before they are ready.

In closing, I assure your Lordships that we want to build on what has already been achieved and enable the independent schools sector to play the greatest possible role through sensible co-operation and partnership, so that we really do have schools that work for everyone.

Committee adjourned at 5.54 pm.

House of Lords

Thursday 9th February 2017 Lords Chamber

Thursday 9 February 2017

11:00

Prayers—read by the Lord Bishop of St Albans.

Hospital Beds: Availability

Thursday 9th February 2017 Lords Chamber

Question

11:06

Asked by

[Lord Dubs]

To ask Her Majesty’s Government what is their estimate of the number of hospital beds currently occupied by persons who could be discharged.

[The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)]

My Lords, the most recently published figures—for the last Thursday of December 2016—reported that 6,191 people who were occupying hospital beds were ready to return home or transfer to another form of care.

[Lord Dubs (Lab)]

My Lords, I thank the Minister for that reply. I am extremely puzzled because the official NHS figures I have been looking at suggest that, in November, there were 200,000 people blocking beds. What is more significant, all the experts say that the actual number of bed-blockers is three times the size of the official figure. Bed-blocking means that people are not given the best possible care and beds are blocked for others who could be admitted. Surely we have to solve this problem quickly.

[Lord O'Shaughnessy]

My Lords, the figures that the noble Lord is referring to are across the whole month. He may be aware that new figures have been published today, which show that an increasing proportion of delayed transfers is due to the availability of social care packages. He will also know that this reflects the changing nature of the patient demographic, which is becoming older and frailer. I agree with him that this needs addressing urgently, which is why the Government took action in the Autumn Statement to increase social care funding. We need to address the wide variation in the rate of delayed discharge from local authority to local authority. As the Prime Minister has said, in the long run we need a more sustainable solution.

[Lord Skelmersdale (Con)]

My Lords, although all Governments have made great strides in recent years in combining health and social care, is it not now obvious that the only way to complete this process is to have a unified budget?

[Lord O'Shaughnessy]

I thank my noble friend for that question. He is quite right that integration of services is the main thrust of policy and has been under successive Governments. This is happening in two ways. First, the Better Care Fund is pooling health and social care budgets at local authority level in order to achieve what he is asking for. Also, NHS England is producing sustainability and transformation plans, several of which are moving towards what is called an accountable care organisation, whereby a single grouping takes responsibility for all the healthcare needs of a population, rather than it being split into different services.

[Baroness Walmsley (LD)]

My Lords, integration is of course very important, but has the Minister ever met anybody in the health service who does not believe that you will never fix the pressures in the health service until you put more money into social care? That means helping areas with low-value properties, not just those with high-value properties, such as in leafy Surrey.

[Lord O'Shaughnessy]

The noble Baroness is of course quite right about the need for more money. I re-emphasise that an additional £7 billion or more for social care is going to councils during this Parliament. Councils have the ability to raise council tax, although the leverage obviously varies from place to place. This is why the Better Care Fund was created—to provide extra help to areas that do not get the same income from council tax increases as the better-off places.

[Lord Crisp (CB)]

My Lords, a year ago, the Royal College of Psychiatrists published a report which showed that about one-fifth of adult mental health beds were occupied by people who were ready for discharge or who should not have been admitted in the first place. They were only admitted because there were no adequate facilities in the community. Could the Minister tell us what the figure is today and what is being done about mental health specifically?

[Lord O'Shaughnessy]

The noble Lord is quite right to raise the issue of mental health. I do not have the specific figure with me but I will write to him with it. We know that there has been a historic disparity between the two services. This was recognised by the Prime Minister in a very important speech she gave a few weeks ago, setting out some of the ways in which the Government are doing more on this. However, there is clearly a lot more to do.

[Baroness Gardner of Parkes (Con)]

What is the situation of people providing care at home on behalf of councils? Many carers I know are called out at 10 or 11 at night to receive someone who has just been sent home from hospital. However, they are not really trained themselves; they are trained only by the care agency. Is it not time that we provided them with proper training, particularly as so many of them have come from the Philippines and other such places and we are not sure what the future holds for them?

[Lord O'Shaughnessy]

My noble friend is quite right that there has been an increasing prevalence of domiciliary care, which involves carers caring for patients in their own homes. Making sure that those patients can get home at a good time that works for them and those who support them is clearly a critical part of dealing with this delayed discharge issue.

[Baroness Wheeler (Lab)]

My Lords, the Minister was talking about care workers rather than carers. He has focused on social care but Nuffield Trust research shows that the proportion of discharge delays due to the unavailability of social care has grown by 84% in six years, but also that 57% of delays occurred because of problems in the NHS itself. This is because of a lack of local NHS community or rehabilitation services, and of the availability of home support therapies or access to diagnostic and other services. Are STPs going to be able to tackle this, given the scale of cuts that will need to be made? Is the Minister confident that last year’s NAO report, which warned that the Department of Health and NHS England rely “too easily” on differing local circumstances as a “catch-all excuse” for not improving NHS performance, is being addressed?

[Lord O'Shaughnessy]

The noble Baroness is quite right that there is increasing pressure on the health service. There have been 3.5 million more hospital admissions in the last 10 years and 2.4 million more A&E attendances in the last five years, so there is huge extra pressure. The number of acute beds has been dropping for a long time but at a slower rate in more recent years. Clearly, making sure that the right level of community care is available—step-down or interim care between hospital and home—will be incredibly important, particularly with a growing and ageing population.

[Viscount Waverley (CB)]

My Lords, surely enough is enough. Is it not high time for an unfettered look again at the health service—bottom-up rather than top-down, and therefore undertaken not by a royal commission, perhaps, but by an independent body such as the Academy of Medical Sciences?

[Lord O'Shaughnessy]

A number of investigations and reviews into the future of health and social care are taking place. I quite agree with the noble Lord that a royal commission is not necessary. What we all need to do in government and through the arm’s-length bodies involved in healthcare is to make sure that we are providing the 2.7 million staff, who are doing a brilliant job every day in supporting our health and care services, with the money and assistance they need to continue to deliver world-class healthcare.

[Lord McColl of Dulwich (Con)]

My Lords, does the Minister agree that it is not so much a question of old people getting older, because old people have always got older; rather, the difference in the last 30 years is the grotesque increase in the number of young people getting fatter and fatter?

[Lord O'Shaughnessy]

There are some long-term public health challenges, involving not just obesity but alcohol. But there is also good news: fewer people are smoking. I think that sometimes, young people—I do not know if I count any more—

[Noble Lords]

No.

[Lord O'Shaughnessy]

No? I do here. If we look at what are sometimes called transgressive behaviours among the under-20s—obesity, smoking, drinking and so on—they seem a lot healthier and more sensible than I was in my youth.

Religious Literacy

Thursday 9th February 2017 Lords Chamber

Question

11:14

Asked by

[Lord Singh of Wimbledon]

To ask Her Majesty’s Government what steps they are taking to combat religious extremism and to promote a cohesive society by enhancing religious literacy at all levels of government.

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, the Government are challenging all forms of extremism through our counterextremism and Prevent programmes. We are working closely with faith groups to understand the impact of policies and to improve religious literacy in government. The Home Secretary and the Communities Secretary hosted a round table for representatives of all faiths last November.

[Lord Singh of Wimbledon (CB)]

I thank the noble Baroness for that Answer, but there are still concerns. The Government paper on the hate crime action plan contained no mention of non-Abrahamic faiths. That suggests something about the religious literacy there. Does the Minister agree that democracy implies being attentive to the legitimate concerns of all sections of the community, not those of a single religious or other majority? Does she further agree that teachings and practices that go against human rights must be robustly challenged, but that we need to know something about what we are challenging before we can do that? Programmes like Prevent cannot be effective without such knowledge. One final point is that I have put the basics of Sikh teachings on one side of A4, and that can be done for other faiths as well. Should that not be essential for religious literacy in government departments?

[Baroness Williams of Trafford]

I missed a little of the noble Lord’s question, but I think I have enough to go on. He said that the hate crime action plan did not specifically refer to non-Abrahamic faiths, but the tenets of the action plan cover points on hatred on the basis of religious belief, disability, sexuality and so on. It is therefore implicit within it that, for example, Sikh communities are included. As for the understanding of religious literacy within both government and wider society, both the Home Office and DCLG engage widely and often with faith communities. Shortly after the referendum, I myself met people from different faiths, including Sikhs, in Manchester to discuss religious literacy, the outcome of the referendum and the corresponding hate crime attached to it.

[Lord Foulkes of Cumnock (Lab)]

My Lords, will the Minister confirm that there has been no violence and no torture, and no wars have been waged, in the cause of humanism?

[Baroness Williams of Trafford]

I do not think I can accurately answer that without looking at my history books.

[Baroness Warsi (Con)]

My Lords, can my noble friend tell us whether the Prevent strand of the Government’s Contest strategy is part of their counterterrorism strategy or their counterextremism strategy? Can she also say whether there is a religious literacy element to the training given to Prevent co-ordinators? If there is, would she be happy to place a copy in the Library?

[Baroness Williams of Trafford]

My Lords, the central tenet of the Prevent strategy aims to protect young people who might be vulnerable to both extremism and terrorist preaching either online or in their communities. Actually, it is a protection mechanism, not a targeting mechanism, as I am sure my noble friend will be aware. It is a protective element to help prevent some of the external forces to which our young people are subjected in a negative way prevailing.

[The Lord Bishop of St Albans]

My Lords, just three weeks ago I spent half a day in an immigration removal centre and so gained an up-to-date insight into some of the complex and sensitive issues that are being dealt with there. Concerns continue to be raised about the level of religious literacy among some of the asylum caseworkers. Is the Minister content with the level of training that they are getting in religious literacy and, if not, what can be done to improve it?

[Baroness Williams of Trafford]

The right reverend Prelate raises a very important point about the detention estate. Certainly an awful lot of time and effort has gone into the training of staff in terms of the sensitivities around LGBT detainees; in terms of his important point about religious literacy, I will go back and check on just what training is given in that area.

[Lord Pearson of Rannoch (UKIP)]

My Lords—

[Baroness Hussein-Ece (LD)]

My Lords—

[The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)]

My Lords, it is the turn of the Liberal Democrats.

[Baroness Hussein-Ece]

Does the Minister agree that last weekend’s Visit My Mosque initiative, which hundreds—indeed, maybe thousands—took advantage of, was a very good and positive example of promoting greater understanding, community cohesion and tolerance in our society? Does she think that we should have more such initiatives from all faiths to bring people together and establish a more understanding and truthful dialogue?

[Baroness Williams of Trafford]

The noble Baroness raises a really good point about community cohesion. There was a mosque event just near to me last weekend and I had reported back that it was incredibly successful. In fact, the same community holds a summer fair, to which all their neighbours are invited and which is a great initiative—so yes, I would encourage more.

Brexit: Consumer Rights Policy

Thursday 9th February 2017 Lords Chamber

Question

11:21

Asked by

[Baroness Hayter of Kentish Town]

To ask Her Majesty’s Government what plans they have to protect consumer rights after the United Kingdom leaves the European Union.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

My Lords, we are working with a range of stakeholders to understand the impact that withdrawal from the EU will have on consumers. We will work to ensure the best possible outcome for UK consumers. Wherever practical, the great repeal Bill will convert current EU law into domestic law to give consumers as much certainty as possible.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the EU has been good for consumers: we have the European health card—there are some 26 million in the country—safe food and products, because of the European rapid alert system; lower mobile roaming charges; and compensation for delayed flights. But despite what the Minister says, none of those can be entrenched in the great repeal Bill, because they depend on our negotiations with the remaining 27. Regrettably, consumer interest does not appear in the 12 negotiating principles in the Government’s White Paper. Will someone in the Minister’s department or another department undertake to set up the same meetings with consumer reps as are taking place with industry, so that consumer interests can be embedded into our negotiations for our relationships with the EU 27 after we leave?

[Lord Prior of Brampton]

My Lords, the great repeal Bill will incorporate consumer protections in the European Union into UK domestic law, wherever it is practical. Noble Lords may shake their heads at that but of course it is “wherever practical”; if we were to say that we would incorporate it where it is impractical, the noble Baroness would be the first person to point it out—this is a perfectly common-sense approach. In terms of ensuring that consumer interests are properly represented, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy is having regular meetings with consumer representatives and we will ensure that consumer interests are properly represented in the negotiations.

[Lord Dykes (CB)]

My Lords, is not the Minister being, unusually, a little complacent in his answers? The total apparatus of EU protection and consumer laws is more extensive and robust than in any single member state, with very few exceptions. If it all has to be unpicked through the very questionable repeal Bill process, it will take a long time anyway. If we end up bringing all these things back in—which we will have to do—then we might as well stay in the single market and under the consumer protection laws, instead of favouring a dodgy view of national sovereignty that last existed in 1910.

[Lord Prior of Brampton]

I do not underestimate the complexity of the Brexit negotiations, which is why we all accept, I think, that the implementation of those negotiations will be phased over time. However, in a number of areas of consumer protection the UK regulations are stronger than those in the EU.

[Baroness Crawley (Lab)]

My Lords, online scams and internet fraud are rapidly increasing, as my colleagues in trading standards know only too well. Will the Minister tell the House what protection will be offered to UK consumers buying faulty goods across borders once we are no longer part of the EU and no longer involved in developing the EU’s digital single market?

[Lord Prior of Brampton]

My Lords, the noble Baroness raises an interesting point. It is going to be difficult. I cannot foresee the outcome of the negotiations; all I can say is that we understand the issue she raises. We have already demonstrated through our support for the alternative disputes resolution and the extra money we are putting into the Chartered Trading Standards Institute that this is an issue that we take very seriously.

[Lord Hannay of Chiswick (CB)]

My Lords, will the Minister say when he will share with the House what is practicable to be included in the great repeal Bill and what is not? Will he also share the result of the inquiries that he says the department has been conducting about the value of this, and has he, by any chance, read the previous Government’s balance of competences review, which went into great detail on this sector?

[Lord Prior of Brampton]

The noble Lord asks when we will share the issues around practicalities. That will emerge during the negotiations.

[Noble Lords]

Oh.

[Lord Prior of Brampton]

Of course it will emerge over the next two years. It would be absurd for me to stand here to explain where all the issues that might arise over the next two years will arise. As the Prime Minister has said, the Government will keep Parliament fully informed of developments throughout the next two years.

[Lord Foster of Bath (LD)]

My Lords, the EU is currently planning the digital content directive, which will give EU-wide protection to consumers on digital content. Unfortunately, the current draft conflicts with UK consumer rights legislation. Since, after we leave, we will have to continue to sell into the EU, can the Minister assure us that the Government are putting all their resources into getting this right, to end the current legal uncertainty?

[Lord Prior of Brampton]

I can assure the noble Lord that we are doing everything we can to clarify the situation. He mentioned the consumer rights legislation. The Consumer Rights Act is generally recognised by consumers here as an extremely good piece of legislation, and we will be working to have as much of a free market within Europe as we can.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend not think that it is very sad, and a counsel of despair, that with all the expertise in this House and the other place, it is not possible for this Parliament to devise a scheme that will protect the rights of British consumers?

[Lord Prior of Brampton]

My noble friend is right: there are legitimate concerns over such a big change. However, we should be relatively optimistic that we can sort them out in the best interests of British consumers.

[Lord Hain (Lab)]

My Lords, will there need to be a separate agreement on air flights into European Union countries to replace the existing one within the single market, which allowed Ryanair, EasyJet, British Airways —all the British carriers—to fly millions of people in over the years cheaply, successfully and easily? Unless a separate agreement is negotiated with the European Union we will not be able to do that.

[Lord Prior of Brampton]

My Lords, there is such a mutuality of interest in continuing the existing arrangements that it would be very surprising if we could not negotiate an agreement. I cannot tell the noble Lord whether we will need a separate agreement to do that but I will write to him.

Crime: Firearms

Thursday 9th February 2017 Lords Chamber

Question

11:29

Asked by

[Lord Harris of Haringey]

To ask Her Majesty’s Government, in the light of recent seizures, what is their estimate of (1) the number of illegal firearms in circulation, and (2) the percentage of firearms illegally imported into the United Kingdom that have been seized in the last year.

[Lord Harris of Haringey (Lab)]

My Lords, I draw attention to my policing interests and beg leave to ask the Question standing in my name on the Order paper.

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, offences involving firearms, excluding air weapons, have fallen by 31% since July 2010. The National Ballistics Intelligence Service regularly assesses the volume of illegal firearms in the UK, but this information is operationally sensitive and is not suitable for release. The National Crime Agency and the police continue to conduct specific operations to disrupt the threats posed by illegal firearms.

[Lord Harris of Haringey]

My Lords, I am grateful for the Answer given by the Minister and intrigued by the fact that on 21 November, in response to another Question on this point asked by my noble friend Lord Rosser, she said:

“Without doing the maths, I cannot give the noble Lord the figures off the top of my head. However, I will certainly write to him with accurate figures”.—[Official Report, 21/11/16; col. 1724.]


I assume from the Answer she has just given that she cannot share the figures that she wrote to my noble friend. Can I put it to her that, if there were 126 illegal arms seized in 2014-15—these are the figures she gave on 21 November—445 seized in 2015-16 and 800 in just four weeks as a result of this joint exercise by the counterterrorism police and the National Crime Agency, this is a situation in which there is an explosion of the problem of illegal firearms and that the Government should do a great deal more?

[Baroness Williams of Trafford]

What the noble Lord points out is not an explosion in the problem but a revelation in the solution, because that four-week operation showed us that a new approach to intelligence collection and sharing is the way forward. The operation that I think he is referring to—Operation Dragon Root—yielded excellent results.

[Lord Paddick (LD)]

My Lords, most of the illegal firearms smuggled into the UK are from Europe. Can the Minister explain how UK law enforcement agencies can continue to exchange information and intelligence with EU countries about gun smuggling after Brexit without complying with EU data protection laws, which are set and regularly updated by the EU? What are the Government going to compromise on—security or sovereignty?

[Baroness Williams of Trafford]

I think that I have déjà vu here, because the noble Lord asked me that the other evening when we had a three and a half hour debate on the subject of security and policing between the UK and the EU. As I explained then, and will explain now, co-operation will be not just absolutely key going forward but one of the top priorities for this country.

[Lord Selkirk of Douglas (Con)]

Is the Minister aware that, in the past, amnesties have been used in different parts of the United Kingdom but under very strong conditions, as in the context of weapons which have been used to commit a crime? Can any possible amnesties be looked into with great care, as all the circumstances need to be taken fully into account?

[Baroness Williams of Trafford]

My noble friend is absolutely right that amnesties have been used in the past—most recently in Northern Ireland, if I am not mistaken—and that great care needs to be taken around such an approach.

[Earl Attlee (Con)]

My Lords, of the 800 seized firearms referred to by the noble Lord on the Labour Benches—

[Noble Lords]

Lord Harris of Haringey.

[Earl Attlee]

It is my great friend the noble Lord, Lord Harris of Haringey. How many of those firearms were seized from one registered firearms dealer?

[Baroness Williams of Trafford]

I have all sorts of facts and figures but I do not have that one, so I will write to my noble friend on that point.

[Lord Rosser (Lab)]

Does the Minister agree that figures on the numbers of illegal firearms seized each year are not very meaningful without an estimate of the percentage of firearms illegally imported into the UK that are seized each year? Is she able to tell us whether we are seizing most firearms that are illegally imported or only a very small percentage?

[Baroness Williams of Trafford]

That is a very difficult question to answer in reference to the first Answer that I gave. However, I can give examples of seizures, for example through Operation Dragon Root, during a specific period of time. In the October operation, there were 282 confirmed arrests and the recovery of 833 firearms, as I think the noble Lord, Lord Harris, pointed out. There were also seizures of 169 other weapons, 4,385 rounds of ammunition and over £575,000 worth of cash.

[Baroness Warsi (Con)]

My Lords, the operation that my noble friend referred to was indeed a success, and I am sure that the whole House will pay tribute to the police units that were involved. Will my noble friend explain what thinking is being done in government at the moment to reconcile what was an effective national operation against what is a much more localised agenda of policing around the PCCs, who probably would not prioritise such operations?

[Baroness Williams of Trafford]

What my noble friend is referring to has not only a national element to it but also an international element in terms of the multiagency approach. Of course the NCA has regional operations as well, but in terms of keeping the country safe from a national and international point of view the national agencies are very often involved.

[Lord Campbell-Savours (Lab)]

Is there not a distinction between a collector who holds illegal weapons and a criminal who holds illegal weapons, and do the stats that the Minister has produced actually draw that distinction?

[Baroness Williams of Trafford]

There is most certainly a difference between a collector and a criminal, and we discussed this at length in the Policing and Crime Bill. In terms of the arrests and the rounds of ammunition, they certainly will be criminal activities. In terms of the other weapons, there possibly is a distinction. I will try and disaggregate that for the noble Lord, although I will not promise as I did to the noble Lord, Lord Rosser.

Child Refugees

Thursday 9th February 2017 Lords Chamber

Private Notice Question

11:36

Asked by

[Lord Dubs]

To ask Her Majesty’s Government why they have decided to close the scheme for unaccompanied child refugees under Section 67 of the Immigration Act 2016.

[Lord Dubs (Lab)]

My Lords, I beg leave to ask a Question of which I have given private notice.

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, we have not closed the scheme to transfer children under Section 67 of the Immigration Act. The announcement yesterday specified the total number of children that will be transferred pursuant to Section 67, as required by the legislation. Over 200 children have already arrived in the UK under this provision and more children will continue to be transferred from Europe up to the specified number of 350.

[Lord Dubs]

My Lords, I must confess that I am slightly puzzled because, if the Government say that there is a specified number of children, then after that total has been reached the scheme has been closed. I remember—it was not long ago—that the Prime Minister, when she was Home Secretary, told me that the Government were prepared to accept the amendment, and on the same day the then Immigration Minister said to me that the Government would accept the letter and the spirit of that amendment. In arbitrarily closing down a scheme without any good reason for doing so, I believe that the Government are in breach of their own commitments.

[Baroness Williams of Trafford]

My Lords, the scheme is not closed. As the noble Lord said, we will be accepting up to the limit of 350 but at this point in time the scheme is not closed.

[Noble Lords]

Oh!

[Baroness Williams of Trafford]

More children will come. The scheme is not closed. We have to appreciate, and I think noble Lords generally have appreciated, that the capacity of local authorities is limited.

[Noble Lords]

Rubbish!

[Baroness Williams of Trafford]

Noble Lords might rubbish that but the capacity of local authorities is limited. We have relied on their good will. It has been an entirely voluntary approach from local authorities, and of course I encourage more local authorities that think that they might have places to come forward. I refer noble Lords to what this Government have done. Up to September 2016 we have provided in this country refuge or other forms of leave for more than 8,000 children. I am very proud of that.

[Lord Cormack (Con)]

Will my noble friend accept that the concern that has been expressed this morning is not confined to the other side of the House?

[Noble Lords]

Answer it!

[Baroness Williams of Trafford]

Sorry, I thought my noble friend might say something else. Yes, I accept the concern but I can only reiterate what I have already said.

[Baroness Sheehan (LD)]

The implication of the Government’s actions, if we go according to the letter of the amendment—Section 67 of the Act—is that local authorities have reached the end of the road and have no further capacity. However, that reasoning is palpably faulty. There are many people who have expressed an interest in helping, as well as churches, other faith groups and local authorities. I know several people who have indicated their willingness to help to a local authority but have had little response. Obviously the Government are quite uninterested in taking in more children.

[Baroness Williams of Trafford]

My Lords, that is absolutely wrong. We have had informal expressions of interest, and if the noble Baroness has the names of those individuals and church and community groups I encourage her to contact us so that we can get matters in train.

[Baroness Morris of Bolton (Con)]

My Lords, I declare an interest as a member of the business task force that was set up after the Syrian donor conference to provide jobs and help families and the dispossessed in the region, to prevent them making the perilous journey to Europe. The Government have to be congratulated on the work they are doing there. When the number of 450 is reached, will the Government still look at the discretionary clauses under Dublin which allow countries to take in the most vulnerable people? I am particularly thinking of mothers with babies and the victims of traffickers.

[Baroness Williams of Trafford]

Yes, the people to whom my noble friend refers in the region are the most vulnerable people on the globe. We do not close our doors to people who genuinely seek refuge in this country. Up to September last year, we gave asylum or other forms of leave to 8,000 children.

[Lord Reid of Cardowan (Lab)]

Will the Minister explain to us where the figure of 350 came from; what consultations and calculations underpin it; and whether her request that others volunteer from the local authorities means that, if such representations and offers are made, the Government will revise that figure of 350?

[Baroness Williams of Trafford]

The noble Lord asks a valuable question. We do not stop consulting local authorities. Of course if local authorities or community sponsorship groups were to come forward, we would certainly consider that. The figure of 350—in fact, it was 400—came from local authorities. We have revised it down to 350 because, if some of the family cases break down, the children will need local authority care and we need some capacity to provide it. Our consultation with local authorities is ongoing.

[Lord Alton of Liverpool (CB)]

My Lords, the Minister will recall that last month I raised with her the disappearance of unaccompanied children. Figures from Europol that I first raised in your Lordships’ House in June showed that 10,000 children had disappeared on the continent and that hundreds were disappearing here in the United Kingdom. One of the reasons why I was proud to be a signatory to the amendment moved by the noble Lord, Lord Dubs, was the disappearance of those unaccompanied children. Last week, I sent the Minister a statement from ECPAT UK, the organisation established to protect children, which said that it is shocking that the Home Office says it has no evidence. Where do we stand on these missing unaccompanied minors?

[Baroness Williams of Trafford]

I presume the noble Lord refers to children both at home and abroad. Obviously, if a child is in Greece, Italy, France or wherever, it is the responsibility of that Government to safeguard that child. I said to the noble Lord that I did not have evidence of disappeared children in this country. That is not to say that in future that may not happen, but at this point we have had no representation from local authorities to say that children are disappearing. Obviously, if that were to be the case, we would follow it up with some urgency.

[Lord Rosser (Lab)]

My Lords, yesterday my noble friend Lord Dubs in this Chamber asked the Government,

“to confirm the news that we have heard about the Government intending to bring to an end the scheme under Section 67 of the Immigration Act”,

namely, the Dubs amendment. In response, the Government told the House:

“A Written Ministerial Statement will underscore that, far from doing that, Section 67 of the Act … stands”.—[Official Report, 8/2/17; col. 1715.]


Why was no reference made yesterday by the Government to any cap of 350 when that response was given to the very specific question from my noble friend Lord Dubs?

Can the Minister also respond to a question about the Written Statement? It says:

“Local authorities told us they have capacity for around 400 unaccompanied asylum-seeking children until the end of this financial year”.


What capacity have local authorities told the Government they have for unaccompanied asylum-seeking children in the 1917-18 financial year on the basis that the current level of government funding is continued?

[Baroness Williams of Trafford]

My noble friend referred the House to the Written Ministerial Statement in which the figure of 350 was iterated; clearly, the WMS was laid not long before Questions began. I cannot remember the second part of the noble Lord’s question.

[Lord Rosser]

I am happy to repeat it because it is a quote from the Government’s own Written Statement:

“Local authorities told us they have capacity for around 400 unaccompanied asylum-seeking children until the end of this financial year”.—[Official Report, Commons, 8/2/17; col. 10WS.]


What capacity have local authorities told the Government they have for unaccompanied asylum-seeking children in the next financial year, namely 1917-18, on the basis that the current level of government funding is continued?

[Baroness Williams of Trafford]

I think the noble Lord means 2017-18. Obviously, as I have said to noble Lords, the Government are in constant consultation with local authorities on a range of things, including this. The scheme is entirely voluntary. We do not want to force local authorities to do things that they may not have the capacity to fulfil. Children are of paramount importance.

Business of the House

Thursday 9th February 2017 Lords Chamber

Motion on Standing Orders

11:47

Moved by

[Baroness Evans of Bowes Park]

That Standing Order 40(1) (Arrangement of the Order Paper) be dispensed with on Tuesday 21 February to enable the debate on the second reading of the European Union (Notification of Withdrawal) Bill to resume before oral questions.

Motion agreed.

Richmond Burgage Pastures Bill [HL]

2nd reading: House of Lords
Thursday 9th February 2017 Lords Chamber

Second Reading

11:48

Bill read a second time and committed to an Unopposed Bill Committee.

University of London Bill [HL]

2nd reading: House of Lords
Thursday 9th February 2017 Lords Chamber

Second Reading

11:48

Bill read a second time and committed to an Unopposed Bill Committee.

Joint Committee on Human Rights

Thursday 9th February 2017 Lords Chamber

Membership Motion

11:48

Moved by

[The Senior Deputy Speaker]

That Baroness O’Cathain be appointed a member of the Select Committee.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I have had some correspondence with the Clerk of the Parliaments. I had not realised that at some point this House agreed that any mistakes that are made in relation to room bookings represent a breach of the Code of Conduct. In other words, if a Member books a room and is not present for the whole of the period of that booking, they are then in breach of the Code of Conduct and can be reported to the Standards and Privileges Committee.

This is quite astonishing and I do not know when it got through, how it got through, and whether other noble Lords realised what was happening. I think we should be far more careful when we look at these Motions. We should have an explanation of why they are being put forward from whoever is moving the Motion—whether it is the Senior Deputy Speaker, the Chief Whip, the Leader of the House or whoever—so that we know exactly the implications. It would be quite astonishing if, just because of an inadvertence in relation to room bookings, a Member was in serious breach of the code. Could that be looked at again?

[The Senior Deputy Speaker (Lord McFall of Alcluith)]

Could I say to the noble Lord, with the utmost courtesy, that this is nothing to do with the Motion that I am proposing just now, which is about a change to the membership of the Joint Committee on Human Rights? However, as always, outwith the Chamber, I will have the most fruitful engagement with the noble Lord at any time.

Motion agreed.

Privileges and Conduct Committee

Thursday 9th February 2017 Lords Chamber

Motion to Agree

11:50

Moved by

[The Senior Deputy Speaker]

That the 5th Report from the Select Committee (Process for publishing Commissioner reports; Commissioner and police investigations; Minor amendments to the Code) (HL Paper 99) be agreed to.

[The Senior Deputy Speaker (Lord McFall of Alcluith)]

My Lords, this report contains various recommendations for changes to the Code of Conduct for Members of the House of Lords and the Guide to the Code of Conduct. First, it recommends a more streamlined process for publishing reports from the Commissioner for Standards when she finds that a Member did not breach the Code of Conduct or where remedial action has been agreed. In those cases, it is recommended that her report and evidence should normally be published only on the parliamentary website and not sent to the Committee for Privileges and Conduct. This is similar to the process in the House of Commons. The commissioner would have discretion to submit a report to the committee if a case involved a particularly serious allegation or if it gave rise to matters of wider interest or relevance. In these instances, the Committee for Privileges and Conduct would report the case to the House.

The second proposal is that the commissioner should be able to continue an investigation into an alleged breach of the code alongside a police investigation. Under the current guidance, the commissioner has to suspend her investigation whenever the police are investigating a related complaint. The committee proposes that the commissioner should be able to continue an investigation in those circumstances but would not finalise a report until the criminal process had concluded. This would allow her to take into account any relevant issue arising from that process. Under the proposed new guidance, the commissioner would always suspend her investigation if the related proceedings become sub judice.

Finally, the report proposes several minor amendments to the code and the guide to reflect developments in practice and to clarify uncertainties. I beg to move.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I sincerely apologise to the Lord Speaker, to the Senior Deputy Speaker and to the House for raising my point under the wrong heading. However, if the noble Lord had the powers that I think he ought to have as Lord Speaker, he could have corrected me immediately. I would have sat down and would not have spoken inappropriately. We are now on the appropriate Motion and I thank the Senior Deputy Speaker for introducing it, which I appreciate very much indeed.

However, I go back to the point that where there are breaches of conduct, and Members do things that are clearly unacceptable to the House and bring it into disrepute, of course what the Senior Deputy Speaker says is absolutely right. But, as I say, the issue of minor breaches in relation to the booking and use of rooms has come to my attention, and I have had correspondence with the Clerk about it. For instance, if you book a room and hold a press conference in it when you were not supposed to hold one there, or if you book a room for an hour and you leave halfway through, that is a breach of the Code of Conduct and you can be reported to the Committee for Privileges and Conduct. That seems to me to be using a sledgehammer to crack a nut. It should be dealt with in some other way, not as a breach of the Code of Conduct. I do not know when it slipped through—these things go through on the nod, and sometimes you get confused about what is going through and when. Can the Senior Deputy Speaker take this particular point back to the committee to have another look at it?

[The Senior Deputy Speaker]

I thank the noble Lord for his eloquent repetition of his previous point. Yes, I will look at that and take it back. I repeat my willingness to have a discussion with him outside this Chamber.

[Lord Campbell-Savours (Lab)]

Perhaps I can follow up the statement that the Senior Deputy Speaker made. He stated that the inquiry that was carried out by the commissioner—as I understand it—could be carried out coterminously by the police. In other words, both inquiries could be taking place at the same time, subject to the criteria that the noble Lord referred to. Does that mean that there could be, during the course of an inquiry, discussions between the police and the commissioner about a matter that was the subject of an investigation? To what extent would that be then allowed to influence an investigation by the commissioner?

[The Senior Deputy Speaker]

It would allow the police to continue their investigation, but there has been experience in the past where the commissioner has had to pause an investigation because of a concurrent police investigation. In one case—I am trying to remember off the top of my head—that was 16 months. The commissioner was not able to go back it for that time. So the proposal is that the commissioner looks at the issue and collects evidence and when the police report they have a fresh understanding of what has been happening can pursue it further. Previously the commissioner had to suspend their investigation, perhaps for 16 months, and then go back and find that the information was a bit dated and that people could not recall things as sharply. For that reason we discussed this with the commissioner and the new proposal was put forward.

[Viscount Simon (Lab)]

I have just one further question, purely for clarification, following my noble friend’s question. If a room is booked for one hour and the meeting takes five minutes, does the Member have to stay there for 55 remaining minutes?

[The Senior Deputy Speaker]

I would not think so. If anything, common sense prevails in this House—and I will make sure that that is undertaken.

[Lord Rooker (Lab)]

If it is no longer accepted that police inquiries should always take precedence, could the Senior Deputy Speaker confirm whether the police are satisfied with this change?

[The Senior Deputy Speaker]

As far as I know, yes, but I will investigate that further and I will write to the noble Lord on that point.

Motion agreed.

Code of Conduct

Thursday 9th February 2017 Lords Chamber

Motion to Resolve

11:57

Moved by

[The Senior Deputy Speaker]

To resolve that the Code of Conduct for Members of the House of Lords be amended as follows:

In paragraph 19, in the second sentence, leave out “goes” and insert “is normally published only on the Commissioner’s webpages. The Commissioner has discretion to submit a report in such instances.”

Leave out paragraphs 26 and 27 and insert:

“The Sub-Committee on Lords’ Conduct keeps the Code of Conduct and the Guide to the Code of Conduct under regular review. Recommended changes are reported to the House and take effect when agreed by the House.”

Motion agreed.

Commonwealth Development Corporation Bill

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Thursday 9th February 2017 Lords Chamber

Second Reading (and remaining stages)

11:58

Moved by

[Lord Bates]

That the Bill be now read a second time.

(Money Bill) Relevant documents: 14th and 15th Reports from the Delegated Powers Committee

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, this is a short, two-clause Bill. It is a necessary piece of enabling legislation to ensure that the CDC is able to continue investing in the world’s poorest countries to create jobs, support local businesses and stimulate economic development. No country can defeat poverty and end aid dependency without sustained economic growth and a thriving private sector. Strong profitable businesses are needed to create better jobs and generate the tax revenues required to deliver improved public services.

There is, however, a huge unmet demand for capital in developing countries. In the poorest and most fragile countries, there is a long way to go to create the right conditions for investors to have the confidence to meet and fill this gap.

In 2015, the UN agreed the sustainable development goals, which are the focus of the Department for International Development through its UK aid strategy. The financing required to achieve these goals is estimated to be $2.5 trillion dollars a year through to 2030. This far outstrips what can be funded through traditional aid-funded programmes and public finance. This is where the CDC comes in.

The CDC was founded back in 1948 and has enjoyed support from successive Governments. It is wholly owned by the UK Government and is a development finance institution, deploying patient public capital to achieve an objective of doing good while not losing money.

The CDC has a portfolio of £4 billion invested in more than 1,200 businesses in more than 70 countries. In 2015, businesses backed by the CDC helped to create 1,030,000 new jobs in Africa and southern Asia. Over three years, these businesses have generated more than $7 billion in tax revenues to the countries in which CDC has invested.

The CDC invests long term to achieve development impact. It has a higher risk appetite and can take a more patient view of financial returns than private investors, but by demonstrating that responsible investing in difficult markets can be commercially viable, it helps to crowd in the private finance that the poorest countries desperately need.

In 2015, the CDC helped to mobilise an additional $832 million of capital from private investors. Over the years, it has made ground-breaking investments in unproven markets, planting the first seeds for industries that have since become mainstream, such as tea exports in Kenya and mobile telecoms in Africa. As an investor, the CDC sees the potential of the people of a country rather than its problems.

The NAO completed a value-for-money study of the CDC last year. Its report highlights the transformation that the CDC has undergone over the past five years, following the agreement of a new strategy and investment policy with DfID in 2012. The CDC now invests only in Africa and south Asia—two regions that account for 80% of the world’s poor. It is the only development financial institution to have this narrow a geographical focus. It now targets the sectors that create the most jobs in an economy. CDC investments in the energy sector are providing the investment needed to improve access and power economic growth in Africa. In the financial sector, the CDC has enabled microfinance institutions and retail banks to advance loans to support small businesses in agriculture and manufacturing in south Asia.

While the CDC continues to invest through funds, it has now built up its capacity to make direct investments and do debt deals alongside equity. It has also tightened controls on costs and cut average salaries by over 25% over five years. It has become a leader among its peers in transparency: it was the first development financial institution to sign up to the International Aid Transparency Initiative and provide full information on the name and location of all its investments.

The Bill is focused on one issue only: raising the limit on the level of financial support that we can provide to the CDC under the CDC Act. The Bill is needed because the current limit, set 17 years ago, has been reached. The Bill will raise the cumulative financial limit by £4.5 billion to £6 billion. It also introduces a delegated power to raise the limit further via statutory instrument, to an upper limit of £12 billion.

To be clear, the Bill is not a commitment to provide this level of financial support to the CDC, nor is it a target to be achieved in a set timeframe. No new capital will be provided to the CDC without a new strategy and business case setting out the market demand, value for money and how development impacts are to be achieved. Both will be published and Ministers held to account in the usual way. Furthermore, after ministerial approval the CDC would be able to draw down the capital only when needed in response to market demand.

The Bill passed its stages in the other place unopposed, reflecting the cross-party nature of its objectives, but not without careful scrutiny. In Committee in the other place, expert witnesses gave oral evidence and several noble Lords—including the noble Lords, Lord Boateng and Lord Stern—provided helpful written submissions which have been taken into account.

There was a healthy debate in the other place, responded to by my honourable friend Rory Stewart, but I would argue that that genuine interest and concern is best addressed through the CDC’s strategy rather than via primary legislation. Work is under way to finalise the CDC’s new five-year strategy. It is critically important to get this right and address the issues raised during the Bill’s passage by NGOs, Members of both Houses and the National Audit Office.

We need to capture better the full development impact of the CDC’s investments. We need to ensure that the CDC’s policy on the use of offshore financial centres is reviewed regularly and meets the OECD’s high standards in this area, and that it pilots new approaches to deepen development impact still further.

The passage of the Bill is an important step to enable the CDC to continue playing a central role in the delivery of the UK’s international development objectives: to boost economic growth and eradicate extreme poverty by 2030. It complements other approaches through which the UK is playing a leading role in the international development market, including in our responses to humanitarian disasters, global epidemics and pandemics.

The CDC is a great British organisation with a proven track record and a clear development focus. The Bill will help the CDC to continue its pioneering work, creating opportunities and bringing hope and opportunity to the poorest people in the world. It is an institution of which British taxpayers can be rightly proud. I beg to move.

12:06

[Lord Judd (Lab)]

My Lords, I thank the Minister for that clear introduction to the Bill. I am glad he is in the post that he is in, because he is a man who has taken our responsibilities in this sphere very seriously during his life. I am also very glad indeed that the noble Viscount, Lord Eccles, will be speaking in the debate, as he made a distinguished contribution to the history of the CDC when he was leading it.

I declare an interest because, for a short while in the mid-1970s, I was the sponsoring Minister for the CDC and I took great interest in it. What I liked about the CDC in those days was that it took very seriously the issue of the development of human capacity. When I visited, the staff took great pleasure in telling me how they were developing hands-on capacity.

That was important to see in the context of the Conservative Party’s own record. I was frankly rather impressed in the 1960s, when the Conservative Government took the initiative in setting up government machinery to meet third-world commitments. They called the department the Department of Technical Cooperation. Indeed, I do not mind telling the House that I spent a certain amount of time at our party headquarters trying to argue that it was a good title; if we were going to have a great emphasis—as we did, thank God—on the central role of overseas development in our programmes, then we ought to look seriously at the title the Conservatives had used. I never felt that the Ministry of Overseas Development quite got to the heart of the concept as the notion of technical co-operation did. I saw the CDC as fulfilling the spirit that says, “Nothing will succeed unless we are developing human capacity”.

I am therefore rather sad that, given the history of the CDC, it has now gone down the road of becoming, in effect, just another merchant bank. It seems to me that the emphasis, originality and creativity that was there has been lost. I do not believe that responsibility for this development can be laid entirely at the feet of the party opposite. Whether it was inadvertent, or however it happened, we were not as vigilant on this point as we should have been.

The Minister has explained the origins of the Bill. It is true that in the informed constituency in this country—a very real and good one on these matters—there is and has been a certain amount of concern. Here I declare an interest as a former director of Oxfam. We are well blessed to have the quality of NGOs we have operating in this sphere, and we should take their concerns very seriously.

What are those concerns? Some are centred on the real development impact of the CDC as it is today and whether recent reforms have adequately improved its effectiveness. It continues to face challenges relating to transparency, monitoring and reporting on its development impact, as well as on routing its investments through tax havens. The Bill provides us with our first opportunity since 1999 to shape the legislative framework for government oversight of the CDC and update it to clarify the purpose of public funding for the CDC, a suitable level for future public funding and the conditions under which it is to be provided and utilised; how the CDC will address the UK Government’s priorities for aid, such as transparency, value for money and achieving development results; and how the CDC can improve its investment standards—for example, on the use of tax havens.

More specifically, concerns have been centred on an overconcentration on the higher rates of returns on its investments. A focus on large formal enterprises, the use of narrowly defined impact indicators, and minimal investment in sectors such as agriculture and manufacturing raise concerns about its development impact for ordinary human beings. The National Audit Office’s recent review of the CDC reported that it,

“remains a significant challenge for CDC to demonstrate its ultimate objective of creating jobs and making a lasting difference to people’s lives in some of the world’s poorest places”.

That observation cannot be cast lightly aside.

As for transparency, the CDC was assessed as poor, with 22.5%, in the Aid Transparency Index, and there have been no major improvements in its transparency since then—or none that I can detect. I acknowledge that the Government and the CDC itself take these concerns seriously but, as late as 2013, 75% of the CDC’s investments were routed through jurisdictions that feature in the top 20 of Tax Justice Network’s financial secrecy index.

During deliberations on the Bill in the other place, Ministers failed to provide a clear and robust case for why the CDC required the level of additional funding and whether it had the capacity and opportunities to invest it effectively. This therefore remains a major question, especially as in DfID’s business case for the £735 million in funding committed to the CDC in 2015 it stated that the CDC had assessed that it had the capacity to invest an additional £1 billion and would require additional funding from DfID only in 2019.

I conclude by putting specific questions to the Minister. I do not want to overdo it, but I repeat the points because I have very great respect for the present Minister and I am sure he will take these questions seriously. First, why have the Government introduced the Bill before publishing the CDC’s investment strategy for 2017-21? Why does the Bill allow the Government to utilise the ceiling of £6 billion to £12 billion for funding the CDC, given that in 2015 it assessed it could invest an additional £1 billion for the Government? Why have the Government not included in the proposed Bill standards that the CDC should meet in order to address the Government’s commitment to transparency, value for money and tracking development results, as well as on issues such as the CDC’s use of tax havens for its investments? How will the CDC be asked to improve its functioning and contribution to development results as a condition of future funding increases? How will the CDC be asked to improve its transparency and reduce the volume of investments it routes through tax havens as a condition of future funding? Finally, how have DfID’s investment plans for the CDC been informed by assessing other options for investing these resources and comparing their value for money and potential for development impact?

As somebody who worked in this sphere for a good deal of my life and who continues to work in an honorary capacity in many ways since becoming a Member of this House, I have difficulty with the term “development impact”. I believe the real heart of the challenge of our co-operation with communities across the world is their empowerment. It is about their taking control themselves. It is about enhancing their capacity. “Impact” suggests it is us bringing something to the country, which we are then evaluating. Our evaluation needs to concentrate far more on how the local community appreciates and benefits from what happens.

My other point, and it is not a popular one in the age of the market, is that in real human terms very often the real effect of this co-operation will not be judged until perhaps decades later. The constant pressure to produce immediate evidence of impact sometimes distorts lasting effective development. I ask the Minister to consider these matters seriously and I look forward greatly to his reply.

12:18

[Baroness Northover (LD)]

My Lords, I, too, thank the Minister for introducing this Bill. It is a privilege, as ever, to follow the noble Lord, Lord Judd, with his long commitment to development and huge experience in this area. The CDC has, of course, played an important part in our development efforts in recent years, particularly since its remit was redrawn in the early days of the coalition and under the stewardship of its current CEO, Diana Noble. It is vital that we promote economic development. That is what will transform societies and pull people out of poverty. We have seen that around the world. Investment in the green revolution in agriculture in India was later to underpin India’s growth in other parts of its economy. The CDC, refocused on poorer countries and frontier markets, has helped in that regard.

Even before that refocusing, it has been a significant contributor. A key investment, of course, was that in M-Pesa in Kenya, to which the Minister referred, kick-starting a transformative method of ensuring that the un-banked were brought within the financial sector. I know that the CDC later regretted that it had no equity stake in the project given the profits now flowing in Kenya and elsewhere, which is a shame. When it is criticised for supporting some developments, it is important to look behind that work and see what skills are being imparted or jobs created. I have seen what it looked to do in Nepal and northern Nigeria in very difficult markets, but finding markets elsewhere easier. Where the CDC leads, it is often then easier to secure other private investment, which is especially important where it is operating in the truly difficult frontier markets.

But we are looking at the CDC as it is now, and even here there have been criticisms as to whether it is sufficiently poverty-focused, for example. I recall the concern in the 2000s about where its focus was. Was it any different, it was asked, from other private equity businesses as it invested in the growing markets of China and India? Andrew Mitchell and Alan Duncan, with their experience in both development and banking, did much to refocus what the CDC did. Diana Noble, as its chief executive, has transformed the organisation most impressively and there is a constant check on how transformative it is in some of the most challenging places. But, of course, she is standing down.

When I was DfID Minister, I was impressed that the CDC had not had its funds topped up in decades because it had so successfully reinvested what it was earning. There was then a relatively small top-up, certainly small compared with what we are looking at here. Did the CDC ask for this increase, and what does it plan to do in terms of attracting staff to manage such increases? What we see here causes me considerable concern, especially as the Bill enables the Secretary of State to increase the amount yet further by secondary legislation. That does not seem wise because I also remember the controversy when there were moves to sell the CDC off, early in Labour’s years in government, and Actis was spun off. Those involved, largely employed by the CDC, profited enormously. Suppose that down the track the Government decided to sell off the CDC. Would we not regret having filled its coffers? It would certainly make it more saleable.

Suppose we were to have a Secretary of State who thinks that this should be the main vehicle for aid money? There is plenty of scope for that. What about all the vital areas that DfID needs to support if we are to improve human development in the poorest countries? Human development underpins the ability of all economies to grow. To meet the SDG of eradicating extreme poverty by 2030, leaving no one behind, that growth needs to be underpinned and to be equitable, including women and girls as well as men and boys.

Suppose the Secretary of State altered the terms on which the CDC invested? What then? It is not at all clear that its funds would be used for addressing the SDGs as the ODA commitment surely means we must do. The Minister will know as well as I do how widely drawn the ODA is, but up until now DfID has been commendably focused on the poorest. Suppose that changed? It is all very well saying that the CDC would have to produce a robust business case, but suppose in the future the need for business cases was dispensed with? They have existed in their present extended form only for less than five years, and even then, having gone through a number of them when I was a DfID Minister, I can say that they are labour intensive and not always as useful as one might want them to be.

Suppose the business case continued, but the parameters that the Secretary of State laid down changed. For example, although in order to count as ODA, benefit needed to be seen in developing countries, it was decided that a close second must be to benefit British investors. The Minister will know exactly what I mean. What then?

This Bill hugely increases the potential capital for the CDC to £6 billion, with the Secretary of State able to increase it further to £12 billion by regulations alone. This is quite an increase from £1.5 billion.

I realise that we have no chance to amend this Bill, as it will go through all its stages here today. Much as I admire what the CDC is doing, I do not think that issuing this relatively blank cheque for a Secretary of State or for a future CDC under a new CEO is wise. The noble Lord says that the CDC will have a new strategy. Surely those in the Commons and the noble Lord, Lord Judd, are right in saying that we should have seen that first.

I know that the Minister will have the situation of the poorest people in the world in his mind. I look forward, therefore, to hearing what he has to say in response to my concerns and what safeguards will be built in, in terms of scrutiny of what the CDC does.

12:26

[Lord St John of Bletso (CB)]

My Lords, I, too, warmly welcome this Bill. When the new world order appears to be more disorder and one of the key themes of the World Economic Forum in Davos is rising inequality and the threat this poses to economic and political stability, the Bill comes at an opportune time.

Clearly, addressing poverty is critical to addressing global inequality. We have moved from the millennium development goals to the sustainable development goals and the role of the private sector has been recognised as a central part of achieving this agenda. Many of the major development initiatives in Africa have come from foreign aid agencies, local and international NGOs and publicly funded multilateral financial institutions. So I wish to focus my few remarks in support of this Bill on the key role that the CDC has played and continues to play in some of the most challenging countries in Africa.

During the last 15 years, the growing Africa-focused private equity community has had a unique opportunity to play its role in what is becoming a development relationship. Private equity has been good for African economic development. It has helped to promote a healthy business sector, as well as creating jobs and alleviating political instability, while taking pressure off Governments to be universal problem solvers. Here, certainly, the CDC has played its role in the development of the private equity industry, particularly in the last two decades. It was an early investor in the 1990s, while the DFIs still focused on debt. Since then, the number of private equity funds has grown from around a dozen Africa-focused funds managing some $1 billion, to well over 200 firms managing over $30 billion. The CDC has played an incredibly important role in poverty reduction, working with these private sector companies and investors to create sustainable growth in its target countries.

As the Minister mentioned in his introductory comments, the CDC is now a transformed institution. From 2012, when the CDC invested some £200 million a year in a broad geography from Latin America to south Asia to Africa, with a staff complement of 50, it has now well over 250 staff. It is investing and will continue to invest more than £1.2 billion a year, focused on Africa and south Asia.

I do not agree with the noble Lord, Lord Judd, that the CDC has become just another investment bank. There have been some notable success stories. While the humanitarian response to tackling the Ebola crisis in Sierra Leone, Liberia and Guinea was very successful and essential, the CDC made a valuable contribution in rebuilding many affected businesses by providing much-needed SME loans. As the Brookings Institution rightly mentioned in its recent Foresight Africa report, with many millions of young Africans entering the labour market every year, job creation remains a top agenda item. Here I agree entirely with the noble Baroness, Lady Northover, that human resource development must be a core focus.

The potential threat of climate change has put many parts of Africa at risk of disasters such as floods and droughts. Many Governments continue to face corruption and violence, and global political uncertainty has complicated peacekeeping efforts, aid disbursement and overall investment. Among the many challenges facing sub-Saharan Africa are not just unemployment but lack of infrastructure, food insecurity, inadequate access to education and healthcare and, of course, to clean water, in all of which the CDC is playing a key role. Often the public sector is ill equipped to tackle these challenges, and this is where the private sector can play a critical role. The CDC, with its well-respected 70-year track record, has made a very important contribution in identifying and nurturing management teams and companies that have provided and continue to provide solutions to many of these problems.

Sub-Saharan Africa suffered one of its worst years in terms of foreign direct investment last year. This was due partly to the fall in commodity prices, particularly the oil price, as well to other concerns, including those of international investors about collapsing local currencies, and was exacerbated by high levels of corruption and lack of accountability. Although technology has continued to transform the continent with the introduction of broadband and many other innovative, transformational technologies, the many challenges that Africa faces are unlikely to be solved in the short to medium term. This will obviously impact negatively on the lives of millions of the poorest people. That is why it is important that the CDC continue to provide much-needed capital and mobilise other international private capital to co-invest in well-run businesses with high levels of integrity and high social and environmental standards. I stress the importance of long-term capital in this regard. These projects can range from building schools to the establishment of hospitals, agribusinesses, renewable energy, ports and logistical infrastructure. While these are all needed in most countries in sub-Saharan Africa, the CDC has not shied away from going to some of the most challenging areas. Here I mention some of the agribusinesses in which the CDC has invested in northern Nigeria, which have had a transformational impact on many of the people there.

A good example of the CDC’s work is the development in Virunga in Eastern Congo. The CDC has helped to construct a hydropower plant that has already transformed the lives of many of those in the area who were living in desperate conditions, through providing jobs and training to former child soldiers who became socially excluded adults. This will in all likelihood have an added benefit of reducing the erosion of natural resources in the parks, which includes the rampant problem of wildlife poaching.

I warmly support the Bill, which provides much-needed long-term additional funding to the CDC, but as it is a money Bill that will not be deliberated on further in your Lordships’ House, it is important that a firm business plan is in place outlining the medium and long-term road map for the CDC, with appropriate checks and balances. In this regard I was reassured by the Minister’s comments in introducing the Bill.

Finally, I acknowledge the leadership, commitment, dedication and vision of the CDC’s chief executive, Diana Noble, who will sadly retire in June this year, and pay tribute to the able chairmanship of Graham Wrigley.

12:34

[Lord Flight (Con)]

My Lords, I congratulate the noble Lord, Lord Bates, on his excellent introduction to the Bill. I declare my interests as set out in the register. I greatly welcome the Bill and wish to speak out in support of it and the CDC. What it has done over the last five years or so is no mean achievement, making successful investments in parts of the world that are difficult to operate in. It has been a civilised and professional body; references to merchant banks are not entirely fair, because it has focused on need just as much as on commercial attractions.

The CDC has also become very capable of investing and managing third-party funds in Africa and India. I hope that that may develop as a new part of its business. As I understand it, it operates in three separate parts. There has been private equity investment, largely in east Asia and Africa, amounting to some $3 billion. A professional fee of, I think, 0.25% is paid for the management of those assets. The Bill will significantly increase the scope here. The second area has been direct equity investment, again in south Asia and Africa, of the order of $1.2 billion, and thirdly debt investment of some $400 million. As has been pointed out, the increase in the size of those investments over the last five years has arisen from their success rather than from additional funding.

The Bill is about significant increases in funding for the CDC—an initial increase from £1.5 billion to £6 billion, and then a route is provided with delegated powers for the Secretary of State to go up to £12 billion. That is a substantial increase, but it is not widely realised that the CDC and its associates are wholly government-owned. This is not the Government funding third-party entities; they are funding another limb of government to operate effectively on a commercial basis. It is still a government entity.

I am a member of the Delegated Powers and Regulatory Reform Committee, which, as noble Lords will be aware, has opined that the Bill inappropriately delegates power without demonstrating the need for it. Personally, I have mixed views. I understand the point but I repeat my own: that this is government advancing funds to another part of itself. I tend to think that is justifiable, and that the case for increasing the funding has also proven itself, so I do not see the need for primary legislation to authorise the additional funding.

The key point is that the CDC’s record, particularly over the last five years, stands for itself. I remember times when there was criticism of it, and it is extremely heartening to see how successful it has been, in very difficult territory.

12:39

[Lord Boateng (Lab)]

My Lords, I declare my interest as chair of the Africa Enterprise Challenge Fund. As such, I have had the opportunity to see the work of the CDC in support of agribusiness in Africa and renewable energy. I am bound to say that I welcome this Bill; I welcome, too, the Minister’s championing of the CDC within the department. I think that it will benefit from his attention. Frankly, if truth be told, the CDC has not in the past benefited from any ministerial champion at all, which has been part of its problem. The noble Baroness, Lady Northover, happily gave it some of her attention but, certainly in my time in government, it must be said that it did not have any champions.

We must also recognise that, at one time under the Labour Government, the CDC was being fattened up to be privatised—that was the reality. It was therefore given a mandate of making as much money as it could, but no target at all in relation to its contribution to the eradication of poverty or to development. We have to be frank: we need to learn the lessons of the past in order to ensure that we do not repeat the mistakes of the past in the future. The good news is that, for the past five years, a process of reform of the CDC has been under way, which has seen a renewed focus on the reduction of poverty and is to be warmly welcomed.

My noble friend Lord Judd, whose knowledge of these matters is, in my experience, unparalleled, was exactly on point when he suggested that, going forward, it is absolutely vital that the CDC continues to focus on empowerment and enablement on the African continent; ensuring that small and medium-sized business can grow and link to global markets; and improving value chains across the continent. This is about saying that we will stand alongside Africa as it develops its own agribusinesses and manufacturing capacity, because it is in these areas that there is currently a marked deficit on that continent.

Real gains have made in the past decades in terms of economic growth—six or seven of the top 10 fastest-growing economies in the world now are to be found in Africa, which is a tribute to entrepreneurs there. There have been vast improvements in terms of governance—the recent successful transitions of power in both Nigeria and Ghana are examples. Across the continent, there has also been a renewed focus on the part of African Governments on creating enabling environments in which it is possible for business to flourish.

This creates a real opportunity for the CDC to get alongside those businesses. One particular aspect of Africa’s development on which I seek to concentrate—including the potential role of the CDC—is the role that small and medium-sized enterprises can and must play in the continent’s development. In Africa, they contribute to around 40% of GDP and to some 50% of employment overall. In some sectors, their level of job creation can be even higher. For example, informal and formal SMEs together account for about three-quarters of total employment in manufacturing. However, the reality is that it is very difficult indeed for small and medium-sized enterprises in Africa to obtain funding from the banks. That is because in the main the banks are risk-averse and do not understand the sectors—the agrisector in particular—in which SMEs are emerging. Significantly, SMEs also suffer from very high interest rates. That is the fact of the matter on the ground, on the continent.

To address that, the CDC has seen it as part of its mission to support those businesses through supporting banks. So, taking the example of a recent investment it has made, it has supported the dfcu Bank in Uganda, which focuses on tackling the lack of long-term funding for SMEs in a country—Uganda—where they contribute around 70% of GDP. A bank such as that could not hope to obtain on the open market the sort of funding that the CDC can give it, on the terms that the CDC can give it. If you were simply applying market judgments and the bottom line to support for banks that work with SMEs, you would not be able to raise capital. The CDC, with its focus, is able to do so.

The CDC needs to be encouraged to focus on and address market failure. That, after all, is the justification for putting public money into it—I cannot think of any other. We are putting public money into something that addresses the failures of the market so that markets can work better for the poor, and to support development. As all sides of the House agree, the long-term and medium-term solution to Africa’s problems does not lie in overseas development assistance but in the development of a sustainable private sector and the capacity within Africa to generate, through tax revenues, sufficient money to do all the things that we expect the state to do in our own country. We want enabling states; we certainly want states that encourage and support a private sector that can create wealth and provide employment. That ought to be the focus of the CDC in the future.

I ask the Minister to ensure that this House has an opportunity to discuss the future strategy of the CDC—that an investment strategy is not adopted without consideration of views from all sides of this House—because, as today’s speakers list shows, there is real expertise in the Chamber. That expertise can encourage, support and spread the word about the importance of investment in this area, and all that investment can do.

I end on this note: we are in a challenging time for global security, and the best protection for any of us in the world is job creation. Africa has the fastest-growing population of young people in the world, and if there are young people in Africa who do not really have an opportunity to gain sustainable livelihoods, whether in urban or rural areas—Africa also has the fastest rate of urbanisation in the world—they will fall prey to those who would exploit them for their own purposes.

In northern Nigeria we see a classic example of this. Boko Haram exists because young people feel disaffected, cut off from relevant educational opportunities and the prospect of getting sustainable livelihoods. The great work that the CDC is doing in that area—creating real job opportunities with real employment and providing real added value—is a classic example of the sort of response that we ought to be making to today’s challenges. I wish the CDC all the very best with its task and hope that the Minister will continue to champion it in his department.

12:49

[Lord Bruce of Bennachie (LD)]

My Lords, I am very pleased to follow the noble Lord, Lord Boateng, and I agree with much of what he said. I draw the House’s attention to my entry in the register of Members’ interests. I have a particular interest because when I chaired the International Development Committee in the House of Commons, we carried out an inquiry published in 2011, before the change in strategy. The noble Lord anticipated some criticisms of the Labour Government, which I did not want to make too forcefully, but he was right that the corporation was being looked at for privatisation. Douglas Alexander got it focused more on poverty but it really took Andrew Mitchell and a wholesale review to come to a strategic change.

One recommendation in our report was to split the fund. The Government did not agree, but did split the corporation’s objectives from being just a fund of funds to separating funds and direct investment and going back to some of the traditions of the early days of the CDC when it invested directly in companies and enterprises, not just through funds. That has obviously had an impact over the last few years and is becoming a more significant part of the portfolio, but it is still very small. I hope that the new strategy will help to explain how we can achieve more of that and find ways to fill the market failures in those gaps to make the transformation. The reality is that I do not believe that any country has significantly lifted its people out of poverty without having a vibrant private sector. The role of development finance funds of the CDC’s kind is extremely important in helping that to happen.

My noble friend Lady Northover identified a number of concerns, which I hope that the Minister will directly address. There have been reservations expressed that we are going for a quadrupling, and then a further doubling, when we do not have a strategy nor yet a clear indication of how that money will be spent. The Minister rightly says that there is a huge demand for a huge amount of money; the question is how much of that would be more appropriately met by an organisation such as CDC, as opposed to the wider market. Given the sort of criticisms that the sector currently faces, the Government need to be careful about putting substantial additional funds into CDC—although I would not put it in these terms—without being absolutely clear that there will be proper accountability, proper results and a proper strategy. If they are not, they will find the sort of heat that they have experienced in the popular press being turned on them for exactly this. It would be extremely unfortunate if that were to happen and we must make sure that it does not.

The reality is that we need to invest in projects that are riskier and offer a poorer return, because those are precisely the projects that the private sector, and by definition the market, will not address. The CDC has shown that they are there and can generate a return. The question is whether there will really be £12 billion of that kind of investment available over the next few years.

The Secretary of State has said that she wants the focus of UK aid to be on trade and investment. That is a kind of mantra across the Government, who are desperate to demonstrate that we can get agreements on trade and investment. But there is a consensus in this House, which I hope is not under challenge, that our aid and development focus should be on poverty reduction. That is our fundamental objective. The noble Lord, Lord Boateng, mentioned the importance of creating jobs and livelihoods. Quite terrifyingly, the forecast of job requirements in Africa alone is not in the millions or even the tens of millions. Hundreds of millions of jobs will have to be found in a relatively short time, which is really quite a scary thought because, if those jobs cannot be found, there will be an awful lot of idle hands looking for something to do—and I fear that those things may not always be positive and constructive. There is no doubt at all that we need to do that.

The other thing I will talk about is the mix of our aid budget and focus, because this is a big increase in one particular component of DfID’s spending. The Minister gave me a reply earlier this week relating to the Government’s humanitarian response. He said that our spend over the last three years has gone from £826 million to £1,266 million—that is, from 12% of total ODA to 17%. Everybody understands why that has happened and there is clear public support for that. Nevertheless that is an increasing proportion of the budget which, by definition, is not available for other aspects of development spending. There have been indications of cutbacks in some development programmes, partly because of that pressure.

The second thing is that the depreciation in the value of the pound—on average 20%—means that the purchasing power of our aid budget has been correspondingly reduced and so there is less scope. Those people who seem to think, because of our commitment of 0.7%, that somehow DfID and our development budget is awash with funds are not really facing up to the pressures of impending famines as well as of traditional development.

There is a clear synergy between the role of development and the role of private sector investment. Clearly investors, whether they are indigenous to a country or outside it or in partnership, benefit from having an educated, healthy workforce and decent infrastructure investment. The two things fit together. Indeed, one of the reasons that many enterprises are reluctant to invest in developing countries is a lack of those things, coupled with problems of governance and corruption that make them difficult places to do business. If the CDC and development can work together to make that environment more conducive, the private sector will be able to take more of the burden on itself and help to address the development needs. We can look to countries such as China, India and Vietnam that have demonstrated how that kind of partnership can lift millions of people out of poverty over a relatively short period of time.

There is a clear need to ensure that extra money going into the CDC is not at the expense of development programmes. I completely agree that the objective in the end is for countries to have the capacity and the resources to run their own services and be free of aid, but we should not cut off that aid prematurely before they have actually established that degree of viability. That would be a point of concern for me. I know it is unpredictable but it would be helpful if the Government and DfID gave us a little bit more guidance on their strategic objectives in terms of how much they feel is reasonable for humanitarian support, how much is going into development and how much is going into the private sector. It would help us to get a clearer idea of the strategy behind it.

Just as a general comment, the people in the sector whom I meet, whether they work for private contractors, NGOs or organisations generally working with development, feel very beleaguered at the moment. They feel under sustained attack—not all of it justified or even accurate—not only from the popular press but also from the more serious media with an inadequately robust response and defence from DfID as well as across the Government. Much more can be done to explain how transformational UK aid is and how effective we are at delivering real results, giving people the good-news stories that are out there of how, thanks to our intervention and the partnerships we build both from our own expertise and that of the country we are operating in, we are helping to make a real difference.

People who say aid does not work are simply ignoring the facts. We have reduced poverty, we have massively delivered on health objectives, we have got more children into education and we are beginning to raise the quality of these services. We have set ourselves an ambition of ending absolute poverty by 2030—no mean commitment—and to do that we will have to maintain our level of commitment but we also have to explain it much more fully and clearly.

Therefore, while the CDC has a role to play, its changed focus over the past five or six years makes it better equipped to spend more fully. I still have reservations about whether there are enough of the right kind of projects to absorb this extra spending, and I would be interested to see the strategies around how that could be done. I support what we are trying to do, but it is important that we show how the CDC fits in with the strategy of development, humanitarian response, building resilience and capacity and helping, as the second-largest bilateral donor in the world, to lead the way to end absolute poverty by 2030. This has to be a contribution to that.

13:00

[The Earl of Sandwich (CB)]

My Lords, it is a pleasure to follow the noble Lords, Lord Bruce and Lord Boateng, with their historical experience of the CDC, and I am much looking forward to the speech of my old noble friend Lord Eccles, who has seen the CDC almost from the beginning.

I was surprised that this Bill was made a money Bill, considering the huge questions raised by the expansion of the DfID programme. I know we have limited powers in this House, but I tried to complain. I went to the Chief Whip, who agreed to talk to the Lord Speaker, but I decided I could not take it any further. A central issue in the Bill seems to me whether, in handing over such a large proportion of our aid to the private sector and to one particular body, we may be bypassing some of the core principles that have governed the aid programme over many years.

I know that the CDC has changed considerably under new management. I have discussed this directly with the CEO, Diana Noble, quite recently. My noble friend Lord St John made a very strong case for the CDC. I accept that it has responded to radical change. To take only one example, in 2015 more than 1 million jobs were indirectly created by the CDC in Africa and Asia alone. I also have great admiration for the Minister of State in another place, Rory Stewart, whose work with the voluntary sector is well known, as is the experience of our own Minister, but having read Mr Stewart’s replies to the debate in the Commons, I am not yet convinced that the CDC has embraced poverty reduction, which, incidentally, is not quite the same as job creation.

The Minister used the words “doing good while not losing money”. That does not seem to be an adequate description of our international development programme, because poverty reduction has been the focus of our aid programme for some time. We abolished tied aid a generation ago, and the failures of huge projects such as Pergau and Narmada marked the end of large-scale UK investments during the 1980s. Since then, successive Aid Ministers have listened to criticism and have won public support for more programmes which demonstrate people’s participation, meet the needs of the very poorest in society, create partnerships and bring non-governmental organisations directly into the planning and execution of projects. The noble Lord, Lord Judd, mentioned that. I was encouraged to hear the Minister say that there is still room for improvement, presumably in the direction of the very poorest. That is precisely the dilemma the CDC faces.

As someone familiar with some of the UK’s best NGOs which are working alongside the poorest and in partnership with DfID, I have seen this work at first hand and I know that it brings real benefits to society. I do not need persuading that the private sector, and the CDC in particular, can be an effective channel to the poor. In fact, business is a good route for the voluntary sector to follow. For instance, the business model in which women create their own credit and loan scheme, originated with the Grameen Bank and other microcredit organisations, is still widely respected. The noble Lord, Lord Boateng, mentioned SMEs in Africa, which are another important channel.

When it comes to investment decisions, which are not risk free, and due diligence at a higher level of management, there comes a point when must priorities change. Pay scales rise and the interests of the corporation itself may take over from those of the beneficiary. This is a built-in dilemma which was discussed in some detail yesterday in the Public Accounts Committee which I attended. Investment really belongs to a different tradition, and this is why the CDC is being kept separate from the mainstream aid programme. One might be forgiven for asking whether it needs to focus on the poor at all.

Additionally, there is the issue of accountability. Does the CDC really know how its funds are being used on the ground and where they are directed and, even more importantly, can it monitor progress and impact at a later date? Fortunately, we now have really good watchdogs in the form of ICAI, the NAO and DfID itself, not forgetting the IDC, other Select Committees and occasionally our own EU Select Committees which have occasionally covered the EU aid programme. The CDC is very closely scrutinised.

On the whole, the CDC comes out well from various reports and audits. It has responded to recommendations and its transformation is much admired. There are some criticisms worth mentioning, some of them highly technical, which were examined, inevitably in much more detail, in the Commons debates, and I am sorry that we cannot do that today. For example, the NAO found that the development impact target measures prospective impact rather than actual impact. The noble Lord, Lord Judd, raised this point. There are also recruitment and retention challenges. The CDC may be on the right track, but it still has to demonstrate that it can make a lasting difference to the lives of the poorest. ICAI reports have come out with similar comments, although they recognise the growing role of foreign direct investment in development. My noble friend Lord St John made that point.

Finally, there is also a problem of public information. Far too little is known about the CDC programme, while DfID projects are much more visible, and this creates discrepancies. ICAI last year pointed out the anomaly that the CDC is moving DfID back to BRICs and middle-income countries. While DfID has scaled down its aid programme in India, the CDC’s investment there amounts to one-quarter of its portfolio. Is the tail wagging the dog? Does this mean that India suddenly again becomes a developing country and not a middle-income country? Should not the public be aware of this, because many people have argued that the poorest in India should always be a priority? I also believe that the CDC should arrange visits, perhaps through the CPA as well as the IDC, so that more MPs and others can go out to see the work it is doing because it is so important.

I am sorry to strike a discordant note during the passage of this Bill, but while I recognise the value of the CDC’s work, I shall need more convincing that it is really about poverty. The noble Baroness, Lady Northover, mentioned the CDC’s effect on DfID, which is important. The SNP and others put down several amendments on these matters, but I think Her Majesty’s Government have still skilfully avoided the answer. The CDC apart, with the future loss of EU channels of funding and the fall in growth rates and commodity prices in Africa, DfID already faces a considerable challenge in rethinking its responsibilities to the developing world.

13:08

[Viscount Eccles (Con)]

My Lords, I worked for the CDC from 1981 to 1994. As the noble Lord, Lord Judd, said, for nine of those years, I was its chief executive. There is one other coincidence: my noble friend Lord Flight now lives in a house in which I lived for a while and in which Lord Reith, who was a most successful chairman of the CDC in the 1950s and 1960s, had also lived. I do not know whether there is any message in that coincidence, but it is interesting.

I would like to concentrate on the period from 2010, on which the debate is concentrating. My period is irrelevant, except that I endorse what the noble Lord, Lord Judd, said about technology transfer and capacity building. A development finance institution such as CDC does not have a role unless it is involved in both technology transfer and capacity building and, therefore, the creation of greater human capacity for people to do things that they did not know how to do before. I could tell your Lordships many stories about how CDC has achieved that in the past, but I would like to concentrate on the period from 2010.

Before doing that, I want to refer to some comments made by the noble Lord, Lord Boateng, about the period before 2010. We are all talking about CDC, but that is inaccurate. It is, in fact, the CDC Group. In 1997, the decision was made in the manifesto that a Bill would be put before Parliament which would have the purpose of changing CDC from being a loan-financed public corporation to becoming an institution with share capital which would then become 75% private and 25% continuing to be owned by the Government.

That is the 1999 Act that we are talking about amending today. It set up the possibility of CDC, then renamed the CDC Group with a shareholding, becoming 75% private owned and 25% retained by the Government. That did not happen. I will not go into the story of why it did not happen, although I am pretty familiar with it. I will just say that I believe that the 1999 Bill was a mistake and that there should never have been a campaign to take any part of the CDC out of public ownership. It should always have remained in public ownership. Although I sit on this side of the House, I can assure your Lordships that, when I was chief executive of CDC in the days of Margaret Thatcher, I was completely consistent with my board that it would be wrong for CDC to seek to be privatised; it should stay in public ownership.

That is where CDC is today and that is why what has happened since 2010 is of very great interest to Parliament. It is a great pleasure to find that Parliament is again debating CDC. Although years ago, CDC was quite frequently debated in Parliament, there was a big gap from about 2004 until 2010 when, frankly, the general opinion was, “Sweep it under the carpet and don’t talk about it”.

From 2010, under the Secretary of State, Andrew Mitchell, a decision was made by the coalition Government to see if they could put CDC back on track. It had become, as I think a noble Lord mentioned, a fund of funds. As a fund of funds it was no longer a development finance institution. The chain of accountability to Parliament was broken by CDC becoming a fund of funds and that needed to be restored. That was spotted by the coalition Government and, as has been said, they made arrangements to appoint a new chief executive, Diana Noble, who has done an extremely fine job, and a chairman, Graham Wrigley, who, in my opinion, has also done an extremely fine job. They have been getting the CDC back on track.

While the Bill is extremely welcome, we need to keep close attention on the business plans of CDC. It is a very important duty not only of DfID but also of Parliament to understand where CDC is going. As your Lordships will understand, it takes a very long time for the things that have been brought into CDC’s portfolio to work out. The usual time before a CDC investment is realised may be about 10 years. We are still living with a great deal of what CDC invested in as a fund of funds before 2010, which is going to take quite a long time to work its way out.

In the strategic future, the question which has been raised by many noble Lords is what proportion of the CDC portfolio is going to be directly invested. Only a direct investor can encompass innovation and going to places where the private sector will not naturally go. Several of those places have been mentioned, including northern Nigeria and the Congo. We can all think of many places in Africa where the fully private sector will hesitate to go. These are the places into which CDC in—it is true—70 years has always been willing to go and had the capacity to go without making serious mistakes.

With a small exception in the period between 1999 and 2010, CDC always made a surplus of income over expenditure throughout the years. When we authorise this increase in capital, we should not worry that CDC will lose that money. If it is true to its past, it will not. It will keep that money and use it as a revolving fund which will enable it to do more and more economic development.

As a condition of that economic development, I come back to the transfer of the knowledge of technologies such as from—I do not know—a generic pill manufacturer. That would be a very beneficial thing to be happening to a greater extent in Africa. However, anyone investing in that would need to know about pharmaceuticals and how to set up and manage a factory. It is very important that, when a strategic plan comes, we can see that CDC has proprietary technology of its own. It has always had some and still has—power generation and mobile telephones are two examples of where CDC has had technology and has deployed it.

The people in CDC are also very important. The staff has been built up recently from, I think, 50 when it was just a finance house to about 250 today. Within the capacity of staff employed by CDC, we need people who understand businesses and how to set up and manage them, as well as people who know how to finance them.

I welcome the Bill and believe very strongly in economic development, not only in financial rates of return but also in what I would call, not development impact, but economic rates of return, in which the social as well as other effects are measured. CDC going forward in that way, rebuilding itself as it has already done with very considerable success, will get even more into the forefront of being out there, doing things that the fully private sector is not in a position or not ready to do. As it goes forward, it will leverage in money from less certain people, because they know that if they come in alongside CDC, it is likely to work and to work well.

13:20

[Lord Shutt of Greetland (LD)]

My Lords, it is a great pleasure to follow so many noble Lords who have had experience of these matters over very many years and particularly of the splendid historical context in which we see the CDC. This short Bill is twice as long as another little Bill that we will have when we return after the recess. We may have a couple of hours now, but of course there are five whole days so far in the weeks that follow, although there could be more. We have no opportunity to amend this Bill, as money is at stake.

We know that there are two basic aims: to quadruple the resources available to the CDC and then, by order, to double them on top of that. Because we cannot amend the Bill at all, it is an act of faith as far as we in this place are concerned. We have to have faith that the funds will be properly used. I do not wish to detract at all from the concerns that have been expressed by so many noble Lords, and look forward to hearing about a sound business plan and strategy.

I have only two points to raise. First, when the resources available are increased, will the CDC, where appropriate, have the opportunity to invest beyond the continent of Africa and the countries of south Asia? I do not think there are any legal constraints on this. It is not in the text of the Bill, and the title says “Commonwealth”, but it certainly seems that investment goes beyond Commonwealth countries. Will the new resources allow investment elsewhere?

The second point, which may not come as any surprise to the Minister, is about the British Overseas Territories. It is government policy that their reasonable needs are the first call on the UK aid programme. For each aided territory, DfID’s objective is to assist it in reaching self-sufficiency. The extension of the potential CDC resources would be but a pinprick for the CDC but could be highly significant for dependent territories such as Montserrat and the St Helena group of islands. I have a particular interest in St Helena, having made two visits there. Even with the delays, the availability of the airport there for mainstream use is keenly awaited, which we hope will happen during this summer. We know that there are detractors around, so it is important just to mention that there have now been several medivac flights of small aeroplanes, and six people are alive now who might not be had they had to wait three weeks to get a boat to Cape Town.

However, St Helena still needs the infrastructure to cater for airborne visitors. When I was there three and a half years ago, two very significant developments were about to happen, but they have not taken place. It would be a proper use of CDC resources to assist with some of these developments in order to take St Helena away from DfID dependency, whether by investment, loan or even guaranteed support.

13:24

[Baroness Flather (CB)]

My Lords, I have no personal relationship with the CDC, although not for want of trying. I went to see Diana Noble but was dismissed—metaphorically, not literally—because she left after 20 minutes. I was trying to find out what it does and how it works, but got nothing. However, that is not the reason why I am speaking today. I was not pleased, but that is not the important part.

I wrote to the noble Baroness, Lady Verma, when she dealt with DfID issues to ask her some questions about the CDC. She did not answer them, but just repeated what the CDC had told her to say. I then wrote to the noble Lord, Lord Bates, and I must thank him, in front of all your Lordships, for writing to me properly and giving me a lot more information. But there are some issues which worry me. The noble Baroness, Lady Northover, and my noble friend Lord Sandwich made the point about poverty reduction. It is difficult to see how some of the investments I have found out about through research, which I will talk about, fulfil the objective of reducing poverty.

The other point which worries me very much is the need for a proper independent review of the CDC’s work. I think most of your Lordships have taken on board what it says, and may know more about its work in depth than I do, but since the Harvard review, which looked at 2008 to 2012, there has not been a proper independent review. Any organisation which receives government money should have regular independent reviews. Some of the things said about the CDC have not been very encouraging. The shadow Minister for Development, Mary Creagh, has said that,

“the government’s own aid watchdog gave their private sector aid spending an amber-red rating and warned that ministers lack targets and a clear focus on reducing poverty”.

Maybe that will be dealt with in the new measures we will read about. She went on:

“Ministers must ensure this new investment in the CDC is transparent, focused on helping the poorest people in the world and delivers value for money for British taxpayers.”


I think it does, but I do not know how much it does for the poorest people. There was also a certain amount of criticism about gated communities, shopping centres and luxury properties in poor countries. According to the Global Justice Now advocacy group:

“CDC have a track record of ploughing money into dubious ‘aid’ projects like the Garden City luxury housing and shopping complex in Kenya and a luxury hotel in Lagos, Nigeria”.


There are issues about the work of the CDC because we do not get outside reviewers to look at it. The noble Lord, Lord Bates, said that the National Audit Office looks at it but that is not quite what I had in mind. It has to be looked at by people who are involved in development, not national audit. Even if it spends its money properly, I doubt whether it manages to keep all of it clean, because I am sure it has to grease some palms in some of the countries it is working in—although the less said about that, the better.

It worries me that there is no real review of the CDC’s work. Let me go through some of its current investments. It has now invested $6 million in Bridge International Academies, a company that runs fee-paying schools in Kenya. That is all very well, but why does it have to invest that much money in fee-paying schools? What people need instead is non-fee-paying schools, or schools where the fees are so small that they can manage to pay them. This deeply concerns me.

Rainbow Children’s Hospitals is a corporate hospital chain in India that provides mother-and-baby care and fertility treatment. The question was asked whether India is a middle-income country or a poor country. India has more poor people than many other countries, but there is so much money that Christine Lagarde said in her lecture two years ago that the Indian billionaires could remove poverty overnight. I do not see why the CDC has to invest in the corporate sector in India. There is a lot of money for money-making in India. People do not give money for the poor or for poverty reduction, but they are very happy to invest in the corporate sector.

Finally—and the worst of all—there is Narayana Health, a corporate multi-speciality hospital chainI have made some enquiries about Narayana. It is not just a hospital chain but one of the biggest conglomerates, and does all sorts of things. Its hub is in southern India and is almost like a small town. Why are we giving it money? I do not understand why we are giving money to Narayana Health, which is one of the richest organisations. I do not want my tax money—if it is my tax money—to go to Narayana Health. It has been given $48 million. It does not need money. It has more money than it can spend.

To me, these things are very worrying. I would like somebody to take a much stronger interest in the CDC’s investment policies: which countries it is investing in and what the return is. It invested in another chain of fee-paying schools, saying, “This is very good because you only pay $6 a month to get your child in there”. Although $6 seems nothing to noble Lords sitting here, it could mean a lot to a really poor person in Africa. Will they be able to find $6 to send their child do school? So I ask the Minister please to make sure that the money is being spent for poverty reduction as well as job creation. Just creating jobs will not change a country entirely. Poverty reduction has to be a priority.

13:33

[Baroness Sheehan (LD)]

My Lords, I add my thanks to the Minister for introducing this Bill to your Lordships’ House. Having listened to the speeches of other noble Lords, I am also reminded—if I needed reminding—yet again about the wealth of experience, and the breadth and depth of geographical knowledge, that exists in this House. I thank everybody who has contributed to my knowledge in this area.

This is a Bill that seeks to divert the policy of a government department quite significantly. It is a Bill that was neither trailed in the Conservative Party manifesto, nor mentioned in the Queen’s Speech. Moreover, it has been hastened with unseemly speed to its place on the statute book. Indeed, the passage of the Bill through the Commons gave rise to a good number of complaints from NGOs and think tanks that they had not been able to meet the very tight timescales made available to them and had had their submissions to the International Development Committee’s inquiry committee rejected. The Bill has been designated as a money Bill, so we in your Lordships’ House have no means by which to amend it or add conditions and safeguards—in short, no means to carry out our responsibility to give it proper scrutiny and make refinements which the Government may in time have come to appreciate. This is a pity, because taxpayers’ money—quite a lot of taxpayers’ money—is being moved from under the jurisdiction solely of Governments to an organisation which is not wholly accountable, given that it invests through funds of funds, as the noble Viscount, Lord Eccles, pointed out. That money is then outside of accountability through the Government and through DfID.

I am not the only one who thinks that the Bill’s designation as a money Bill is inappropriate. The noble Earl, Lord Sandwich, agreed with me, as did the report of the Delegated Powers and Regulatory Reform Committee, which said:

“We consider that the Bill contains an inappropriate delegation of power unless the Government can provide a convincing explanation of the need for this Henry VIII power”.


The Government did respond, but not convincingly. The need for development aid confronts us daily on our screens. Surely this is not the time to open up another line of attack for the vitriolic campaign that the Daily Mail and other rags are waging against the Department for International Development. That is what I fear this Bill will encourage. As we have seen, the CDC is vulnerable to attacks. In making this momentous and generous increase in the budget of the CDC, the Secretary of State risks exposing the entire 0.7% of GNI available for aid, yet again, to another round of attacks from parts of the media. She could have given herself some ammunition to rebut the attacks by putting some safeguards into the Bill, but then she has hardly been beforehand in rebutting any of the attacks levelled at her department. I know to his credit that the Minister is supportive of the 0.7% ODA, but will he convey to his boss that her history of attacks on DfID during the EU referendum campaign and her record of failing to defend the department on becoming its head are not reassuring?

I move on to why I think this Bill would have benefited from some refinements. It seeks to allow the CDC a massive increase of £4.5 billion to its overall spend to raise the ceiling to £6 billion, with an option to increase it further by another £6 billion by secondary legislation to a total of £12 billion. This raises eyebrows as the CDC has a chequered past—historically coming under heavy criticism in the really bad old days. Before 2012, the CDC spent 100% of its budget through funds of funds in projects that could hardly be described as pro-poor, including as they did, the arms trade. Nowadays, one-third of the CDC’s investments are made in other intermediary funds—funds of funds—a third are syndicated with other funds, co-invested; and a third are direct investments. We hope that the proportion of direct investments which give greater accountability to taxpayers will increase under the new strategy, once that is published.

First, let me address the problems posed with respect to transparency in the reporting of data. This is important because we need to be sure that ODA invested in the CDC can be traceable and accountable to taxpayers, in line with DfID’s international commitment on aid transparency. It is true that reporting has improved; however, a full two-thirds of the CDC’s investments remain opaque.

The CDC needs to take this on board and push for greater transparency in the deals it does with intermediaries, be they co-investees or other funds. These deals are rarely published with clarity, giving rise to allegations of secrecy and nefarious goings-on. It must publish what it funds. This has become even more imperative given that, since 2014, all capital transfer to the CDC is now reported as ODA by DfID to the OECD credit reporting system, but not all CDC investments are eligible as ODA.

The International Aid Transparency Initiative standard in 2012 rated the CDC as poor—a point mentioned by the noble Lord, Lord Judd—and asked it to publish what it funds. Why can it not publish country-by-country data? Neither DfID nor the CDC publishes data that give us a complete picture of how public money is invested. We do not know who is accountable: DfID or the CDC. This is unsatisfactory, and some clarity from the Minister on this question would be appreciated.

Given that 100% of the capital transfer from DfID to the CDC will now count as ODA, it is essential, to avoid controversy, that CDC projects demonstrate that they are focused on ending poverty. Closely linking its performance framework, evaluation and reporting, strategies and policies to the International Development Act 2002, the International Development (Gender Equality) Act 2014 and the UN sustainable development goals would go some way to countering media attacks. However, the recent NAO report on the CDC’s development impact framework does not include indicators for development impact achieved. Moreover, the CDC is not formally required to report on that. Why not?

Will the Government change their current reporting structure so that the CDC is subject to and compliant with the International Development Act 2002—surely not a big ask? Measuring impact is so important, and a really hot topic in the sector. The CDC has £5 million put aside to invest in a research project to develop a methodology to measure impact, yet that money lies unused. That is inexcusable.

The CDC’s preference for using job creation as a measure of impact is crude. Nor is it readily verifiable, as its intermediaries and co-investees can choose to provide no back-up data for their assertions. The CDC itself must not remain silent when it is attacked in the press. It is imperative that it defends itself, and to do so it must have facts and figures at its fingertips. It is no longer enough to say that it is in the business of job creation: that is only one indicator and is, moreover, unqualified. To be more meaningful, we need to know the quality of the jobs, pay and working conditions of employees, gender and age of the workforce and whether any training or education is delivered.

I move on to the criticism that the CDC has come under because of its use of tax havens. I hear what Diana Noble, the CDC’s CEO—for whom I have great regard, incidentally—says in defence of their use: that it is sometimes unavoidable when co-investees will not commit to a project where they believe there are not sufficient safeguards for the money or to avoid double taxation. My response is that the use of tax havens leads to the diversion of tax revenues from the poorest nations in the world—revenues that could be spent on health, education, clean water and so on—and all efforts must be made to put in place extra precautions and lend expertise to develop more robust financial practices that move that agenda forward. Development is, after all, the key word. These precautions may eat into profit margins, but profits at the CDC are still well above the 3.5% agreed with Ministers—for example, last year’s profits were 16%. The Prime Minister cannot on the one hand promise a crackdown on companies’ use of tax havens and at the same time sanction their use by a government-owned company.

The CDC must be careful to guard against scandal. It must not appear in the press for the wrong reasons. Every deal must meet the Daily Mail resilience test. Will it stand up to allegations of propping up corrupt leaders? Can a luxury mall be justified—for example, would the project struggle to attract investment elsewhere if the CDC were not to invest in it? Can the project withstand allegations of “public money, private profit”? The CDC’s remit is to invest in private enterprises that would typically struggle to attract investment elsewhere, as stated in its mission statement. Does it really need to invest in high-end private education or for-profit private health? These highly profitable enterprises, targeted at the well-off, usually in middle-income parts of a country, are justified, the CDC says, because the country is overall a low-income country. The CDC would do itself a favour if it were to cease investing in such businesses and stick to its objective: invest to contribute to economic growth for the benefit of the poor.

That is not to say that investing in health is wrong—far from it. The health sector is a key area where the impact of aid is clear and one that the public can connect with—very important—so the economic benefits of spending on health are strong, estimated to exceed cost by a factor of 20 in lower or middle-income countries. However, recently published figures for UK bilateral aid show that health has dropped from being the largest area of spending to fourth place. There is a trend of moving away from social development sectors into areas such as economic development and infrastructure, which may not always be pro-poor. That is something we must guard against. Each has its place, but we must ensure that one important sector does not lose out in place of another—a point my noble friend Lord Bruce made far more ably than I can. The CDC’s investment in health can be targeted so that it is demonstrably pro-poor.

In drawing my remarks to a close, I highlight the lack of strategy. The current strategy ended last year. During the Bill’s passage through the Commons, the Minister, Rory Stewart, said in his response that the amendments addressing the points I have highlighted were all valid, but that they were best addressed through internal governance and the forthcoming investment strategy rather than primary legislation. We were told by the Minister that this already much-delayed strategy would be with us by last December. It is now February, and we have had no sight of the new strategy which will guide the investments under which up to £12 billion of taxpayers’ money will be spent. This is unsatisfactory.

We must add to that the fact that the current CEO, Diana Noble, is due to leave shortly and the CDC will be under new leadership. I congratulate Ms Noble on her work for the CDC over the past five years. It cannot have been easy. The changes she has wrought have moved the organisation in the right direction. However, as I have outlined, this is very much work in progress. The appointment of a new head of the organisation will inevitably mean a different way of doing things but, without knowing who the new head will be or what the CDC’s vision for 2017-22 will look like, we are being asked to give our consent to a blank cheque.

I confess that I feel uncomfortable about doing that. However, the Bill’s passage is assured. I hope that the Government and the CDC will take on board not only my comments but those made by others in your Lordships’ House, and ensure that the CDC does not become the weak underbelly of DfID and leave itself open to attacks from those elements in the media which have never understood the imperative for the 0.7% commitment of GNI towards international aid.

UN figures tell us that more than 65 million people across the world have had to leave their homes to seek safety and to try to meet basic human needs for both themselves and their families. If we are to deter even more of them, in their desperation, from exposing themselves to the risks of dangerous journeys across continents, then we must work to ease their misery in their own countries. This is a moral imperative that benefits us as much as them.

13:50

[Lord Collins of Highbury (Lab)]

My Lords, in this House there has been strong support for the 0.7% aid target and Britain’s role in international development. There is also a broad consensus around the role of the CDC, as we have heard in this debate.

Job creation is one of the best ways to reduce poverty; it is important that the Government have a development investment arm that will help poorer countries to create new and innovative jobs. However, the focus for such work must be on the poorest, least developed and lowest-income countries, and on ensuring that the work is consistent with the sustainable development goals agreed by the UN.

As we have heard, the CDC made significant changes following the 2008 National Audit Office report and—as the noble Lord, Lord Bruce, reminded us—following the 2011 International Development Committee report, in line with recommendations to move towards a focus on the alleviation of poverty. This shift in focus is a major achievement of Diana Noble. She has done a terrific job and will be sorely missed. The changes were reviewed recently by a further NAO report released just before the Second Reading of the Bill in the House of Commons in November 2016.

The report was mostly positive. It noted that the 2012 to 2016 investment strategy shifted the CDC’s investment focus, which is clearly welcome. It noted that the CDC had exceeded the targets agreed with DfID relating to financial performance and development impact. However, it also said that the CDC should do more to measure the development impact of its investments. This would not only provide a better basis for investment decisions, but increase the transparency of the CDC.

Poverty alleviation is absolutely central if we are to make a success of the SDGs and Agenda 2030. As the noble Lord, Lord St John of Bletso, said, the adoption of SDGs has resulted in an international consensus that the private sector needs to play an even greater role in delivering a sustainable future for everyone, by integrating the aims of the goals into its business practices.

Developing countries currently face an annual investment gap of $2.5 trillion to achieve the global goals by 2030. The goals can be achieved only by working with the private sector, including with DFI organisations such as the CDC. The CDC states that it is committed to helping to achieve the global goals by focusing on those where it can have most impact: goal 7 on affordable and clean energy—as we have heard, we know there is an infrastructure need, particularly in Africa—as well as goal 9 on industry, innovation and infrastructure, and goal 8 on decent work and economic growth. Noble Lords have made the point that the CDC is investing in areas where labour standards are a key issue for its investment. In the most difficult countries, I know it has even built in proper workplace representation, which is vital in terms of delivering on our SDG objectives.



We are told that the ending of extreme poverty by 2030 is central to the CDC strategy. The 2012 to 2016 investment plan has, as we have heard, expired and we are yet to see the 2017 to 2021 investment plan. Like many noble Lords, I am disappointed that Parliament is being asked to raise the investment threshold before seeing the plans for the next four years of investment.

In terms of measuring the development impact of its investments, I ask the Minister whether he can assure the House that in the new investment strategy a more robust approach to measuring development impact will be implemented. Like my noble friend Lord Boateng, I also hope the Minister will be able to reassure us that Parliament—this House in particular—will have the opportunity to debate and consider the new investment strategy. There is no doubt that the CDC has become more transparent, but more can still be done to ensure that money is being spent as well as possible. One way this could be achieved is to allow the Independent Commission for Aid Impact to play a bigger role—for example, by carrying out a regular assessment of CDC investments, allowing scrutiny so that we can ensure the full effectiveness and value for money of the programmes in which the CDC invests.

We should be proud. The CDC has been a world leader among development finance institutions in publishing details of its investments since 2012 under the International Aid Transparency Initiative. But it would improve transparency further if it published similar details on its entire active investment portfolio, including those investments made prior to 2012. That would enable greater scrutiny of the CDC’s entire portfolio and hopefully provide assurances to the public that all CDC investments are focused where they need to be—on the goal of poverty reduction.

My noble friend Lord Judd and the noble Baroness, Lady Northover, as well as other noble Lords, highlighted two particular areas of concern: first, the volume of the Government’s proposed new investment for the CDC and, secondly, the CDC’s continued use of tax havens. Regarding volume, a critical issue, which noble Lords have raised, is whether the CDC can absorb this funding—does it have the capacity to deal with it? I hope the Minister will be clear today about the schedule for this spending. What is his idea of the number of years over which the increase would be spent before we might require another Act to increase it even further?

On tax havens, it is disappointing that, despite the Government’s stated objective in cracking down on tax evasion, the CDC continues to use them, including the Cayman Islands and Mauritius. I met the chair and the chief executive of the CDC recently and raised this concern with them. They responded in the way that we have heard about in this debate, by stressing the importance of stable financial arrangements for investments. In some countries—this is pretty obvious—it is clearly not possible to set up arrangements within their legal structures to ensure that the right duties and controls are in place.

Surely a way for the Government to address legitimate concerns would have been to include on the face of the Bill standards for the CDC to meet, in terms of the commitment to transparency, value for money and tracking development results. Since this opportunity has been missed, I ask the Minister whether the CDC will be asked—in the strategy that I hope your Lordships’ House will have the opportunity to debate—to improve its transparency and reduce the volume of investments it routes through tax havens.

While I believe that it makes sense to increase the CDC’s investment threshold, we need to ensure, as with any area of government spending, that every penny is going where it can have the greatest effect—the right places and the right people delivering value for money for the taxpayer. One way in which to achieve that would be to ensure that we could have regular scrutiny and proper debates in Parliament on the CDC’s activities.

14:00

[Lord Bates]

My Lords, I begin by thanking all noble Lords for their contributions in what has been a thoughtful and fascinating debate that has ranged quite widely over a number of different headings. Broadly, I have categorised those—although there is a significant overlap—into: the CDC’s role in the private sector, which the noble Lord, Lord Boateng, referred to with practical examples, as did my noble friend Lord Flight with other examples, and it was also referred to by the noble Lord, Lord St John of Bletso, and my noble friend Lord Eccles; the CDC development strategy and where this Bill fits into that, which was focused on by the noble Lord, Lord Collins, along with the noble Lords, Lord Shutt and Lord Judd, the noble Baroness, Lady Northover, and the noble Lord, Lord Bruce; and, finally, the question of parliamentary scrutiny that should rightly be afforded to such an important area of public expenditure and investment, which was the focus of the noble Earl, Lord Sandwich, and the noble Baronesses, Lady Flather and Lady Sheehan. I shall take that as my rough template to draw some strands out of the initial remarks.

The first point to make, however, is that, obviously, I echo the comments made by a number of Members during the debate recognising the significant level of expertise resident in this House that can be brought to bear in scrutinising and helping to shape strategies in future.

On the strategy, the noble Lord, Lord Collins, was absolutely right to take us back to the sustainable development goals and Agenda 2030. When we look at a Bill, we look at a particular strategy in isolation, and I want to try to place this Bill in the wider context, which is that of the sustainable development goals. Goal 8 has been mentioned, but essentially it is goal 1 that we are after, the eradication of poverty, which is the mission of DfID. The noble Baroness, Lady Northover, and the noble Lord, Lord Bruce, referred to that. We have made good progress on that goal. In 1990, those living in extreme poverty numbered some 2 billion; as of 2015, that number had reduced down to 705 million—almost to one-third, at a time when global population had gone up. In many ways, that heartened and strengthened the view—because a significant proportion was drawn from the commitment to the millennium goals—that global concerted action and focus could deliver significant change, if it was co-ordinated. That was why the UN Secretary-General set up the high-level panel of which the former Prime Minister David Cameron was a co-chair, which then led to the sustainable development goals.

The sustainable development goals, which have as their target eradicating extreme poverty by 2030, with a number of successor goals to that, are very much at the heart of what we do. Because we now view development activity through the lens of the UN sustainable development goals and have our commitment—which continues to be reiterated, as perhaps it needs to be—to the 0.7%, which has been secured through legislation and our manifesto commitment, we seek to match the 0.7% with the goals. Our strategy across government for implementing the goals will be set out in a new Agenda 2030 strategy document, which will be published in the next couple of months.

I am providing a protracted introduction because my opening remarks perhaps did not quite cover the context that this Bill fits into. We have the sustainable development goals as a focus, we have a plan which is coming and we have a UK aid strategy, which sets out the importance of economic development and of jobs, which are sustainable goal 8, as well as the eradication of poverty, which, rightly, was number one. It talks about partnerships and working together. The UK aid strategy then fits into and drives the single departmental plan of the Department for International Development as the prime lever for doing this.

The noble Baroness, Lady Flather raised a point on data, and one of the most important elements in the sustainable development goals is, to the delight of mathematicians and statisticians, the incredibly complex data that will be required to track progress towards those goals. That is set by the United Nations Statistical Commission, and the Office for National Statistics will have responsibility for collating data from across government—including the Government Statistical Service and many other sources—and uploading those so that we can better track our progress. That rests in the single departmental plan, which is published.

Off the back of that, last week we published our economic development plan, which recognises the importance of private sector investment in infrastructure. Gradually, this has all been built together. All of that is then scrutinised and overseen by the Independent Commission for Aid Impact, ICAI, by the Select Committee on International Development, by the NAO, whose report has been referred to, and by the Public Accounts Committee—the noble Earl, Lord Sandwich, referred to attending the PAC meeting yesterday, where the Permanent Secretary gave evidence.

So that is the context in which this Bill needs to be set. We are arguing that it is not all about economic development; economic development is part of what DfID does—in the current year, economic development sits in an envelope of roughly £1.8 billion out of a £12 billion spend. So we are talking about funding within that envelope on economic development.

Then we come to the question of the CDC Bill itself. The argument was that, because several years had elapsed since the Act had been passed and the cap had not been moved during that time, it was right that, given that economic development was going to play a more significant role in addressing the sustainable development goals, we look at raising that cap.

Of course, the UK Government are the shareholder, so when we talk about hiving off funds, as my noble friend Lord Flight said, we are hiving off funds to ourselves. It is taxpayers—it is ourselves—who are the owner and shareholder, and we have the ultimate power as the shareholder, without wishing to worry current holders of posts, to appoint the board and appoint the chief executive. We can have a quite significant impact. I want to reassure noble Lords on that, because there was some concern in that regard.

On the CDC and its strategy, I took on board the point that was made. We are now drilling down: we have gone through the sustainable development goals and the cross-government approach to delivering on aid; we are now into economic development and we have the economic development strategy; and now we are saying that it is right that there should be an investment strategy for CDC, which should be published and discussed initially with the shareholder—namely, Her Majesty's Government.

When that was being discussed, we felt there were two alternatives: to publish the strategy alongside the Bill, or to allow the Bill to make its progress through the House and do the House the courtesy of listening to its scrutiny of the Bill. Some comments, such as the ones mentioned by the noble Lord, Lord St John of Bletso, have made a profound difference, and others, such as those brought to our attention by the noble Baroness, Lady Flather, perhaps less so. We chose to let it go through the House and for the wisdom and expertise that exists in this House to be incorporated into the final strategy that is published.

At the same time, when agreeing our process on this, we had a couple of choices regarding parliamentary scrutiny, and I want to address this quite directly. There was a debate about whether we put in £12 billion, which was what we assessed looking forward. The noble Lord, Lord Collins, referred to the estimated $2.5 trillion funding gap, so this is significant but, in terms of the need, it is not vast. It is also fair to say that the amount we allocate, as a percentage of overseas development assistance, to capital in financial institutions is significantly less than countries such as the Netherlands, Germany, France and the USA. We asked whether we should go straight to £12 billion or have an interim stage. I suppose the conclusion was that we could take this in cycles, so the initial plan will be for the next four years and then there will be a successor plan for the following five years, which will be published and discussed. Off the back of that, there will then have to be an affirmative resolution, before your Lordships’ House and the other place, to give permission for that investment to occur. We considered that point very carefully and came to the conclusion to do it in two steps. That was the rationale behind that.

The noble Baroness, Lady Sheehan, and the noble Earl, Lord Sandwich, asked about the CDC Bill being certified as a money Bill. I would like to say it was part of a strategy, but of course we have no control over that. The certification of a money Bill is the preserve of Mr Speaker in the other place, and I do not think he would take any advice from Her Majesty’s Government on this or probably any other matter. He certifies it and it is what it is, and we must work within that.

I was struck by the points made and the quality of the debate. Noble Lords suggested it would be useful to have a debate on the strategy when it is published. There will be a number of other strategies around at a similar time on a sustainable development goals—sorry, let me just clarify that there will be an affirmative resolution before the House of Commons only, which will have the opportunity to comment on this second step. On whether there should there be an opportunity for your Lordships’ House to discuss this, that would be for the usual channels to agree, but I will be very sympathetic to it on the basis of the discussion we have had this morning.

I have set out the broad headings, so let me turn in the time that remains to some brief responses to specific questions that I have not covered in my general remarks. The noble Lord, Lord Collins, asked whether there would be full disclosure of the CDC’s investments on its website. I can reassure him that a full list of investments, including the legacy investments, can be viewed on the website.

The noble Baroness, Lady Flather, and the noble Earl, Lord Sandwich, raised the point about measuring the CDC’s contribution to poverty reduction. The contribution is clear, as it is made through jobs, local taxes and infrastructure.

However, this economic development and investment have to be seen alongside the work we are doing with our multilateral partners in the development banks. The World Bank operates in a lot of these countries and international finance institutions in some regions have been mentioned, such as the Caribbean Development Bank. We also have a UK Caribbean Infrastructure Fund partnership. We use many different vehicles and direct investment is just one.

We also have a huge commitment, rightly so, in education—which the noble Baroness, Lady Northover, oversaw as well during her time as Minister. It is true that no one has ever got out of poverty by aid alone and therefore trade is required, but it is equally true that, as well as economic development, you need education. Without the skills and the workforce, then I am afraid it is not going to happen. We have a major programme in education, which then feeds into economic development and our work with our international partners in respect of that.

In terms of independent evaluations, there was an evaluation commissioned in 2015 by a team from Harvard. It reviewed the CDC’s investment for the period 2008 to 2012 and concluded that the CDC’s investments had been transformational—a point made by my noble friends Lord Flight and Lord Eccles and the noble Lords, Lord St John of Bletso and Lord Boateng—such as in the work of the Africa Enterprise Challenge Fund particularly with small and medium-size enterprises.

My noble Friend, Lord Eccles, asked about the proportion of the CDC portfolio that is now direct. The noble Lord, Lord Bruce, referred to the report on this from when he chaired the Select Committee. The CDC has built up its capacity and moved significantly from operating as a fund of funds to operating more directly where it could exert greater control and measure the results. In 2015, 67% of new commitments by value were direct investments, and we expect this ratio of about two-thirds direct to one-third through funds to continue.

The CDC was set a great challenge, and many noble Lords rightly paid tribute to the work of the current chair and current—and outgoing—chief executive, Diana Noble. I certainly echo that. The CDC’s staff are immensely high-quality and combine private sector expertise with a compassion for the world and a determination to ensure that we improve our performance in relation to the poor.

There was a criticism that the CDC has gone for easy wins. Perhaps that applies to a bygone era, as the noble Lord, Lord Boateng, referred to, when it was perhaps being “fattened up” for privatisation. When we decided during the coalition Government, when Andrew Mitchell was Secretary of State, that we wanted this to be a long-term public vehicle as part of our economic development strategy, we narrowed the focus. We said, “Where are the poor people?”. The answer is that 80% of that 700 million-plus that I mentioned still living in extreme poverty are in Africa and south Asia. Therefore, that should be the focus of our attention.

What is the greatest need in those areas? Is it for financial sector instruments? That may be part of it, but I agree with the noble Lord, Lord Collins, that the greatest need is for jobs and better jobs in those areas. So we said that the focus should be on the areas of greatest poverty and on job creation as being the objective. That is a fair area to head for.

[Baroness Flather]

I was trying to say, with some of the examples that I gave, that they do not need money: they are already very wealthy and they have jobs that they are giving to people. There has to be something focused on the areas where there is not enough money.

[Lord Bates]

That is right. The noble Baroness refers specifically to India, which is of course itself a signatory to the sustainable development goals and the eradication of poverty by 2030. That will have to be its focus.

A number of other questions and particular points were raised. I will review the record, particularly with reference to the points made by the noble Lord, Lord Judd, at the beginning, and where there are gaps or I can add anything, if it will be convenient for the House, I will write to noble Lords. I reiterate my commitment to continue to engage with the House as the CDC progresses with its strategy and we finalise the new business case.

[Lord Judd]

I am grateful to the Minister for what he has said and the fact that he will write to me, although it is a pity that, because this is a money Bill, we do not have the opportunity to go into these things in Committee. However, will he agree with what has been said by quite a number of noble Lords in this debate, that the CDC, which of course has a lot of admiration, must remember that job creation and the eradication of poverty are not synonymous? Job creation can play an important part, but the eradication of poverty is a greater issue. We must not let one become a substitute for the other.

[Lord Bates]

I defer to the noble Lord’s great experience in this area. He is right. He is also right to say that it must not be perceived as an imposition. This must be something that comes from the ground up. It must be about strengthening capacity within the countries. That is why education, healthcare and all the other things that we are doing in terms of infrastructure are so critical to the overall success. I accept that.

The CDC is the oldest development finance institution in the world. It is a great British institution that reflects the values of the British public, who consistently demonstrate their concern for and generosity towards the poorest. We will make sure that we can all continue to be proud of the life-changing, pioneering work that this institution does. With that, I ask the House to give the Bill a Second Reading.

Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.

Immigration (Health Charge) (Amendment) Order 2017

Thursday 9th February 2017 Lords Chamber

Motion to Approve

14:23

Moved by

[Baroness Vere of Norbiton]

That the draft Order laid before the House on 20 December 2016 be approved.

[Baroness Vere of Norbiton (Con)]

My Lords, the House will be aware that the immigration health charge was introduced in April 2015 and is paid by non-European Economic Area temporary migrants who apply for leave to enter for more than six months, or who apply to extend their stay. The charge, which is set at the competitive level of £200 per annum, per migrant, and at a discounted rate of £150 per annum for students and youth mobility scheme applicants, ensures that migrants make a fair and proportionate contribution to the National Health Service in a manner commensurate with their immigration status, subject to limited exceptions. Those who pay the charge and are granted leave to enter or remain in the UK currently receive NHS care in the same way as a permanent resident, subject to the same clinical need and waiting times, for as long as their leave remains valid.

In setting the level of the charge, careful consideration has been given to the range of health services available without charge to migrants, the valuable contribution that migrants make to our country and the need to ensure that the UK remains an attractive destination for global talent. Indeed, there is no evidence at present to suggest that the charge has deterred the brightest and best from coming to the UK. In 2015, the Government estimated that the introduction of the health charge could raise as much as £1.7 billion, at 2015-16 prices, over 10 years—an average of around £170 million per year. Performance in the first year of the policy was, I am pleased to say, broadly in line with these estimates.

In its first year of operation, the immigration health charge collected £164 million for spending on the NHS. Of that amount, £140.1 million was made available for spending on the NHS in 2015-16. The remainder will be made available to the NHS in 2016-17. This year, the Home Office has transferred £120 million for spending on the NHS and is expected to make a further transfer of income to the NHS before the year end. Income from the charge is shared between the NHS in England, Scotland, Wales and Northern Ireland to spend as they see fit.

The draft order before us today amends the principal order—the Immigration (Health Charge) Order 2015—in two areas. First, it removes the exemption from the health charge for intra-company transferees. Secondly, it creates a new and explicit exemption for victims of modern slavery. It also makes a number of minor and technical changes. Intra-company transferees are employees of multinational employers who are transferred to the UK either to take up a role that cannot be filled by a UK recruit, or for training purposes. It is the only route within tier 2 that is exempt from the health charge.

In 2015, the independent Migration Advisory Committee conducted a review of a number of potential changes to the tier 2 route. It was asked specifically to look at the case for applying the health charge to users of the tier 2 intra-company transfer route. While partners to the review pointed out that a large proportion of intra-company transferees may be in receipt of private healthcare, the MAC noted that they nevertheless have access to the NHS, whether they use it or not, and indeed there may be instances where they do need to make recourse to it—for example, for a GP referral to a private consultant. The MAC also noted that contributions to a universal service are not made on the basis of whether an individual makes use of that service, and that, for example, UK residents can opt for private healthcare without paying less tax to reflect their lower use of the NHS.

The MAC therefore concluded that it could not see a good reason why intra-company transferees should be exempt from payment and recommended that this group pay the health charge in line with other users of the tier 2 route. The Government accepted this recommendation and the draft order amends the principal order to that effect. The increased cost to intra-company transferees of paying the health charge is small, relative to their expected income over the duration of their stay in the UK. By applying the health charge to intra-company transferees, we estimate that an additional £136 million to £205 million could be raised for the NHS over the coming 10 years.

The second area of significant change is the explicit exemption from the health charge for victims of modern slavery. Where a victim of modern slavery has been trafficked, they already fall within an exemption on the face of the principal order. Where they have not been trafficked, the charge is waived. However, the recent review into the first six months of operation of the charge recommended that, rather than waiving the charge in these circumstances, an explicit exemption should be set out on the face of the principal order. The Government have now addressed this important point. The draft order makes it clear that all victims of modern slavery—whether trafficked or not—applying for leave under modern slavery policies fall under an explicit exemption.

Turning to more minor changes, the draft order also amends the principal order to make it clear that applications for further leave to remain as a visitor are exempt from the charge. This is a minor, clarifying amendment that does not change the status quo. The Government have been clear from the outset that all applications for visitor visas do not attract the health charge.

The draft order strengthens the wording of the principal order to ensure that migrants granted temporary leave following a reconsideration of their application or an otherwise successful challenge to a refusal of leave must pay the charge when requested to do so. It also makes it clear that those granted an additional period of leave on appeal must also pay a health charge for that additional period. These amendments are in line with the Government’s general policy that temporary migrants should make a proportionate contribution to the NHS through payment of the charge, irrespective of the process by which leave is granted.

Finally, and in order to provide certainty for those migrants whose applications are already in train, Article 4 provides for transitional arrangements. The amendments introduced through this draft order will not apply to an immigration application submitted to the Home Office before the order comes into force.

The Government believe that it is only right and fair that migrants—including intra-company transferees—should contribute to the extensive and high-quality range of NHS services available to them during their stay, in line with their temporary immigration status. It is also right and fair that victims of modern slavery should not pay the charge. I am delighted that this draft order makes this explicit. I beg to move.

[Baroness Walmsley (LD)]

My Lords, I welcome the noble Baroness to her new role. We welcome the exemptions and clarifications that she has just outlined. I should like to use this opportunity to express some concerns and ask some questions about the Government’s policy of charging foreign nationals for the use of the NHS, and how this will work.

It is right that those who are not entitled to the free use of our NHS should pay for their treatment—or it should be paid for by their insurance or their Government. Some hospitals have already introduced the policy successfully but, irrespective of its merits, the focus on collecting the equivalent of 0.5% of the NHS’s annual spend reflects the Government’s skewed priorities. It ultimately serves to mask the main challenge facing the health service—a lack of cash.

The principle that those not eligible for free NHS care should pay up front for non-urgent treatment is sound. However, there must be clear safeguards in place to prevent profiling of people who have surnames that sound “not British”, and to protect vulnerable people such as the homeless who cannot prove their right to treatment by providing the correct documents. We must also guard against any temptation to extend this policy to urgent treatment. How do the Government plan to ensure that this does not happen?

Health tourism should be properly addressed, but it is not particularly significant in terms of the overall funding of the NHS. The recent government announcement cannot mask the refusal to address the serious failures of care which are now routine across the NHS as a result of impossible financial pressures. Only this week we have heard about increases in waiting times for operations, and in unexplained deaths among those with mental health problems. One hospital trust in Kent has halted all non-urgent operations until the end of the financial year. The Government need to tackle important problems such as staff shortages and retention and a lack of social care. Recent statements reflect a warped sense of priorities. I hope that my right honourable friend Norman Lamb MP’s cross-party meeting with the Prime Minister last week will lead to a genuine consensual process to deliver a long-term settlement for the NHS and social care.

Ultimately, the NHS must not lose the humanity and compassion that are the hallmarks of an institution of which this country is rightly proud. Doctors do not see their jobs as being border guards or revenue collectors. Can the Minister assure us that clinical staff will never be expected to collect money? This would completely change the relationship between doctor and patient. Can she also assure us that hospital administrators will get funding for extra help, and if they do, will the policy be cost-effective? Talking of capacity, I heard a Minister on the radio recently whom I felt was actually encouraging people to come from abroad to use our NHS—as long as they paid for it. As waiting lists and queues in A&E and for GP appointments get longer, I would have thought the last thing we should be doing is encouraging more customers from abroad. Can the Minister say whether hospitals are charging a full cost-recovery amount—or more, or less? Does the hospital keep the money, or does it go straight to the Treasury like the rebate on drugs?

[Lord Rosser (Lab)]

My Lords, this is the first opportunity I have had to welcome the Minister to her new role. I thank her for the explanation of the purpose and thinking behind this order which we support. It brings into effect amendments to the Immigration (Health Charge) Order 2015. That order led to an annual immigration health charge, introduced, as the Minister said, on 6 April 2015, being imposed on non-EEA nationals applying for leave to enter or remain in the UK for a limited period. Those who pay it can access NHS services free of charge, apart from payments in respect of treatments or prescriptions for which UK residents have to pay.

The Minister has set out the reasons for making the amendments provided for in this order which, in essence, remove the immigration health surcharge exemption of intra-company transferees and their dependants, extend the human trafficking exemption to include victims of modern slavery and provide greater clarity in the interpretation of some rules in the Immigration (Health Charge) Order 2015.

I have two brief points. One of the amendments in respect of ICT workers has emanated from a recommendation of the Migration Advisory Committee. Are there any committees or other bodies looking at issues that might lead to further amendments to the Immigration (Health Charge) Order 2015? Or have we now reached the stage where the Government can confirm that they have no reason to believe that further amendments will be needed in the foreseeable future—and certainly not prior to our departure from the European Union?

In the House of Commons the Government said, as the Minister has reiterated today, that the immigration health charge collected £164 million for spending on the NHS in its first year of operation. These amendments could provide an additional minimum amount of £136 million for the NHS over 10 years. Can the Government give an assurance that the money raised from the immigration health charge represents additional money for the NHS which would not have been available had the charge not been in existence? The money raised must not simply be used to enable the Government to reduce the amount they provide to the NHS by the sum raised by the health charge.

[Baroness Vere of Norbiton]

My Lords, I thank noble Lords for their contributions. I shall address the specific issues raised where I am able to do so.

I say to the noble Baroness, Lady Walmsley, that I do not think this is a case of skewed priorities. It is, indeed, right and fair that we look to overseas visitors to make a contribution to the cost of the National Health Service when they use it. The noble Baroness seemed to imply that this was not a particularly large problem. However, overseas nationals using the NHS cost the NHS £2 billion a year, which I do not think is an insignificant sum. Non-EEA migrants cost the NHS £950 million a year. Again, that is not an insignificant sum. The cost for non-EEA temporary migrants, for example, amounts to £800 per person per year, which is quite a lot.

As regards the other issues raised by the noble Baroness, I am responding on behalf of the Home Office, not the Department of Health. Therefore, I hope that noble Lords will forgive me if I refer certain issues to the Department of Health for that department to answer their questions on those issues. However, I can address certain issues. The surcharge is collected by the Home Office but the NHS is currently, and will be, responsible for ensuring that charges are collected from the right patients. However, there will also be safeguards to ensure that no vulnerable patient is denied care when they need it.

The noble Lord, Lord Rosser, asked whether there were any other committees or bodies that might make further changes to the order. Removing the exemption for intra-company transferees was a recommendation of the Migration Advisory Committee, as was mentioned. The Government are not aware of any forthcoming committees or commissions that will make recommendations in connection with the surcharge. However, as with all government policies, the health charge is kept under regular review. The noble Lord also asked whether this money was additional cash for the NHS. I can confirm that the surcharge brings in additional money to the NHS to be spent in England, Wales, Scotland and Northern Ireland. The surcharge is an important source of new income for the NHS, which is shared by the NHS across the country using the Barnett formula.

The amendments bring intra-company transferees in line with other temporary migrants and provide an important clarification in respect of victims of modern slavery. The health charge helps the NHS remain sustainable, with migrants making a fair contribution to our health services while ensuring that our country remains the destination of choice for the brightest and the best. On that basis, I commend the order to the House.

Motion agreed.

Immigration and Nationality (Fees) (Amendment) Order 2017

Thursday 9th February 2017 Lords Chamber

Motion to Approve

14:43

Moved by

[Baroness Vere of Norbiton]

That the draft Order laid before the House on 11 January be approved.

[Baroness Vere of Norbiton (Con)]

My Lords, the purpose of this order is to make minor technical changes to the Immigration and Nationality (Fees) Order 2016, which remains in place and continues to set out the overall framework and maximum amounts that can be charged for immigration and nationality functions, as agreed by Parliament last year.

The order before your Lordships’ House does not itself set fees; they are set by regulations which are updated annually. The regulations for 2017-18 fees are due to be laid before Parliament in March. The minor technical changes made by this order include bringing fees for entry clearance to the Channel Islands within the scope of the 2016 order. This change is being made following the extension of provision in the Immigration Act 2014 to those jurisdictions by way of Orders in Council, the effect of which will be to enable the Secretary of State to set fees in relation to them.

The order also makes express provision for the Secretary of State to charge for an approval letter in respect of applications for entry clearance to the Isle of Man as a tier 1 exceptional talent migrant. It will ensure that the scope of the charges set under the Immigration Act 2014 for above-basic Border Force officer services, such as attendance at premium airport lounges, or port-owned fast-track services, is broadened for the future, for example to cover above-basic services provided at sea. The order also permits a charge to be set for providing information in addition to the current services that include providing advice, training and assistance. We consider that this charge will better reflect the nature of the information and advice services we provide.

To be absolutely clear, this change does not affect existing Home Office basic status checking services, for example those provided to employers or landlords in the UK, which will continue to be provided free of charge. It does not affect in-country services, for example calls to employers’ or landlords’ helplines, or the nationality helpline, which will continue to be charged at local rates. Nor will it affect the availability of information for sponsors and educators. This order makes provision for international services only. Customers using these services are able to access more detailed information over and above the basic level of the service which is available online. This is a standard, free-to-use service available on GOV.UK in all cases.

We are also seeking to change the way in which fees for some information and advice are structured, adding scope for a fixed fee in addition to the per-minute fee currently provided for in the 2016 order. This is to accommodate likely changes to the overseas contact centre services, where a new service provider, who will assume responsibility for the service in May 2017, may offer and charge for webchat and email services in the future. The proposed maximum amount that can be charged for these new services is based on the per-minute rate set out in the 2016 order. To be clear, under the new contractual arrangements there are no plans to increase the per-minute fee for accessing telephone services overseas.

Lastly, the order will also update the description of an electronic visa waiver so that it accurately matches the process and policy intent, as set out in the Immigration Rules. This service enables visitors from Oman, Kuwait, the UAE and Qatar to travel to the UK without a visa.

I emphasise that we are not seeking to change the overarching framework for immigration and nationality fees, or the maximum fee levels that were agreed by Parliament and set out in the 2016 order. As I have already mentioned, the next set of immigration fees regulations, which are due to be laid in Parliament in mid-March, will come into force in April. They remain completely within the parameters agreed by Parliament and in line with the impact assessment published with the 2016 order.

It is important that we strike a good balance between the economic interests of the UK and the need to maintain a sound immigration system. Be assured that this Government will ensure that fees for immigration and nationality services enable the UK to retain its position as an attractive destination to work, study and visit. I beg to move.

[Lord Rosser (Lab)]

I thank the Minister once again for explaining the purpose and thinking behind the second order we are considering this afternoon. The order makes changes to the Immigration and Nationality (Fees) Order 2016, which sets out the maximum amount that the Secretary of State may charge for the provision of certain immigration and nationality-related services and products. In particular, this order extends certain provisions of the 2016 order to the Channel Islands and the Isle of Man. The powers that this order will give the Government in relation to the Channel Islands and the Isle of Man have until now been exercised by the Government under the terms of other fees regulations and powers.

In extending certain provisions of the 2016 order to the Channel Islands, this order, among other things, sets the maximum fee which the Secretary of State may charge a person who applies for entry clearance to the Channel Islands, with the actual fees to be set in subsequent regulations. As I understand it, though, in setting such a maximum fee—and, indeed, the maximum fee in relation to the approval letter in connection with entry clearance to the Isle of Man—the level of that fee must be consistent with the Home Office’s current laid-down approved charging policy. On the assumption that my understanding on that score is the case, I have no questions or queries to raise on the order.

[Baroness Vere of Norbiton]

My Lords, I thank the noble Lord for his contribution, and I can confirm that that is indeed the case. As I said earlier, we aim to set out shortly the individual fee levels for 2017-18 in regulations to be introduced by the negative procedure. This amendment to the 2016 fees order does not increase the maximum amounts that can be charged for any immigration or nationality service. The Government believe that those who use and benefit most from the immigration system should contribute more to the cost of the system, reducing the burden on the taxpayer. It remains the Government’s ambition to move towards a border, immigration and citizenship system that is fully funded by those who use it. I commend the order to the House.

Motion agreed.

Brexit: Financial Services (European Union Committee Report)

Thursday 9th February 2017 Lords Chamber

Motion to Take Note

14:50

Moved by

[Baroness Falkner of Margravine]

That this House takes note of the Report from the European Union Committee Brexit: financial services (9th Report, HL Paper 81).

[Baroness Falkner of Margravine (LD)]

My Lords, I am delighted to introduce this European Union Committee report. In doing so I congratulate the noble Baroness, Lady Neville-Rolfe, on her recent appointment to the Treasury and on her role as Minister in charge of “EU exit financial services”. I hope to have a very positive interaction with her in the future.

In the wake of the referendum of 23 June last year, the EU Select Committee agreed to undertake a series of short, co-ordinated inquiries into the implications of Brexit for various policy sectors. The Financial Affairs Sub-Committee began by looking into the impact on financial services. The committee took evidence from nine panels of witnesses—21 in total—during September, October and November 2016 and received written evidence. We are extremely grateful to all those who contributed to our work.

At this juncture it is customary for a chair to thank the members of the committee, but I do so today with particular emphasis, because we all, as a committee, worked at a frantic pace to produce this report in a timely manner so that the Government might take our views into account in setting their strategy for Brexit and financial services. So far we have not had sight of their response. I also want to single out for particular thanks the committee clerk, John Turner, who with depleted resources—as our policy analyst had been recruited by the Treasury—heroically managed to get us to this point. He was periodically assisted by Pippa Westwood, on loan from the EU Select Committee, and we owe her thanks as well.

From the outset we were aware of the huge importance of the financial services industry to the UK economy. The UK is the world’s leading exporter of financial services, with net exports in 2013 of $71 billion. The industry employs more than 1.1 million people—double that if related professional services are included—and contributes around 7% of UK GDP. The implications of a change to our trading status with the EU are potentially enormous. The consultancy Oliver Wyman estimated that £40 billion to £50 billion of the sector’s annual revenues—around a quarter of the total—were related to its business with the EU.

The relationship between UK-based financial services providers and the EU is underpinned by a system of so-called “passports”, which grant rights to do business across borders. This system is not as straightforward as it first appears: passporting rights are provided for by different pieces of EU legislation, affecting the provision of different services, and their use does not map onto the business models of firms in a straightforward manner. Unpicking the reliance on passports is therefore complicated—we were told that even the firms themselves did not have firm grasp of their own reliance on passporting—but it was clear that UK-based firms were likely to suffer from loss of access to the single market and the passporting rights that came with it. That has become more evident since our report was published.

As we were undertaking our inquiry it was not clear what model of engagement with the single market the UK would seek. The Prime Minister, in setting out the UK’s negotiating aims on 17 January, and in the subsequent White Paper of 2 February, said that the UK would seek a free trade agreement to allow for,

“the freest possible trade in goods and services between the UK and the EU’’,

but she ruled out,

“membership of the Single Market”.

This would also rule out any automatic passporting rights: they would need to be negotiated as part of the bespoke agreement she is aiming for.

If the UK were unable to negotiate a bespoke deal on access, it would have to fall back on third country equivalence provisions. However, we found that these were,

“patchy, unreliable and vulnerable to political influence”.

They are patchy because they do not cover the full range of activities in which businesses engage: a bank might be able to rely on provisions under MiFID II for its investment activities but could not carry out traditional banking services because the relevant legislation underpinning that, CRD IV, does not include equivalence provisions. Third country equivalence provisions are unreliable because financial regulation is liable to change: as EU legislation evolved, the UK would have to adapt its own regulation in order to remain equivalent, and be assessed to be so every single time. They are vulnerable to political influence because the European Commission has a role in deciding whether a country is equivalent.

We concluded that any bespoke deal should seek a deal to bolster the current equivalence arrangements, to cover gaps in the regime and to ensure the continuation of equivalence decisions as regulation develops. There was, and still is, considerable uncertainty over the level of access to the single market that the UK will retain. Our witnesses were consistent in advocating a transitional period during which businesses could plan for and adjust to the new circumstances. We were told that a “cliff edge”, with regulation and market access changing suddenly and without sufficient warning, would represent a grave threat not only to the business interests of the firms involved but to financial stability more generally. So the “new deal” scenario might prove extremely damaging.

I therefore welcome the Prime Minister’s reassurance that the Government will seek a “phased process of implementation”. An early declaration on this transition period by both parties—the UK and the EU—would help allay the fears of businesses and possibly prevent them moving operations out of the UK on the basis of a worst-case scenario. I draw noble Lords’ attention here to the advice prepared by PricewaterhouseCoopers for the Association for Financial Markets in Europe, which found that it would take banks between two and four years to put in place contingency plans for a hard Brexit.

The UK has been Europe’s dominant financial centre for some time. It has been particularly dominant in recent years in derivatives clearing through central counterparties. In April 2013 the UK accounted for half the world’s turnover of interest rate derivatives, and one-third of foreign exchange derivatives. It was even more dominant in euro-denominated interest rate derivatives, accounting for nearly three-quarters of world turnover.

This has drawn unwelcome attention from our EU partners. In 2011 the European Central Bank launched its location policy, which would have required euro-denominated trades to be cleared in the eurozone. The Government successfully resisted this at the European Court of Justice, but it is possible that the scheme could be revived—with appropriate legislative changes. It was notable that the President of France, François Hollande, made such a suggestion on 28 June, just five days after the referendum.

So the political incentive is there, and so are the legal means, with some tweaking. But would it be wise to remove London’s ability to clear euro-denominated trades? Clearing works through counterparties posting a margin, or collateral, with the clearing house. Because this is done centrally, the margin can be netted across multiple trades in multiple currencies, reducing the amount of collateral required. Research by Clarus Financial Technology suggests that disaggregating the euro component of one clearing house’s operation—LCH.Clearnet’s, for example—would cost the financial services industry $77 billion in additional margin, which would then not be available to lend to the real economy.

Our witnesses expressed doubts about whether a clearing operation comparable to that in London could be migrated to another European city. Some suggested that New York was the only plausible alternative location for such a service. Of course, any revival of the location policy would also apply to New York. This suggests that the benefits of the UK’s clearing system currently enjoyed by businesses throughout Europe would be lost or greatly diminished. Ultimately, it would not be in the EU’s economic interest to repatriate euro clearing. We hope that pragmatism will prevail.

This leads me to my final point. The real economy in the EU benefits from the financial services provided in the United Kingdom to an extent that militates against any large-scale attempt to prevent UK-based firms doing business with the EU. We heard a lot in our inquiry about the financial services “ecosystem”: the various services provided in the UK that interconnect in such a way that the effects of unpicking the ecosystem would be unpredictable. Unless another European centre could replicate that system, real businesses in the EU would lose out.

London has recently been ranked as the world’s number one financial centre again. Nowhere else in the EU comes close. Luxembourg is 12th and Frankfurt is 19th. We were not convinced that another EU location could step up and provide the services as efficiently and effectively as the UK currently does. If the economic argument trumps the political one, the EU should be willing to do a deal—but deals are ultimately dependent on rationality as well as goodwill. We hope that the UK Government will approach these negotiations with enormous goodwill and pragmatism, as the costs to the real economy of both the UK and the EU—and to real people’s lives—could be very high indeed. I beg to move.

15:02

[The Earl of Caithness (Con)]

My Lords, I thank my friend, the noble Baroness, Lady Falkner, for her introduction and the rest of the committee for its work. Sadly, I am no longer on that committee so I did not take part in this report; but I declare my interest, which is that I remember the 1950s and 1960s very well and do not want our grandchildren to live under such years as we lived under when Britain was going downhill rapidly. One reason why Britain has turned that corner is the financial services, which are the whole subject of this report.

Although the noble Baroness has said that London is the world’s leading financial centre, it has no divine right to be. It was not when I was a child, but it has now got to that position—and there are many countries interested in taking it away. Our change in status as we go from within to outside the EU is undoubtedly an extra threat to the dominance of London, and another undermining factor. The other side of the argument is of course that the EU has lost a major player in its financial discussions. Britain was always at the forefront. When I was a Treasury Minister, we were at the forefront of changing regulations in Europe—we took the lead because nobody else had the experience to do so. The capital markets directive, led by my noble friend Lord Hill of Oareford, and how that has changed direction is just one example of Britain’s influence no longer being in the right place.

We made our decision on 23 June and we must now make the best of it. This report will help the Government to achieve that. I was particularly pleased to read paragraphs 109 and 110, which refer to the transitional period and trying to avoid a cliff edge. As the noble Baroness has just said, the Prime Minister has been firm on that and given a positive lead, which is to be welcomed. Third-party equivalence and passporting are also important. In paragraph 56, the committee tells us that the Government are,

“analysing the difference between the opportunities afforded by passporting and third-country equivalence”.

It would be helpful if the Minister told us where the Government have got to with that.

Paragraph 58 refers to possible regulatory divergence between the UK and EU, and indeed between the UK and US. I thought this was a very good point to make because, since the report was published, we have all seen in the press what has been happening. We have a new President Donald—in fact we have two President Donalds: one in the EU and one in America. President Donald in America has made it absolutely clear that it is “America First”—and, indeed, America second and third—with the rest of the world about fourth. He has been backed up by Patrick McHenry, the Republican vice-chairman of the House Financial Services Committee, who wrote to Janet Yellen at the Federal Reserve, warning her that:

“Continued participation in international forums such as the Financial Stability Board, the Basel Committee on Banking and Supervision and the International Association of Insurance Supervisors is predicated on achieving the objectives set by the new Administration”.


That is worrying.

Let us take away the froth: we all know that America has always put America first in international negotiations, but what worries me is America not standing by its international obligations. Can the Minister say whether there was any indication in the Prime Minister’s meeting with President Donald of the USA—President Trump—that the US will not stand by those international obligations? If it does not, it is serious not just for the UK but for the EU and the rest of the world. Sir Jon Cunliffe at the Bank of England has said:

“It is important that we have proportionate, highest quality regulation – robust and in line with best international standards … The UK – in order to be a successful financial centre, you need good regulation … robust regulation and … regulators that have credibility and experience”.


Those are very wise words from Sir Jon, with whom I had the pleasure of working when I was a Treasury Minister. Abiding by those international obligations is so important. Sir Jon is also quoted in paragraph 51 of the report:

“If we want globalised financial services, we all have to have confidence in each other’s regulatory and supervisory machinery”.


That encapsulates it extremely well.

It is not just a trade negotiation between the political parties that is important, but agreement between the regulators. Can the Minister confirm that the intention is that provisions on international regulatory co-operation in financial services supervision will be included in all future trade agreements, both with the EU and other states, and that this would be an additional requirement in the future mission of the Financial Conduct Authority and Prudential Regulation Authority?

I turn from the report specifically to a wider view of financial services, because if we are no longer members of the EU, we will have to increase our trade around the world. There is no doubt that there is a new world financial order. Europe, the old aunt to the world, is getting even older and more irrelevant. In a recent report PwC said that by 2040, the E7—Brazil, China, India, Indonesia, Mexico, Russia and Turkey—could be double the size of the G7, which comprises the UK, Canada, France, Germany, Italy, Japan and the US. That will certainly change the dynamics. PwC went on to predict that, whereas in 2016 five countries in the world top 20 of projected GDP rankings, based on purchasing power parity, were in Europe, by 2050 there will only be three, all at a lower level than now.

One might think that gives us a great opportunity in dealing with the E7, but then comes the crunch. TheCityUK has done a lot of work on service trade restrictions and produced an index. It is interesting that, on that indexed basis, the E7 countries—which are going to be double the size of the G7 countries—are the most restrictive with regard to accountancy, commercial banking, insurance and legal services. We will have a tough job breaking into those markets. We have a lot of work to do, and if the US is not working to the international standard it will be even harder. I agree, therefore, with what the noble Baroness and her committee say in their report. If the City of London loses its status as the world’s premier financial centre, it will not be to other countries in Europe but to overseas—to New York, Singapore and China.

Can the Minister also comment on currency devaluation, through which we have the potential to really mess up the world and our financial services? We have been told that the euro is undervalued and the American dollar overvalued. Does the Treasury think that a currency devaluation between countries will start, which would be hugely damaging to us?

I will comment briefly on what I call “language and perception”. Language is hugely important in Europe. Phrases such as “common ground” and “a good compromise” are perfectly acceptable in Europe, while here they are portrayed in the press as wishy-washy and as Britain giving everything away. It is not as the press portrays it: it is 27 countries all having to give something and take something to reach a good compromise. I am greatly concerned that language will play a big part in our negotiations, and I hope the Minister is fully aware that this could be a major problem.

As for perception, a lot of people are influenced by it. If the perception is that Britain is not doing as well as before, that will compound our difficulties. One need only look at today’s papers: it is predicted that 30,000 jobs will be lost—that is the headline, the bad perception. That, however, is 0.5% of the people working in the financial services industry, and although the figure comes from the Bruegel think tank, it is at the worst end of TheCityUK’s projections, which thinks, at the other end of the scale, that as few as 3,000 jobs could go. Perception is of major importance.

We have no idea where we will end up at the end of our negotiations with the EU. I hope that the press and both Houses of Parliament will let the Government get on with the negotiations and do the best job we can. One good thing about Brexit is that if it all goes wrong, we have nobody to blame but ourselves.

15:14

[Lord Desai (Lab)]

My Lords, it is a pleasure to follow the noble Earl, and I also thank our chairman, the noble Baroness, Lady Falkner, for guiding us through this extremely complex subject. The more I study the problem of Brexit, the more complicated it appears to be, and I am sure that no one, when they ventured into this territory, knew exactly how complicated it was.

As the noble Earl also said, the City has seen both good times and bad times. The 1950s and the 1960s saw an involuntary exit from the sterling area. I do not know whether noble Lords remember the sterling area, but it was not a great thing after India had become independent and various former colonies began to have their own monetary policy. The City was lucky in then having the Eurodollar market—a result of the folly of American taxation policy—and soon after, when the US renounced its dollar-gold link, a huge market in foreign exchange transactions sprang up and the City was ready for that market.

At about that time—in 1971-72—we entered the European Economic Community, as it then was. In a sense, therefore, we entered the European Economic Community at a time when the City had recovered from its gentle decline and got into totally new activities for which it had, or soon got, the expertise. We know, therefore, that the City can suffer a shock and respond to it.

At the same time, we have to decide among ourselves—or, I hope, the Government will—what is the maximum loss that we could suffer. One of the best negotiating tactics is to figure out the worst-case scenario that we could face, and then find out if there is any way of avoiding it. The worst-case scenario is, obviously—as I said—that if there is not a good deal, we walk away with no deal. A no-deal scenario would mean no passporting, no equivalence and starting from scratch. We should mentally work out what that would mean for the City. Among our witnesses, some were, I would say, rather complacent, saying, “Oh, we are just so good that they will have to come to us”. They say that our eco-system—I was fascinated by that word, because I am sure that most of those people do not like any of this global warming stuff, but they use the word—is so fine and beautifully calibrated that our sheer competitive advantage will make them come to us. I am not so sure about that; it would mean that we do not need to worry about passporting or equivalence and we would still come out on top on sheer competitive advantage. Just as we are willing to suffer an economic loss for the sake of our sovereignty, they are capable of suffering economic loss through their reluctance to come to London. We must not assume that they are going to be terribly rational and will come to us. I keep hearing that, and I doubt it very much.

One advantage for us is that the regulatory system of financial markets is global and not confined to the EU: the EU melds in to the regulatory system headed by the Bank of International Settlements, the IMF, and so on. We have played a major part in the architecture of that system, so, in or out, we shall continue to be relevant to the architecture of the global financial system. To that extent, we ought to be able to put it to the EU that, in or out, the rules that we all have to obey are pretty common, and they are almost the equivalent of equivalence. We all have to follow certain global rules, so there cannot be too much of a disruption between us and them in the area of financial regulation.

I am not worried either that although we may establish equivalence in today’s terms, in the future they might change—and then what will we do? I do not think they will change arbitrarily, independently of the global system, because we will all have to dovetail with each other in that system. The technology is changing so fast that we all have to be ready as new products and technologies come up. The framing of financial regulations will therefore have to be a fast, global and innovative process, and I am sure that we will play our part in that.

Can we work out what we prize most within our interests in keeping the financial centre in the front? It might turn out that immigration is a crucial topic. It might be that our need to access the best talent internationally, and therefore have flexible immigration rules, will be more central to our position on the financial sector than anything else. In agreeing to whatever we agree with the EU, one thing that we ought to remember is to retain the flexibility of admitting highly skilled global experts in the financial markets, and not make the mistake of going overboard in restricting immigration by not distinguishing between those who are likely to be helpful to us and those who would be less helpful.

In the final analysis, we will have to be ready for the worst-case scenario—a repeat of the sterling area scenario, as it were—and to hope that new markets spring up for us while the damage is minimised. At the same time we ought to try as far as possible, consistent with our general aims of a hard Brexit, not to lose an advantage which we could retain.

15:22

[Lord Shutt of Greetland (LD)]

My Lords, I too pay tribute to my noble friend Lady Falkner of Margravine, who has steered us through several of our deliberations over the last year or so. The report, like all those which come from our EU committees, is based on the evidence. What those of your Lordships who have not been on the committee are getting is what we have heard from other people and the questions that we have been able to put to them.

There is no doubt that financial services are a highly significant sector of the United Kingdom economy. We are told that they employ 1.1 million people, two-thirds of whom are outside London. It seems to me that 1.1 million jobs are likely to support 4 million United Kingdom citizens. On any basis that is significant, serious and important. I have three points to make in my contribution, which really concerns livelihoods. I will come to these in order because I want to speak of some of the people who came to see us.

First, on 19 October a man by the name of Simon Kirby, the Economic Secretary to Her Majesty’s Treasury, came to see us. The noble Lord, Lord Desai, asked him about clearing and said:

“We have had conflicting evidence about what will happen to clearing houses”.


The response from Simon Kirby was:

“There is a lot of noise about clearing. The whole of Europe, the UK included, would be worse off if that particular part of the financial services that London offers was dismantled and redistributed across Europe”.


In a further question, the noble Lord, Lord Desai, talked about clearing and Simon Kirby said:

“It is an element of the negotiations. Is it the most important element? Probably not, but it is … significant”.


That sounded complacent to me.

On 2 November we then had a visit from Xavier Rolet, the chief executive of the London Stock Exchange Group, and I quoted Simon Kirby’s evidence to him. We were aware that Xavier Rolet had earlier indicated that 100,000 jobs were at stake if clearing were to relocate. He confirmed that,

“we stand by our estimate of 100,000 jobs”.

When I pressed him a little further as to where these jobs were, he said that he would,

“provide a more detailed estimate”.

That was to happen “reasonably shortly” and so it did, in that on 11 November we had further written evidence sent from Xavier Rolet, together with an EY report that had been prepared for the Stock Exchange. He said that the report estimates that up to 232,000 combined financial and non-financial jobs throughout the UK could be lost. This was a detailed 44-page report, which sets out where those jobs are. Those 232,000 jobs suggest to me that we are talking about the livelihoods of 1 million people.

The last thing that we had was not presented to our committee but—as things keep moving—was the White Paper from Her Majesty’s Government on 1 February. Perhaps it is better to call it a grey book. In its section 8 on pages 42 and 43, there are a few paragraphs about financial services. Paragraph 8.25 says:

“In our new strategic partnership we will be aiming for the freest possible trade in financial services between the UK and EU Member States”.


So Simon Kirby’s complacency has now moved to an aim. Where is the determination? Will it come from the noble Baroness, Lady Neville-Rolfe, who I now congratulate on her new role?

15:27

[Lord Butler of Brockwell (CB)]

My Lords, I declare my interests as noted in the report. After the figures of potential job losses given by the noble Lord, Lord Shutt, I hope to cheer the House up a bit. I have come to think that since the report which we are discussing was published in December, the impression it gave about the problems presented by Brexit for the UK’s businesses and financial services is perhaps too pessimistic.

As a member of the sub-committee which produced the report under the courteous and skilful chairmanship of the noble Baroness, Lady Falkner, I believe that it correctly reports the importance of our financial services to the UK economy; the unreliability of the equivalence and passporting regimes which enable UK financial institutions to provide services to the rest of the EU; and the need for a regime to ensure that UK financial services do not face a cliff edge when the UK leaves the EU. All that is correct, but the reason why I have become more optimistic is that this report is understandably UK focused. It is about what UK businesses want and need and not so much about what EU businesses want and need. When the issue is considered from the EU perspective, more grounds for optimism emerge. The reference to avoiding a cliff edge implies that there is a sharp fall on the other side of the cliff, but when the interests of the EU partners are taken into account, I wonder whether that implication is correct.

The report received many representations from outside—for example, from the British Banking Association—which urged the need for a transition period to avoid the cliff edge, which has already been referred to. It is widely recognised that the phrase “a transition period” has two meanings. It can mean an extension of the period in which existing arrangements continue to apply while a new bilateral agreement is negotiated. It can also mean a period after a new bilateral agreement is reached before it comes into effect so that businesses on both sides have time to adjust to the new arrangement. Certainly a transitional period—in both senses of the phrase—is better than a cliff edge, but a rapid agreement respecting the mutual interests of both sides is better than either. The refrain that we most insistently hear from businesses is that they want certainty and they want it as soon as possible.

A report by an official working group for the European Parliament’s Committee on Economic and Monetary Affairs, seen by the Guardian newspaper, warns of the importance of the London market to the EU partners. According to the Guardian, it says:

“The exclusion of the main European financial centre”—


that is, London—

“from the internal market could have consequences in terms of jobs and growth in the EU. It is in the interest of EU 27 and the UK to have an open discussion of this point”.

It is relevant that, while 5,500 UK firms benefit from passports for trading financial services in the EU, more than 8,000 EU firms benefit from passports for trading into the UK. It does not follow that we can take equivalence and passporting regimes for granted but I believe it does follow that the EU partners have an interest in not using them in a vindictive manner.

I do not go along with TheCityUK in its view reported last week that Brexit will enable London to become more attractive to worldwide businesses by tearing up those parts of the EU regulatory regime which UK firms find finicky and burdensome. It will still be necessary for the UK to retain harmony with EU regulations. This may involve conforming to regimes and requirements which we will have no formal role in formulating but it does mean that we will have a mutual interest in keeping close to each other. Since the UK has often been a leader in formulating effective regulation, this is likely to be in the interests of both sides. Certainly, when the UK’s approaches have differed from those of our EU partners in the past, it has not been because the UK has been less rigorous.

Those are important issues for companies but there are also important issues for individual citizens. One illustration is the provision of insurance. It would be tedious for UK motorists if they had to start applying for green cards again or pay extra insurance for trips to Europe because it is no longer recognised that UK insurance policies provide the same minimum cover as their EU counterparts, but it would also be tedious for European motorists if their policies were no longer accepted in the UK. A similar point applies to the European health insurance card.

The old injunction against cutting off one’s nose to spite one’s face is particularly apt in both the UK’s and the EU’s approach to these matters. In all these areas we must hope that the negotiations take proper account of the mutual interests of both sides and are not driven by ideology.

15:34

[Viscount Eccles (Con)]

My Lords, it is very usual to say how pleased one is to follow the previous speaker but I find myself in a slight embarrassment because I so completely agree with the noble Lord, Lord Butler, that I am not going to be able to put it without repetition and nothing like so well. I congratulate the sub-committee and its chairman on this report. It is a very useful document and needs to be studied with great care. It has been slightly overtaken since the days of the referendum by the 12 principles and the White Paper. Nevertheless, that gives us a theme which is “exit from” and “a new partnership with”. I 100% endorse everybody who says that we need and want a new and productive partnership with the EU and this needs to be negotiated with the best possible will on both sides.

I hope we can achieve an agreement within the two years. There I very much agree again with the noble Lord, Lord Butler. I do not see the argument that two years is never going to be enough as a positive one. I regret that people keep saying two years is not enough. The important thing about the two years is to reach an agreement and then to be clear, because we have a new partnership, on how we are going to handle all the changes that will inevitably follow after two years, and changes would have followed whether we remained a member or not.

Within those two years there is nothing more important to negotiate than financial services. In considering the negotiation we should take very careful account of the present position. As the noble Lord, Lord Desai, said, the background is very complex and quite troubling. After all, 2008 is not so long ago and many things happened then which were unexpected. Although we have made much progress since then, there is still a great deal of risk out there in the world as a whole. Indeed, I think we would be incorrect to think about financial services in the way that we might think about the effect of the single market on, say, the building of aeroplanes or the production of motor cars. The European context does run there to a large degree but it does not run in financial services because they are truly global.

In the G20, which is representative of two-thirds of the world and 85% of its economic activity, we have got six members of the EU and the European Union itself, and based in the Bank for International Settlements there is the Basel Committee, again with nine EU members and the EU and the Financial Services Board. Much of what has been done which applies to Europe, which has 7% of the world’s population, has been achieved by these international institutions. The European Union, some of its members and ourselves have been very deeply involved in all that.

So far, so much the better as a result of all those efforts since 2008, but this is not a time to disrupt the progress. It is not a time in which either the 27 or we have an interest in disrupting the processes which have been going on. That highlights the partnership, the need for it to be approached positively and the need for it to work.

Just as a note of dissent, there is the question of the dealing and settlement in euros. If you look at that on its own, changing the rules in the way that has been suggested is nothing more nor less than a trade barrier and would be very disruptive. It cannot be in anybody’s interest to generate that disruption.

On passporting and equivalence, I hope that the effect of the great repeal Bill will be that on the day we exit, we continue to abide by all the law and regulation which has come to us through the European Union. Logically, that means that equivalence is there. I cannot quite see what the argument against it would be. If we get to that day, the question then becomes: what do the deals say about the way in which we and the 27 approach any changes that they or we feel are necessary? In that sense, we would have a “transition period” that would never cease, because we are going to need to have arrangements for dealing with changes as they take place. I am more optimistic than some other people who approach this problem. I join the noble Lord, Lord Butler, in that optimism.

15:42

[Lord Dykes (CB)]

My Lords, it is a pleasure to follow the noble Viscount, Lord Eccles. I have always respected the sensible approach he has to these practical matters of markets and business. I add my thanks to the other speakers in this debate, particularly the very distinguished, competent and professional chairman of the committee, the noble Baroness, Lady Falkner of Margravine, and her colleagues who produced this excellent report. This is a complicated area, but the report is not too long.

Unusually, I do not agree with my noble friend Lord Butler who said that he feels very optimistic, in contrast to this report. The report is realistic, but it espouses a not irrational, not excessive, but sensible and proper degree of pessimism about the difficulties we will see in the future.

There are many warnings in this excellent report, and I shall quote briefly two significant parts of it.

“We conclude that, if the current passporting regime is not maintained”—


and we cannot assume that it is necessarily going to be—

“the Government should seek a deal to bolster the current equivalence arrangements for third country access, to cover gaps in the regime and to ensure the continuation of equivalence decisions as financial services regulation develops”.

More fundamentally:

“Negotiations on the UK’s new relationship with the EU are likely to take longer than the withdrawal negotiations under Article 50”.


That is a very serious problem. The report also states:

“A transitional period will therefore be needed in relation to financial services following the completion of the Article 50 process, when the UK leaves the EU. This may need to be adapted and extended in the light of subsequent negotiations on a new long-term relationship with the EU. This will enable firms and others such as regulators to adapt to any new business conditions”.


There has been a lot of coverage in the press of the Article 50 Bill, which has now successfully passed its Commons stages and will come to us when we resume after the mini-recess that is just about to begin. It is very interesting to observe how the intelligent commentaries in various parts of the press—but not all of them, unfortunately—are coming increasingly to the conclusion that it would be much better to maintain the status quo in the relationship between the new separate UK total market—financial and other markets, including physical markets—and the rest of the EU.

I was therefore very impressed when the Prime Minister in her Lancaster House speech outlining her plans and the details said:

“I know that this—and the other reasons Britain took such a decision—is not always well understood among our friends and allies in Europe. And I know many fear that this might herald the beginning of a greater unravelling of the EU.


But let me be clear: I do not want that to happen. It would not be in the best interests of Britain. It remains overwhelmingly and compellingly in Britain’s national interest that the EU should succeed. And that is why I hope in the months and years ahead we will all reflect on the lessons of Britain’s decision to leave”.


Astonishingly it has not been noticed by many people, but in the first paragraph of her Sunday Telegraph article on 8 January the Prime Minister emphasised that the Brexit decision was only part of the reaction as a result of those who voted no in the referendum. The rest of it was a general disaffection with the state of people in the British economy, their feeling of job insecurity, older people feeling they were being left out—although pensions have been more generous in recent years—and, of course, 16 and 17 year-olds were grumbling because they were not included in the voting system this time round.

There was an astonishing mixture of things in an advisory, opinion-giving referendum. We have to bear that in mind. I make no criticism of the Prime Minister; she was not herself elected and she could not be under the system. She took over from the previous Prime Minister, Mr Cameron, whose vote was less than one-quarter of the total voting population. I believe that Theresa May knows that the more she thinks about it, the more she has to sustain the very good relationship that we ought to have with the EU.

Sixty per cent either abstained or voted against the referendum result. That meant that the total amount of the population will have enormous second thoughts. Those second thoughts are developing. We see the post coming in and more and more emails, particularly on the financial sector and worries about the famous London market. I declare an interest tangentially as a member in those days of the London Stock Exchange and a partner in a big institutional firm. We were not part of the financial markets, as such, although we were indirectly. We were all very proud of what the city has achieved and of the London financial markets becoming the leading market in the world. It is a tremendous asset. It is ironic that the very market that has sustained and cultivated the success of the euro itself as a currency—the main market in the world—is in a country where a good number of people have become increasingly psychologically afraid of the euro, because we were driven out of the exchange rate mechanism in humiliating circumstances in 1992. That has lingered as a feeling.

Since the war, there have been eight devaluations of Britain’s currency—three by government action and five in the marketplace. The recent one when the referendum result was announced was modest, and not too bad against the dollar and the euro. That is not a good background for us to be too overoptimistic about our ability to do what we were intending to do for those who did vote in the referendum and voted just about Brexit and nothing else.

I think there was also a blending and mingling of all those emotions, not least the fear of immigrants. Theresa May as Home Secretary was responsible with others for not bothering to invoke some of the articles of the Rome treaty—the TFEU as it now known—that gave some restrictive possibilities to limit the number of immigrants as if there was no reason to have a free-for-all, which we seem to be accepting, including from Romania.

The definition of optimism given by the noble Lord, Lord Butler, is, I think, a little esoteric for the purposes of this debate. It reminds me of the lovely old Hollywood joke: the true definition of optimism was a 98-year old man who got married for the seventh time and deliberately bought a new house near a school—that kind of optimism, maybe. We have to face up to the realities of this difficult matter.

In the debate last autumn in the Moses Room on the single currency, I noticed how the noble Earl, Lord Caithness, praised the euro for being a successful currency. It is now the second world reserve currency after the US dollar. It is getting closer and closer to the US dollar. The European Union, of course, has a much lower overall national or international debt coefficient than the United States. As noble Lords know, the difference is $19 trillion for the federal Government in the USA and $12 trillion for the European Union with 500 million people.

There is a lot to be working for. In this feeling that we have a lot of negotiations to come, I wish the Minister very well in terms of the details and add my congratulations on her new post. The conclusions are more and more to do with somehow leaving the European Union in a formalistic sense, but keeping all the relationships going—the markets, the physical relationships and the acquis communautaire. Of course, it will be put into what is going to be the repeal Bill, if it comes along. I do not use the adjective “great”, by the way, because I have my doubts about it. Therefore, we are ending up with the same kind of bureaucratic input that people who did not like Europe were madly complaining about when they said that the European Union was far too bureaucratic and heavy. All those instructions, regulations and requirements will be inserted into the repeal Bill if we maintain the status quo in all the markets in Europe that we are suddenly so keen on.

The whole thing is becoming more and more shaky as an approach for a mature Government in a mature Parliament in a mature country. This country needs to recover the self-confidence we had as an upstanding and successful member of the European Union, whatever the future structure and decisions may be. The Article 50 Bill has only just started. There is a long, painful and bumpy road to come. No one can predict how it is going to turn out, but I think the second-thought syndrome is becoming increasingly powerful.

15:52

[The Earl of Kinnoull (CB)]

My Lords, it is a pleasure to follow the noble Lord, Lord Dykes, with his lovely clarity of expression and thinking all round. I declare my interests as set out in the register, particularly in respect of Hiscox insurance group and Schroders plc. I warmly join in the many congratulations for the noble Baroness, Lady Falkner of Margravine, and her committee and staff on producing in double-quick time a carefully thought through and thought-provoking report.

I will confine my remarks to three high-level areas and not descend into the detail. The first is people. There has been a lot of debate and comment from all parts of the House about the 3 million people from the EU 27 who are here in Britain. A strong moral case has been made, saying that the uncertainty they are living with should be made certain.

There are probably two other things relevant to this debate to think about, the first being the need to engender a good atmosphere as we begin the negotiations. I should also have said that I am a Member of the European Union Select Committee, and in that capacity visited Strasbourg a couple of weeks ago for three days. We met 17 MEPs from more than 10 countries and were able to talk about a lot of issues, both on and off the record. What was interesting was how many of these people had friends and relatives living in the UK and how they too felt the uncertainty, in a slightly vicarious way. It would be good to address that, which would help to engender the very positive atmosphere we will need at the start of what will be complex and long-lasting negotiations.

The second and possibly harder-hitting point is the old City adage that capital follows talent. In my commercial career, I have seen that adage acted out time and again. The Minister has a tremendous commercial career behind her too, and a wonderful, sharp and seasoned brain. I am sure many here are thinking what I am thinking: that it is jolly good news that she has appeared at this time for our country in this role. She will be a great help. I have managed financial services businesses, including in continental Europe, for a number of years, using passports of course, and in Bermuda using the equivalence regime. Everything that one did was about trying to manage the talent and keep them attracted to and retained in the business, and when new talent was needed, to attract it. Anything that damages the ability of businesses to attract and retain talent is definitely not in our national interest, and I worry enormously that the uncertainty that people from the EU 27 in the financial services sector are living under at the moment is doing just that. That therefore needs to be coped with, and I would very much welcome the Minister’s comments on that line of thinking.

The second line of thinking, again born out of my business experience, concerns the mindset we should have going into the negotiations. Our mindset should be very much about having regard to the interests of the 500 million in the EU 28—including the United Kingdom—rather than to the narrow interests of the 65 million in the UK. In my experience with repeat order customers—the EU 27 are most certainly repeat-order customers of UK plc—at the end of every transaction one needs to achieve equity in the consideration that has passed between the parties. Everything is about communication, and again, it would be extremely helpful to make sure that our own people who are engaged in the negotiation at every level have that mindset.

I saw as well during our three days in Strasbourg that a number of what one might call macho statements by political commentators and politicians were being reported through the British press and other media. The lingua franca in Strasbourg and Brussels is of course English, so everyone reads the British press and watches the BBC and CNN, for example. Those statements were being faithfully reported, and it is not helpful to the sentiment there if it is seen that we are not having regard to the 500 million but solely to the 65 million. Again, I would appreciate some comments on that.

When we come to the negotiation, there are certain sectors where we have an incredibly strong hand, and we should not play that hand ungenerously. One is the reinsurance sector, which I am very familiar with, where we have the strongest hand. So we should act generously and be seen to be doing that, because that will help us in sectors where possibly we have a weaker hand.

The third area I want to talk about is the cliff edge and the very helpful paragraphs in the report about that, beginning at paragraph 100, and the transitional arrangements. Again, I am happy to report from Strasbourg—where the cliff edge came up—that there was a generally warm feeling towards the transitional arrangements on the part of MEPs. They are just MEPs, but I do feel that their warmth is probably reflected in their countries. I am going to mix metaphors in an appalling way now, but there was certainly a feeling that the cliff edge cuts both ways. They too felt that this was important.

I want to sound a warning bell, again born out of business experience. As the noble Lord, Lord Butler, said, businesses hate uncertainty. Using just an interim arrangement, with the ability to push a horrible negotiation down the road for two or three years, is possibly damaging to business as well. We should try to sort out everything we possibly can in these two years, putting into a transitional arrangement only those things that have to be put there. If we do not, we will cause damage to business.

I cannot resist talking about optimism, because others have. Regarding the bits that I know—the insurance sector and to a lesser extent the fund management sector—I am in the Butler camp. For those sectors, good and sensible deals can and probably will be done, and I feel reasonably optimistic. I do not at all underestimate the very many hard yards ahead. I commend again the noble Baroness, Lady Falkner of Margravine, for her tremendous report.

16:01

[Lord Tunnicliffe (Lab)]

My Lords, I too would like to express my sincere thanks to the noble Baroness, Lady Falkner, her committee and the members of the EU Financial Affairs Sub-Committee for producing this report as well as to all those who have spoken in this afternoon’s debate. I am grateful to the committee for looking at this issue first of all. Having read the report, I think it is clear this decision was a wise one, given the number of knowledge gaps that undoubtedly exist both in government and industry, and the lack of a strong evidence base which will be required.

In the months following the referendum, the overriding concern has been on what our future relationship with Europe and the rest of the world will look like. In that, there has been an implicit assumption that we have a sufficient knowledge, capacity and basis upon which to make such decisions. The people of this country voted to leave the European Union, and it is our duty to facilitate that. That being said, it will be a process that goes against all the natural instincts of the Houses of Parliament. We are not as institutions good at making a lot of difficult decisions quickly. It will be a strain. That is why reports like the one we are debating today are vital prisms through which we can explore such complex issues. But even such reports, produced and debated in such a short period of time, have to be considered in the current political climate. I wonder, for example, how different this report would have been if we had heard from the Prime Minister prior to its publication.

It will come as no surprise to noble Lords that I am interested in process. I am interested in the mechanics of the system. This report confirmed my suspicions that at present we are not sufficiently prepared for the monumental task of extracting ourselves from the European Union. I do not doubt the determination of the Government in wanting to maintain a strong and vibrant financial service sector here in the UK. However, I doubt whether they have the strategy to achieve this. I fear that, instead of a clear plan, the Government are clinging on to the notion that our position as a global leader in financial services is unshakeable.

Many noble Lords this afternoon have discussed this issue, and there has been a general conversation about being sensible, about this being two-sided and about Europe needing us as much as we need Europe. There have been conversations in Strasbourg and the rest of Europe where that impression has come across. The problem is that the negotiations will not necessarily be conducted by rational people looking at economic advantage; they will be conducted, dare I say, by politicians, who on occasions have been known to be irrational—indeed, tragically irrational.

Our lack of knowledge is well illustrated by passporting, which has become the issue to be discussed whenever Brexit and financial services are mentioned. Passporting is obviously related to equivalence—and, separately, the cliff edge—and those seem to be the key areas of concern. Why has passporting caught the imagination of so many people? Because it perfectly exemplifies our relationship with the EU. Passporting has become integral to the way in which banks operate. As Douglas Flint, group chairman of HSBC, told the committee,

“Everyone is affected by passporting rights to a greater or lesser degree”.


It also cuts across the most significant debates we will have about Brexit—notably, our membership of the single market, which the Prime Minister has confirmed Britain will no longer be a member of, as well as equivalence and regulatory divergence.

Despite all this, it appears that our knowledge of the system in which we are operating is limited. Before we can make a decision about where we want to go, we surely need to figure out what we have been doing and where we are. As the report states,

“It is striking that some firms do not themselves appear to be aware of their reliance on the current passporting arrangements”—


the implication being that they do not have a full picture of the reciprocal impacts that passporting has on both the UK and EU financial markets. I for one believe this to be a startling realisation. There is a responsibility on the Government and industry alike to rectify this deficit as quickly as possible.

In a Written Answer to my noble friend Lady Hayter on 24 January, the Minister stated that:

“Government ministers have met with a full range of institutions from across our financial services sector”.


It is encouraging that such conversations are taking place, but I wonder whether the noble Baroness could go into more detail than she has provided on meetings that related specifically to passporting rights. Do the Government share the view of the EU Select Committee about the awareness of passporting access across the industry? If so, I would be interested to hear how the Government intend to resolve this problem.

Given that the Prime Minister has made it clear that she has no intention of Britain remaining a member of the single market, could the Minister outline what implications the Government believe that will have for our ability to maintain passporting rights, and whether it will be a priority for the Treasury in the negotiations?

That brings me to the evidence base more generally. I appreciate that not all communications, let alone the detail of those communications, will or should be available for scrutiny. What I am asking for—and I believe that I am justified in doing so—is evidence that the Government are building the robust analysis and filling the gaps which the report made clear are so apparent. Can the Minister say whether, further to the request by the EU Financial Services Sub-Committee, the Treasury is modelling the effect of different scenarios on the deal that will be struck between us and the EU?

Related to that, will those models take into account the executive order signed by President Trump, which seeks to review the working of the Dodd-Frank Act? I know that the Government have been keen not to comment on the domestic policy of the US, but surely when minimum standards of financial regulation are at risk we have a responsibility to advocate measures which were designed to protect consumers.

Indeed, the report warns of the challenges associated with possible regulatory divergence between ourselves, the US and the EU. The UK has played an integral role in the design, implementation and management of financial service regulations. Do the Government intend that we continue to work with our European partners on regulation setting?

We have heard today some of the more intricate matters that the Treasury will have to consider. However, the point that I am trying to make is that, if we do not understand the basics of the overall industry, we will not be properly prepared to discuss the parameters of a debate on, for instance, as mentioned by a number of noble Lords today, our continued position as the European clearing centre, or—we have heard less of this, but it is important to London—as a hub for fintech development. Too often these basics are overlooked.

We must not confuse the mass of detail that we have for understanding the industry as a whole. The report left me with the impression that we do not have the necessary understanding of the industry to enter these negotiations, that the industry does not have a complete understanding of itself and that the Government have yet to find the tools with which to fill these knowledge gaps. I hope the Minister’s response will put my concerns to rest.

16:10

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, the noble Baroness, Lady Falkner of Margravine, and her committee have produced an excellent, clear report. I thank her, and others, for the warm welcome they have given me in my challenging new role. I join others in thanking her and members of the committee—some of whom, along with others, have spoken with great clarity today—for their work. I especially thank the clerks, who have done a really good job at great speed.

It is obvious that financial services will be an important component of the EU exit discussions and it is helpful to have a comprehensive document covering all the issues at this exact stage—as well as to have this debate before we submit our government response to the committee. This debate is especially useful to me, as only last week I was given responsibility within the Treasury for EU exit on financial services. I can reassure noble Lords that I have a long history of working with, and operating in, the EU and I believe that we can build a strong new partnership on financial and economic matters.

The links between the UK and our nearest neighbours in Europe are numerous and long-standing, as the Prime Minister said when she highlighted financial services as a priority. Above all, it is in our interest for the EU to flourish and we will be aiming for the freest possible trade in financial services between the UK and the 27 member states.

I am especially grateful to my noble friend Lord Caithness, who gave us the benefit of his experience at the Treasury and an insight into the global future. This underlined to me the importance of maintaining the UK’s pre-eminence in financial services. Having, like him, operated for many years in the EU, working with EU partners, I very much agree about the importance of language. Notions such as seeking common ground are good concepts in negotiation.

The noble Earl asked about the risk of currency devaluations. He will remember that Treasury Ministers have to be very careful about what they say regarding currency. However, since the financial crisis, the Government have strengthened the domestic financial stability policy framework and, as the Governor of the Bank of England noted, the UK financial system has passed several tests over the past year. The Treasury, the Bank, the Prudential Regulation Authority and the Financial Conduct Authority will continue to monitor any risks closely. That is very important and reassuring.

As a glass-half-full person, I was glad to hear the noble Lord, Lord Butler of Brockwell, sound more optimistic than he did at the time the committee produced its report. My noble friend Lord Eccles and the noble Earl, Lord Kinnoull, felt the same. The noble Lord, Lord Butler, is right about the interest that the EU has in a sensible outcome. He may well know that four-fifths of EU 27 capital market business is conducted through the UK, and he is also right to say that we need to keep close to each other.

One key issue that the report discusses is that of access to EU markets. I listened with great interest to the noble Lord, Lord Dykes, who said how important it was to remain a confident country in this time of change. The Prime Minister helped us here with her speech at Lancaster House, in which she made it clear that we would not seek membership of the single market. Instead, we are seeking a new strategic partnership with the EU that complements the needs of our industries, including the needs of financial services companies and their customers.

That means that we are working closely with firms to understand what issues Brexit raises for them and what a good outcome might look like. Our work so far shows that the answer to that question varies enormously according to whom you ask. Many firms, for example, across banking, asset management, insurance and payment services, which currently trade across borders, benefit from passporting rights, but that is less true of firms that provide retail financial services chiefly within the UK, such as domestic insurance firms and high street retail banks.

We are working to understand the needs of the wide spectrum of financial services interests in the UK. That includes, for example, the car companies, which provide lease financing for most new cars bought in Britain today. It means understanding the interests of the wider financial and related professional ecosystem—a word that others have used—including accountants and lawyers, as well as thinking about the interests of consumers of financial services, including the less well-off or those who might be misled. I liked the example given by the noble Lord, Lord Butler, about car insurance for travellers in Europe.

As the report rightly notes, various elements of EU financial services legislation contain equivalence provisions, some of which can offer a basis for firms from third countries to provide services across the EU. We have heard calls from our stakeholders on this and studied the industry analysis proposing these equivalence regimes as the basis for future market access.

The noble Lord, Lord Tunnicliffe, asked about the depth of discussion on passporting rights. The simple answer is that at nearly every meeting on financial services interests there is a discussion of passporting rights—but, as with equivalence, different people are talking about different things. We need some flexibility in our negotiations, but I reassure this House that in our new strategic partnership we will seek the freest possible trade in financial services between the UK and the EU. In the Prime Minister’s words, it will be on the basis of a “bold and ambitious” free trade agreement.

As the committee’s report noted and our debate today has illustrated, this is an exceptionally complex set of issues. For this reason, I am determined that consultation with our industries and stakeholders should continue throughout the negotiating process, which will enable us to improve our evidence base and understand the impact of different scenarios. Those themes from the report were picked up by the noble Lord, Lord Tunnicliffe. The noble Lord also asked about Dodd-Frank. It is frankly early days on that. Our simple aim is to secure the future of a sector responsible for 7% of GDP and over 1 million jobs.

A second area of enormous significance to the sector is to avoid a so-called “cliff edge”. As the report highlights, this will be important to a large number of industries across the entire EU. For financial services firms, this is of particular importance because of the deeply integrated market for financial services and long-established regulatory coherence. To pick up on the points made by the noble Baroness, Lady Falkner, we want to give businesses enough time to plan and prepare for the new arrangements that will be in place. We want the change from where we are now as EU members to our new relationship with the rest of the EU to be as smooth and orderly as possible. It is in recognition of this that the Prime Minister has made it clear since the committee reported that a phased process of implementation will be sought.

I understand the noble Baroness’s point about the need for an early agreement on phasing to help allay the concerns of the financial services industries. We also believe that such a phased process of implementation can be in the mutual interest of the UK and the EU. Inevitably, the details of the timing of the implementation period will have to be discussed through the process of negotiation with our EU partners.

A third priority that many noble Lords touched on, including the noble Lord, Lord Desai, and the noble Earl, Lord Kinnoull, and which I think is extremely important, is access to talent. The noble Earl, Lord Kinnoull, warned that capital follows talent. I certainly remember that from my time in business. For some, it is the overriding issue. Fintech firms, for example, tell us they rely on drawing from an international talent pool. Europe leads on fintech, much of it here in London, and we are committed to staying at the cutting edge of financial innovation. Let me highlight the statistic from the report that is so telling on talent: of the 1 million or so people who work directly in our financial services, 60,000 are EU nationals and 100,000 are non-EU nationals. To respond to the noble Earl, we recognise that the ability to attract and look after highly qualified staff and transfer them easily between the UK and the EU is a key issue, including for insurance.

In future we must ensure that we can control the number of people coming to the UK from the EU. We are considering the options for our future immigration system very carefully. As part of that it is important that we understand the impacts of different options on different sectors of the economy and on the labour market. Companies are not only discussing with us how we keep attracting new talent; they want to know what it means for the international staff they already have and value. It is a priority for the UK to be able to guarantee the rights of EU citizens already living in Britain, and the rights of British nationals living in other member states, as soon as possible. That must be agreed on a reciprocal basis and we stand ready to sign up to this and to do so soon if it can be agreed with our EU partners.

I turn now to the international dimension. My noble friend Lord Caithness asked about the Prime Minister’s meeting with President Trump in the United States. The trip in January was very positive. I felt very proud of the Prime Minister. Obviously I cannot comment on the private detail of the conversation but the Prime Minister set out that there is a shared commitment to economic co-operation and trade between the United States and the UK. The UK has always been a leading voice for free trade in the EU and globally. That will continue. I always say that trade is in our DNA.

The Government agree with the committee’s assessment of the UK as a global financial services hub and the depth of capital market activity it fosters—to the benefit of Europe as a whole, its pensioners, its businesses and its public sector bodies and their customers. The UK and the EU have a mutual interest in ensuring that specialist activities, such as clearing do not end up in New York. The noble Lord, Lord Shutt, talked about possible job implications. I will say two things. First, I saw Mr Xavier Rolet today. He is one of the first experienced leaders in this industry that I have had the pleasure to consult. He gave me a copy of the EY report.

Secondly, as the committee’s report identifies, many firms in the UK, in the rest of Europe and internationally benefit from London’s multicurrency clearing structure. The Chancellor himself has pointed out that any changes to the structure could force up the cost of clearing, with a substantial cost to the European economy and to firms in the 27 member states—and cost is an important motivator. We will look at the committee’s recommendations on clearing very carefully in responding to the report.

My noble friend Lord Caithness asked about financial services regulatory co-operation in future trade deals, which was a very good question. The Prime Minister has said that the UK will be free to strike trade deals around the world after exit because of the approach that we have taken. That includes financial services. Trade deals involving non-tariff barriers, which have been mentioned, such as regulation, are also important and can be part of discussions on any new trade deal.

As the noble Lord, Lord Desai, said, we have played a major part in the architecture of the international financial system. We agree that we need to ensure that the UK, with its expertise, experience and eye for detail, continues to have influence over international standards with a voice on things such as the Basel Committee, the Financial Stability Board and other international fora such as the International Organization of Securities Commissions and the International Association of Insurance Supervisors. These international bodies could not be more important.

A priority of the Government is to consult external expertise extensively at this time and I am grateful for the vast amount of input that we have already had at every level in the Treasury and in DExEU. We are not talking just to those businesses with whole new Brexit strategy departments and consultants. We are also talking to those with none and to start-ups, supply chains and other stakeholders. We are also engaging outside London, where, as the noble Lord, Lord Shutt, said, we have large numbers of financial services jobs. There are, for example, around 140,000 people in this sector in Scotland, Northern Ireland and Wales—think of Standard Life or Virgin Money in Edinburgh, Legal & General in Cardiff, and Citi in Belfast. Indeed, next week I will visit Wales in my new role and hope to meet some financial services stakeholders.

We will keep up this process of listening to expert views from a range of standpoints as the negotiations kick off and progress. I hope not to be criticised by this House for lack of vigour. I know that many noble Lords have expertise in these areas. I therefore take this opportunity to invite them to contact me if they have advice to proffer.

I have focused my remarks largely today on two things: the needs of our varied financial services sector as we leave the EU, and how we are researching, understanding and analysing those needs. While some are more optimistic than others, there is a wide measure of agreement today that we need to secure the freest possible market access, the smoothest possible transition, and the ability to recruit and retain the best and the brightest. This matters to those people whose jobs depend on this industry—more than 1 million people in this country. It matters to the wider UK economy. Financial services contribute around £66 billion a year in tax and represent a growing percentage of our exports. It matters to our partners across Europe—and, of course, we are a gateway to the world of international finance.

It has been a pleasure to debate this perceptive and timely report. I again express my appreciation to the noble Baroness, Lady Falkner of Margravine, and the team that she chaired so expertly, for their conclusions.

16:28

[Baroness Falkner of Margravine]

My Lords, this has been an extremely fruitful debate and I am particularly grateful to the Minister for giving us, in the absence of a formal government response, a clear line of vision about how she is proceeding with her role. I particularly want to thank those noble Lords who spoke in this debate today who were not members of the committee—the noble Earls, Lord Caithness and Lord Kinnoull, the noble Viscount, Lord Eccles, and the noble Lord, Lord Dykes. We have benefited greatly in this House from hearing from them as well.

The tone of the debate touched on optimism and pessimism. As all Select Committees should do—and I believe do—we followed the evidence. When our interlocutors were extremely concerned about their future businesses, workforces and livelihoods, we reflected that in the debate. Frankly, we did not encounter too many voices cheering the impact of Brexit on financial services from the rooftops.

Where I entirely agree with the optimists is about the durability of the City of London to innovate, reinvent itself anew and adapt. Voltaire picked this up in the early 18th century when he was in London—enriching himself on the back of the City of London. He exhorted the French to move in the same direction. “Nobody understands commerce like the English,” he said. As I reminded the House today, President Hollande is, somewhat belatedly, trying to take France in that direction.

In conclusion, it is people who are at the heart of this. It is not fashionable to defend bankers, nor to say that the financial services sector does a very good job in liquidity and capital markets. Our committee saw how important it was that the livelihoods of people in this country and in the European Union should continue to benefit from that most essential commodity—capitalism.

Motion agreed.

House adjourned at 4.31 pm.