(3 years, 4 months ago)
Lords ChamberMy Lords, we have not made as much progress on this issue as many people, including thousands across the country, would have hoped. That is not through any lack of effort. The noble Lord, Lord Sharkey, and my noble friend Lord Stevenson have been tenacious in their pursuit of change. However, for that to be possible, both sides must want to work towards a favourable outcome.
I said on Report that we were not convinced that this amendment provided the answer to the long-running problems experienced by mortgage prisoners. It certainly provides an answer, but I accept the argument that there would be consequences for the mortgage market as a whole. With this in mind, colleagues offered an alternative option in what was then Amendment 37B. Your Lordships’ House has a reputation for being constructive and, in that spirit, the noble Lord, Lord Sharkey, and my noble friend made further offers to look at any text that the Treasury would be prepared to bring forward. Unfortunately, Ministers chose not to put an amendment on the table.
The Economic Secretary has, to his credit, demonstrated knowledge of the challenges in this area. Every time he has spoken, I have believed his wish to identify workable solutions. The noble Earl, Lord Howe, and the noble Lord, Lord True, have said similar things in our meetings; again, I have viewed their comments as earnest. The problem is that warm words do not pay bills—nor do they generally lead to lenders taking the kind of steps that are required. The initiatives launched to date have helped only a tiny fraction of mortgage prisoners, so one would have thought that the case for further action was overwhelming.
We wanted—and continue to need—the Government to take proper ownership of this issue. We welcome the fact that the FCA will conduct a further review of the options available to mortgage prisoners and that the Treasury will revisit its data on the different cohorts of affected customers. As well as following these processes closely, we will of course continue to press the Economic Secretary to do what is needed.
It is regrettable that we have not been able to achieve a satisfactory outcome on this legislation, which should have been more than another false dawn. However, Conservative MPs have rejected the case for action, and it is hard to imagine meaningful progress being made unless Ministers revise their red lines. Accordingly, we do not believe we should press this matter any further today and look to the noble Lord, Lord Sharkey, to withdraw his amendment. However, I can assure the Minister that we will return to this issue at the next legislative opportunity.
My Lords, I am grateful to noble Lords who have spoken in this short debate, both for their constructive comments and for re-emphasising the genuine concerns they clearly have for this unfortunate group of people who find themselves trapped in mortgages that cause them great difficulty. I do not doubt for a second the distress that many such people are experiencing, but my noble friend Lady Noakes brought us back to some very important realities on this vexed subject. I agree with the noble Lord, Lord Tunnicliffe, that it is regrettable that we have not been able to reach full agreement on the way forward. Nevertheless, I hope my earlier remarks indicated that we take this subject extremely seriously. I am confident that noble Lords who have listened to my honourable friend the Economic Secretary speak on the subject will be in no doubt whatever of his intention to keep on top of it in the weeks ahead.
Part of the problem we face relates to the data that underpin the case that the noble Baroness, Lady Kramer, and the noble Lord, Lord Sharkey, have made. The report of the UK Mortgage Prisoners group makes accusations about the data held by the FCA, essentially saying that the data analysis is wrong. However, I put it on record that the FCA data analysis was conducted using information on the 250,000 borrowers with inactive lenders alongside a credit referencing agency dataset which includes data on 23,000 borrowers with inactive lenders. The FCA data has shown that, on average, the 55,000 borrowers with inactive firms who have characteristics that would make it difficult for them to switch but are up to date with payments are paying around 0.4 percentage points more than similar borrowers with active lenders who are now on a reversion rate. Its analysis also shows that the majority of borrowers with inactive firms are on relatively low interest rates of 3.5% or less.
It is important that, as part of the review that the Government have announced, the existing data is analysed to provide further details on the characteristics of the borrowers of most concern. That is definitely a core part of getting to grips with what more can be done in this area.
It was suggested that in the first instance the Government failed these consumers. I repudiate that suggestion very strongly. The customer protections that we set were best practice for transactions of this type—or went beyond best practice: the Government strengthened the consumer protections for the last two sales of new car loans in response to concerns raised by parliamentary colleagues.
I do not accept the points made by the noble Baroness, Lady Kramer, about the difference between those whose mortgages were refinanced with active lenders and those who found themselves with inactive lenders. The sales of those mortgages did not impact customers’ ability to remortgage elsewhere: customers with inactive lenders can remortgage with another provider as long as they meet the lender’s risk appetite. The customer protections that we insisted on for new car sales also included prohibitions on placing barriers in the way of customers remortgaging with another provider; for example, all early repayment charges are waived. These lenders are charging interest rates in line with SVRs set by active lenders.
The noble Lord, Lord Sharkey, asked about Cerberus. The customer protections in these sales were best practice in the market at the time. For the last two sales, restrictions on setting the SVR last for the lifetime of the mortgage. I add that Cerberus indicated that it was offering new products to customers but this was not part of its bid, so UKAR did not seek a binding commitment on this point. Cerberus was selected because it agreed to the consumer protections that were sought and provided the best value for money for taxpayers. I underline, therefore, that inactive lenders can, and often do, allow borrowers in arrears to make use of a variety of tools to get themselves back on track. Such tools include capitalisation of arrears, term extensions and payment holidays.
It is simply not true that the FCA has done nothing for this group of people. For example, to reflect the current Covid-19 situation, the FCA has brought forward guidance to allow borrowers who are up to date with their payments on a recently matured or soon-to-mature interest-only, or part-and-part, mortgage to delay repaying the capital on their mortgage while continuing to make interest payments. This guidance has enabled borrowers to stay in their own homes for a significant period. The FCA also confirmed that it was making intra-group switching easier for borrowers with an inactive firm that is in the same lending group as an active lender. On 14 September, the Money and Pensions Service launched online information and a dedicated phone service as a key source of information and advice for borrowers with inactive firms.
The point was made that the modified affordability assessment has helped only 40 households. The modified affordability assessment, I contend, provides an additional and important option for some borrowers who may not otherwise have been able to switch. We must just give it time to take effect. It will not be a silver bullet for all borrowers with inactive firms, many of whom have other characteristics that affect their ability to remortgage.
I will leave it there. I say again that I regret there has been no meeting of minds on this, but I also say that the Government place a great deal of emphasis on the work that is now in train. We will do our utmost to see what more can be done for mortgage prisoners as a result of the further analysis I have referred to. I hope noble Lords will see fit to agree with the Government’s Motion.
(3 years, 4 months ago)
Lords ChamberMy Lords, the noble Baroness, Lady Bennett, gave us fair warning that she was likely to bring an amendment back on Report for further debate, which is reasonable given the time constraint we faced in Grand Committee. As with the amendment of the noble Lord, Lord Sikka, we agree that implementing the right forms of oversight is of utmost importance. In Committee, several speakers mentioned the potentially valuable contributions to policy debates that could come from academics, think tanks and others, if they only had access to the data they needed. We agree that more must be done to facilitate such research, and I hope the Minister will say something on this.
The noble Baroness’s redrafting of her amendment addresses some of the points raised in the previous debate. However, her original pitch was for
“a network, not reinventing the wheel, not creating a whole new institution.”—[Official Report, 10/3/21; col. GC 735.]
Yet Amendment 124 from Committee and today’s Amendment 36 would create a whole new institution. I believe that the comments from the noble Baroness, Lady Kramer, bear consideration. Surely the first thing we should do is to make sure that this role is fully taken up by Parliament. We have already established, informally at least, that much more scrutiny of how the FCA and the PRA work will be necessary, and I look forward to how well Parliament reacts to this challenge. It is also important to recognise that resources may be needed to give parliamentary scrutiny the expertise necessary in this complex area.
One area that interests me is the impact of the financial services sector on the real economy. We are all familiar with the arguments advanced by the Minister last time on jobs, tax take and so on, and colleagues will remember that I reflected on the successes of the sector at Second Reading. However, as the UK comes out of the pandemic and as government support schemes begin to disappear, we will need to monitor the extent to which lenders continue to support business expansion and other aspects of the economy. This brings us back to the point about ensuring the availability of data.
My Lords, as I set out in our earlier debate, the Government agree that effective oversight of the regulation of our financial services sector and consultation with a diverse range of stakeholders are crucial to the sector’s ongoing success. As we have discussed previously, Parliament has a unique role to play in that oversight function.
In that context, I will set out the existing mechanisms that ensure effective independent oversight of the sector and its regulation by a diverse range of stakeholders. I will not repeat my previous remarks on the regulators’ arrangements for publishing consultations and the manifold ways in which they are already held to account by various panels and Select Committees.
I understand that this amendment is partly inspired by Finance Watch in the EU, an organisation which conducts research, monitors financial services legislation inside the EU and advocates on financial services issues. As the noble Baroness indicates in her amendment, we do not have a body in this country that performs an equivalent role; were we to have one, I imagine it would be made up of industry stakeholders of various kinds. As noble Lords will know, parliamentary committees can and do seek input from a wide variety of experts. In doing so, they can bring together the existing expertise of academics, think tanks and industry stakeholders.
Nothing prevents the creation of such a body in this country without a legislative basis; indeed, the EU organisation was not created by EU law but was simply set up as a non-profit organisation under Belgian law. It is funded by a combination of contributions from its members and philanthropic foundations and grant funding from the EU, for which the group has to bid.
The Government and the regulators regularly consult on their plans and proposals, and interested parties, including those from the backgrounds set out in this amendment, are free to respond. The Government and regulators consider all responses to such consultations carefully and consider how the views expressed should influence final policies and rules. I am concerned that this amendment would therefore duplicate existing practices in a very real sense.
In addition, it would appear to duplicate the work carried out by the Financial Policy Committee of the Bank of England. The FPC acts as the UK’s macroprudential authority; it identifies, monitors and acts to remove or reduce systemic risks to the UK financial system. It may make recommendations to the Treasury, the FCA and the PRA, and is required to publish a financial stability report twice a year setting out its view of the outlook for UK financial stability, including its assessment of the resilience of the UK financial system and the main risks to UK financial stability.
Given this, and the existing processes that I have set out in previous debates today that offer ample means for achieving the outcomes sought by this amendment, I hope the noble Baroness will feel able to withdraw it.
My Lords, we had a fruitful debate on the issue of parliamentary scrutiny and the regulator’s rule-making powers last Wednesday. Since this amendment was tabled, I have viewed it as an opportunity to tie up any loose ends, rather than being likely to result in a Division.
It is fair to say that nobody is particularly happy with the current arrangements, particularly given the loss of European Parliament scrutiny of new prudential rules, and the glut that will come once the Bill becomes an Act. However, there is little sense in repeating the arguments made in previous debates. I recognise that the Minister was able to make some important additional commitments in his response to last week’s group of amendments. Since this amendment was tabled, we have seen correspondence from the Economic Secretary to the heads of the FCA and PRA, asserting that Parliament, as we have all said in recent months, has and must enjoy a special role in overseeing the regulators’ output. The letter provided what my noble friend Lord Eatwell has long referred to as the final component of a three-legged stool.
Having reached agreement that Parliament should be treated as a significant stakeholder, the key is to now put in place a mechanism for meaningful scrutiny to take place. Our Amendments 45 and 48 envisage the establishment of a dedicated committee of each House, or a Joint Committee of both, and that remains an attractive prospect to us. Therefore, as we move into a new Session, I hope the Minister can assure me that the Treasury and business managers in both Houses will look at making it a reality. We await the outcomes of the future regulatory framework review, which I hope will represent a significant step forward for all strands of oversight. Once we have digested the findings, our task will be to scrutinise a successor to FiSMA, and I repeat our call for legislation to receive the detailed pre-legislative scrutiny it deserves.
Scrutiny has been the central theme of the Bill. The noble Baroness, Lady Kramer, said that we must look forward, and she commented that, in many ways, the theme of scrutiny has crossed parties as an apolitical discussion. I hope it will not be a matter of conflict between regulators and Parliament, and that the opposite will be true, as they must work together to make this scrutiny work. I also hope it will mean that we can have real confidence in the work of the regulators, and a real sense that their actions are fully understood by responsible politicians.
My Lords, I am grateful to the noble Baroness, Lady Kramer, for her helpful and constructive introduction to this amendment. I begin by stating my agreement with her on what I am confident is common ground between us in two respects: Parliament has a unique and special role in scrutinising the regulators and shaping the financial services regulatory landscape, and scrutiny and accountability of regulators has emerged as the foremost issue throughout our debates on the Bill. The noble Baroness, Lady Hayman, will forgive me for not putting the issue alongside that of climate change.
I appreciated the noble Baroness’s remarks on the way in which our cross-party discussions have enabled us to make progress on this issue, which we debated in some detail last week. I will not repeat all my remarks from that occasion, but I will summarise them. I confirmed to the House that the Economic Secretary to the Treasury has written to the chief executives of the PRA and the FCA, to endorse the commitments that they made in their recent letters, and emphasised the importance that the Government place on them. I assured noble Lords that the Government agree that the regulators should provide a comprehensive response to parliamentary committees on any issues they raise in the course of their scrutiny. I also confirmed that the Government remain committed to further considering this issue as part of the ongoing future regulatory framework review, and to engaging with Members of this House and the other place, as we continue that review.
As I said then, delivering the reforms that the Government have proposed in this area could be done only through further primary legislation. Therefore, Parliament will have the opportunity to return to this issue where it can be considered fully. The noble Baroness, Lady Kramer, noted that consultations are not the only relevant issue here, and I agree with her. I am happy to confirm again that the Government view parliamentary scrutiny much more broadly, also to encompass the regulators’ wider work.
(3 years, 5 months ago)
Lords ChamberMy Lords, I thank the Minister for introducing these amendments and for the explanation that was shared ahead of this debate. We will not oppose them today, as it is right that changes should not be made without legislative consent. It is, however, very troubling that these provisions will go forward without Northern Ireland’s inclusion. and that time has not been offered to allow the Northern Ireland Executive to pass a consent Motion. It is my understanding that there were also difficulties on timing for a legislative consent Motion during the passage of the Medicines and Medical Devices Bill. It cannot become a habit for this Government to carve Northern Ireland out of legislation at the last minute or treat legislative consent as an afterthought. What conversations were had with the Northern Ireland Executive on the problem of timing? Were any measures considered to allow them extra time as needed?
Have the Government identified ways to prevent this happening again? On the substantive issues, the result is that the Bill will be passed without offering the same powers and protections for communities and law enforcement in Northern Ireland as in other areas of the UK. This is of particular concern for the statutory debt repayment plans at a time when the impact of the Covid pandemic has placed extreme stress on people’s personal finances.
Finally, what options are the Government considering, with the Northern Ireland Executive, to ensure that Northern Ireland is given an opportunity to enact these provisions and that communities in Northern Ireland are able to benefit from the planned support on debt and personal finance?
My Lords, I thank noble Lords for their remarks, and I stress again that UK government officials will of course continue to work closely with and support their opposite numbers in Northern Ireland. I hope that the noble Lord, Lord Tunnicliffe, will accept that that is as far as I can go as regards our support for our Northern Ireland colleagues, because the ball is very much in their court as to how they wish to proceed and when. As and when they decide to proceed, they will of course get full co-operation from the UK Government.
I would like to touch on a question that the noble Lord, Lord Tunnicliffe, asked me relating to the Medicines and Medical Devices Bill. That also gave rise to an issue over a legislative consent Motion from Northern Ireland. The context for securing legislative consent for the Medicines and Medical Devices Act 2021—as it now is—was quite distinct from that for this Bill. Northern Ireland Executive Ministers were asked to consider promoting a supplementary legislative consent Motion on a second occasion as a result of amendments added to the Medicines and Medical Devices Bill during its House of Lords Committee stage. The Northern Ireland Assembly had sufficient time to consider and pass a supplementary LCM before the Bill’s Report stage in the second House—in this case, the Lords. Report is considered to be the last substantive amending stage of a Bill in the House of Lords and, consequently, the last opportunity for the Government to avoid legislating for Northern Ireland had consent been denied or not achieved in time.
Unfortunately for this Bill, it has not been possible to secure legislative consent in time, in spite of the efforts of our officials and those in the Northern Ireland Executive. The noble Lord, Lord Tunnicliffe, asked whether we can prevent this situation happening again. I respectfully say to him that it really is not within the control of the Government here to influence the order of business and the work conducted by the Northern Ireland Executive. It is largely in their domain, but I hope my earlier reassurances will have been helpful on this topic.
The background to this, to come to his earlier point and the issues raised by the noble Lord, Lord Stevenson, is that breathing space regulations, which are the second half of the SDRP measures, that come into force on 4 May this year, do not apply in Northern Ireland, largely due to there being no sitting Assembly during the policy formulation and drafting of regulations. As I have said, we have been advised by officials in Northern Ireland that it will not be possible to pass the LCM agreeing that Parliament should legislate on their behalf until mid- to late April, which is too late for the Lords’ Report stage. The amendment carves out Northern Ireland from Clause 34 as I have described, with the exception of Clause 34(4). The Government understand that the relevant departments in Northern Ireland intend to take forward their own legislation for a debt respite scheme in due course.
I am afraid that the noble Lord, Lord Stevenson, has the better of me in his detailed questions. I will need to write to him, if he will forgive my not answering him now, on where the precise authority vests in relation to a Northern Ireland debt respite scheme, and indeed how the Government’s plan for the debt respite scheme will pan out prior to the end of 2024.
(3 years, 5 months ago)
Grand CommitteeMy Lords, the interesting amendment tabled by my noble friend Lord Sikka is another demonstration of the considerable unease felt on all sides of the Grand Committee about the governance of the FCA and the PRA, and their relationship with one another. The amendments moved on Monday by the noble Lord, Lord Blackwell, addressed similar concerns. The question still to be answered is: what would be the composition and terms of reference of such a supervisory board? Is the Treasury not deemed to be performing that role? How can we be confident that the supervisory board would have the authority and expertise to perform a task that my noble friend Lord Sikka rightly identified as being necessary?
I am sorry to sound like a broken record. Are not my noble friend Lord Sikka’s concerns another example of the lack of an effective mechanism of parliamentary scrutiny? Whether an effective parliamentary mechanism can be created is a question that we do not hear or have the ability to address but it must be addressed. I am sure that the Minister will agree.
My Lords, the Government agree that effective oversight of the FCA and PRA is a crucial component of our regulatory framework. Indeed, noble Lords will remember that in earlier debates we discussed the existing mechanisms to ensure effective independent oversight of the regulators by a diverse range of stakeholders. For example, both the FCA and PRA are required under the Financial Services and Markets Act 2000 to consult independent panels on the impact of their work.
I should say that in general I do not recognise the picture of regulatory capture that the noble Lord, Lord Sikka, painted in relation to our two financial regulators, although I shall of course read his comments in Hansard and make sure that I understand all that he said.
For the PRA, this involves consulting an independent practitioner panel of industry representatives, while the FCA must consult four different statutory panels, representing consumers as well as the financial services industry. Furthermore, the regulators are already under a statutory obligation to publish the results of their public consultations, including on proposed new rules.
The amendment proposes that the FCA and PRA should attend hearings in front of a supervisory board. I simply observe that both bodies must already attend such hearings before parliamentary committees, and those committees may also hear evidence from stakeholders about the performance of the regulators. The FCA, for example, must attend general accountability hearings before the Treasury Select Committee twice a year, while the PRA must appear before that committee after the publication of its annual report. Parliamentary committees of both Houses are also able to summon the regulators to give evidence whenever they may choose. For example, the CEO and chairman of the FCA appeared before the Treasury Select Committee on 1 March to answer questions on their regulation of London Capital & Finance.
The amendment proposes that a supervisory board should have the power to inquire into the adequacy of resources used and available to the FCA and the PRA. However, as we have discussed in previous debates, the Treasury already has the capacity to order independent reviews into the regulators’ economy, efficiency and effectiveness. Therefore, all told, the amendment would result in a duplication of existing opportunities for scrutiny and oversight of the regulators’ resourcing.
I realise that the noble Lord, Lord Sikka, has a close interest in the issue of supervision, but I hope I have convinced him that the PRA and FCA are already accountable in meaningful and tangible ways, and that a diverse range of stakeholders has opportunities to participate in scrutiny of their actions.
Finally, let me say that the Government are not closing down debate on these issues. As I have set out during other debates, the future regulatory framework review is already exploring how our framework needs to adapt to reflect our new position outside the EU. It would be premature to make changes to these arrangements before we consider stakeholder responses to the ongoing consultation. However, I have noted the contributions from the Committee on what form that may take. Against that background, I ask that the amendment be withdrawn.
My Lords, the provision of country-by-country data by banks and investment firms will be an important step forward both in combating financial crime and in addressing the vexed question of the fair taxation of international entities. These problems will be solved only by international negotiation and agreement. It is important that we are seen as an exemplar, and satisfactory country-by-country reporting is surely part of that.
My Lords, Amendment 121 aims to ensure that banks and investment firms engage in country-by-country reporting related to the provision of tax information. I am happy to assure the noble Baroness that there is no need for this amendment, because such requirements already exist for these firms in legislation.
Banks and most investment firms are already subject to country-by-country reporting requirements as a result of the fourth capital requirements directive, or CRD IV, which we implemented in the UK while we were an EU member state. This was done through a statutory instrument in 2013, and it requires firms to report relevant information on tax and revenue in each country where they have operations. This statutory instrument remains in place today. In order to implement the investment firms prudential regime, this Bill removes investment firms from the prudential requirements for banks in the capital requirements regulation—in order to allow the FCA to implement the new regime. But Schedule 1 to the Bill ensures that country-by-country reporting requirements will continue to apply to FCA investment firms.
There is an exception for small and non-interconnected investment firms. This is because this new regime aims to ensure proportional requirements for investment firms consistent with their size and activities. These firms are, by definition, small and non-interconnected with the wider financial system, and it would be disproportionate for these requirements to apply to them. This is the same approach that the EU took in the investment firms directive.
Amendment 121 would have the effect of preventing small and non-interconnected firms from being carved out in this way. For the reasons just mentioned, I do not think that this is appropriate. Therefore, when it comes to banks and investment firms, I am confident that the existing country-by-country reporting requirements for these firms are appropriate, and I ask the noble Baroness, Lady Bowles, to withdraw the amendment.
My Lords, I think the whole subject of supervision and the presentation of information for decision-making is very important. I do not think that it could be shoehorned into this Bill. I hope that the Government will note the concerns about this and meet it where we can in parts of the Bill, but perhaps there has to be an ongoing debate, which will hopefully come to some consensus about how we improve the supervision and accountability of the financial services sector.
My Lords, I listened carefully to the noble Baroness, Lady Bennett, in her clear introduction to these amendments, and I thank her for the background briefing papers that she kindly sent me this morning. Having said that, I hope she will forgive me if I do not turn the end of these Committee proceedings into an off-the-cuff economics seminar. Indeed, she will not be surprised if, on behalf of the Government, I adopt an orthodox stance on the role of our financial services sector.
It is the Government’s firm contention that the financial services sector is a vital part of our economy. It employs more than a million people, and two-thirds of the people employed in financial and professional services work outside London. It has been a critical source of tax revenue, whatever the exact figure, especially in these difficult times.
The IMF has described the UK’s financial system as a global public good, so the Treasury is not persuaded by the arguments of the Tax Justice Network around “too much finance” or that finance is inherently a bad thing for the real economy. The financial services sector supports British businesses to expand, manage cash flow, invest in themselves and create jobs. The sector is also one of our leading industries in its own right, driven by a concentration of international, and therefore internationally mobile, firms.
Amendment 123 would require regular reports on the impact of the financial services sector on a range of topics including growth, inequality and risk. Amendment 124 would establish a new oversight body which would consider the impact of this sector on the “real economy”.
I have already set out some of the positive impacts that the sector has in its own right on growth, jobs and tax revenue in the UK. But let us not forget that it is also a sector on which all other parts of our economy rely. This means that the sector is a vital source of funding and services for other sectors of the economy. But, of course, it can also mean that if there are problems in the financial services sector, they can affect other parts of our economy. That is why the sector is so vital, and it is why I am able to assure noble Lords that the Government are absolutely committed to transparency around financial risks and welcome independent scrutiny of risk exposure.
The Bank of England’s Financial Policy Committee also has a responsibility to identify, monitor and take action to remove or reduce systemic risks. The committee was established under the Financial Services Act 2012 and must publish and lay before Parliament a financial stability report twice a year. As part of its assessment of financial stability risks, the Financial Policy Committee already considers and reports on risks arising from shadow banking, also referred to as “non-banks”. Given the rapid growth of non-banks, the Treasury has asked the Financial Policy Committee to publish a detailed assessment of the risk oversight and mitigation systems in place for non-banks. That is expected in the first half of this year.
The Office for Budget Responsibility produces and presents a fiscal risks report to Parliament every two years, and it has previously explored risks posed by and to the financial sector. More generally, the FCA and PRA are required to prepare and lay annual reports before Parliament, assessing how effectively their objectives have been advanced. These objectives are set by Parliament, as noble Lords are well aware.
Of course, as I said, one key role of the financial services sector is to provide funding to the so-called real economy. The Government have recognised that, in this Bill, the provisions on the implementation of Basel require the PRA to have regard to the likely effect of its rules on the ability of the firms affected to continue to provide finance to businesses and consumers in the UK, on a sustainable basis in the medium and long term.
The amendment refers to inequality. On that issue, I can reassure the Committee that the Treasury, the FCA and the PRA are all bound by the public sector equality duty. As part of that duty, all three are required by the Equality Act 2010 to have due regard to the need to eliminate discrimination and to promote equality of opportunity in carrying out their policies, services and functions. The FCA publishes a diversity annual report to set specific measurable equality objectives and publish relevant, proportionate information demonstrating its compliance with the public sector equality duty.
Amendment 124 mentions the impact of the financial services sector on climate change and biodiversity. The Committee will I hope forgive me if I do not repeat what I said in earlier debates on that topic, as I have already set out the actions that the regulators are taking in that space.
I turn briefly to the composition of the oversight network that the noble Baroness proposes. I am completely with her in believing that the regulators should take on board a variety of different views; it is important that they do so. In fact, the FCA already has a statutory requirement to consult independent panels representing consumers and practitioners, and the Bank of England has strong links with many academics. Of course, all the groups mentioned are able to respond to consultations, which the regulators are required to undertake, and where their responses must be considered.
As a general comment, I just say that the topics raised by the noble Baroness are those which the Treasury and the regulators consider every day when making financial services policy. I assure her that the Government are committed to ensuring that the sector has a positive impact for consumers and for the economy as a whole. No Government could do otherwise.
Given all that I have said, which I hope has provided some useful perspectives on this topic, I hope that the noble Baroness will feel comfortable in withdrawing her amendment.
(5 years, 1 month ago)
Lords ChamberI am grateful to the noble and gallant Lord, and can tell him that resilience is one of the priorities of his successor, the current Chief of the Defence Staff. We are acutely aware of the need not to run down munition stocks and a programme is in train to ensure that those matters are addressed.
My Lords, yesterday the Defence Select Committee report found that MoD expenditure has been cut by an eye-watering 25% since 2010. The former US Assistant Secretary of Defense for International Security Affairs said that during this time there has been,
“a steady decline of Britain as the partner of first choice for the US military”.
Does the Minister accept that austerity has undermined the UK/US defence partnership and that ultimately you cannot do security on the cheap?
My Lords, no, I do not think it has undermined the partnership. It is true that defence expenditure has declined as a proportion of GDP since the 1980s, but we have seen total defence expenditure steadily increase again since 2014. I would add only that, when we look at defence spending, it is not necessarily appropriate to try to compare like with like, because the nature of defence spending changes year by year, particularly the nature of operational spending. As I said, the core defence budget has been increasing and is currently £39 billion.
(5 years, 1 month ago)
Lords ChamberAs I am sure my noble friend would expect, we keep our fleet deployments under constant review to adapt to evolving security situations around the world. That is the case with the current situation in the Gulf. Having said that, the recent actions of HMS “Montrose” demonstrate that we have the right assets in the right places. I stress that our priority now is to reduce tensions in the region.
My Lords, can I build on that point? Does that incident in which HMS “Montrose” was involved indicate the probability that more frigates will have to be deployed in the Gulf and, if so, what tasks elsewhere will be left uncovered?
(5 years, 2 months ago)
Lords ChamberMy Lords, building on the theme of accidental escalation, following reports that the UK is sending additional marines to the Strait of Hormuz, can the Minister give us an overview of the rules of engagement for British forces in the area? If he is minded not to do so, can he at least assure us that specific rules of engagement have been issued and inform us which member of the Government approved them?
I should correct the noble Lord on one point. Contrary to some media reports, we have not deployed any additional forces to the region as a result of the latest attacks. I completely understand why the noble Lord asked about rules of engagement, but I hope that he does not expect me to set out what those rules are. However, I can assure him that appropriate force protection measures are in place and are subject to regular review as the situation evolves.
(5 years, 2 months ago)
Lords ChamberMy Lords, the Cabinet Office policy contains guidelines for appropriate nationality and UK residency periods for prospective applicants, but they are not absolute requirements and should be considered on a case-by-case basis for each individual. It is important to understand that the process of security clearance is a matter of assessing not simply an individual’s trustworthiness but the degree of risk to that individual in the circumstances of the employment that they seek, and the security measures that would be needed to protect that individual and potentially their family as well.
My Lords, the way in which the Government have treated Afghani interpreters is an absolute travesty. During the UK’s 13-year mission, they risked their lives in support of our Armed Forces, but have since been forced to work in low-paid jobs as well as struggling to secure security clearance and family visas. It has been reported that vacancies remain for interpreters with NATO forces in Afghanistan, so does the Minister accept that the Government’s decision not to speed up the security clearance process has hampered NATO’s continuing mission in that country?
My Lords, I hardly accept anything that the noble Lord has just said. I do not believe that the Government’s scheme for previously employed interpreters is a travesty. I was glad to hear the noble Baroness, Lady Coussins, endorse the quality of the scheme because uniquely in the world it is there to provide for our former staff and their families, who have played such a generous role in supporting UK and NATO staff in Afghanistan. In total, through our ex gratia redundancy scheme, around 500 former staff and their families have relocated to the UK, which represents around 1,295 individuals in total. In June last year the then Defence Secretary announced that the criteria had been even more generously expanded. We are the only nation with a dedicated investigation unit in-country to investigate and provide solutions to intimidation.
(5 years, 2 months ago)
Lords ChamberMy Lords, I wonder whether we could build on that point, as I am a little confused. In the good old days, when a Secretary of State made a speech, one had reasonable assurance that he was speaking the policy of the Government. That is not so clear at the moment. Have the various statements by the Foreign Secretary been more in his role as a candidate for Prime Minister than as a representative of the Government?
As I said earlier, my right honourable friend the Foreign Secretary was suggesting that it is right for the Government to ask themselves the question of how much they should be spending on defence. That is the question we are asking ourselves, or will shortly be doing, in the spending review that faces us this year.
(5 years, 5 months ago)
Lords ChamberThe noble Baroness is quite right: in April, the forecast cost of the equipment plan exceeded the allocated budget of £7 billion over 10 years, which is the central estimate. Indeed, if we took no action, the plan would not be affordable. However, based on past experience as well as what we are doing, we are confident that we will successfully deliver the plan within budget, both this year and next year, through effective management, by monitoring and controlling costs as we go, and with the benefit of the additional money secured in the Budget.
My Lords, on 20 July 2016, the then chief executive of Defence Equipment and Support, said to the Defence Committee that,
“the eight Type 26 frigates are approximately £8 billion-worth of planning going forward”.
I interpret that as meaning that a Type 26 frigate will cost £1 billion. The Government have consistently said that the Type 31e frigates will cost a quarter of £1 billion each. Just how incapable will these frigates be, or does the Secretary of State have a magic wand?
My Lords, the Type 26 is a high-end specification, anti-submarine warfare frigate; not unnaturally, that specification makes it expensive. The Type 31e is an adaptable, general purpose frigate, subject to completely different procurement processes. However, it should not be inferred from that comparison that the Type 31e will be in any sense a low-grade warship. Of its kind, we intend it to be a world-beater, which other Governments will wish to buy.
(5 years, 6 months ago)
Lords ChamberMy Lords, that is not a question for me but for the Minister. What it brings out, given some of the contradictory statements by Her Majesty’s Government, is the need for a proper Armed Forces debate in the not too distant future—I think that is the view across the House.
I move on to my narrower questions. First, what happens if we do not pass this instrument? The Minister has anticipated that question substantially in his opening speech, but the one area he did not cover is what would happen to military personnel if it is not approved. What happens on simple issues such as whether they are paid and whether their accommodation is still available? The information he gave us earlier was all about the maintenance of discipline, which we can all understand. But we also have to recognise that we may be unabling the continued proper employment of personnel by passing this order.
The order and the Act that we are keeping alive are about the law. The one area that I have never really managed to understand is this: by what authority does a member of the Armed Forces use lethal force? To put it more directly, when that person kills someone, why is that not murder? Is the explanation different when war has been or has not been declared? In particular, what is the legal position if they kill someone supporting the civil authority in the United Kingdom?
My Lords, I am very grateful to all noble Lords who have contributed to this debate. I will of course do my best to answer all the questions that have been raised. I start with the noble and learned Lord, Lord Morris of Aberavon, who gave us a most interesting exposition of his long experience, not only in relation to the Armed Forces but also as a law officer. Not unnaturally he homed in on the service justice review, which is being undertaken by His Honour Shaun Lyons, who, I am sure noble Lords will agree, has an excellent knowledge of criminal law and procedures, as well as having served in the Royal Navy as Chief Naval Judge Advocate. The review is covering all aspects of the service justice system, including court martial and the types of cases that it deals with, the summary hearing process, the service police and the Service Prosecuting Authority.
The policing aspects of the review are being led by Sir Jon Murphy, a former chief constable of Merseyside Police. The noble and learned Lord asked whether it was possible to see the conclusions of the report. The answer is, “Not yet”. The review is due to report in the spring. That will give us time to consider it and, if necessary, make plans for any legislative changes before the next Armed Forces Bill in 2020. As for consultation, there is no public consultation on the process, but Judge Lyons is consulting a wide range of stakeholders with an interest in the service justice system. Of course, he can be contacted by interested parties through the head of the review secretariat.
The noble and learned Lord asked in particular about the ability of the service justice system to deal with serious offences. As he will be aware, the service justice system is capable of dealing with the most serious offences, and has done so over the course of history. It has been held to be compliant with the European Convention on Human Rights, both for investigations and prosecutions within the UK and abroad, where the civilian police do not have jurisdiction. We are, however, keen for the review to take a strategic look at all key aspects of the service justice system, and this is one of the issues being explored.
The noble and learned Lord referred to the use of majority verdicts under the current system. The Government, as he will be aware, have been successful in establishing, both in the European Court of Human Rights and in the civilian courts, that the court martial system is in principle safe, independent and impartial. The current system has been considered twice by the Court Martial Appeal Court in the last five years and was on both occasions held to be fair and safe. Noble Lords, and noble and learned Lords, will know that the Court Martial Appeal Court is made up of the same judges as sit in the civilian Court of Appeal. That Appeal Court has held that there is no ground for deciding that a verdict by simple majority is inherently unfair or unsafe. I am advised by my noble and learned friend Lord Keen that in Scotland a majority verdict of eight to seven in a murder case, for example, would be sufficient to convict an accused person. However, the Government recognise that there are differing views about the system of majority verdicts, and this is another issue that will be covered by the review.
I thank the noble Lord, Lord Foulkes, for the compliments he paid me over the recent Written Answers that I was able to give him. I am glad that he found them helpful. He referred to the dreadful accident that I am sure we all remember involving the deaths of two RAF pilots in Scotland. I will take away the suggestion he made about the possibility of encouraging the process to move forward in Scotland. I would not wish to give a firm undertaking to that effect, because I do not want to do anything improper as regards undue influence on the Scottish Executive, but I undertake to take the point away.
The noble Lord asked me about Gibraltar and the jurisdiction over Gibraltar in relation to this order. The Armed Forces (Gibraltar) Act was passed by the Gibraltar Parliament on 8 November 2018—very recently. It came into law on 10 December 2018. The Act gives effect in Gibraltar law to certain provisions of the Armed Forces Act 2006, and Gibraltar wishes to make its own provisions in relation to that Act. Of course, we continue to work with Her Majesty’s Government of Gibraltar on the inclusion of the Royal Gibraltar Regiment within the Armed Forces Act 2006 service discipline regime to ensure that a discipline system is put in place that meets the needs of the regiment. The noble Lord also asked whether there had been any consultation on the order. There has been no public consultation but, as a matter of routine, the Armed Forces are consulted in relation to legislation that affects the service.
The noble and gallant Lord, Lord Craig, asked what point we had reached in relation to an issue that he has very effectively championed in this House on more than one occasion: the vexed issue of the challenge in recent years to the principle of combat immunity. This has created considerable legal uncertainty about liability in combat situations and the risk that we may be moving towards the judicialisation of war, if I can put it that way. We want to introduce better combat compensation for those injured in combat operations and for the families of those killed. The public consultation closed on 23 February 2017. Therefore, we have consulted and are still carefully considering the views expressed during the consultation and will be publishing a response.
The proposal that we are advancing is that compensation would be paid at the same level as court damages, which can often be substantially greater than awards under the Armed Forces compensation scheme. Our aim is to ensure that those who have risked their lives in the most challenging of circumstances should be put in the best possible financial position quickly. That last word is one of the operative words, because some of these cases have a tendency to drag on and it is immensely upsetting to the individual or their family—and many times to both. The vast majority of compensation paid in these circumstances currently is not as a result of MoD negligence. These proposals are aimed at providing combat compensation to those who have suffered in the most extreme circumstances. We will announce further proposals in due course and I hope to have further news before too long on that front for the noble and gallant Lord.
The noble Baroness, Lady Smith, asked what arrangements involving the Armed Forces are being considered for the case of a no-deal Brexit. She will remember, I am sure, that on 18 December last year my right honourable friend the Secretary of State for Defence announced that approximately 3,500 service personnel would be held on standby to ensure that defence resources were available to support the wider Government to implement their no-deal Brexit contingency plans, if required. In headline terms, the prudent standby package will comprise approximately 3,500 personnel at varying levels of readiness, including niche capabilities such as military working dogs. No defence estate is ring-fenced at this time as it is anticipated that there will be spare capacity available during spring 2019 to provide a warehousing/storage function, if that is required. Similarly, it is judged that in extremis a request for defence strategic transport capability could be accommodated by existing capacity.
In addition to the prudent standby package, defence has also been making available military planning expertise to support other departments with their Brexit contingency plans. To date, we have provided 28 military planners to a number of departments across Whitehall. I hope that that outline is helpful to the noble Baroness.
I assure the noble Lord that we are only too aware of the point he has raised. I think there is common to us all an antipathy to seeing large numbers of Armed Forces personnel on our streets, so to the extent that that can be avoided, it will be. However, it is prudent nevertheless to have the kinds of contingency plans that I have outlined.
The noble Lord, Lord Judd, asked me, very properly, about the training that Armed Forces personnel receive before they are deployed to a combat zone. I can tell him that such training as he asked me about does take place; that is, training in international law, international humanitarian law and the law of armed combat, which of course governs all that we do, and indeed those key provisions of the European Convention on Human Rights. We are as mindful as he would wish us to be of the need to maintain the kinds of standards that set an example to other nations in how our Armed Forces personnel should behave in such circumstances.
The noble Lord, Lord Tunnicliffe, referred to the fall in Armed Forces morale, as evidenced in recent surveys. It will not surprise him to hear that we take this extremely seriously. There is no single reason for that fall in morale, but we are aware that a number of factors play into it. That is why the chief of defence personnel is leading an important work strand in the Ministry of Defence known as the people programme, which involves looking at the terms and conditions of service—that is, pay and pensions—and accommodation arrangements for personnel; flexible service is another strand. A proposal is also being explored to use the early departure payment resource more effectively and efficiently, which, it is hoped, will address part of the issue we face over the retention of trained people. Therefore, we are not sitting back and doing nothing. However, it is true to say that at a time when the Army in particular is not deployed on an overseas operation in large numbers—although we are overseas in modest numbers—morale tends to suffer. Young men like an exciting challenge, and if they are sitting in barracks and simply training, there is a tendency for morale to dip. That is not to sound complacent, but I am advised that we have seen that in the past.
The noble Lord, Lord Tunnicliffe, asked me by virtue of what law a soldier or serviceperson is empowered to kill. Of course, UK military personnel are always subject to UK law, even on overseas deployments, under the Armed Forces Act. As such, they have the right to use force in self-defence in accordance with UK domestic law. In the context of overseas armed conflicts, personnel may also use offensive force in accordance with their rules of engagement, which reflect the position under both domestic and international law, including the law of armed conflict. I hope that those answers will have been helpful to noble Lords. To the extent that I have not covered everything, I will of course write.
I wonder whether the noble Earl could be a bit more specific in the answer to the last question—not now, obviously, but I really would value a letter, because this is a key question. As we know, when it goes wrong, the alternative is that the person involved is indicted on a murder charge. When we give people the responsibility to use lethal force, it would not be unreasonable for them to know that there is a very solid background for them to do as they are ordered.
(5 years, 6 months ago)
Grand CommitteeMy Lords, I thank the noble Lord for introducing this statutory instrument. On the other hand, that is not really true: the facts of life are that I would rather not spend my weekend studying SIs for a scenario that is deeply absurd and the Government should have ruled out many months ago. It is, however, forced upon us.
Initially, I tried to read the Explanatory Memorandum while applying the test that I have been using so far—that there is no new policy except what is necessary to smooth the transition. That is essentially the test of the withdrawal Act. He has already said, however, that this SI goes beyond what is allowed in the withdrawal Act. I noticed that the SI also prays in aid the infamous—as I would call it—European Communities Act 1972, which must have the grandest powers of any piece of primary legislation. Since, therefore, this is quite important—that the Government are seeking to mix the two—I would be grateful if he could give a little more detail on where the 1972 Act has been used and where he is praying in aid the 2018 withdrawal Act.
I found the Explanatory Memorandum difficult to understand because it requires considerable previous knowledge. I can find only one area of concern. In general, the references to the requirement for a new organisation—for new parts of government to take over what is happening in the EU—all seem to make sense.
Essentially, I think the Minister has said that this SI leaves the situation unchanged. Does that mean that the requirement to put defence procurement up for both domestic and international tender is unchanged, except where derogated under provisions similar to Article 346, which I assume is written into the regulations? Does the derogation for national security reasons remain unchanged? Has it been decided that it should not be enhanced, as many of us would argue it should, to include wider, more long-term considerations, such as the preservation of UK sovereign capability by favouring UK firms in some circumstances? This measure seems to create a situation where the rest of the world can bid for UK contracts except where derogated. Does that mean that UK firms will be able to bid for foreign contracts, particularly opportunities in the EEA?
Finally, can the Minister indicate what will happen to these regulations in the event of a deal? Do they die in total or in parts? How will the deaths be managed?
My Lords, once again I thank the noble Lords who have contributed to this debate for their questions, which I will do my best to answer. The noble Baroness, Lady Smith, and the noble Lord, Lord Tunnicliffe, both asked a similar question about the coming into force of these regulations and the circumstances in which they might not come into force. These amending regulations apply only in a no-deal scenario, other than the changes being made under Section 2(2) of the European Communities Act.
The noble Baroness, Lady Smith, was slightly unclear as to how we could avail ourselves of powers under that Act if we are not a member of the community. The answer is that we are still a member of the European Union and we can avail ourselves of the powers under the 1972 Act until such time as we cease to be members. The very minor adjustments we are making will come into force regardless of whether there is a deal or no deal. If the withdrawal agreement enters into force, the UK, with certain specific caveats, will be treated as an EU member state for the duration of the implementation period. Therefore, the current DSPCRs will continue to apply for that period, albeit with the updates and corrections made in Regulation 2.
The noble Baroness and the noble Lord asked about those changes. They are very minor. They are, in the main, changes required to resolve outdated references and to correct an omission arising from an amendment to the European Economic Area agreement. There is an amendment to the definition of “member state” to add Norway and Iceland, ensuring that economic operators from those two EEA states are covered. Again, that amendment is required regardless of whether the exit-related changes come into force. There are various other minor changes that I can read out, but I think it would be tedious if I were to do so.
The noble Baroness and the noble Lord, Lord Adonis, asked about the effect of the coming into force of these regulations on UK companies and what the benefits to UK industry are likely to be. The main benefit for both UK and Gibraltarian suppliers will be stability and continuity of working regulations, which are well established, understood and practiced. Importantly, UK and Gibraltarian suppliers will continue to enjoy legal rights to participate in UK defence and security procurements. Other non-UK economic operators, save for those in Gibraltar, will not have these rights under the amending regulations. I make it clear that that is not to say that only UK or Gibraltarian suppliers can bid for defence and security procurements. As noble Lords will know, the UK has a long-standing practice of allowing overseas suppliers to participate in defence and security procurements where there is no need for restrictions on who can bid in some way—for example, on national security grounds.
The noble Lord, Lord Tunnicliffe, asked whether UK companies would be disadvantaged regarding their access to the EU market. As a matter of EU law, EU member states will no longer be legally obliged to open their defence and security procurements to UK suppliers, as the EU defence and security directive will no longer apply to the UK after exit day. However, it has to be said that our UK suppliers are recognised as world class. They offer extraordinary experience and expertise in defence. Individual EU member states therefore may choose to give UK suppliers access to their competitions to maximise the effectiveness of their procurements in the same way as the UK does. There is a strong case in terms not only of value for money but of other considerations, such as interoperability and cutting-edge capability.
I feel that I have lost my place. Is the Minister saying that non-derogated invitations to tender will be restricted to the UK suppliers and Gibraltar, or will they be available to worldwide competition, with certain exceptions?
It will depend on the procurement. If it is determined that the procurement rate relates to an issue necessitating the protection of UK sovereign capability, as in the case of the construction of warships, we would restrict the tendering process to UK-based suppliers. However, the generality of defence procurement is opened up to the widest market possible, although, as was pointed out, we make clear in certain procurements that we will not entertain bids from certain countries. Each procurement has its operational basis made clear at the outset.
The noble Baroness, Lady Smith, asked whether we will give state aid to suppliers. We have no intention of providing state aid to UK suppliers, which is incompatible with our state aid regime. I am sure she will not be surprised to hear that. Having said that, it is important to understand that there are ways we can alert our home-based industry to forthcoming procurements to enable them to prepare their bids in good time and understand our needs. That process is already under way; we are clear that the entire procurement process needs to be smoother than it perhaps has been. That is not the same as state aid, however.
The noble Baroness also asked whether the Government have modelled the impact of the change on UK defence exports. As I said, defence suppliers will lose their legal rights to participate in procurement in the EU 27, but the quality of our companies should ensure that many EU member states will still wish to entertain bids from our defence industry. As the noble Baroness knows, the UK defence industry participates in co-operative defence projects, such as Eurofighter; that will not change either.
I am sorry to ask the same question over and again, but it is important: putting the derogated areas covered presently by Article 346 to one side, do the regulations—noble Lords must realise that I cannot read them; it took all my time to read the Explanatory Memorandum and try to understand it—require the UK to put non-derogated opportunities to international tender, or is that a matter for the United Kingdom Government’s discretion on a project-by-project basis?
It is important to understand that competition remains at the heart of our approach to defence procurement. Currently, we routinely allow bids from suppliers outside the EU, although the current legislation provides a legal right of access only for suppliers based in EU member states. Where we restrict who can bid in some way—for example, on national security grounds, as I have mentioned—we would make that clear at the outset in the advert or in any pre-procurement documentation.
That position will not change after exit day. Suppliers in the EU and elsewhere will still be free to bid for procurements where no limitations are specified. What is changing is that bidders from the remaining EU member states will not have a legal right to bid for defence contracts; this is the same position as for suppliers currently based outside the EU. I hope that answers the noble Lord’s question.
For UK Government defence procurements, the process from the point of view of an EU supplier will be no different. What it will experience is the need to bear in mind two separate portals or bidding channels; one is the UK e-notification system, which I mentioned earlier, and the other is OJEU. It will need to keep an eye on both if it wishes to participate in the Europe-wide market; in using that phrase, I include the UK as still being a European country, even if not a member of the EU.
The noble Earl says there will be no changes. I understand that at the moment, in non-derogated areas, EU suppliers have a right to bid and we have an obligation to take their bids seriously. I think that under the new situation they do not have this right and that whether they are allowed to bid will be a matter of policy. That policy could change year by year or Government by Government.
That is technically right. It is our policy to maintain access for EU member states—and indeed, non-EU states—in many, if not most, instances of procurement. A good example might be the fleet solid support ships. We invited tenders from all over the world to build those ships and that should provide the best value for money. We all hope that UK suppliers will feel confident in bidding for that contract, but we wish to benefit the taxpayer as well as the Royal Navy and the process will be an open one.
To answer one point which the noble Lord, Lord Adonis, alluded to, there will of course be opportunities to reform the defence procurement rules after we leave the EU. The current rules are generally seen as out of date, compared to the PCR 2015. We have the opportunity to take a fresh look at what is needed for defence procurement—
(5 years, 7 months ago)
Grand CommitteeMy Lords, perhaps I may speak briefly on this rather macabre amendment. First, I am not sure who the testing is to be done on. I cannot see many volunteers being willing to be corroded. My second and more substantive point is that I cannot see why the definition is required because, as I read the Bill—not an easy Bill to read, as we have discovered today—a corrosive substance is de facto defined by Schedule 1. I would have thought it much more satisfactory to retain the concept of a schedule, which can be altered by order, than to have this rather frightening test.
My Lords, I am grateful to my noble friend for explaining his amendment, which seeks to modify the definition of a corrosive substance for the purposes of the new possession offence. This provides me with the opportunity to clarify why we have taken the approach that we have, and to reassure him about how the new possession offence would be used.
We know that perpetrators of these horrendous attacks often decant the corrosive into other containers, for example soft drinks bottles. This is done to make the substance easier to use but also to conceal.
Police officers who come across an individual carrying a bottle containing a suspect liquid will not know exactly what chemicals it contains or at what levels. As a result, the approach we have taken for the sales and delivery offences of defining a corrosive product by substance and concentration limit will not work on our streets. The police require a simpler definition for use operationally, so we have defined a corrosive substance by its effect rather than by its specific chemical composition—that is, as a substance capable of burning human skin by corrosion.
(5 years, 7 months ago)
Lords ChamberWhile we recognise that we have had to live without aircraft carriers, and then with aircraft carriers but without aircraft, when will the carriers be optimally equipped? The Minister seemed to imply in an earlier answer that that would be when 24 aircraft could be embarked and fully crewed. When will that be, how does that compare with the original plan, and what is the critical path: fully trained pilots or aircraft deliveries?
With regard to whether the critical path is aircraft or indeed pilots, we clearly need both, and we are on track and within budget to deliver both in accordance with the planned rollout. For example, this will see initial operating capability for carrier strike—one squadron consisting of 12 frontline F35s and 18 pilots—in December 2020. Full operating capability, consisting of two squadrons, will be achieved in December 2023.
(5 years, 7 months ago)
Lords ChamberMy noble friend makes an extremely important point, and we in the Ministry of Defence are always very conscious of the point he has stressed. But it is also important for all three armed services to look at the resources they have to see how they can use them even more effectively. The SDSR in 2015 and the modernising defence programme recognise the changed threat that faces us, and as a result the Army will be able to generate a more capable war-fighting division, at higher readiness, as part of the Joint Force 2025 programme.
My Lords, I note that it is not the intention of the Government to deploy and manoeuvre at a divisional level, but I assume it is a capability we believe we have. Is that a capability we have? Do we have the logistics capability and the trained staff necessary for the complex task of manoeuvring large bodies of troops?
My Lords, yes, the Army is already prepared to deliver a division, albeit at best effort. As I have just said, it is working towards its Joint Force 2025 structures that will deliver a more capable force at higher readiness. The point the noble Lord makes about enablers and logistics is well made. The exercises in which the Army has participated recently have been a very good test of those enablers.
(5 years, 10 months ago)
Lords ChamberMy Lords, I understand the noble and gallant Lord’s point. There is a £31 billion budget for the Dreadnought programme and we are currently confident that that estimate is robust. It is quite separate and distinct from other procurement budgets. We do not consider that it impacts upon them adversely—but we are conscious of the risks that he articulates.
My Lords, the BASIC report says that the Infrastructure and Projects Authority, which rates government projects,
“has rated Dreadnought Amber/Red, meaning that the IPA assesses that: ‘Successful delivery of the project is in doubt, with major risks or issues apparent in a number of key areas’”.
It goes on to say:
“Worse, the linked Core Production programme, which will produce a new submarine reactor core production facility … is the … only Red rated project”,
in the Ministry of Defence. Given this sorry state of affairs, what faith can we have in anything the MoD says about these programmes?
My Lords, the amber/red rating for the Dreadnought programme in 2016-17 recognised that the programme was unaffordable at that time against the required profile, and that there were significant risks in the design-to-build transition. Since 2016-17, funding has been approved for the second delivery phase, the design has matured and governance has improved. The red rating for the core production capability reflects scope changes and associated delays and cost increases. We have to recognise that this is a very complex programme—probably the most complex engineering programme that any Government have undertaken—hence the caution in those risk ratings.
(5 years, 10 months ago)
Lords ChamberMy Lords, the Armed Forces have come a long way on this issue of alcohol and drugs. The railway industry faced this challenge some 20 years ago and the position that the Armed Forces have reached is very similar. I sense that there is an ongoing significant challenge in the military. I do not have statistical data but if one wanders through Google and looks at the events there was certainly the tragic event of the submarine that highlighted these cultural problems.
The Minister’s speech tonight was a great deal better than the EM, because I think that I understand the regulations now. It seems to me that this statutory instrument is virtually identical to another one that covered the suspected offence side of it, and this is really just a matter of writing it across—I do not know whether there are any detailed differences.
The regulations essentially state that if one is doing any of these activities one must have alcohol levels below the specified limits. That leaves me with one question, which we wrestled with in the railway industry but is a good deal more acute in the military. That is a situation where an individual is not performing one of these activities—the most obvious example is the captain of a ship—because he is not the officer on watch. He is actually in his bunk asleep after an interesting night out. His subordinate drives the thing into another ship. There is instantly an incident, at which point, presumably, the captain would take command. There must be parallel situations in the Army, and perhaps, although less likely, in the Air Force. Are we clear about our expectations of these individuals who are on duty but not actively performing a task? Do we expect them at all times to maintain their lifestyles so that they are below the appropriate limits?
My Lords, I am grateful to the noble Baroness and the noble Lord for their comments and I am glad that they are supportive of these regulations, which I hope they will agree are fairly uncontroversial in their content.
The particular question that the noble Lord, Lord Tunnicliffe, posed, is an interesting one. It is one that I have discussed with my officials. The short answer is that it would very much depend on the circumstances of the situation as to whether the captain of a ship would be tested for drugs or alcohol after a particular accident took place and he or she were away from the bridge when the accident occurred. The key point, however, is that the powers commit a commanding officer to order a test if he or she has reasonable cause to believe that a person was carrying out a safety-critical function or duty at the time of the accident or had carried out a safety-critical function or duty before the accident.
In the example that the noble Lord suggested, the captain will still have command of the ship and he or she may have given orders for the control or navigation of the ship before repairing to their cabin—let us imagine that situation. It would largely depend on the circumstances of that order and whether the person to whom the order was given was a fit and responsible person and in a fit condition to accept the responsibility. However, I can imagine a situation where a captain was away from the bridge following an accident and was not, so to speak, in the line of fire when it came to taking a drug or alcohol test, but where a commanding officer might feel that it was prudent for the captain to take such a test. It would be very much back to the test that I have just articulated if a commanding officer has reasonable cause to believe that any given individual was involved in a safety-critical function.
I will explain my point just a little more. I am concerned not so much about the test as about what the Navy’s expectation is of a commanding officer. It seems to me that there is an implication that he should, in all circumstances, maintain a lifestyle whereby he is under the limit. Certainly in my organisation—fortunately, we did not have the same commanding officer situation—we did have a level of management where we ran a roster to make sure that we always had a sober general manager to handle any situation. The noble Lord probably cannot answer now, but I would have thought that there was an implied moral obligation that the senior person at sea, the captain, should maintain a situation below these limits.
The noble Lord is absolutely right. He will see that in the regulations officers may be tested—they are one of the groups of people who can test. The alcohol limits for prescribed safety-critical duties have been set at two levels, higher and lower. The limits will not be amended by these changes. The majority of safety-critical duties correspond to the higher alcohol level for testing of breath, blood or urine; the lower levels apply to safety-critical duties that require a heightened speed of reaction in an emergency situation, such as aviation or carrying a loaded weapon.
I would not dissent from the noble Lord’s statement. He is absolutely right that the captain of a ship, to take that example, bears responsibility for the safety of the ship and its crew in all circumstances, which is why we have seen captains—on rare occasions—court-martialled for an accident that has occurred, even though the captain has sometimes not personally been on board the ship. I come back again to the point I made at the beginning: it would depend on the judgment of the person investigating the accident immediately after the event as to who was tested or not.
I hope that is helpful. If I can amplify those comments in a letter in any way, I shall certainly do so. In the meantime, I beg to move.
(5 years, 10 months ago)
Lords ChamberMy Lords, we will, of course, support these regulations. I fear the noble Earl, Lord Attlee, has in many ways the wrong challenge. The requirement that these be subject to an affirmative order has an effect that one comes across again and again in complex organisations: the knowledge that something will be scrutinised at the highest level produces very high-quality work. One of the key factors noticeable in these regulations—I take them together with the notes for the service personnel who will use them—is that virtually every question left unanswered in the primary legislation has been answered in them. Therefore, I welcome and support them. I have only one question related directly to the regulations, which is about the reporting procedure: will the frequency of their use be reported in the public domain, and if so, where?
The problem of being a Minister in your Lordships’ House is that nobody is here to enforce the rules. Accordingly, I looked at the Explanatory Memorandum to see if I could find something to say. I noted that one reason for these rules was to improve recruitment and retention in the Armed Forces. Essentially, it was an important piece of morale-boosting, which this Government certainly need. Total outflow from the Armed Forces has exceeded intake every year since 2011. I looked into this a little bit further; the way to find out what morale is like in the Armed Forces is to go to the regular Armed Forces continuous attitude survey. It is a brilliant document in terms of information—and a deeply depressing one for anybody who reads it. I will quote one or two statistics from it: satisfaction with pay has gone from 52% in 2010 to 31% now; satisfaction with service life in general has decreased—among both officers and other ranks—from its peak of 61% in 2009 to 41% now.
Dissatisfaction has been particularly acute in the Royal Marines. Members of this House have fought a little battle to keep ships retained for the use of the Royal Marines, yet we find that service morale among officers—that is, ratings for high morale—has gone from 64% two years ago to 23%; for other ranks, it has gone from 32% two years ago to a staggeringly low 9% now. I would defend the right of the Minister not to respond to this, but I hope he will rise to the occasion and give us some indication of how this crisis is being addressed. I put it to him that one of the reasons is leadership—I am not talking about people in uniform; I am talking about the politicians. SDSR 2015, which was published on 23 November 2015, promised annual reviews. That was a good thing, as I think it has emerged that the SDSR was underfunded.
The Government met their commitment and, roughly a year after that publication, they produced an annual review—the first annual report. The second annual report should have been published on 23 November 2017 but it was overtaken by, of all things, a review by the Cabinet Office. There must have been some squabbling because that metamorphosed into something called the Modernising Defence Programme. We were told that its main points would be published by the time of the NATO summit of 2018, and indeed we got a letter from the noble Earl. As ever, it read brilliantly the first time—these letters are always well drafted—but the second time you read it through you realised that it said absolutely nothing. There was not a single concrete piece of action in it.
If the noble Earl wants to rise to the occasion, I hope he will say when we will see real progress on the review and when the Armed Forces will recognise that they have a serious morale problem, with a programme to address it directly. Although I have served in the VR, I am not a military man in the sense that I have not served full time or been presented with any hostile forces, but I have talked to a lot of people who have. My summary of what they have said to me is: if you want effective forces, you have to have leadership, equipment, training and morale. These are not additives; they are multiplicities, and if any of them is at a low level, that affects all of them and you have wasted your money. We are not at all happy with the equipment area or the training area, and now we are not at all happy with the morale area, and I hope that the Minister will be generous enough to provide some answers.
My Lords, I am grateful to all noble Lords who have spoken in response to the introduction that I gave. Beginning with my noble friend Lord Attlee, whom I thank for his supportive comments, I think it is fair to say that Ministers felt duty-bound to respond to the recommendation of the Delegated Powers Committee to make these regulations affirmative. One reason that the committee felt as it did was that there would be a great deal of significant detail and that would really matter in the way that the arrangements were rolled out. I hope that, in common with the noble Baroness, Lady Smith, noble Lords will feel that, having read the statutory instrument, the devil is absent from the detail. Indeed, I hope that the Archangel Gabriel has exercised an influence on it, not least in the way it is expressed, which, as the noble Baroness helpfully said, is designed to be as clear as possible.
Perhaps I may turn to the questions put to me by the noble Lord, Lord Tunnicliffe. First, on whether and to what extent we will publish the statistics relating to take-up after the scheme is launched, initially and going forward we will capture this type of data on our internal systems for analysis purposes and make adjustments where necessary. We do not plan to report publicly on the numbers who take up flexible service in the early years following the launch of these new opportunities. As we have said previously, a more valuable measure of the effectiveness of flexible service will be the long-term effect on recruitment and retention. That is the principal aim of these new policies.
The numbers who initially take up these opportunities will be modest. I have no doubt that they will grow over time but I think they will grow slowly. We envisage that it is unlikely that they will account for more than 1% of individuals—approximately 1,400—so we want to avoid undue focus on numbers for numbers’ sake. We feel that regular collating of external reporting information on such a small cohort would not be particularly beneficial. Having said that, we have pledged to report on the introduction of flexible service in the Armed Forces covenant annual report. If in future we have meaningful data on take-up, we will include it. We will of course provide information in the normal way in response to external ad hoc requests.
(5 years, 12 months ago)
Lords ChamberMy Lords, this Question prompted me to look at the National Shipbuilding Strategy, whose first birthday is today. When it was published a year ago, it was meant to be a solid basis for industry to develop. It is interesting to see how it is starting to erode. Paragraph 56 said of the Type 31e ships:
“The first will be in service by 2023”,
but “by 2023” means during 2022. The Minister has just answered a similar question by saying that it will be by the end of 2023. This is the first incremental crumble in the strategy. In paragraph 61, the strategy said:
“We have set a maximum £250 million per ship price for the Type 31e”.
Are either of those statements still sound, or is this one year-old strategy going to crumble incrementally, like all the strategies before it?
My Lords, our target dates have not changed, as I have already said, and we still believe that industry can deliver all five Type 31e frigates at a price of £1.25 billion. The national shipbuilding strategy is an overarching strategy for the future of naval ship-building in the UK over the next 30 years, and is much wider than the procurement of a particular class of ship. Type 31e is a pathfinder project for a new way of procuring warships, and we are learning beneficially from those challenges.
(6 years, 1 month ago)
Lords ChamberMy Lords, I am grateful to the Minister for introducing this statutory instrument and apologise for arriving momentarily after he started. He mentioned that the changes introduced in 2014 were intended to improve value for money and MoD procurement arrangements in general and that, since then, £19 billion had been spent using the single-source procurement mechanism. Will he explain a little more how the changes proposed in the SI will benefit the MoD and the taxpayer? I heard him say that the changes will be of benefit to the supplier. While we do not want to do down the suppliers, it would be helpful to understand how the changes will benefit the taxpayer as well.
My Lords, I thank the Minister for presenting the regulations. Part 2 of the 2014 Act and the subsequent Single Source Contract Regulations 2014 are supported by these Benches. Unfortunately, I have lived through every bit of their creation and evolution. The key thing is: are they effective? The way to judge their effectiveness is, first, to understand the mechanisms, which the Minister has been invited to expand on, and, secondly, to look at how extensive they are. Does the Minister have at hand how much is being spent on equipment and infrastructure in a typical year, say, 2017-18? How much of that is single sourced? I believe the answer is nearly half. What proportion—and this is the key issue—are qualifying defence contracts? I wonder if he has similar figures for contracts with BAE.
The Explanatory Memorandum says that three of the five categories are “working well”, meaning that they describe the exclusions clearly. Two relate to land, I believe, and the third to government-procured equipment. Three are new or modified. The first, Regulation 7(b), is where there is international co-operation. The modification is that there should not be an exclusion if all parties agree. I have great trouble working out why parties would want to agree, because the mechanism is designed to give the Government, the SSRO, the MoD or whoever a better understanding of what is happening in the contract, giving them rights to challenge the suppliers. Why would anybody want to agree to this? Have any firms actually agreed to this?
The second modification relates to “intelligence activities”. This is clearly a case of unintended consequences because all intelligence activities are currently excluded. This turns it on its head to require only those contracts that are a risk to national security to be automatically excluded. Paragraph 7.9, I think, of the Explanatory Memorandum effectively defines “risk to national security”; that is, reports that would normally be required by the SSRO would contain information above a certain security level. Am I right in that understanding? Am I right that the key test will be the security level of the information that the SSRO would naturally demand if they became qualifying contracts? Otherwise, how is national security defined and who defines it?
The final modification relates to what one might loosely describe as novation. That does not give me any pain at all.
The key question about the modifications is: how many more, or what greater proportion of, single-source contracts will be brought into the ambit of the Single Source Regulations Office by these changes? Will the number be trivial or substantial? My final question relating to the order is: when will the MoD respond to the other SSRO recommendations?
Lastly, I have a question that is completely out of order. I point out to the Minister that the NATO summit is, I think, on Wednesday and Thursday. Will he give some indication of when he will give an overview of the defence modernisation programme promised before the NATO summit?
My Lords, I am grateful to the noble Baroness and the noble Lord for their general support for these regulations, and for their questions. The noble Lord, Lord Tunnicliffe—if I may address his questions first—asked about the level of MoD procurement spend for the last full financial year and the level of single-source procurement within that. In the last full financial year, 2017-18, the MoD spend on procurement was just over £24 billion, of which just over £8 billion went on single-source contracts. We do not track the value of defence qualifying contracts on a year-by-year basis, but I can confirm that since the framework came into force in December 2014, up until the end of May 2018, a little over £19 billion-worth of single-source contracts have been brought under the framework. For the same financial year, the MoD placed contracts worth more than £3.6 billion with BAE systems—about which the noble Lord asked me specifically—of which around £3 billion were on single-source contracts. I am afraid I cannot disclose the proportion of the single-source spend covered by the SSCR framework because it is commercial in confidence.
The noble Lord and the noble Baroness, Lady Smith, asked how much the department expects this situation to change as a result of these regulations. We have identified approximately 8% to 10% of single-source spend which we would seek to bring under the regulations as a result of this amendment, subject to the consent of the suppliers in question. Obviously, before the contracts are signed, it is a bit difficult to quantify the amount of money that we expect to save, but I hope that that gives a rough order of magnitude to both noble Lords.
Is that an 8% to 10% increase in the contacts which become qualifying, or is it a 50% increase in those that qualify? If the noble Earl does not know, I am perfectly happy to wait for a letter.
I will vouchsafe to the noble Lord that my note is ambiguous on that point and I think, therefore, that I should write to him. We have identified 8% to 10% of single-source spend, which makes it more or less clear that we are talking about single-source spend as a whole rather than that proportion of the spend that comes within the framework. But I will confirm that.
The noble Lord asked me about the exclusion relating to international co-operative programmes which would require the consent of the suppliers involved. He made a very good point about obtaining consent, which was a matter on which we deliberated long and hard. We came to the conclusion that to remove supplier consent altogether would mean that we would have to seek agreement with partner nations, which in practice might sometimes be difficult to achieve. We believe that this proposal represents a pragmatic approach. In fact, we are reassured to note that such agreement on several large contracts has already been achieved with the supplier. Since the framework came into force in December 2014, 11 contracts have been made into qualifying defence contacts on amendment—that is, with the consent of the supplier in question—with a total value of more than £10 billion. The background to that is that many suppliers recognise that the Government are fully committed to implementing the framework and accept that it is in their long-term interests to co-operate with it.
The noble Lord asked me about how the intelligence exclusion would work in practice. Under current legislation, single-source contracts relating to “intelligence procurement” would be excluded from the framework. The problem with that is that experience has shown that there is confusion over exactly how this definition is applied. That is why we have proposed the amendment. Under this change, single-source contracts would be excluded where complying with the single-source legislation would involve having to release information to the SSRO that it is not authorised to see. That significantly raises the bar required for exclusion.
It might be easiest if I gave a hypothetical example. It may be that we sign a single-source contract allowing us access to a specific port overseas in support of a sensitive operation. If this becomes a qualifying defence contract, the reporting requirements under the framework would mean disclosing to the SSRO who the contractor in question was. That would very quickly reveal the location and the likely purpose behind the contract. It is that aspect that we wish to keep classified because of the risk of a negative impact on national security.
The noble Lord asked me when we will respond to the review of single-source legislation. I can tell him that when my right honourable friend the Secretary of State completed his review of single-source legislation last December, several proposals were identified which could improve the operation of the framework, but he asked officials to carry out further work on how these might be implemented, so as to avoid any unintended consequences. Part of that included an extensive process of cross-Whitehall engagement to ensure a fully joined-up position, as well as additional engagement with key stakeholders to take forward the proposals. That work is nearing completion, and we expect to publish our full response shortly.
Finally, on the noble Lord’s last question about the NATO summit and when we expect to announce headline figures from the modernising defence programme, unfortunately, I cannot promise anything this week—contrary to the hopes that I and others have expressed at similar previous occasions. We are endeavouring to make the delay in the announcement as short as possible, and I shall be sure to give the noble Lord as much warning as possible before that event.
(6 years, 2 months ago)
Lords ChamberMy Lords, this is the most significant deployment for a generation. Did SDSR 2015 envisage such deployments and what deployments have been abandoned to provide resources for them?
My Lords, no deployments have been abandoned, but one of the expressed aims of SDSR 2015 was for defence policy to be international by design, which includes working closely with our partners and allies. Ultimately, both our allies and the nations in the region will judge the UK by our actions. The deployment of Royal Navy ships shows that we have both the will and the capability to deploy naval power to the region in support of our friends.
(6 years, 2 months ago)
Lords ChamberMy Lords, in researching this Question I discovered the defence industrial policy December 2017, which I believe is the latest statement of the Government’s intentions. I word-searched it for the word “helicopter”, which appeared under two pretty pictures and nowhere in the main text. Are we really going to get by the middle of July in the modernising defence programme a definitive answer to the original Question?
I might suggest that the noble Lord should turn his attention to the Government’s industrial strategy White Paper as well. We are very alive to the issue he raised concerning helicopters. We are committed to keeping the UK as a leading aerospace nation. The industrial strategy White Paper identifies a range of cross-government measures to boost productivity, employment, innovation and skills. Indeed, my honourable friend Philip Dunne has recently completed a review of prosperity arising from our defence industries which will help to inform our future thinking in this area.
(6 years, 5 months ago)
Grand CommitteeMy Lords, I thank the noble Earl for introducing this order. I note the excellence of the Explanatory Memorandum. In previous years, we have had esoteric conversations about what would happen if we did not pass the order. This time, we are told. We could not tell them to go and get Ted. I fully support the order and, in doing so, also pay tribute to the men and women of our Armed Forces. Like other noble Lords, I have looked at the original documentation. The national archive refers to the Bill of Rights 1688 as, “1688 CHAPTER 2 1 Will and Mar Sess 2”. If you dive into it, there are two references to a standing army. The second says that,
“the raising or keeping a standing Army within the Kingdome in time of Peace unlesse it be with Consent of Parlyament is against Law”.
Why was that clause put in? They were turbulent times: it was an armed invasion and there were some clashes, but it ended up with a deal between William and Mary and Parliament. Why would Parliament at that point be so concerned about not having a standing army? In those turbulent times, a standing army was the means by which the Crown was able to impose its will on the people. There was, therefore, a strong movement for standing armies to be under the control of Parliament and to be illegal without its approval.
I do not think we are that worried any longer about a standing army imposing the will of the Crown, or even Parliament, on the people. However, this annual event gives an opportunity for a short annual review of the Armed Forces and their administration. Sadly, the Armed Forces are in a sorry state at the moment. They are underfunded by—I think the consensus figure is—about £2 billion per annum. Because of the financial constraints, some of the Armed Forces are undertrained. Morale is bravely measured each year by the Ministry of Defence, and has fallen in recent years.
I will concentrate today on how the Armed Forces are being administered. Let us look at the present confusion. On 20 July 2017 the Cabinet Office—not the Ministry of Defence—announced a strategic defence and security review implementation. It said:
“The government has initiated work on a review of national security capabilities, in support of the ongoing implementation of the National Security Strategy and Strategic Defence and Security Review … The work will be led by Mark Sedwill, the National Security Adviser, with individual strands taken forward by cross-departmental teams, and will be carried out alongside continued implementation and monitoring of the 89 principal commitments set out in the NSS & SDSR … The government is committed to report annually on progress in implementing the NSS & SDSR, and published its First Annual Report on implementation in December 2016. Further progress on implementation of the NSS & SDSR, and related work, will be reported in the Second Annual Report after the end of the second year of implementation”.
I believe that any reasonable person would have taken that to mean that if the first annual report was produced by the end of 2016, the second annual report—which is now apparently being subsumed into the Cabinet Office review—would have been published by the end of 2017. In fact, I am reasonably sure that it was not. Indeed, the question remains of when the report will be published.
The Joint Committee on the National Security Strategy is launching an inquiry into the national security capability review, which I assume is the same review. That was announced on 18 January 2018. So it is apparent that that Joint Committee had not seen the conclusions of the review. Meanwhile, on 25 January the noble Viscount the Minister—I am sorry, the noble Earl—
If only I had the noble Earl’s upward mobility. We mere Barons should show respect, I am so sorry. He was kind enough to write to us on 25 January. The letter said:
“I am writing to describe the purpose of this Government’s Modernising Defence Programme and what it will involve. Following Ministerial discussion on the National Security Capability Review, which will be published later in the spring”—
when is the spring, I ask—
“the Secretary of State for Defence has agreed with the Prime Minister and the Chancellor that further work is required to modernise Defence. We must ensure that we deliver the best military capability that constantly evolves to counter the threats we face, and that this is done in a sustainable and affordable way”.
I think that in modern parlance we can safely say that it was both, but as a working basis, 1689 will do very well.
The noble and gallant Lord, Lord Craig, returned us to the issue of human rights, as he has done in the past. I understand entirely the concerns that he outlined. Clearly, we need to address what many people see as a flaw in the way that the law has come down upon certain events and situations experienced by the Armed Forces in the course of combat and in conflict zones.
For the future, and I make it clear that we cannot do anything about the past, the Government have already announced that they would consider on a case-by-case basis a derogation from the European Convention on Human Rights, where that is appropriate in the context of a future operation overseas. That could help to ensure that our troops can confidently take difficult decisions on the battlefield, and enable us to focus on the defence budget rather than on lawyers. Some would say that lawyers have had too big a slice of the cake in recent years when it comes to the cross-questioning of our Armed Forces personnel in various contexts. I am the first to agree that it has been very burdensome and difficult for many individuals.
Does the noble Earl agree that the problems in general have not been with the Human Rights Act but with very crooked lawyers?
I agree with the noble Lord that dishonesty on the part of lawyers has played a part in the difficulties that I have referred to. Nobody wants to see service personnel facing extensive investigations and then re-investigations into the same incident. The situation is exacerbated when members of the legal profession are less than honest in the way that they handle the cases before them.
The noble Lord, Lord Campbell, asked about the report that he had read saying that a battalion specialising in chemical and biological weapons had been stood down or disbanded in recent years. He is quite right that the joint CBRN regiment was disbanded but I can reassure him fully that the capability which that regiment had is retained in the services, especially in the Army and the RAF. What matters, particularly in the context of the recent events in Salisbury, is that the capability we need was there when it was needed. Our Armed Forces stepped up to support the police in their investigation in Salisbury, building on the vital expertise and information already provided by our world-renowned scientists at the Defence Science and Technology Laboratory at Porton Down. We have the right people with the right skills to assist with the crucial inquiry that is in progress.
I would just add that our modernising defence programme, which is currently under way and to which the noble Lord, Lord Tunnicliffe, referred—I will come on to his question in a minute—will make sure that our country can respond to the changing nature of warfare and the new threats that we face, including those of a chemical and biological nature. The noble Lord, Lord Campbell, may have read that we have announced a £48 million investment in a new chemical weapons defence centre at Porton Down to maintain our cutting edge in chemical analysis and defence.
The noble Lord, Lord Jones, referred to the press reports from today relating to the Royal Military Police. Every year, the service police carry out a wide range of investigations into many different service offences. They play a key role in ensuring that allegations are investigated and offenders brought to justice, but it is clear that, in this specific case, something went very wrong. We will review that. The service police are a key part of the service justice system and as such are already included in the service justice system review, which we announced last year. It is due to report by the end of this year. The policing aspects of that review are being led by Sir Jon Murphy, the former chief constable of Merseyside Police, and we will of course consider carefully any recommendations that he makes.
I turn to the questions asked and points raised by the noble Lord, Lord Tunnicliffe, who asked me about the national security capability review and how it dovetails into the modernising defence programme, which we are leading from the Ministry of Defence. First, on the timelines, the Government will publish a report on the NSCR at Easter. The Ministry of Defence aims to be in a position to share headline conclusions from the MDP by the NATO summit in July. The NSCR essentially updates the Government’s analysis of the threats and risks to the United Kingdom and articulates what an integrated, cross-government approach to national security ought to look like. When published, the report will set out high-level findings across 11 of the 12 strands of work that make up the NSCR, but will refer to defence—the 12th strand—only at a strategic level. The defence element of the NSCR identified that further work was needed to modernise defence to deliver better military capability and value for money in a sustainable and affordable way. Therefore, the National Security Council commissioned a separate, further programme of work, namely the modernising defence programme, or MDP.
The noble Lord, Lord Tunnicliffe, questioned the meaning of “strategic affordability”. That phrase is a condensed way of describing what we are seeking everybody’s views on this consultation: how we marry strategy and affordability. By strategy, we are referring to not only the ways we should plan to counter the various threats identified in the 2015 SDSR, but the emphasis that we should attach to each strand of those capabilities. Different people will have different views on that, but we have to consider the affordability of all that we do. The MDP will build on the findings of the NSCR and the Ministry of Defence will continue to consult colleagues across government throughout the course of the programme.
The noble Lord asked about the apparent lack of synchronicity in launching the MDP before we published the NSCR. There is a very simple reason for that. Earlier this year, as the NSCR was reaching its final stages, it became clear to us that further work was needed to modernise defence. To conduct that work at the necessary pace, it was agreed by the National Security Council that the MoD should initiate the modernising defence programme without further delay. There would be no benefit from waiting for the publication of the NSCR report before starting work on the MDP. Work across government on the NSCR and the MDP continues to be, I assure the noble Lord, fully joined up.
(6 years, 7 months ago)
Lords ChamberMy noble friend is entirely right. We have regular discussions with our Commonwealth partners in particular and also with our NATO allies, in the light of the national shipbuilding strategy which, as he knows, is designed to ensure that we once again a competitive and vibrant shipbuilding industry in this country.
My Lords, we have had report after report and promise after promise. Why should we have any faith in any of them? Yesterday, fortuitously for me—but not for the Minister—the National Audit Office produced its annual Ministry of Defence equipment plan report. Amyas Morse, head of the National Audit Office, said:
“The Department’s Equipment Plan is not affordable. At present the affordability gap ranges from a minimum of £4.9bn to £20.8bn if financial risks materialise and ambitious savings are not achieved”.
When reading the report, I got as far as page 14, on costs not included in the plan:
“As a consequence of the Strategic Defence and Security Review 2015, the Department introduced a number of new equipment commitments into the Plan. The Department was unable to demonstrate that all equipment requirements are now included within the Plan. We”—
that is, the National Audit Office, the highest analysing body in the land—
“have established that the Plan does not include the costs of buying five Type 31e frigates”.
If there is an error of that order of magnitude in the plan, how can we have any faith in anything that comes out in the next few weeks or months?
My Lords, we have been quite open about the pressures that we face. The defence equipment plan summary, published yesterday, acknowledged that the equipment plan emerging from the MoD’s current year budget contains a high level of financial risk and an imbalance between cost and budget. It is exactly those risks and imbalances that we aim to resolve in the programme that is now under way.
(6 years, 7 months ago)
Lords ChamberIt is difficult for me to comment on a speech that has not yet been given, but I recognise the sentiment that the noble Lord articulated. The National Security Capability Review is about maintaining agility in this country’s security and defence, and staying ahead of the curve in terms of the resources we deploy. We must remain agile in a world that is ever changing, and that is why the Government are conducting this review: it is about ensuring that our defence and security policies and plans are as joined-up, efficient and effective as possible.
My Lords, does this not show the chaos in the whole area of defence? The annual report on SDSR 2015 was due by the end of December. This has somehow been subsumed into the NSCR, a date for which we have not got. Will this review set out the threats and how they are going to be met? If, as the Minister has stated in previous answers, there is no money, what threats are we going to tolerate?
My Lords, there is no chaos whatever. The NSCR is about analysing, across government, the intensifying threats to national security and considering their impact on the implementation of the 2015 SDSR and national security strategy. In that context, the Ministry of Defence has done a great deal of high-quality work. Once the NSCR has drawn to a close, we will want to build on the elements of the good work that has been done, to explore further the opportunities for modernisation that have been identified.
(6 years, 7 months ago)
Lords ChamberMy Lords, I thank the Minister for repeating the Statement. I may regret this but I am almost tempted to welcome it—however, I had better be careful to understand it first. It seems to say that this review will define the threats. I think its implication is that the Ministry of Defence will not do its normal thing of muddling through, and that when the defence needs for the threat are defined, the money will be found. Is that a reasonable précis?
Certainly, my Lords, there is no intent for us to muddle through. The threats we face are ones we believe we correctly identified in the 2015 SDSR. What we did not sufficiently predict was the intensification of those threats that we have seen over the last two or more years. So, the capability review is designed in part to ensure that we have the right capabilities for the threats we face and expect to face but, as the noble Lord is aware, it is also a response to the EU referendum turning out as it did and the pound sterling depreciating to the extent that it did. We must therefore be realistic in the way we configure our budget over the next few years.
(6 years, 9 months ago)
Lords ChamberMy Lords, my noble friend has a deep knowledge of all these matters, in particular on the personnel front. There is no denying that recruitment and retention are currently a challenge, as they always are when the economy is growing and there is a demographic shortage of young people. That is precisely why we have to focus on the things that matter to those thinking of joining the Armed Forces and the offer that we make to them, not only in terms of pay but in modernising the lived experience of service personnel—that is where the covenant comes in—and in the Armed Forces family strategy.
My Lords, the Minister has said that the press are being deeply unhelpful. Now, the Minister has been around long enough to know that being helpful is not a core objective of the press. The MoD’s own attitude survey shows satisfaction in the forces over the past year has declined in almost all areas. The key measure, satisfaction with service life in general, has decreased from 61% in 2009 to 42% this year—a one-third decline. This is a service morale crisis. How are the Government going to arrest this decline if the review does not yield significant additional money?
My Lords, Britain has a competitive advantage in defence, and that advantage is based on the commitment, professionalism and skills of our people. We place heavy demands on them all, including those in the Armed Forces whom we ask to risk their lives on operations. Therefore, we place a very high premium on recruiting, retaining and developing the right people. As set out in the 2015 SDSR, we have identified a number of long-term plans to ensure that the service offer to which I referred better reflects the aspirations and expectations of our personnel and new recruits.
(6 years, 9 months ago)
Lords ChamberMy Lords, I feel I must apologise to the House because, amazingly enough, I did not come equipped today to discuss Brexit, European armies, NATO in general, the 2% target, Russia, Putin or anybody else. But since we are making general points, I would point out that the Labour Party does support NATO—indeed, we are proud to have actually created it.
I have taken rather the opposite point of view. Given the constitutional niceties of this House, even to suggest that one is going to oppose an affirmative resolution produces a constitutional crisis that rocks the whole building. Whenever I stand up at the Dispatch Box, it is because I have drawn the short straw because I have the SI to do. I spend some time working out what to do to make it interesting. Sometimes you expose the Government’s poor performance, as we did last night, or point out that the order is not going to work, take a swipe at the primary legislation, ask some clarifying questions or ask that clever question that rocks the Minister back on his heels and sends him scrambling for the Box. On this occasion, however, despite the considerable efforts of my researcher and myself, I have to report that we have no questions and the Opposition are content that the order should be approved.
My Lords, I thank the noble Lord, Lord Tunnicliffe, in particular for not asking me any questions. He need make no apology at all for that. I am pleased that he is content with the order, which, as I said in my opening remarks, is essentially legal and administrative in nature.
I was grateful for the comments and questions from the noble Lord, Lord Campbell of Pittenweem. He expressed his view that collating the legal arrangements that are in place could be to everyone’s benefit. I well understand why he should make that point, but the advice I have had is that consolidation would be quite difficult because there are complex interactions between our international and our domestic law. For that reason, I suspect it would be unlikely to attract parliamentary time. Still, I am sure his point has been registered in the right quarter.
The noble Lord asked how often the exemption mentioned in paragraph 5 had been relied upon. The advice I have had is that criminal problems with NATO personnel are extremely rare, and therefore the seizure of articles would be similarly rare. It is always beneficial for this House to return to the subject of NATO, which, as we always say, remains the bedrock of our defence in this country. I am sure that if we did set aside time to debate NATO and matters relating to it, though the noble Lord will understand that that is not in my gift, it would attract considerable support from around the House. As he intimated, it is particularly relevant at the moment in the light of our impending departure from the EU.
The proposal, if that is what it is, for a European army is not one that I or my colleagues sense has generated a great deal of support among European nations generally, particularly not in Germany. However, the subject keeps bubbling up. Our position, in talking to our European colleagues about this country’s future relationship with the common security and defence policy, is to make clear that anything that makes it more difficult for us as a country to continue engaging with the EU after we come out would be retrograde. Our red line here is that there should be no infringement of the Albright principle of duplication; if the EU were in some way to duplicate what we already have in NATO, that would be both unnecessary and damaging. We think that message has hit home, but of course after we leave we will have no direct influence on what the remaining member states decide to do in this area.
I hope I have covered most of the noble Lord’s points, although one could elaborate at length on many of them. If there is any doubt on the subject, the relationship that the UK continues to have with the United States remains broad, deep and very advanced at every level. The collaboration we have with the US extends across the full spectrum of defence, including intelligence, nuclear co-operation, scientific research and flagship capability programmes. That has continued under President Trump’s Administration. From our many conversations with our American colleagues, we know our shared priorities include the fight against Daesh and the importance of NATO as the bedrock of our collective defence. President Trump, Vice-President Pence and Secretary Mattis have all confirmed the US commitment to NATO.
If I have omitted to come back on any of the noble Lord’s points, I will of course write to him.
(6 years, 10 months ago)
Lords ChamberMy Lords, this proposal has been put forward by the House of Commons Defence Select Committee, and the Government have noted it. We are well aware, and recognise, that there are alternative views on how best to deal with the legacy of the past. In recognition of that, the consultation on Northern Ireland will acknowledge that there are other views on how to address the past, including that put forward by the Defence Committee. A public consultation, as I have just mentioned, would provide everybody with an interest with an opportunity to give their views on the best approach to addressing the legacy of Northern Ireland’s past, in particular.
My Lords, this is part of a bigger problem—an in-theatre conduct, post-theatre investigation problem. It is about the difficult problem of the military legally vesting violence on the Queen’s enemies, as opposed to criminality on the battlefield. The excoriating report of the Defence Committee on the Iraq Historic Allegations Team brought that out, as did the rather apologetic response from the MoD and questions on the subject. Will the Minister reconsider his Answer of 5 September and agree that we should have a public consultation with expert input to try to get to the bottom of this, so that we can produce a consensual answer that goes to the root of the problem, and include it in the 2020 Armed Forces Bill?
As my noble friend Lady Goldie made clear on Monday, in answer to a Question from the noble and learned Lord, Lord Morris, there will be a full-scale independent review of the service justice system. That will give an opportunity for anyone to feed in their views. I therefore hope that the issues about which the noble Lord is rightly concerned can be addressed in that context.
(7 years, 1 month ago)
Lords ChamberMy Lords, as always, and as the noble Lord, Lord Tunnicliffe, rightly said, we have had a good debate, and I thank noble Lords for their insightful contributions. I was very grateful for the supportive comments of many speakers regarding the Bill’s purport.
I will try my best to respond to as many as possible of the questions and points that have been raised but I hope that noble Lords will bear with me if I do not manage to address each and every one today. I will of course write to any noble Lord where I have something to add.
I begin with the contribution of the noble Lord, Lord Touhig. I was disappointed by his sceptical reaction to the Bill. In fact, uncharacteristically, his remarks came over as sceptical bordering on the cynical. I just ask him to give some credit to the services. I believe that we need to support them, in the first instance, for having identified a gap in the current offer to the Armed Forces and, secondly, for coming up with proposals to address that gap in a way that reflects best employment practice in industry and commerce.
Indeed, I stress one key point to the noble Lord and to the noble and gallant Lord, Lord Walker. The new flexible working options have the full backing of the three services. They have been consulted and engaged throughout the design process, and they will continue to be involved as we implement the changes. As I said earlier, the chiefs of the services support these proposals, and they have regularly provided direction and guidance during their development. That development work continues, which is why I do not currently have all the answers requested by the noble and gallant Lord, Lord Stirrup.
As I said, we have consulted the services throughout this project and their advice has helped to shape the design of the new flexible working arrangements. We recently engaged with the three services’ families federations, which have collectively said that they welcome the MoD’s plans. We continue to engage with a range of key stakeholders, and that process will intensify as we continue to develop and finesse our policies in the lead-up to the introduction of the new arrangements in April 2019.
Let me deal with another misconception. There is no question of the services or the MoD imposing flexible working on anybody. Flexible working will only happen following an application by an individual. Far from imposing on regular personnel, these changes provide further protections to personnel in enabling them to achieve a better work/life balance to suit their circumstances.
The noble Lord, Lord Touhig, and the noble and gallant Lord, Lord Walker, suggested that this could all be a plot to reduce the pay bill and/or deprive people of pay. No it is not. The new arrangements have been designed with cost neutrality in mind. As I have stressed before, this change is predominantly about giving service personnel more choice over the way they serve. It will help the Armed Forces to retain our current personnel and to attract and retain future joiners. I thought that the question posed by my noble friend Lord Attlee was very apt: why should we lose personnel because of their family set-up? The answer is, we should not, and I hope the Bill will help us to address this.
Of course, those wishing to vary their commitment will see a commensurate variation in their reward. That variation will be fair and reasonable, both to those who work flexibly and to those who do not. Pay will be calculated on a proportional basis. Further work is under way to determine the precise impact on pensions and the full range of allowances, against the principle that the outcome will be fair and proportionate. We already offer the ability to undertake flexible start and cease-work times for no loss of pay. However, the Bill is designed to offer the ability to work less than others. Therefore, it is right and fair to others to reduce pay proportionately.
As I have just said, flexible working should be seen as filling a gap in the flexible working arrangements already available in the Armed Forces. The noble Baroness, Lady Smith, was right to point out that flexible working is something of an umbrella term in this context. A number of formal flexible working arrangements, such as variable start and cease-work times, have been available for some years subject to local chain of command approval, but these invariably involve doing the same amount of work over a different working pattern, rather than a formal agreement to work less for less pay. We recently introduced a number of progressive flexible working changes, including new leave options and improvements for those taking career breaks, but these flexibilities are limited in their applicability and do not go far enough. As a snapshot, some 2,000 applications were approved across the services in the last six months, covering the various arrangements currently available.
The noble Baroness, Lady Jolly, asked whether the Bill could enable other types of flexible working, such as working from home. I have largely dealt with that and, as she will appreciate, that is not necessary because we already offer opportunities to work from home, as I know she is aware of from her own experience.
The noble and gallant Lord, Lord Craig, asked some detailed questions, including on entitlement to service accommodation. I reassure him that entitlement to service-provided accommodation is a key element of the conditions of service that support the mobility of personnel, and that entitlement will not change as a result of flexible working because it will not change personnel mobility.
The noble and gallant Lord also asked what this will mean for reserves. Reserves are already able to serve in a range of different commitments, so legislative change is not required for them. Under Future Reserves 2020 we have expanded reserves’ terms and conditions of service to meet developing service needs, and there will be no change in entitlement to medical and dental services. Regulars will remain subject to service law at all times, even when they are working part-time. As the noble and gallant Lord knows, the duty to serve and obey, enforced through disciplinary action, is central to the functioning of the Armed Forces. It will remain essential for commanders to be able to issue lawful commands to personnel undertaking part-time or geographically restricted service. Those commands must be followed. However, it will clearly not be lawful for a commander to order a regular to attend for duty on one of their agreed days off or to serve outwith the prescribed maximum number of days of separation.
Keeping part-time regulars subject to service law at all times has the added advantage of absolute clarity for all. There will be no difficult questions for personnel or commanders to consider about whether someone is or is not subject to service law on a given day. The noble and gallant Lord, Lord Craig, asked me a number of other questions and I hope that he will allow me to write to him on those.
However, what I can and should say to the noble and gallant Lord, Lord Stirrup, with great respect to him, is that this is not about flexible terms of employment. Regulars are not employed, so the legislation refers to terms and conditions of service. The noble Baroness, Lady Jolly, and the noble and gallant Lord, Lord Stirrup, asked about levels of uptake. The answer is that we expect a small but significant number to take up the new arrangements. We will manage expectations and explain that applications will be approved only where the MoD can accommodate the arrangements without unacceptably affecting operational capability. We expect that the majority of service personnel will remain on full-time commitment arrangements. So in answer to the noble and gallant Lord, Lord Walker, there will not be a specific cap on numbers, but the services will have full control over the number of people they can allow to work flexibly and will have the controls to vary this over time.
The noble Baroness, Lady Jolly, and others asked about implementation. We plan to allow the first applications from 2019, as I mentioned earlier, and we anticipate that applications and the services’ ability to accept them will grow slowly. This will take careful management and a change of culture in some areas. Implementation will include a communication campaign, along with training and guidance for commanding officers and potential applicants alike.
The noble Lord, Lord Touhig, the noble Baroness, Lady Jolly, and the noble and gallant Lord, Lord Walker, asked about the decision-making process. Commanding officers will not make the final decision on applications to work flexibly. They will be considered by an approvals authority within each service at headquarters level, which will be informed by advice from the chain of command, manpower planners, career managers and other relevant parties. The process is still being finalised, but our aim is for an agile system that will be able to administer applications efficiently.
As regards the applications that are considered, of course some will be refused, as the noble Baroness, Lady Jolly, rightly anticipated. A new flexible working application is more likely to be refused if personnel are in a role that is delivering a critical output or is highly deployable, such as on a ship or in a high-readiness unit, or have already been warned to be ready to deploy to an operational theatre. An appeals process will be put in place to reconsider applications that have been rejected. Each service will have its own separate appeals review body, which will include career managers and other subject matter experts. Personnel will retain their right to enter a service complaint if their appeal is unsuccessful, which will have the oversight of the independent Service Complaints Ombudsman.
Let me stress again that maintaining operational capability will be at the forefront of any decision on allowing a serviceperson to temporarily reduce their commitment. We will also retain the ability to recall personnel to their full commitments in cases of national crisis. We judge that in time this will enhance our national defence as it takes effect and we experience the benefits of improved retention, a more diverse workforce, and the ability to deploy a broader spectrum of our people, both regular and reserve, when and where we need them through the flexibility which this initiative will bring.
The noble Baroness, Lady Jolly, asked whether personnel will be able to join the services and take flexible working straightaway. My noble friend Lord Attlee was quite right on that point. We envisage that personnel will be expected to complete both their initial and trade training along with a period thereafter to settle in and consolidate their training before flexible working is considered.
The noble and gallant Lord, Lord Walker, asked about the legal risks of refusing applications. Decisions on applications will be subject to a robust process, taken at a senior level on advice, and, as I said, with an appeal available. A disappointed applicant will have avenues available to them to seek a remedy. Those appeals or complaints will be considered carefully, with oversight as necessary from the independent Service Complaints Ombudsman. As a result, we would not anticipate a rise in discrimination claims in this context.
The noble Baroness, Lady Jolly, raised an interesting point about workloads, wondering, if I can put words into her mouth, whether these arrangements will mean there will be more work for those who do not avail themselves of flexible working. We will manage the levels of flexible working permitted and therefore will be able to ensure that the right levels are maintained to deliver defence outputs. It is envisaged that capacity surrendered to flexible working arrangements will either be within reducible capacity or otherwise be sourced through other means, such as employment of reserves. Like other organisations with part-time workers, the organisation will change over time to better accommodate flexible working.
The noble Lord, Lord Touhig, asked what skills have been lost so far. I simply say that all personnel who depart take hard-won skills and experience with them, as he will know. Saving any of those skills will clearly help. While figures on the number of skilled service leavers are not held centrally, the Ministry of Defence is absolutely committed to ensuring that our personnel who leave the Armed Forces make a successful transition to civilian life.
The noble Lord also indicated that he would propose that new Defence Council regulations should be subject to the affirmative resolution procedure. The changes will be made by amending existing Defence Council regulations, which are subject to the negative procedure. The matters to be set out in new regulations will be procedural—the right to apply, the right to appeal and so on. The negative procedure is appropriate in this context.
The noble Baroness, Lady Jolly, asked what the prescribed circumstances would be to vary or terminate the new arrangements. These will be set out clearly in new Defence Council regulations, scrutinised as necessary by Parliament. The new arrangements will be terminated only when absolutely necessary—for example, as I indicated, in a national emergency or when there is a major manning crisis.
The noble and gallant Lord, Lord Walker, suggested that we should prohibit those availing themselves of flexible employment from undertaking secondary employment. I simply say to him that this Bill is not about enabling secondary employment. Regulations already exist with stringent controls over the types and forms of employment that may be accepted, but only with authority. As in all cases, service duty takes precedence.
The noble Baroness, Lady Jolly, asked whether flexible working would affect someone’s chance of promotion. Many factors affect promotion, as she is aware, but a period of flexible working will not of itself impact on promotion. In designing the new arrangements we have agreed a number of principles with underpinning activities aimed at ensuring that very thing. These include that we would wish to avoid intentional or unintentional career penalties for those who undertake flexible service. We will create the opportunity for individuals to maintain or regain career momentum. We will seek to maximise accessibility of transfer between the regulars and reserves in both directions by minimising negative career impact. When one thinks about it, a decision on promotion is very largely forward-looking, rather than looking back. It is very substantially about the person’s potential.
The noble and gallant Lord, Lord Walker, asked whether personnel would be able to dodge deployments. In the right circumstances some will be able to avoid being deployed, but a request on those lines will be approved only where the service can continue to deliver its operational capability. It will be refused where that cannot be achieved. Protection from deployments for a limited period where possible will retain some of our skilled personnel.
The noble Baroness, Lady Smith, asked how personnel would find out about flexible working. We have a communications plan in force already to build on the reality of the flexible duties trial, but I shall be able to give her further particulars of that in due course.
My noble friend Lord Sterling raised the important issue of service ethos and was worried that our proposals might damage it. I hope that, as the Bill proceeds, I can convince him that that will not be so. In fact, we expect that the arrangements will enhance ethos over time by helping us to retain and recruit the best people for defence. The evidence that we have gathered from published research literature, consultation with our people, surveys and an ongoing trial tells us clearly that personnel have reported consistently that the impact of service life on family and personal life is the most important factor that might influence them to leave. The three most frequently cited benefits of flexible working are that it helps employees to reduce the stress and pressure they feel under, it enables better work/life balance and it encourages people to stay with their current employer.
I was grateful to my noble friend Lady Eaton for her contribution about family stability and support. I will write to her about the points that she raised. I should be glad if she could provide evidence of the gaps that she feels exist and that are not currently provided for by other statutory bodies in family support, so that I can understand what type of additional support she feels is needed by service families. We need to understand whether families want that additional support, because finding a balance between paternalism and an intrusive approach against making that support readily available is clearly very important.
I listened carefully to the noble Lord, Lord Dannatt, who argued for better mental health service availability for serving personnel. I will gladly follow up the points that he raised after this debate. I also listened carefully to the noble Lord, Lord Brooke of Alverthorpe, regarding his Private Member’s Bill on the abuse of military honours. The Government were well disposed in principle towards the Bill introduced in the previous Parliament; I should be happy to talk to him about the introduction of a similar Bill in your Lordships’ House and the scope for giving it appropriate debating time, which of course is a matter for the usual channels. We explored whether it might have been possible to amend this Bill in the sense that he has suggested, but the advice that I had was that it was not within the scope of the Bill’s Title. As I have said, I would be glad to talk further to the noble Lord.
Where the Minister responds in writing to Members, I would be grateful if he could copy it electronically to all of us who have taken part in the debate.
I should be glad to do so.
I am conscious that in the time available I have not responded to the noble Earl, Lord Listowel, on his concerns about families, the noble Baroness, Lady Burt, on BAME recruitment and other matters, and the noble Baroness, Lady Smith, on families’ accommodation. I will do so, however, in writing.
I hope that, despite the reservations that have been voiced, this Bill will receive a fair wind from your Lordships. Our Committee proceedings will doubtless enable us to explore a number of areas of detail about which, quite understandably, noble Lords have raised questions. Until then, however, I commend the Bill to the House.
(8 years, 4 months ago)
Lords ChamberMy Lords, I shall also speak to Amendment 4 in my name. These amendments deal with a matter raised by the Delegated Powers and Regulatory Reform Committee of your Lordships’ House in its 21st report. That matter concerns the regulation-making powers in new Sections 304D(10) and 304E(9), which are inserted into the Armed Forces Act 2006 by Clauses 10 and 11 of the Bill. These powers allow regulations to be made in relation to appeals against reviews of sentence.
It would perhaps be helpful to remind the House that Clauses 10 and 11 of the Bill are part of the statutory framework that we are creating for offenders assisting investigations and prosecutions. New Sections 304D and 304E provide that a person who has been sentenced by the court martial may have their sentence reviewed to take account of the assistance that they have given or offered to give to an investigator or prosecutor, or a failure by that person to give the assistance that they offered to give to an investigator or prosecutor, and in return for which they received a sentence that was discounted. A person whose sentence is reviewed under new Sections 304D or 304E may appeal against the reviewing court’s decision on sentence. The Director of Service Prosecutions may also appeal against a decision. New Sections 304D(10) and 304E(9) allow regulations to be made in relation to the conduct of proceedings on such appeals. Both provide as follows:
“In relation to any proceedings under this section, the Secretary of State may make regulations containing provision corresponding to any provision in Parts 2 to 4 of the Court Martial Appeals Act 1968, with or without modifications”.
Such regulations are subject to the negative procedure.
The Delegated Powers and Regulatory Reform Committee noted in its report that most provisions of the Courts-Martial (Appeals) Act 1968 are provisions governing proceedings before a court, and that it is reasonably common for such provisions to be set out in subordinate legislation, subject to the negative procedure. However, the committee noted that the 1968 Act includes provisions about the recovery of costs and expenses in appeal proceedings, the effect of which may be modified by the Lord Chancellor by regulations, subject to the affirmative procedure. For example, under Section 31A of the 1968 Act an appeal court is prevented from directing the Secretary of State to pay legal costs to a successful appellant except where affirmative procedure regulations made by the Lord Chancellor provide otherwise. The committee is concerned that it would be possible for regulations under new Sections 304D(10) and 304E(9), which are subject to the negative procedure, to make provision corresponding to the costs provisions of the 1968 Act but with modifications that, if made to the 1968 Act by the regulations under that Act, would be subject to the affirmative procedure. The committee takes the view,
“that as a matter of principle the powers conferred by sections 304D and 304E should be limited so that they do not allow the making of modifications which under the 1968 Act would require the affirmative procedure”.
I therefore propose to amend Clauses 10 and 11 to limit the regulation-making powers in new Sections 304D(10) and 304E(9) so that they may not be used to make provision corresponding to a provision that may be included in regulations made by the Lord Chancellor under Sections 31A, 33, 33A, 46A or 47 of the 1968 Act, and that they may be used to confirm regulation-making powers corresponding to the powers in Sections 31A, 33, 33A, 46A and 47 of the 1968 Act, only if the powers are, like the powers in the 1968 Act, subject to the affirmative procedure.
It may be helpful if I give one example of the effect of the proposed amendments. As mentioned previously, under Section 31A of the 1968 Act, an appeal court is prevented from directing the Secretary of State to pay legal costs to a successful appellant, except where affirmative procedure regulations made by the Lord Chancellor provide otherwise. The effect of the proposed amendment is that regulations under new Section 304D(10) could not make provision allowing an appeal court to direct the Secretary of State to pay legal costs to a successful appellant, but could confer a power on the Lord Chancellor to make regulations providing that an appeal court may direct the Secretary of State to pay legal costs to a successful appellant, but only if the Lord Chancellor’s regulations are subject to the affirmative procedure.
This is somewhat complicated but I hope noble Lords will accept that the amendments address the committee’s concerns regarding the parliamentary procedure to which regulations under new Sections 304D(10) and 304E(9) of the Armed Forces Act 2006 are subject. I therefore hope noble Lords will support the amendments. I beg to move.
My Lords, discharging our responsibility as the Opposition, I have carefully read the Minister’s letter of 11 April and studied the 21st report of the Delegated Powers and Regulatory Reform Committee and Amendments 3 and 4, and I am satisfied that they meet the committee’s concern. They have our support.
(8 years, 6 months ago)
Grand CommitteeThe noble Earl seemed to say something fairly profound there about support for service personnel who may come under investigation in the Iraq cases et cetera, and about legal and historic pastoral support. Could he flesh that out, particularly the extent of legal support that he sees being provided? I recognise that might require a somewhat delicate answer so a written response could be more appropriate.
I shall be happy to write to the noble Lord with further and better particulars on that issue. I add to the noble Lord, Lord Empey, that the aim of the Iraq Historic Allegations Team is to try to compete the majority of its investigations by the end of 2017. The team believes that that is within its grasp, although it may slip. I hope that is helpful as an indication of the timescale to which it is working.
Following the precedent of other Bills, when the Minister writes to me could he copy in any other noble Lord who has participated in the debate?
The Minister mentioned necessary legislative changes. Is it the Government’s intention to use the Bill as a vehicle?
(8 years, 6 months ago)
Grand CommitteeMy Lords, the first two groups for debate today discuss the generality of military law. The first group relates to how an individual is found guilty and sentenced, while the second group deals with the extent and scope of the body of military law. I make the point because I take a very different view about the extent to which we should consider changing the two groups, and hence these groups of amendments. We will come on to debate the second group, but I approach the first group from the point of view of the rights of the citizen who, as a member of the Armed Forces, has become the accused. I find the arguments put forward by the noble Lord, Lord Thomas of Gresford, persuasive. With that individual having committed an offence and gone into a process which is now so analogous to that of a civil court, I find quite strong the idea that the individual should have the right to a trial that is analogous to that in a civil court.
The amendments before us would, first, create more of a jury of the individual’s peers and, secondly, produce a voting system that is much closer to that of a Crown Court, which seeks unanimity. The proposals put by the noble Lord, Lord Thomas, are close to unanimity in their form. The reforms the noble Lord is suggesting would mean that the rights of the individual who has been accused would become increasingly similar to those of a normal civilian in a criminal case. Since 2006 we have developed the three bodies of law, brought them together and introduced civilian best practice—there is probably a better way of putting that, but it is essentially what we have done—so I find this next step very attractive.
As an alternative or as a supplement, the noble Earl, Lord Attlee, has suggested a minimum number of 12 on the board. That is an interesting suggestion which again is in step towards achieving similarity, and I would guess that he has suggested the figure on the basis that while such a revolutionary change might not appeal to the Government, there is also the idea of an inquiry to see how courts martial work to see if that could be a step towards reform.
Clearly, and I have sat on that side, these amendments will not work and there will be something wrong with them. However, that is irrelevant. What matters is: should we make steps in this direction using this quinquennial Act? We do it only every five years and I would find unconvincing the argument that it is not appropriate. I am putting a burden on the Government, today and perhaps in subsequent meetings and in writing, to argue the case for why we should not move in the general direction of these amendments and make the whole process for the defendant more analogous to that of a civil court.
My Lords, I am very conscious of the close interest taken by the noble Lord, Lord Thomas of Gresford, and my noble friend Lord Attlee, as well as by the noble Lord, Lord Tunnicliffe, in the operation of the court martial and I welcome the opportunity to discuss these matters today. The first amendment of the noble Lord, Lord Thomas, would amend Section 155 of the Armed Forces Act 2006, which makes provision with respect to the constitution of the court martial. It provides that only officers or warrant officers may be lay members of the court martial. As the noble Lord explained, Amendment 1 would change this; it would also provide that court martial rules may provide that lay members must,
“be drawn from each and every branch of the armed services”.
The noble Lord’s next amendment, Amendment 2, would insert a new Section 155A into the 2006 Act. The effect of proposed new Section 155A would be to allow serving personnel of any rank to be lay members.
The court martial consists of a judge advocate and between three and seven lay members. Lay members of a court martial, who are also referred to as the panel or the board, have a role in relation to findings on a charge and sentencing. The lay members for any proceedings are specified by or on behalf of the court administration officer. Only commissioned officers and warrant officers may be lay members. Amendments 1 and 2 would change this, as I have said, by allowing members of the Armed Forces of any rank to be lay members.
It will not surprise the Committee to hear that I am resistant to the proposals that the noble Lord, Lord Thomas, has put forward. The first point I wish to make in response is that the existing rules governing lay membership of the court martial result from the fact that the court martial is part of an overall system of justice and discipline. Those rules recognise the importance of experience of command and the exercise of service discipline at a sufficiently high level to enable lay members to assess the actions of those who appear before them in the court martial in the appropriate command and disciplinary context. The role of a lay member in the court martial differs from that of a juror in a Crown Court trial. In the Crown Court, the jury’s role is limited to findings of fact: sentencing is a matter solely for the judge. In the court martial, the lay members and the judge advocate vote on the sentence. In considering sentencing, they must have regard to the maintenance of discipline, so must have a strong understanding of what things affect discipline and what things do not.
All service courts have to apply the statutory principles set out in the Armed Forces Act 2006 as to the purpose of sentencing. These are closely based on the civilian sentencing principles but include, in addition, “the maintenance of discipline” and the reduction of “service offences”—that is, both service discipline offences, such as looting or absence without leave, and criminal offences.
These principles reflect four special aspects related to the service justice system. The first is the existence of disciplinary offences unknown to the general criminal law, such as absence without leave. The second is the fact that the military context of an offence may be relevant to sentencing—for example, an assault against a superior or an inferior may make an offence more serious, and then there is the well-known naval concern about the effect on morale and discipline of mess-deck theft.
My Lords, as I said earlier, I see this debate as being in two parts, of which this is the second part. The development of service law in this country has been going on for several hundred years and we have seen important movements in the past 10 years with the 2006 Act and now with these proposals. I am unsympathetic to what the noble Lord, Lord Thomas of Gresford, proposes in this area, because it goes too deep into the body of military law. There is presumably an argument that you do not need military law on any offence that is covered by an equivalent piece of civil law, but we are not there yet in the minds of either the public or the military. We are on a journey and I think that we are at the right place in that journey, so to carve these offences out of the scope of military law at this point would be wrong. I shall read with great care the speeches that have been made and listen with great care to the Minister’s response. We will ponder on those views but, as a generality, the scope of military law is probably right at this time. I repeat that we should address the courts martial system to make the judgment process analogous but leave the scope substantially as it is.
My Lords, these further amendments address other aspects of the service justice system about which the noble Lord, Lord Thomas, is exercised. I agree that it is right that this Committee should engage in close and careful scrutiny and assure ourselves of the rationale that underpins the system.
Amendment 4 would limit the jurisdiction of the court martial. It would prevent the court martial from trying certain offences: murder; manslaughter; the wide range of sexual offences under the Sexual Offences Act 2003; and any offence committed overseas that a civilian criminal court in the United Kingdom has jurisdiction to try.
The noble Lord, Lord Thomas, explained that his intention with Amendment 15 is to extend the jurisdiction of civilian criminal courts in England and Wales by giving them jurisdiction to try members of the Armed Forces and civilians subject to service discipline for acts overseas that, had they been committed here, would have constituted sexual offences under the Sexual Offences Act 2003. The Committee may be aware that service courts are able to exercise jurisdiction in respect of acts overseas. Section 42 of the Armed Forces Act 2006 provides that a member of the Armed Forces is guilty of an offence under service law if they do an act outside the United Kingdom that would constitute an offence under the law of England and Wales were it done here.
Amendment 16 would give members of the Armed Forces accused of committing certain crimes overseas a right to elect whether to be tried by the court martial or by a civilian criminal court. The crimes in question are those that the civilian criminal courts may try even if the events in question took place overseas. Those offences include murder and, although the noble Lord explained that this was an alternative to his previous proposal, would also include sexual offences if Amendment 15 were accepted as well.
I note one point in passing. Amendment 16 does not appear to propose that members of the Armed Forces should have a right to elect civilian criminal trial in respect of conduct in the United Kingdom or in respect of conduct overseas other than on active service in operational circumstances, yet it is not immediately apparent why such cases should be treated differently.
The noble Lord, Lord Thomas, may not be too surprised to hear that the Government do not support these amendments, which imply that there are problems with the court martial system. Yet the service justice system has been scrutinised by the UK courts and by Strasbourg, and has been held to be compliant with the European Convention on Human Rights for both investigations and prosecutions within the UK and abroad, where the civilian police do not have jurisdiction.
As regards the implication about the competence of the service police and prosecutors, the service police are trained and able to carry out investigations into the most serious offences, with members of the Special Investigations Branch having to pass the serious crime investigation course before being selected for that unit. In addition, selected members of the service police attend a range of specialist and advanced detective training at either the Defence College of Policing and Guarding or externally, with the College of Policing or training providers accredited by the college.
At the Service Prosecuting Authority, prosecutors are trained to effectively prosecute serious cases. For example, prosecution of serious sexual offences requires attendance on the CPS rape and serious sexual offences specialist training course, and the SPA ensures that decisions on charging in such cases are taken only by prosecutors who have completed that training. The Government believe that the service justice system is capable of dealing with the most serious of offences and should be able to continue to do so. In the case of offences which both the civilian criminal courts and service courts have jurisdiction to try, it is recognised that it is necessary for prosecutors to consider in each case whether the offence is more appropriately tried in the civilian criminal courts or in a service court. This applies not only to offences committed overseas in respect of which the civilian criminal courts have jurisdiction but to offences committed in the United Kingdom.
The existing protocol between service and civilian prosecutors recognises that some cases are more appropriately dealt with in the service system and some more appropriately in the civilian system, particularly those with civilian victims. The principles of the protocol were approved by the Attorney-General for England and Wales, and by the Ministry of Justice. The protocol recognises that any offence can be dealt with by the service authorities. The main principle in deciding who acts is whether the offence has any civilian context, especially a civilian victim. The protocol therefore provides that cases with a civilian context are dealt with by the civilian criminal justice system. However, where a case has a service context, it is important that the service justice system—which is specifically constructed to deal with that unique service dimension—is able to manage the case in question. But were we to create a right to elect of the kind contained in Amendment 16, I submit that it could undermine the service justice system, as an accused could make an election which would see the types of cases which civilian and service prosecutors currently consider should be dealt with in the service system—because of their service context—instead having to be dealt with by the civilian criminal courts.
The noble Lord, Lord West, referred to the importance of mitigation in certain cases. Partly for that reason but also for others, many cases which concern conduct outside the UK will have a service context such that both service and civilian prosecutors would consider that they would be more appropriately tried in the service system. That is significant because of the key point that I made on the previous group of amendments: court martial is part of an overall system of justice and discipline, and the existing provisions governing sentencing in the court martial reflect this.
As I mentioned earlier, all service courts have to apply statutory principles set out in the Armed Forces Act 2006 as to the purpose of sentencing. These are closely based on the civilian sentencing principles but include, in addition, “the maintenance of discipline” and the reduction of “service offences”. These principles reflect special aspects related to the service justice system, including those factors that I touched on earlier and shall repeat: first, in service courts the military context of an offence may be relevant to sentencing, and I mentioned an assault against a superior or an inferior; secondly, in service courts a heavier sentence may be justified by reference to the fact that the offender is in the Armed Forces, and I mentioned a drugs offence in that context; and, thirdly, certain penalties are available only to service courts, requiring an assessment of whether they are appropriate from a broadly disciplinary point of view—for example, service detention or dismissal. Allowing a case with a purely service context to be dealt with in the civilian system on the election of an accused therefore risks undermining the system of justice and discipline in the Armed Forces.
(8 years, 8 months ago)
Grand CommitteeMy Lords, my department has laid a single instrument for the Committee’s consideration today. These regulations are required as part of a package of measures to implement a new service complaints process and a Service Complaints Ombudsman for the Armed Forces.
The new legislation is designed to provide a streamlined and more effective internal redress system for our Armed Forces, and new, strengthened external oversight through an ombudsman. It will come into being on 1 January 2016. The new system is provided for in new Section 365B and Part 14A of the Armed Forces Act 2006, as inserted by Sections 1 to 3 of, and the schedule to, the Armed Forces (Service Complaints and Financial Assistance) Act 2015.
This instrument is intended to promote fairness in the new system by preventing conflicts of interest and ensuring that complaints are dealt with by those who have the right experience and knowledge to properly assist the complainant. It also covers procedural matters that provide essential safeguards and aspects of independence for our Armed Forces personnel.
The regulations include four important things, which I shall deal with in turn. First, as for the existing system, we have made rules on who cannot be appointed to deal with a service complaint; for example, because they are implicated in the matters complained about. The second important aspect of the regulations is that we have set out those matters that cannot be raised as a service complaint. This is not a new aspect to the complaints process. These are provided for in the regulations that cover the current system, and have been updated in this instrument to take account of the new process and of experience.
We are excluding for the first time challenges to decisions made in the internal redress system because under the new legislation the ombudsman will be able to review or investigate them. Similarly, the regulations exclude complaints about decisions made by the ombudsman. It is the ombudsman who provides external oversight of the complaints system so it would be contradictory for the complaints system to be able to overturn decisions of the ombudsman. Challenges to the decisions of an external ombudsman are best made in the courts.
A newly excluded matter, which I should mention in particular, is that we have decided to exclude complaints alleging clinical negligence or personal injury against the Ministry of Defence, so these have been added to the list of excluded matters. The redress system is not appropriate for deciding the complex, specialised medical and legal issues that can arise in clinical negligence and personal injury cases. It will remain possible, however, to make a service complaint if a person believes that we have not provided medical care when it was our responsibility to do so. As under the existing system, the regulations also exclude matters for which there are more appropriate alternative remedies. For example, challenges to decisions made at court martial are best decided through the appeals system.
The third important effect of these regulations is to set out when at least one independent person must be appointed for deciding a service complaint. The main circumstance is where a complainant alleges bullying or similar misconduct. This is the same as under the current system and it is there to provide an extra safeguard for fairness in such sensitive cases, and to give a measure of external oversight as part of the internal system.
The fourth main effect of the regulations is the setting out of the matters that must be reported to the Service Complaints Ombudsman when an allegation of a wrong suffered by a service person has been referred by the ombudsman to the chain of command. As with the Service Complaints Commissioner now, the ombudsman will be able to receive allegations of wrongs done to service personnel. For example, a family member of a service person will be able to approach the ombudsman with their concerns. The ombudsman will be able to refer those cases to the chain of command and to track what happens. The regulations will ensure that the ombudsman is kept updated on progress and is able to respond to queries, if raised, without compromising her investigative role.
The Joint Committee on Statutory Instruments has scrutinised this draft instrument and, in doing so, has brought to our attention three drafting points, which we will seek to correct at the earliest available opportunity. However, we do not expect that these points will affect the practical working of the regulations.
On the first point that has been raised with us, we accept that the definition of the expression “in writing” has been included unnecessarily in Regulation 2(1).
On the second point that the committee has brought to our attention, we will seek to provide further clarity at Regulation 6. This regulation provides for the start of the three-week period within which the ombudsman is to be notified of certain events in connection with the progress of a matter that has been referred by the ombudsman as a potential service complaint. It also provides that the ombudsman is to be notified of each event that is listed in the regulation. We will seek to clarify the exact moment of the day from which the three-week period applies and to clarify that the period applies separately to each event that appears in the list.
The third of the JCSI’s points relates to a provision in the schedule to these regulations that excludes a right to make a complaint where there is a right of review as to certain service police or prosecution matters. The committee has said that the regulations refer incorrectly to those rights of review being “under” the code in which they appear, rather than being mentioned “in” that code. Again, we will look to make the correction at the earliest available opportunity.
I hope noble Lords will support these regulations. I beg to move.
My Lords, I thank the Minister for introducing this instrument, which effectively—with, I believe, four other negative instruments—gives effect to the Service Complaints Ombudsman, established by the 2015 Act, which some of us were privileged to flog through a few months ago.
The concern goes back to the tragic deaths at Deepcut between 1995 and 2002 and the subsequent inquiry. The outcome of that inquiry was the creation of the Service Complaints Commissioner. That role was taken up by a splendid lady, Dr Susan Atkins, who, having taken up the role, declared it not effective, efficient or fair. I commend the Government for reacting to her criticism. My party has long been calling for the introduction of an Armed Forces ombudsman, so we welcome the Act and the instruments designed to put it into effect. Labour is determined that all members of the Armed Forces who serve this country with such professionalism and distinction should be saved from bullying, harassment and other inappropriate or illegal behaviour. Ensuring that this is achieved forms a core component of the Armed Forces covenant. Hence, we support not only this affirmative SI but the negative SIs that go with it.