Brexit: The Future of Financial Regulation and Supervision (European Union Committee Report)

Lord De Mauley Excerpts

Wednesday 6th June 2018 Lords Chamber

[Lord De Mauley (Con)]

My Lords, I am also a member of the sub-committee and I echo the complimentary opening words of my noble friend Lord Lindsay about those who run us and those who help us. It is the responsibility of the regulators and supervisors to regulate and supervise, so that the financial services markets are safe and fair for those who participate in them and, in particular, for those who rely on them. This is a country with a reputation as a safe place for investors and retail banking customers that predates our membership of the EU. Indeed, as the noble Baronesses, Lady Falkner and Lady Liddell, said, our experts have taken a disproportionately large part in designing the EU regulatory and supervisory framework precisely because of their experience and fine reputation.

I think I can safely say that our meetings with the Bank of England and others did more than enough to convince us that our regulators and supervisors are capable of designing and operating systems to maintain the stability of our financial system and investment markets. However, there is an opportunity here, perhaps in the medium to longer term, for systems which are purpose-designed for the United Kingdom. We would benefit from systems which, while keeping our investors and retail bank customers safe, at the same time avoid a bureaucracy that stifles the appropriate risk-taking we need if we are to benefit from new technology, new opportunities and new potential trading partners.

Our report covered a number of important matters, all of great complexity and all of which require a great deal of work and a co-operative attitude on both sides of the channel to achieve them. I acknowledge that the negotiations under way will need both sides to compromise if we are ultimately to agree. I also acknowledge the issues raised in the debate so far by other noble Lords, but I want to focus on where we discovered scope for the United Kingdom to regulate our financial services sector better and more appropriately than the EU currently regulates it. Both the noble Baroness, Lady Falkner, and my noble friend Lord Lindsay referred to this.

Our report provides examples of where EU regulation and supervision, which of necessity has to cater for widely differing markets, fall short. In paragraph 189, for example, we say:

“Some areas of the EU’s current regulatory framework have proved problematic in the UK context. The EU, according to UK Finance, ‘has always faced the challenge of regulating a market with an exceptionally diverse set of financial services businesses’, resulting in compromise solutions on legislation that are not always coherent when applied to domestic markets. Lloyd’s accordingly concluded that ‘the process of arriving at a level playing field can have disadvantages .... Brexit may, therefore, present an opportunity for the UK to amend its regime in order to make it more fit for purpose’”.


In paragraph 39 we say:

“Furthermore, Professor Moloney stated that by virtue of its decision-making process, the EU’s policies may not always be optimal. One benefit of Brexit may be ‘a breakaway from groupthink about financial regulation. The EU is a monolith and it has big structures designed to produce compromise positions. That is not necessarily good for the global financial governance system’”.


Looking at specific areas of business within financial services, I will take investment management first. In paragraph 35 we say:

“TheCityUK criticised asset segregation rules in the Alternative Investment Fund Manager Directive (AIFMD) and Undertakings for Collective Investment in Transferable Securities (UCITS), and the Short Selling Regulation (SSR) on trading practices, as areas where the EU has taken unwelcome action, commenting that ‘the overlap of these pieces of legislation are a central cause of the reduced liquidity in the market but critically are not based on international standards’”.


On insurance, we say in paragraph 194:

“There are areas of the UK regime that have incorporated EU standards in ways that may have been detrimental to the UK’s domestic market … Julian Adams of Prudential told us: ‘There are a number of aspects of Solvency II that not just the industry but the regulator does not think work appropriately’”.


On fintech, an area where the UK has taken an early lead, in paragraph 42 we mention that the regulatory sandbox had,

“demonstrated the FCA’s greater commitment to flexibility and supporting innovation compared to other regulators”.

In paragraph 209 we say:

“The UK’s innovative approaches to FinTech regulation have served as a model for other regulators. In the words of Charlotte Crosswell, the sandbox ‘has been successfully copied across the world’”.


But in paragraph 43 we say:

“While the UK currently possesses a degree of autonomy in FinTech, which it uses to put in place innovative supervisory practices, there is the potential for EU intervention. Karel Lannoo, Chief Executive of the Centre for European Policy Studies, told us that ‘The EU is now working on a regulatory approach to FinTech. Is it needed?’”.


Turning to the mainstream business of banking itself, in paragraph 32 we say:

“Deloitte’s written evidence argued that the EU’s proposals for the CRD ‘demonstrated a growing willingness to depart from implementing global post-crisis banking rules’, in particular by discounting risk weights derived from the fundamental review of the trading book … by 35% for the first three years of application’. The EMIR review is, as we have noted, a matter of concern for the clearing industry”.


In paragraph 38 we point to some of the risks of membership of the EU:

“The Financial Services Consumer Panel made a related point, suggesting that a ‘weakness of the EU regime has been a lack of consistent supervision across Member States. Regulatory expertise and resources across the EU28 vary greatly’, which in turn ‘creates risks for all consumers and undermines trust in the market, especially for passported products’”.


As we say in paragraph 201:

“The second aspect of the UK’s current regime, as derived from EU regulation, that was cited as problematic was the regulatory treatment of smaller firms operating domestically rather than internationally. As the ICAEW”—


the Institute of Chartered Accountants in England and Wales; I declare an interest as a fellow—

“pointed out, this has been especially problematic in the context of prudential standards, as ‘the approach to bank capital is an area where there have been differences between the international and EU approaches’. They explained: ‘The Basel Accord was originally intended for internationally active diversified banks. In the EU (CRD IV, CRR) we have elected to apply the same Basel rules to all banking and investment firms. The US, in contrast, has not. It applies the Basel rules only to its international banks’”.

It is often said, with truth, that one of the benefits of membership of the EU is that we can influence it from within. But in paragraph 46 we say:

“There have, though, been a few failures of UK influence at the EU level. One of the most notorious concerned remuneration rules in CRD IV, which impose a bonus cap for bankers. Deloitte noted that the UK had opposed this measure, on the grounds that it ‘fails to link risk-taking with variable remuneration, increases fixed pay at banks and consequently makes those banks less able to reduce their salary costs in times of stress, potentially contributing to financial stability risks’”.


In paragraph 186, we also say:

“However, proposals to demand the relocation of systemic CCPs within the eurozone will not achieve the Commission’s objectives of bolstering financial stability”.


While no one should be under any illusions that this is going to be easy, it could in the long term also present opportunities for us. I hope my noble friend the Minister will tell us that the Government intend to grasp these opportunities, to the benefit of businesses in the financial services sector and, in particular, to the benefit of their customers.

Dogs: Electric Collars

Lord De Mauley Excerpts

Monday 7th April 2014 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, I thank my noble friend for securing this debate. Before I get into the detail, it is worth reminding your Lordships, as did the noble Lord, Lord Grantchester, that it is an offence under Section 4 of the Animal Welfare Act 2006 to cause any unnecessary suffering to an animal.

In declaring my interests, I should say that I have been a dog lover all my life. My wife and I now have a particularly wonderful rescue dog which is reputed to be a cross between a poodle and a shih tzu—I leave it to your Lordships to suggest a name for that combination. One of the great pleasures of my current role has been to become well acquainted with our wonderful dog charities, which do such wonderful work.

I will return to the Animal Welfare Act. If anyone has evidence that an animal has suffered as a result of the inappropriate use of an electronic collar, a prosecution under the Animal Welfare Act can be taken forward by any person or organisation; the act is what is known as a common informers Act. My noble friend set out very eloquently her concerns and the concerns of others about the general availability and use of such devices and their potential effect on dogs. These concerns are what motivated my department to commission research into their use and the effect they have on the dogs, because we take dog welfare, like all animal welfare, extremely seriously.

I understand the strength of feeling some people have about the use of such devices, but before introducing a blanket ban on their use, the Government would need to be satisfied that such a ban was in the public interest and could be supported from an animal welfare point of view. The research was published last year and concludes that electronic training aids had a negative impact on the welfare of some dogs, but not all.

Based on the research, we do not believe that the evidence is strong enough to introduce a legislative ban on e-collars. Furthermore, the fact that such training aids are no more effective than other training methods is not a reason to introduce a ban or impose any restrictions. The Government recommend that people use positive methods in the first instance, then consider using these devices when other methods of training have failed, having taken professional advice, for example, from their vet.

I was taken by the argument of the noble and learned Lord, Lord Scott, that without his collar, his dog might have to be put down. I agree with him that it would not be difficult to envisage a situation where a reasonable and sensible person owns a dog which is a danger to no one but itself, for example, because of a tendency to act erratically but not dangerously, which but for its collar would have to be put down.

However, we need to ensure that e-collars are used responsibly and manufactured to a high standard. The reports showed that there is variation in the design and operation of e-collars. Noble Lords may be interested to hear that I have done my own rather unscientific research of these devices, which bore this out. I borrowed two of them and tested them on myself. While one gave me a minor shock which I would certainly not describe as painful, the other when turned up to maximum power certainly gave me quite a jolt. We have asked the industry to work up standards for their design and manufacture to reduce the likelihood of their causing unnecessary suffering due to manufacture or misuse. We are also working with the Electronic Collar Manufacturers Association, which is drawing up guidance for dog owners and trainers advising how to use e-collars properly.

I acknowledge that some owners do not read the instructions, as my noble friend said, and that some electronic training aids can be obtained over the internet from overseas. That is why it is important to get the message out to unwary dog owners who are considering purchasing one of these devices to make sure that they obtain one from a reputable manufacturer, rather than a cheaper alternative which may not be safe or operate properly. Our position is consistent with the 2012 report from the Companion Animal Welfare Council, entitled The Use of Electric Pulse Training Aids in Companion Animals, which concluded that there was no evidence to justify a ban on welfare grounds.

Once again, I thank my noble friend for introducing this debate and conclude by reminding the Committee that under the Animal Welfare Act 2006, it is an offence—the noble Lord, Lord Grantchester, said this—to cause unnecessary suffering to a dog through the use of an electronic collar, or any other means and could be punishable by a fine of £20,000 and/or six months’ imprisonment.

Water Bill

Lord De Mauley Excerpts

Thursday 6th February 2014 Lords Chamber

[Lord Redesdale (LD)]

My Lords, I rise to support this amendment. I believe that the noble Lord, Lord Whitty, has underestimated the effect of the change to the primary duties of Ofgem in the 2008 Act, which states that the duties for present and future customers are one of the underlying bases of its commitment to sustainability. The problem that it faces is that the limitations of the sustainable action that should be undertaken have not yet been tested. I had the fun of suggesting to Ofwat that we could take it to judicial review to suggest that it was not fulfilling this pledge. That had an enormous effect on Ofgem. Ofgem should be commended for the strides that have been taken over the past six years to move from an organisation that saw sustainability as something outside its remit to seeing it as something that is very much part of its remit. The value of this—in an amendment first moved by the noble Lord, Lord Oxburgh, to which I added my name—is such that it has changed the culture of Ofgem. It is rather unfortunate that Ofwat does not have the same duty and therefore the same drive to understand that it has that responsibility.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, the purpose of Amendment 109 is to ensure that, in discharging its primary duty to protect consumers, Ofwat must take account of the needs of both current and future customers.

I agree that this is an essential objective. Water is an industry with unusually long planning and investment horizons. Our water resources management-planning processes require companies to plan, as a minimum, 25 years ahead and encourage them to plan over much longer timeframes. Although much of our current infrastructure will be expected to serve customers well for decades or even centuries to come, this is why we have introduced the new duty of resilience, which requires Ofwat to secure the long-term resilience of systems to the long-term pressures identified in the water White Paper, such as climate change, environmental pressures and population growth. It also requires Ofwat to ensure that the companies take action to meet the long-term needs of consumers by promoting appropriate long-term planning and investment; and by taking any and all relevant measures to manage water resources sustainably and reduce demand.

So let me assure the noble Lord, Lord Whitty, that I concur entirely with his aims. However, I consider his amendment to be unnecessary, because its effect would be to duplicate an identical existing provision in Section 2(5A) of the Water Industry Act 1991, which provides a definition of “consumers” for the purpose of the consumer duty. It clearly states that,

“‘consumers’ includes both existing and future consumers”.

I hope that this will satisfy the noble Lord and that he will feel able to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the noble Lord, Lord Redesdale, for his support and agree with him that I was perhaps too dismissive in relation to the effect on Ofgem. Such a responsibility has had an effect on Ofgem and on the way in which its work, output and regulatory responsibilities are seen by the companies and consumers within the energy sector, so it has made a difference.

The arguments that the Minister has just put were very similar to those put initially by Energy Ministers in relation to the amendment to the 2008 Bill pursued by the noble Lords, Lord Oxburgh and Lord Redesdale. I cannot remember whether I openly supported them, but I certainly spoke to the then Minister—it was none other, I believe, than the noble Lord, Lord Hunt of Kings Heath—who agreed that the briefing that he had from his department was too negative and reflected the usual view of Whitehall that just because there were references to it in other documents you should not make it clear in the Bill. The Minister should perhaps go back to his own officials and say, “Well, yes, it may be that we can point to other documents, but people will look at the Bill”. They will look particularly at the front end of the Bill, if they get that far, which amends the 1991 Act—although that bit of it has not been amended yet by the Minister.

The role of future consumers is reflected very early on in the Bill in defining Ofwat’s responsibilities. The flexibility shown by Ministers in responding to the amendments to the 2008 Bill proposed by the noble Lords, Lord Oxburgh and Lord Redesdale, should be repeated here. Perhaps the Minister could agree to go back to his officials. I do not suppose that he will tell me that he is going to do that, so I will withdraw the amendment now and allow him time and grace to do that, because I would like to see this matter addressed on Report. I beg leave to withdraw the amendment.

--- Later in debate ---

Let us be frank: some of the suspicion out there, in view of recent months, is that there are forces within the Government who regard any reference to sustainability or sustainable development as part of what the Prime Minister allegedly referred to as “green crap”. I am not sure whether that has been mentioned before in this House and if it is out of order, I will withdraw it. However, it has been widely reported. If the Government being so illogically resistant to the amendment of the noble Lord, Lord Redesdale, is seen to be part of the attack on green measures, then I regret that. The Government have to reassure the many people who are interested in the long-term future of water supply and the ecological and economic sustainability thereof. Given my support for the noble Lord, Lord Redesdale, I hope that the Government will recognise that they need to do something on this front. I look forward to hearing from the Minister both today and in the period between now and Report.

[Lord De Mauley]

My Lords, I turn first to Amendments 110 to 112, in the name of my noble friend Lord Redesdale. I thank him for them, as I thank my noble friends Lord Selborne, Lord Crickhowell and Lady Parminter and the noble Lord, Lord Whitty, for their comments on these amendments, which would extend the new duty of resilience so that it became a dual duty of resilience and sustainable development. Of course, as my noble friend knows well, Ofwat has had a stand-alone statutory duty to contribute to the achievement of sustainable development since 2005. The Government have reinforced the importance of this duty by providing clear statutory guidance that sustainable development is central to everything that Ofwat does and must be fully embedded throughout its regulatory decision-making. We also require an annual report from Ofwat on its contribution to sustainable development.

I know that my noble friend Lord Redesdale has a long-standing interest in this issue, and I am particularly grateful to him for his assiduousness in pursuing this. He wishes, understandably, to see meaningful changes to culture and practice in economic regulation in water. These changes are already taking place: by correcting the historic bias towards capital investment, for example, the current price review looks set to achieve a much more equitable balance between capital and operational solutions than has previously been the case. Similarly, Ofwat has been working with the industry and Infrastructure UK to halt the stop-start pattern of work, sometimes described as “cyclical investment”, that has been a cause for concern in this sector for many years. Again, we are seeing measurable changes in behaviour. Ofwat has recently given permission to water companies to bring forward £100 million of investment into 2014 to smooth the investment profile and benefit the wider water supply chain.

My noble friends Lord Redesdale and Lady Parminter suggested a water efficiency duty for Ofwat. My noble friend Lord Redesdale referred to the fact that the water companies do indeed have a water efficiency duty. Ofwat has an obligation to ensure that the companies can perform their functions.

Having said all that, we are not and must not be complacent. That is why we have created a new duty of resilience, designed to address the specific issues relating to the long-term pressures facing the water industry. The resilience duty encompasses all the activities that water companies can undertake to manage those pressures: from investing in the additional water storage, to tackling unsustainable abstraction, to focusing on environmental management across the catchment. This duty recognises the need to address the pressures caused by climate change and population growth, and to protect the natural environment on which our water sector relies.

In response to concerns raised by people such as my noble friend, I am delighted that we have already amended this duty in another place to be absolutely explicit about the need to manage water resources sustainably and to manage demand to alleviate pressures on those precious resources. I think that I can say that our amendments have been welcomed, for example by the coalition of environmental NGOs with a particular interest in this area, the Blueprint for Water, with which my noble friend has been closely involved. I met this coalition recently, and it expressed itself satisfied with what we had done in this regard. I therefore hope that I will be able to persuade my noble friend that, given the changes already made, further amendment of the kind he proposes is not required.

Turning to Amendment 113 in the names of the noble Lords, Lord Whitty and Lord Grantchester, the noble Lord, Lord Whitty, has argued that elevating the existing sustainable development duty to primary status would help us to achieve a wide range of important objectives. Let me be quite clear: the Government support those objectives. As I said in the debate on the previous group, we want to see the regulatory regime for water recognise more clearly the needs of future, as well as current, consumers. We recognise the need for a strategic response to climate change, and we firmly believe that catchment management and demand management should form a mainstream part of water company activity.

The Government commissioned the Ofwat review to consider the case for elevating the sustainable development duty as proposed by the noble Lords. Having looked carefully at the arguments, David Gray concluded that he simply did not believe that the creation of a primary sustainable development duty would have the effect that its proponents were looking for. Despite the scepticism of the noble Lord, Lord Whitty, therefore, while we—and I speak for the entire Government—remain fully committed to the principles of sustainable development, we do not believe that the amendment is the best way to achieve the objectives that the noble Lords wish to see. I also believe that we should recognise where changes have already begun to take place. I have already spoken about the way Ofwat’s new price review methodology, to which the noble Lord, Lord Whitty, referred, has addressed the industry’s perceived preference for capital investment, resulting in the companies bringing forward business plans that propose a much more even split between capital and operational expenditure, such as demand management activity.

During our particularly constructive Second Reading debate, a number of noble Lords highlighted the importance of taking a proportionate approach to changes to Ofwat’s duties. Of course, it must be right that we should occasionally amend the duties to ensure that they remain up to date with the Government’s policy priorities. This is what we have done in the case of the resilience duty, in order to reflect the core policy message of the water White Paper on the need to build the long-term resilience of the sector. We have amended this provision in another place to emphasise that this must include the sustainable management of water resources. However, I agree that we must demonstrate restraint in applying new duties to the regulator; and the changes that we have already proposed strike the appropriate balance. I must therefore ask my noble friend to withdraw his amendment.

[Lord Redesdale]

My Lords, yet again I am not disappointed in my expectation that I will not get anything out of the Government. However, it seems almost a waste of a parliamentary process to have a White Paper which is full of water efficiency proposals and then to say, “We’ve had enough duties”, so that something which all noble Lords believe should be an objective is not moved forward on.

The noble Earl, Lord Selborne, and the noble Lord, Lord Crickhowell, raised very interesting points. I will make two points. First, the battles that the noble Lord, Lord Crickhowell, undertook, which were incredibly valuable, are not now taking place in the same way. Most groups agree that there has been a shift from the regulator against the balanced approach to economic environmental regulations. The noble Earl, Lord Selborne, raised the Gray review. I met Mr Gray to discuss this; one of his recommendations was that it is fine, because the Environment Agency leads on policy on this area, and therefore deals with this issue. Since the review, however, the Environment Agency has lost that ability, so it is out of kilter. Things have moved on so that the balance which the regulator has to take—and I understand the difficulties it faces between price, social cohesion and environment, which is tricky—has to be dealt with. However, the problem is that the regulator is seen as not meeting that objective.

The Minister talked about meeting with the NGOs. I believe he met with the RSPB and the WWF, but those are not all the NGOs that make up Blueprint for Water. I have discussed this with Blueprint for Water, and meeting with one, two or three NGOs out of a group of them is always slightly difficult. The whole group does not believe that, but those two NGOs will speak on their behalf. Therefore the Minister’s view that the Bill does not need amending to expand the role of resilience, even though it was amended in the other place, was unfortunate. It leaves no option when we come to the next stage but to try to force through sustainability as a solution to that problem. That may not be the simplest way of dealing with this issue, but, as was proved by Ofgem’s change in attitude, it does have an effect. Therefore it is rather unfortunate that the Minister has not agreed even to have discussions on this. Although I shall withdraw the amendment, I hope to bring it back at the next stage because this is a core issue.

This is not a political matter, which is why I very carefully did not ask the noble Lord, Lord Whitty, or any other noble Lords to put their names to this amendment. This is about whether we believe that water should be a sustainable resource and whether there is somehow a political lever. Most people in this country do not believe that water should be dealt with in a political context; it is about whether we have it or not and whether the regulator makes sure that we judiciously use this resource. If that means that I am a wishy-washy liberal, I sit on these Benches so I am quite happy to be described in those terms—and not as one of abuse. However, the Conservative Party talked about being the “greenest Government ever” and the coalition has moved forward on many of these green policies, so I find it incredible that we are bringing politics into this area. Therefore I hope that the Government will think again about a water efficiency duty. On that basis, I beg leave to withdraw the amendment.

Animal Welfare: Methods of Slaughter

Lord De Mauley Excerpts

Thursday 16th January 2014 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, I thank the noble Lord, Lord Trees, for securing a debate on this very important issue, and I thank all noble Lords for concisely making some really important and informative points on all sides of the argument.

This is a subject in which I am intensely interested. Indeed, I should start by saying that we are completely committed to improving standards of animal welfare, including welfare at slaughter. I should highlight that my response on behalf of the Government applies only to England. The devolved authorities are responsible for their own animal welfare policy.

In 2012, in England, 764 million poultry, 8.4 million sheep, 8.1 million pigs and 1.4 million cattle were slaughtered. Given the sheer numbers involved, it is right that we take the welfare of animals at slaughter very seriously. The public rightly expect the Government to ensure that appropriate welfare measures are in place. In late 2012, we consulted on the best way to implement the new EU Regulation 1099/2009 on the protection of animals at the time of killing.

After careful consideration of responses, we decided to retain all existing national rules protecting the welfare of animals at killing, including those on religious slaughter, where they provided greater protection than the EU regulation. We will bring forward new secondary legislation soon to consolidate these national rules with the new requirements under the EU regulation. In coming to that decision, the Government assessed the key factors—legal, ethical and religious—raised in this debate. In answer to the question from the noble Lord, Lord Grantchester, I anticipate laying the regulations in April.

As regards the legal factors, Council Regulation 1099/2009 provides for the protection of animals at the time of slaughter and came into effect on 1 January last year. It aims to ensure that animals are spared any avoidable pain, distress or suffering at the time of slaughter and it therefore requires that animals are stunned before they are killed. The only exception, as this debate has widely covered, is where animals are slaughtered according to religious rites.

The EU regulation also requires religious slaughter to take place only in an approved slaughterhouse and it allows member states to introduce additional national rules for religious slaughter. It is on this basis that we will retain our existing national rules on religious slaughter in the new domestic regulations and provide more extensive welfare protection to animals slaughtered in accordance with religious rites than that provided by the EU regulation.

Our existing national rules provide greater protection than those contained in the EU regulation in relation to, for example, cattle restraints, the method of killing and the handling of animals. We will keep our rule on “standstill time”, which means that animals must not be moved after the neck is cut until they are unconscious, and in any event not before a minimum period depending on the species.

It is worth saying that our stricter national rules take into account human rights legislation, including Article 9 of the European Convention on Human Rights, the right to freedom of religion and the freedom to manifest one’s religion or beliefs, and Article 14, prohibiting discrimination on grounds of race or religion.

The consumption of meat is a matter of personal choice. Those who choose to eat meat expect animals to be treated humanely when they are slaughtered. This is reflected in both EU and domestic legislation, which require that animals are spared any avoidable pain, distress or suffering both when they are handled and at the time of slaughter. As the noble Lord, Lord Trees, said, the Farm Animal Welfare Council’s 2003 report on the welfare of farmed animals at slaughter proposed that non-stun slaughter should be banned on the basis that it caused unnecessary suffering. That view needs to be balanced against the rights of the Jewish and Muslim communities to eat meat prepared in accordance with their religious beliefs. To insist on pre-stun slaughter would also effectively deny Jews and Muslims access to meat slaughtered in this country.

While the Government would prefer to see all animals stunned before slaughter, we respect the rights of Jewish and Muslim communities to eat meat prepared in accordance with their religious beliefs. It is worth noting that the term “religious slaughter” does not automatically mean that the animals are slaughtered without being stunned. As noble Lords have mentioned, some halal meat comes from animals that are stunned before slaughter. My noble friend Lady Fookes asked: why not require post-cut stunning? As we have seen, this is a very complex subject, but I understand that animals subject to post-cut stunning would no longer be acceptable to some religious communities.

The noble Baroness, Lady Deech, the noble Lord, Lord Palmer, and my noble friend Lord Gold referred to mis-stuns of cattle in conventional slaughtering. All animals that are mis-stunned must be immediately re-stunned, and operators are required by law to check that stuns are effective. That process is checked by independent vets.

The noble Lords, Lord Trees, Lord Rooker and Lord Grantchester, and my noble friends Lady Fookes, Lady Parminter, Lord Sheikh and Lord Palmer all spoke about labelling. The Government are aware of concern about non-stunned meat being sold on to the general meat market. We agree with noble Lords who have made the point that consumers should have the information to make an informed choice. It has to be said that there are some practical difficulties in identifying the method of slaughter for all meat from the point of source to the point of consumption, so the European Commission, which is well aware of our view, has commissioned a study on the labelling of meat from non-stunned animals. We await the results of that study, which are due shortly. We will look carefully at what options are available for providing information to consumers in the light of the study, and I am sure that noble Lords will want to revert to this subject when we have those results.

We remain committed to improving the welfare of animals at slaughter and, as my noble friend Lady Fookes proposed, to a continuing dialogue with all those concerned, particularly on the issues raised in this debate.

Ethical and Sustainable Fashion

Lord De Mauley Excerpts

Tuesday 19th March 2013 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)]

My Lords, I thank the noble Baroness, Lady Young, for initiating this debate on the promotion of ethical and sustainable fashion. I have enjoyed the contributions of all noble Lords and I will try to respond in a moment to relevant comments raised during the debate.

Although I make no claim to be a fashion expert, I should declare a vicarious interest by virtue of having a wife who runs a small but, she tells me, successful business retailing fashion accessories. Her range includes, I am relieved to say, sustainable products, notably some in the shape of handbags made from recycled offcuts of leather. She tells me that they are highly desirable. Of course, I am very interested in the range of economic, ethical and environmental issues associated with the fashion industry, which have been so well covered this evening.

As several noble Lords have said, fashion is a vital part not only of our national but of the global economy. In 2009, the United Kingdom fashion industry was estimated to contribute more than £20 billion to our economy and to support more than 800,000 jobs, so this is indeed an industry worth talking about. About 90% of the clothing consumed in the UK is imported. Our consumption has positive economic effects in developing countries, but there are also a wide range of environmental and ethical implications to take into account. We need to consider the water, fertiliser and pesticides used when fibres are grown and the emissions generated when synthetic fibres are made. There are issues associated with access to markets and trade terms for producer farmers. There are concerns about labour conditions in clothing factories, sweatshop conditions and child labour.

As the noble Baroness, Lady Jones of Whitchurch, said, there are significant water as well as greenhouse gas impacts associated with washing and drying clothes and waste at end of life. As the noble Lord, Lord Young, said, we landfill around a third of a million tonnes of clothing every year. There are complex global supply chains. Although the issues are different, the recent and ongoing horsemeat saga has shown that we need to be able to trust all our supply chains, including, of course, the fashion ones. I will return to this in a moment.

We want to ensure that the fashion sector continues to grow. Several noble Lords, the noble Baroness, Lady McIntosh, in particular, spoke about small businesses, and I agree with her. I will return to that point in a moment. Last October, the Government hosted the UK fashion and textile manufacturing showcase. This was part of the Government’s Make it in Great Britain initiative, designed to dispel the myth that the UK does not make anything any more. UK Trade & Investment is promoting UK products and services to customers abroad and encouraging foreign investment in the UK through its GREAT campaign. I hope the noble Baroness, Lady McIntosh, will be pleased to hear that Creative Skillset, the sector skills council for the creative industries, recently launched its first higher level apprenticeship in fashion and textiles and is planning to deliver 500 apprenticeships. My noble friend Lord Razzall and the noble Baroness, Lady McIntosh, both spoke about higher education, and I will return to that, too, time permitting.

As for environmental improvements, my department, with WRAP, co-ordinated the Sustainable Clothing Action Plan, which several noble Lords referred to. This is a collaborative effort with businesses and third sector organisations to reduce the environmental impacts of the UK clothing supply chain. The organisations involved include high-street names such as Nike, Sainsbury’s, M&S, John Lewis and Primark, as well as clothing reuse and recycling organisations such as Oxfam and the Salvation Army.

This is a world-leading initiative, which has been recognised internationally. As the noble Baroness, Lady Young, said, Defra and WRAP have just received the 2013 global leadership award in sustainable apparel from the Sustainable Fashion Academy in Stockholm. I am proud about that and pleased that the noble Baroness was able to be there.

Government action to improve ethical standards in the fashion sector includes the creation of the Responsible and Accountable Garments Sector—RAGS—Challenge Fund. This fund helps projects that improve the conditions of vulnerable garment production workers. It is aimed at workers in low-income countries in Asia that supply the UK market.

DfID has also provided support to the Ethical Trading Initiative, an alliance that brings together businesses, trade unions and voluntary organisations and has developed a base code to define the minimum standards that member companies should reach. The nine provisions of the base code include that child labour shall not be used.

The Government, of course, need to look to their own procurement, too. The government buying standard for textiles was published in December 2010. It limits the levels of hazardous chemicals and encourages the consideration of durability, the use of recycled fibres, ethical standards and end of life disposal. We are now starting a review of this standard and plan to strengthen it and cover additional issues such as demand management, recyling and repair, and we will work with the Government Procurement Service to embed the new standard in the framework contracts for use across government. We are working hard to ensure that the climate is right for growth in the UK fashion industry, and at the same time are encouraging businesses to move UK consumption on to a more ethical and sustainable footing.

I will now address questions the noble Lords have asked. The noble Lord, Lord Young, referred to the number of government departments involved. Ethical and sustainable fashion is a complicated topic, and there are roles here for more than one government department. DCMS leads on the UK fashion industry, BIS on UK business, Defra on environmental policy aspects, and DfID on poverty reduction aspects. We work together to ensure that appropriate links are made without duplicating or generating unnecessary bureaucracy. There are cross linkages between the initiatives. For example, Fairtrade, the ethical trading initiative, and DfID are all members of the sustainable clothing action plan steering group. Many of the businesses involved in the Ethical Trading Initiative are also involved in sustainable clothing action plan, and there is a joint BIS-DfID trade unit. In many cases it makes sense to take a wider geographical approach. We look at the broad range of issues in a particular country and identify opportunities for reducing poverty and improving working conditions.

The noble Baronesses, Lady Young and Lady Prosser, raised the issue of child labour in Uzbekistan in particular, I think. In negotiations about eligibility for the EU’s generalised system of preferences, we understand that there are legitimate concerns about the use of forced labour during the cotton harvest season in Uzbekistan. There remains much to do, but we welcome this year’s progress; enforcing a ban outlawing the use of children aged under 15 in this year’s cotton harvest is a step in the right direction. We continue to monitor the situation and encourage further efforts towards full implementation of Uzbekistan’s obligation under the ILO conventions.

My noble friend Lord Patten asked about child labour, and other noble Lords have also referred to this matter. The Government are committed to ensuring that children are not engaged in work that is harmful or detrimental to them. We know that this is an ethical issue—perhaps the issue on which, as the noble Lord, Lord Young of Norwood Green, said, UK businesses already take action. I also agree with my noble friend Lord Razzall, who has congratulated several businesses that he has named. We help by supporting organisations that enable companies to demonstrate their commitment. I have referred already to several initiatives. Let me add to the Ethical Trading Initiative and Fairtrade the UN Global Compact, which is a call to companies everywhere to align their operations and strategies with 10 universally accepted principles, including abolishing child labour.

We are working towards long-lasting changes that tackle the poverty we identify as being at the root of the problem of child labour. The noble Lord, Lord Young of Norwood Green, referred to the launch of the UK business and human rights strategy. The Foreign and Commonwealth Office has led a successful process across government to agree the UK’s first strategy on business and human rights. Arrangements are being finalised for the launch in the near future. The UK has played a leading role in supporting the UN guiding principles on business and human rights.

My noble friend Lady Parminter asked about government advice to UK business on ethical issues relating to specific countries. I have already mentioned the strategy on business and human rights. This includes clear signposting to advice provided by different government departments responding to business feedback during extensive consultations when business requested clearer guidance on how to approach the Government for advice. The Government also provide guidance to businesses on how to carry out corporate social responsibility reporting on environmental and ethical issues. I think it is fair to say that UK companies lead the world on corporate and social responsibility reporting.

My noble friend also asked about audit and checks on the supply chains. Textile supply chains can be complicated, with many intermediaries, and UK businesses often do not have visibility along their whole supply chains or even beyond their tier 1 suppliers. That said, many businesses are working to improve this, and even without full transparency they can still influence the practices of their suppliers through their product specifications.

The noble Lord, Lord Stone, spoke about the role of consumers. I agree with him. Further action that consumers can take includes buying pre-owned clothing, choosing fair trade products, washing at lower temperatures and recycling textiles. He also asked whether the Government would introduce compulsory reporting on corporate social responsibility for all UK companies, particularly in this area. UK companies, as I have said already, lead the world in choosing to report on their contribution to social, ethical and environmental sustainability. We support mechanisms that help them to improve their reporting and are keeping a watching brief on current trends towards more mandatory reporting in some countries.

My noble friend Lord Razzall raised the issue of encouraging universities to support ethical fashion. London is seen as a global centre of fashion, with our universities attracting students from around the world. In 2011, almost 18,000 students were registered on fashion and textile courses, and there were 190 apprenticeship starts in the fashion and textile framework.

I will write to noble Lords if I have not answered all their questions. To finish, there is no simple answer to the many economic, environmental and ethical issues associated with the global fashion industry. However, I hope noble Lords will agree that we are taking action and are making progress.

Zoos

Lord De Mauley Excerpts

Monday 8th October 2012 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)]

My Lords, I am grateful to the noble Lord, Lord Harrison, for bringing this debate today, and to all noble Lords for their contributions. In fact, noble Lords probably have no idea how grateful I am for the opportunity to be here today.

I assure your Lordships that the Government are firmly of the view that well managed zoos play a key role in a number of areas. Most importantly, zoos play a significant part in promoting wildlife conservation. Several noble Lords referred to that. As I see it, this is their key role, and their activities include direct financial and in-kind support for projects aimed at conserving populations in the wild in this country and overseas. They also contribute and work together in managed breeding programmes and carry out research; for example, to support field conservation as well as to learn more about the animals in their care.

Noble Lords may have seen the “top 10” list of endangered species whose future is most reliant on conservation programmes supported by UK zoos. The list, published by the British and Irish Association of Zoos and Aquariums in August, contains species such as the scimitar-horned oryx, from north Africa, which is extinct in the wild, and our own white-clawed crayfish, which is endangered. As an example, Bristol zoo has bred these crayfish in captivity and recently reintroduced 80 into the wild in the south-west. My noble friend Lord Redesdale mentioned another successful example.

Zoos have an important role in raising public awareness, as the noble Lord, Lord Paul, so movingly said, and educating their visitors, who are often young people, about wild animals and their habitats in a relaxed and natural setting. The noble Baroness, Lady Rendell, also spoke about the importance of the educational facet of zoos. Of course, as the noble Lord, Lord Harrison, rightly said, zoos contribute to their local and regional economies. Last year a BIAZA report estimated that zoos contribute more than £600 million pounds to the economy each year. That economic contribution is important However, I am sure that BIAZA will be the first to agree that the contribution of zoos to conservation is paramount. The noble Lord, Lord Harrison, highlighted a number of areas where work might be done with BIAZA to supplement support through its work. Following this debate, I shall ask officials to meet BIAZA to discuss a range of issues, and I myself will also look forward to meeting it in due course. One of the specific issues that the noble Lord, Lord Harrison, raised was its concern about access to lottery funding, and I shall make sure that that is on the agenda.

We value the work that BIAZA is doing continuously to raise standards among its members, not to mention the key role that it plays in supporting the European Association of Zoos and Aquaria in striving to raise standards across Europe. The Government also benefit from BIAZA’s expertise in that two members of the Zoos Expert Committee—the Government’s advisory body on zoos matters—are currently also from BIAZA member zoos.

I should add that we welcome the contribution made by the British Association of Leisure Parks, Piers and Attractions and the National Farm Attractions Network and we look forward to continuing to work with all organisations involved in zoos matters.

Of course, not everyone supports zoos, and some zoos are indeed still striving to meet the required standards. I shall come back to that because noble Lords have specifically raised the issue.

The Born Free Foundation asks that the conservation and education contributions made by zoos are formally evaluated and measured. Zoos are expected to review their activities. Indeed, this is a recommendation of the Secretary of State’s Standards of Modern Zoo Practice—to which the noble Baroness, Lady Smith of Basildon, among others, referred—which sets out the minimum standards that zoos are expected to meet. The conservation and education contribution is also assessed at each zoo inspection to make sure that these activities are taking place and are commensurate with the size and nature of the zoo.

The Born Free Foundation also asks for species-specific guidelines for zoos, illustrating the optimum standards for zoo animals. As noble Lords may know, the Government have recently updated and published the Secretary of State’s Standards of Modern Zoo Practice, which for the first time include a specific section on elephants. The welfare of elephants in zoos had become a matter of concern, with research indicating that serious problems existed. These new standards, which we introduced after discussions with BIAZA, will help to ensure that improvements are made to the welfare of elephants in UK zoos. While I am not yet persuaded that specific guidelines are needed for all animal species, I am happy to look at any evidence which suggests that further government intervention is needed. The Born Free Foundation’s inquiry has been very useful in raising awareness of zoos standards across Europe and I welcome any action which will help to improve standards wherever there are difficulties.

The Captive Animals Protection Society—the noble Lord, Lord Harrison, referred to this, as did other noble Lords—claims that the zoo licensing and inspection system is not being implemented properly and that, as a result, zoo animals are suffering. It is claimed that most of this is because local authorities are inconsistent in their application of the legislation. The Government have always been concerned to help and support local authorities in their role. They have had this role for 30 years—local authorities have been responsible for implementing the zoo licensing and inspection system since 1981. They arrange regular zoo inspections and issue zoo licences. They have powers to attach conditions to zoo licences to require that the standards are met. They have powers to require zoos to comply with any conditions, and ultimately they have powers to close a zoo.

It is the Government’s position that local authorities are best placed to implement the zoo licensing system. They know their local area and have close links with local communities. In many cases, they will be in touch with the zoos in their areas on a day-to-day basis, where they will be able to spot problems before they arise. To help them to carry out these activities, the Government have published comprehensive guidance on the requirements of the 1981 Act and have made this widely available.

I should add that, partly in response to concerns expressed about inconsistency in the implementation of the Act, the Government commissioned research to review local authority implementation. The research found that it was generally good and had improved in recent years, but that further improvement could be made.

The noble Lord, Lord Harrison, and my noble friend Lord Redesdale expressed concern that central government support to local authorities in delivering their zoo licensing obligations has diminished recently. Many local authorities have responded positively to these challenging times by working collaboratively to share good practice across local authority boundaries and through nominating officials who are experts in zoo licensing and who willingly share that knowledge and expertise with their colleagues in other local authorities. My noble friend Lord Redesdale asked me to look into self-regulation, and I am certainly happy to do that, although the directive clearly has an impact on it.

Let me assure noble Lords that the Government are tenacious and, to be fair, I pay tribute to the previous Administration who worked hard over many years to make sure that zoos aspire to and strive to achieve ever higher standards. The 1981 Act first set out the legislative framework for the inspection and licensing of zoos. This framework provided the model for the 1999 EU zoos directive. It is fair to say that the UK has led the way in setting and measuring standards in zoos since that time.

The Secretary of State’s standards are at the heart of the zoo licensing and inspection system. They are the minimum which zoos must meet and are taken into account by zoo inspectors and by local authority licensing officers. The Secretary of State has a list of zoo inspectors who he can call upon, including veterinary surgeons and practitioners who have experience of zoo animals and people who are competent to inspect animals in zoos, to advise on their welfare and to advise on the management of zoos generally. Inspectors play a key role in checking that zoos are meeting the required standards. They also support and assist zoos, helping them with any improvements which may be needed. They also support local authorities, for example, by recommending conditions which should be attached to zoo licences.

Successive Governments have also put in place arrangements to make sure they have the best possible advice to help them in developing policy on zoos matters. The Zoos Expert Committee consists of people who, between them, have a wide range of expertise in zoos matters. They provide independent, impartial and objective advice to the Government, which is invaluable, and for which I am very grateful. In particular, the committee has been instrumental in our work to support local authorities who arguably have the most important role in ensuring high standards in zoos.

But what of the future? I can advise your Lordships that the updated standards will come into effect on 1 November. Also on that date, a new guidance document will come into effect. Zoo Licensing Act 1981: Guide to the Act’s Provisions replaces and updates the existing guidance on the legislation and simplifies and brings together the ad hoc documents which are currently in place. It will help local authorities in carrying out their roles.

In November, Defra officials are hosting a second seminar for Secretary of State Zoo Inspectors who will have the opportunity to share their experiences and to compare their approaches to inspections. The noble Lord, Lord Harrison, asked whether the Government could undertake further assessment of inspection reports. The Government have not only looked at local authorities’ implementation of licensing and the contribution that zoos make to education and research but have also responded to concerns on elephant welfare and have put measures in place to improve it.

The noble Lord, Lord Knight, referred to the Born Free Foundation’s 2009 EU zoo inquiry. The Government welcomed the BFF’s report on England’s zoos and have looked at it carefully in the context of their review of standards in their work on the new guidance for local authorities, taking it into account where appropriate.

The noble Baroness, Lady Smith, raised the Captive Animals Protection Society report A Licence to Suffer. The Government welcome that report and I shall cut things short a bit by saying that we have also taken it very much into account in the preparation of the guidelines, as I think she kindly mentioned.

I hope that noble Lords will agree that the Government are working hard to maintain and improve standards in zoos. I have not mentioned the subject of the better running of European zoos. I suspect that I am running out of time, like the noble Lord, Lord Harrison, but it is extremely important to us and we are at the heart of that. I can assure noble Lords that the Government will do all they can to help support improving standards in zoos, but at the same time we have to continue to recognise in the European context individual member states’ authority in ensuring high standards in zoos in their countries, and the Commission’s role in holding member states to account in complying with the directive.

Finally, I acknowledge the good work being done in zoos up and down the country, and thank the noble Lord, Lord Harrison, for giving us an insight into the activities of Chester Zoo in particular, which I know he holds in high regard.

Committee adjourned at 6.29 pm.

Global Fund: AIDS, Tuberculosis and Malaria

Lord De Mauley Excerpts

Wednesday 4th July 2012 Lords Chamber

[Lord De Mauley]

My Lords, I apologise for intervening. I know that what noble Lords have to say is extremely important. However, they will appreciate that this is a time-limited debate and that there is very little spare time in the budget. Every noble Lord who goes over his three minutes is therefore eating into the time of noble Lords who speak after him.

Economy: Growth

Lord De Mauley Excerpts

Thursday 21st June 2012 Lords Chamber

[Lord De Mauley]

My Lords, I start by thanking my noble friend Lady Kramer for initiating this debate and noble Lords on all sides for participating and for some important, helpful and often creative ideas. Even if I do not have time to touch on all those ideas specifically this evening, I will, I assure noble Lords, take all of them back to the respective government departments.

As underlined in my noble friend’s opening speech, the Government’s overriding priority is to return the United Kingdom to strong, sustainable and balanced growth. There are three parts to our strategy to achieve that. The first two are focused on dealing with the challenges we face now: sustained deficit reduction to deal with the record deficit we inherited; and monetary activism to provide immediate stimulus to the economy through credit easing, quantitative easing and the recently announced liquidity and funding for new bank lending. The third part of our strategy focuses on dealing with the challenges of the future: promoting long-term growth by accelerating supply-side reforms that will enable United Kingdom businesses to develop and grow.

I will deal with each of those in turn, along with the points that have been raised. First, I turn to the immediate challenges. As I think no one would dispute, we are living in difficult economic times. We are recovering from the biggest financial and debt crisis of our lifetimes. If one thing is clear, it is that we cannot borrow our way out of a debt crisis. The actions we have taken to reduce the deficit and rebuild the economy have secured stability and positioned our country as a safe haven in an international debt storm, with interest rates near record lows, benefiting families, businesses and the taxpayer.

Our fiscal plan, supported by the IMF and the OECD, has helped us maintain our AAA credit rating and lowered interest rates to record lows, making business loans and family mortgages cheaper. Of course, as the noble Lord, Lord Paul, said, the eurozone crisis remains a challenge. As we have said before, Britain cannot cut itself off from what happens elsewhere. Problems in the euro area—our biggest trading partner—affect us too, but there are still encouraging signs: 630,000 private sector jobs have been created, more than outstripping public sector losses; manufacturing output, rightly referred to by the noble Lord, Lord Bhattacharyya, is up by more than 3 per cent; and exports outside the EU are up by nearly a quarter since this Government came to office in 2010.

Of course, we acknowledge that there is a long way to go. Building for the future, our Plan for Growth set out a wide-ranging, radical programme of economic reforms to help build a stronger, more balanced economy in the medium term. We have already made significant progress towards our four ambitions.

The first is to create the most competitive tax system in the G20: cutting corporation tax to 24% in April this year, and to 22% by April 2014; committing to lower the top rate of tax; and committing to make tax easier for small unincorporated businesses by introducing a new cash basis for calculating tax.

The second is to make the UK the best place in Europe to start, finance and grow a business. There has been £3 billion saved through deregulation; we have introduced the national loan guarantee scheme, with further support for credit to follow as the Chancellor and the governor announced last week; and we have increased the generosity of incentives for investment in early-stage businesses.

The third is to encourage investment and exports as a route to a more balanced economy—£1 billion has been invested in infrastructure to reduce congestion on the roads, for example—and setting an ambition to more than double UK exports to £1 trillion by 2020.

The fourth is to create a more educated workforce that is the most flexible in Europe. We created more than 450,000 new apprenticeships last year. We will continue to work closely with business to implement our reforms.

I turn to specific questions from noble Lords. My noble friends Lady Kramer, Lord Shipley and Lord Stoneham, among others, asked about housing. Each of my noble friends stressed the importance of housing to the Government’s growth strategy, and they are right. Over the past decade, housing construction, repairs and maintenance have accounted for an average of 3% of GDP. As noble Lords will be aware, the Government published our housing strategy last November. This included introducing the NewBuy mortgage indemnity scheme; launching a new £400 million Get Britain Building investment fund, which was subsequently increased to £550 million; and reinvigorating the right to buy by increasing the maximum discounts to £75,000. My noble friends urged us to go further, perhaps using guarantees, and I am grateful for their views. We have said that the Government are looking at further ways to use the principle of guarantees to boost the credit for housing and infrastructure, and that work is ongoing. We will set out our plans in due course.

My noble friends Lady Kramer and Lord Shipley and the noble Baroness, Lady Valentine, raised the matter of tax increment financing and made a number of specific points. As my noble friend Lady Kramer explained, from April 2013 all local authorities will be able to borrow against future business rates revenues, partly or wholly to fund the provision of infrastructure. That in turn should lead to an increase in business rates, which normally would be taken into account when resetting local authorities’ tariffs and top-ups. However, to allow long-term planning, the Government have set an aspiration to allow 10 years before that reset for TIF. While I accept that that may not be long enough to allow local authorities to finance big-ticket projects, it is another tool that local authorities can use to promote growth in their area and could kick-start many small projects that are, as we well know, ready to go.

My noble friend also mentioned TIF 2, which was the announcement in the Budget that up to £150 million will be available in 2013-14 for large-scale TIF projects in core cities. Bids from core cities are now being assessed. We appreciate that the limit of £150 million means that not all TIF 2 projects will be able to go ahead, but TIF 2 schemes come at a cost to the Government because we have to count the cost of the additional spending that the new borrowing by local authorities supports. As a result, with our continued priority of deficit reduction, the Government have to limit the amount of funding available for TIF 2 schemes at this time. However, I will ensure that the noble Lord’s comments are passed to the Treasury.

My noble friend Lady Kramer touched on the importance of a social investment strategy. She called for the Government to develop one, and I am pleased to say that the Treasury is already undertaking an internal review of the financial barriers to social enterprise. This will conclude by the autumn. The Cabinet Office is also looking at the legal and regulatory barriers to social enterprise through the red tape challenge. We are very much alive to these issues.

My noble friends Lady Kramer and Lord Popat talked about the banking sector. My noble friend Lord Popat argued that the Government should be encouraging the creation of new banks. We have seen a number of new entrants into the current-account market in recent years, including Metro Bank, and I agree with him that it is essential that the regulatory regime facilitates new entrants wherever possible. The Government are of course also supportive of ensuring that the divestments of branches by Lloyds results in as strong a challenger bank as possible. We have engaged with the European Commission and with Lloyds itself on that point.

My noble friend Lord Popat also talked about smaller lenders. He might be interested in the Government’s support for community development finance institutions. For example, £30 million of regional growth fund money has been used to establish a wholesale fund that will provide extra capital for CDFIs to lend on to businesses and individuals. I know that my noble friend Lady Kramer is well aware of the importance of CDFIs. Like my noble friend Lord Popat, she raised the advantages of local banking models focused on building relationships with customers. I very much agree with her that banks need strong relationships with their customer businesses, and it is encouraging to see the success of banks such as Handelsbanken, which focused on its relationships with businesses. More widely, I am encouraged by the work that the major high-street banks have done through the BBA’s business finance task force to build relationships with businesses—for example, through a new appeals process and support for mentoring for small businesses. I am pleased that my noble friend acknowledged the schemes announced by the Chancellor and the governor last week. Those follow the national land guarantee scheme that we have introduced, and measures such as expanding the enterprise finance guarantee and setting up the £1.2 billion business finance partnership to encourage non-bank lending. The Government remain focused on the need to help businesses obtain credit.

My noble friend Lord Popat also raised his concern about the planning system. I certainly agree with him about its importance. Indeed, the Government have made this issue a priority in our growth strategy. Already, we have published the national planning policy framework, which is now in effect. This focuses 1,000 pages of policy guidance into around 50, and includes a powerful presumption in favour of sustainable development. This will remain a focus for the Government because the planning system had simply become too complicated. I hope that the chances we are making can unlock the kinds of investments that my noble friend mentioned, which have in the past been stopped by planning rules getting in the way.

My noble friends Lord Popat and Lord Bates also raised the vitally important matter of exports, a subject which a number of other noble Lords also touched on. There are, as my noble friend said, some encouraging signs, with exports to countries outside the EU up by nearly 25% since May 2010. In terms of the key emerging markets which my noble friend Lord Popat mentioned, and in particular the value of UK goods, exports to India grew by 11.9% over the past year, and to China by 15.8%. As a result, China and India were the destination of 5% of UK goods exports in 2011, twice as large a share as five years earlier.

I agree, however, that the Government have to stay focused on this, including on the diplomatic support which our companies need. Indeed, my noble friend Lord Sassoon is not here responding to the debate today partly because he is doing exactly what my noble friend Lord Bates exhorted us to do—he is meeting with my right honourable friend the Prime Minister and my noble friend Lord Green to talk about how the Government can best target high-value export opportunities and inward investment into infrastructure, a matter to which my noble friend Lord Popat also referred.

The noble Lord, Lord Bhattacharyya, raised the matter of an industrial strategy. I agree with him not only about the dangers of picking winners but that we need to think about the long term. We are developing an industrial strategy to give businesses, investors and the public more clarity about the long-term direction of the economy. We are responding to what industry is calling for, looking at how we can set out a vision for where the UK’s strategic capabilities should lie and how we will support them.

My noble friend Lord Clement-Jones raised a number of points, and I welcome his recognition of the role of tourism and the creative industries in promoting growth. On his specific points, he asked about businesses being banned from declaring that they have acted as a supplier for the Olympics, a matter to which the noble Lord, Lord Haskel, also referred. I agree that it seems, to say the least, a little strange, so we are looking at redrawing the terms of these arrangements. We will make an announcement in due course.

My noble friend also talked knowledgably about skills in the creative industries and suggested merging the Creative Skillset sector skills council and the Creative and Cultural Skills council. I understand that there have been discussions about this, but that it was decided that it was not the right time to take it forward. I will, however, ensure that his views are noted. He also asked about overseas promotion, and I welcome his positive comments on UKTI’s work. UKTI has a network of advisers working on this, working closely with DCMS and other organisations.

Finally, my noble friend asked about the work of the Creative Industries Council on access to finance. I am not yet in a position to tell him what was in the report presented last week but I assure him that it will be looked at closely. I welcome his interest in these sectors and assure him that the Government share it.

My noble friends Lord Clement-Jones and Lord Bates specifically raised the matter of foreign students. We need to bring migration down to sustainable levels. The Government are committed to achieving net migration in the tens of thousands. However, we recognise the economic benefits of overseas students and the substantial export earnings that they create for the UK, as well as the importance of the long-term relationships that they can create. We welcome legitimate students but we must crack down, and we are, on bogus colleges and those who abuse the student visa route. The new system ensures that only high-quality, genuine students can come to the UK to study with legitimate education providers, which, I am sure, is what noble Lords want.

In related comments, the noble Baroness, Lady Liddell, and my noble friend Lord Clement-Jones, spoke thoughtfully about the importance of tourism—with which I strongly agree. Of course, we have enormous opportunities to capitalise on the Olympics this year. I should perhaps mention VisitBritain’s £100 million campaign to attract international visitors, with matching funding from the private sector. Added to that is the Great Britain image campaign, with funding of more than £22 million. We estimate that nearly 90 million people will see these advertisements at least five times. Put together, VisitBritain is running the largest tourism marketing campaign in our history.

My noble friend Lord Bates and the noble Baronesses, Lady Liddell and Lady Valentine, referred to Chinese visitor visas and the recent letter from Her Majesty’s ambassador, Sebastian Wood. Obviously, I would never welcome the apparent leaking of such a letter but it at least shows noble Lords that the issue is being looked at seriously by senior Ministers. I noted the suggestion of the noble Baroness, Lady Liddell, about allowing access to Chinese visitors with a Schengen visa. I will certainly pass that on and make sure that it is considered as part of this work.

The noble Baroness, Lady Valentine, touched on the important issue of airport capacity. The Government are committed to maintaining the UK’s aviation hub status. The aviation policy framework is due to be published shortly and will set out the Government’s strategy to ensure that aviation contributes to economic growth within environmental constraints. The Department for Transport plans to publish a call for evidence on maintaining our hub status this summer. This will give all stakeholders the opportunity to comment in more detail. I am sure that the noble Baroness and London First will put forward their views.

The noble Lord, Lord Paul, spoke about, among other things, the effect of low interest rates on companies’ pension liabilities. It was an interesting point and one that I will look into. However, one must weigh this concern against the very real benefits to those same businesses from the effect of low interest rates on the cost of their funds, to which my noble friend Lord Stoneham, among others, referred.

The noble Baroness, Lady Royall, spoke about research and development, which is extremely important. I am not sure that she asked a specific question but the Government launched their innovation and research strategy for growth in December 2011. It sets out how the Government will support innovation and research in the UK, where our investment can add value, how we will achieve this and how we can leverage significant public and private investment to drive sustainable growth.

There were a lot of questions to which it is impossible to do justice in the time allowed. However, I will ensure that any that I have not been able to answer are addressed in writing. I hope that I have demonstrated that the Government are tackling the current economic challenges head-on. Continued deficit reduction and monetary activism are vital to rebalance the economy and achieve strong, sustainable and balanced growth. Alongside dealing with our immediate challenges, the Government have a plan for growth, which I have outlined today. These issues are vital for the UK economy; noble Lords made that point forcefully today. Again, I thank my noble friend Lady Kramer for bringing this matter to your Lordships’ attention and all noble Lords who have participated.

Female Genital Mutilation

Lord De Mauley Excerpts

Thursday 30th June 2011 Lords Chamber

[Baroness Rendell of Babergh]

To ask Her Majesty’s Government what steps they are taking to increase public awareness of female genital mutilation in the United Kingdom and to bring prosecutions under the Female Genital Mutilation Act 2003.

[Lord De Mauley]

My Lords, I respectfully remind noble Lords that Back-Bench contributions to the debate initiated by the noble Baroness, Lady Rendell, are limited to four minutes.

[Baroness Rendell of Babergh]

My Lords, I begin by declaring an interest as a patron of the National Clinical Group against female genital mutilation and as a participant and narrator in the DVD made by that group.

Female genital mutilation is an African practice, common to many of the countries of Africa since time immemorial—not Muslim or tied to any particular religious faith, but cultural and often tribal. It began to take place in this country when immigrants from Somalia and Sudan, as well as Kenya, Nigeria and Sierra Leone began coming to live in the United Kingdom. FGM was brought here but did not diminish in its countries of origin where, in Somalia, for instance, 100 per cent of the female population has suffered this procedure. In parts of that country death from loss of blood and infection is as high as 10 per cent. FORWARD, the Foundation for Women’s Health Research and Development, puts the figure of women at risk from FGM each year as 3 million in Africa alone. When we see on our televisions mothers and children in drought-stricken Somalia at starvation point, suffering the effects of famine, we should remember that these women will all have been mutilated, and some crippled by mutilation.

In some communities the practice is embedded in coming-of-age rituals, sometimes for entry into women’s secret societies. In spite of the intense pain caused by performing surgery by an untrained person without use of anaesthetic or sterile instruments, and in spite of this operation permanently denying them pleasure in sexual intercourse and making childbirth more painful and hazardous than it would otherwise be, girls themselves may desire to undergo it as a result of social pressure from peers and family. Those who have not undergone it may not be allowed to milk the cows or go to certain parts of the farm. Such women believe that they can never become a real wife, and parents are convinced that they are doing the best for their daughters in insisting on it, having a good marriage in view. In parts of northern Kenya young men will not marry an uncircumcised girl. FGM is thought to make a girl clean and beautiful and to preserve virginity. In fact, it is unhygienic and damaging to fertility, leading to infection, bladder disease and fistula.

As I have said, FGM was brought here 40 years ago and more; a practice which in African countries was, and is, so common that talking about it was no more necessary than discussing the age-old preparation of certain kinds of food or some system of making clothes. This was the way it was done, so women who came here saw no need to speak of a practice that was accepted and taken for granted. It became, and still is, a secret. It is this secrecy in families and communities, not to mention contact with the outside world, which has made changing the attitude of immigrants and the children and grandchildren of immigrants so difficult and near-impossible. People will not speak of it. They will not talk to their non-African neighbours about it, still less to doctors or the police. It is only when a woman becomes pregnant that her FGM is discovered and a doctor or midwife asks, “Where did you have this done?”.

They want to know because performing it is against the law in the United Kingdom. The Female Circumcision Act was passed in 1985 and superseded by the Female Genital Mutilation Act in 2003. This later Act makes taking a female person out of this country for FGM to be performed abroad punishable by a maximum of 14 years’ imprisonment. Yet FORWARD estimates that 24,000 women are at risk of FGM in the UK and over 66,000 live with its results in England and Wales, figures which may be grossly underestimated since the data were based on the 2001 census.

Although the police are intent upon bringing a prosecution—it is hoped for more its deterrent effect than as punishment—no prosecution has yet taken place, the secrecy factor being in great part responsible for this failure. Girls who can be heard in north London talking to their friends about being “cut” as initiation into a kind of community membership will say that FGM was performed on them as babies or before they came to the United Kingdom. Women presenting themselves at ante-natal clinics may well say the same and midwives are naturally wary of inquiring too closely into this highly sensitive and delicate cultural area.

The public at large know little about FGM and many of those who have heard it called female circumcision believe it to have some connection with male circumcision and be therapeutic or a mere formality. I have told those who have asked me what it really is and my explanation has been received with horror and in some cases, “I don't want to know”. But I believe that the more people who know the details of this practice the better; that they know that some victims—the word is not an exaggeration—are babies of three months or even newborns; many are infants and five year-olds.

Obviously, because of its nature, it cannot be the subject of a widely advertised and well illustrated campaign of the kind that alerts the public to the dangers of, say, heart disease, prostate disease and many forms of cancer. Does the Minister believe that such widespread advertising of what FGM is and what remedies are possible—I am thinking of reversals—could be achieved and might be effective?

Reversals are now being performed and they are of enormous benefit to mutilated women. Parts of the excised genitalia cannot, of course, be restored. No surgeon, however skilful, can do that, but reversal is of great benefit to women, restoring ease in urination and establishing straightforward menstrual periods. Most of all, perhaps, it ensures easier childbirth and less danger to mother and child.

I am constantly asked by those who know what FGM is, why, if it happens in the UK, there have been no prosecutions eight years after the passing of the Act. It is not for want of trying that the police have so far been able to bring no prosecutions, against either practitioners carrying out FGM here, or those taking a child abroad for mutilation to be performed in a country less aware of its dangers. The police are anxious to prosecute, as much to provide a deterrent as to punish the perpetrator. They would be much assisted by public awareness. It would be particularly valuable in the struggle against FGM if teachers, especially in primary schools, were to be on the watch for female children who tell them that they are being taken to the country of their parents' origin for a holiday or to visit family in Somalia, for instance, Nigeria or the Côte d'Ivoire.

The Metropolitan Police, in conjunction with the Foreign and Commonwealth Office and Kids' Taskforce, have made a film to raise awareness of the issue which will be launched next Monday at the Lilian Baylis Technology School in Kennington. The National Clinical Group against female genital mutilation has had worldwide success and benefited a large number of women with its DVD showing a surgical reversal being performed. I understand, too, that there are films being made, often by schoolchildren, all over this country. Do the Government support the making of such films showing the pain and suffering caused by FGM and exposing the superstitious beliefs which help it to remain an ongoing custom? There are 16 specialist FGM clinics in England, 10 of them in London. Unfortunately, many are at risk of closure due to funding and staff cuts. Does the Minister agree that it is essential these clinics remain open? Again, does she agree that encouraging teachers to be aware of what is a very real danger to young girls can be of help to the police in bringing perhaps the single prosecution which would be such a major deterrent and factor in putting an end to this practice in the United Kingdom?