Charities (Protection and Social Investment) Bill [HL]

Lord Palmer of Childs Hill Excerpts

Monday 20th July 2015 Lords Chamber

[Lord Kerslake (CB)]

My Lords, I declare my interests as chair of Peabody and president of the Local Government Association. I speak in favour of this amendment in light of the Government’s stated intention to extend the right-to-buy policy to housing associations. I entirely support the Government’s aim to extend home ownership but have serious concerns about this proposed way of doing so.

Currently, tenants in housing association properties—unless their property was transferred from a local authority and therefore covered by a preserved right to buy—are able to purchase their properties only through right to acquire. That is limited to properties built or bought after 31 March 1997 and—this is crucial—funded through social housing grant. Under the Government’s current proposals to extend right to buy, all properties would be open to purchase and the available discount of up to £104,000 on a flat after three years’ occupation would be much greater. That would include significant numbers of properties built with absolutely no contribution from government.

Peabody was established 153 years ago by an enlightened, London-based but American-born banker, George Peabody. The aim of the Peabody Donation Fund that he launched in 1862 was to,

“ameliorate the condition of the poor and needy of this great metropolis, and to promote their comfort and happiness”.

His contribution was £500,000, equivalent to nearly £1 billion at today’s prices. By 1882, 3,500 properties had been constructed, including the Whitechapel estate in east London and the Wild Street estate in Covent Garden. By 1939, there were 8,000 properties. Today, Peabody is established by statute and has 28,000 properties, but its mission has remained essentially the same. In all of its 153 years, it has received public funding for only 40.

Given that the average value of a Peabody property is over £350,000, it is likely that, even with the discount, sales will be to the better-off residents. Experience from local authority sales though right to buy is that, over time, substantial numbers of the properties are sold off, so that one-third of the homes become buy-to-let properties at market rents. These can be as much as double social rents, and so not accessible to low-income families, as was originally intended. The Government’s intention is, rightly, to see one-for-one replacement but, again, local authority experience is that this is unlikely to be achieved, and certainly not at the pace of the sales or in the locations where the sales have occurred.

I have spoken extensively of Peabody, but since I first raised this issue I have been inundated by many people and organisations of all shapes and sizes with very similar concerns. For example, the Holt and Neighbourhood Housing Society was brought to my attention by Norfolk county councillor, Dr Marie Strong. This is what the chairman of that society has to say:

“The Society was funded in 1960 with land and finance by a local family because of concern for affordable local housing. Now, with the generosity of local people, the Society has 35 properties in Holt, Glandford and Letheringsett, managed by a committee of local volunteers. The aim is to provide affordable housing for local people in housing need. Not bound by local authority rules the properties are always allocated to local people which helps ensure a continuity of the community. The rents are around one-half to two-thirds market rent. The government proposal would be a gross violation of what was intended—that the properties would be let in perpetuity to local people”.

If the policy is pursued in its current form, it will be contrary to the charitable intent of Peabody and housing associations like it. It would also—this is the critical point—be a major disincentive to charitable benefactors such as George Peabody and the local family in Norfolk that I referred to, to donate their money or their land for good causes, if the Government can intervene and direct the sale of those assets for very different purposes.

One wonders what George Peabody would have made of this. In 1866, he said that his donation would,

“act more powerfully in future generations than in the present; it is intended to endure forever”.

Far from enduring for ever, the sequestration of property built with private philanthropic money would seriously undermine the charitable foundations and ongoing objectives of Peabody and other charitable housing associations like it. The amendment would protect charities from this, both now and in future.

[Lord Palmer of Childs Hill (LD)]

My Lords, being on Report and bearing in mind all the comments made by the noble Baroness, Lady Hayter, and the noble Lord, Lord Kerslake, I can keep my remarks to the minimum, although I agree with all that they have said—and I certainly support the amendment. My brief point is that we should put ourselves in the place of the charity itself, which in this case may be a housing association that is told by the Government that it has to sell off its properties at a discount, as the noble Lord, Lord Kerslake, said, of up to £104,000 per property. That housing association has an ongoing business and ongoing logic of providing housing—not just the houses that it has already, such as in Peabody, but the houses that it might build for the future.

Let us put ourselves in the place of chief executives of housing associations asking their banks for finance to build more properties as registered social landlords. Any bank manager would look at them and say, “I would lend you the money, but how can you deal with the fact that the Government are going to take a proportion of those properties away by forcing you to sell them at a massive discount?”. No bank manager would lend. Therefore, if the Bill is not amended, it will take away not only housing associations’ assets but their ability to borrow and build more housing for people in need. Therefore, I heartily support this amendment and hope that when we get the housing Bill we will be able to go into this in great detail.

When I asked the noble Baroness, Lady Williams, how housing associations are going to build like for like when there are discounts of up to £104,000 she replied in this Chamber and in a letter that it is government policy. It is a government policy without any arithmetic. If that is the way the Government are going, they are headed for disaster.

[Lord Cormack (Con)]

I hesitate to rise on this occasion because I have a great deal of sympathy with what has been said so far. I was concerned when the pledge to sequester the assets of charities was made during the election, and I believe that it is very difficult to justify. However, this is not really the time or the place to debate that. Whether we like it or not—and as I made plain, I do not particularly like it—it was a government pledge. The Government have every right to introduce a Bill, just as we have every right to seek to amend that Bill, and if it is defeated in another place, I am not going to be heartbroken.

However, for us in this Bill to anticipate a crucial part of another Bill which has not yet come before us is not the right parliamentary approach. Colleagues in all parts of the House should signify their concerns and misgivings, just as the noble Lord, Lord Kerslake, did in a notable maiden speech on the Queen’s Speech, and that is fine. It is good that colleagues should voice their concerns. We in this House have a reputation of which we are all proud and which I trust we will always deserve. It is for looking in minute detail at Bills that come before us to seek to amend them, for asking another place to think again and even for asking another place to think yet again.

This Bill, which in broad general terms has the support of colleagues in all parts of this House, is not the way to approach the crucial social issue which colleagues have touched upon this afternoon. I hope that, the subject having been aired, this amendment will be withdrawn. When we come to the housing Bill, that is the opportunity for all of us who have misgivings, if those misgivings are still justified, because we have not seen the final form of that Bill. It may be, and I very much hope it will be, that the Government will have taken on board many of the points that have been made in your Lordships’ House this afternoon and on other occasions. Now is not the time, now is not the place, this is not the Bill to tackle this extremely important social issue, and I hope that we do not proceed to a Division this afternoon.

Defence Review

Lord Palmer of Childs Hill Excerpts

Wednesday 25th March 2015 Lords Chamber

[Lord Spicer (Con)]

My Lords—

[Lord Palmer of Childs Hill (LD)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, as the noble Lords are not giving way to each other and the House was calling for my noble friend Lord Spicer, we will start with him.

--- Later in debate ---

[Lord Wallace of Saltaire]

My Lords, as the noble Lord knows, there has been a great deal of discussion on preparations for the next SDSR. He will have seen the new House of Commons Defence Committee report. The Government have responded to various reports from the Joint Committee on the National Security Strategy, and there have been a number of conversations between officials, Ministers and various think tanks around London. I have certainly taken part in those and I think that the noble Lord has as well.

[Lord Palmer of Childs Hill]

My Lords, the report suggests that the departing part-time chairman of BAE Systems was paid £211,000, plus £5,000 for a chauffeur, for three and a half months after he ceased his board duties. Can the Minister confirm that the defence review will ensure that these obscene costs are not recharged to the taxpayer?

[Lord Wallace of Saltaire]

My Lords, I was not aware of the issue that the noble Lord has just raised. The next security and defence review will certainly look at how to squeeze the most out of the defence procurement process.

Israel and Palestine

Lord Palmer of Childs Hill Excerpts

Thursday 5th March 2015 Grand Committee

[Lord Palmer of Childs Hill (LD)]

My Lords, despite what the noble Lord, Lord Luce, said, there will be a two-state solution, which I passionately want, only if the Israelis and Palestinians sit down and negotiate. I worry that nothing much has moved on since it was said about President Arafat that he missed no opportunity to miss an opportunity. There can be no quick, misguided fix of recognition of the state by the United Nations.

Let us be clear. Many noble Lords have talked, or will talk, about the requirements of Israel towards that peace negotiation. I would like to use the short time I have to talk about the requirements of the Palestinians as well as of the Israelis. There has to be a cessation of rockets and mortars from Gaza. There were 4,036 rockets in 2014 landing on Israel. Just think—if rockets were being fired at the Peers’ Entrance of this place there would soon be a militia acting in response. There has to be a cessation of tunnels. These are attack tunnels; they are not just for goods and supplies. It is people going down these tunnels to come out at the other end and attack civilians within the State of Israel. These tunnels are being built with concrete and building materials which should go to the building and restoring of the houses, hospitals and schools within Gaza.

As has been said by noble Lords, one of the requirements would be the granting of citizenship of the new state of Palestine to all who live in the West Bank and Gaza. On the subject of those refugees who live in UNRWA refugee camps, I was appalled by the way they live and the fact that there is no barbed wire between those camps and the Palestinian mansions of those people who lived in Gaza and the West Bank before the refugees came. Then there are the divisions between Hamas and Fatah. Hamas needs to change its vocabulary if there is to be peace in the Middle East.

Defence: Strategic Defence and Security Review

Lord Palmer of Childs Hill Excerpts

Monday 2nd March 2015 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, I agree that debate and search for consensus are important, particularly as we now face a remarkably diverse selection of security threats. The 2009 Green Paper was indeed about defence and not about security in the broader sense. I remind noble Lords that, in the national security strategy 2010, only two of the eight tier-one and tier-two threats identified were directly military; the others included pandemics, climate change, cyberattacks, organised crime on a transnational basis, terrorism and surges of migration.

[Lord Palmer of Childs Hill (LD)]

My Lords, given that the French Government invited the former UK National Security Adviser—now the British ambassador in Paris—to take part in their recent defence review, could my noble friend the Minister say whether the Government intend to invite an appropriate official from France to participate in next year’s strategic defence and security review?

[Lord Wallace of Saltaire]

My Lords, the House of Commons Defence Committee raised that question in its report last year. The Government’s response said that,

“we have already had preliminary discussions in particular with the US and France following our engagement in the French Livre Blanc and US Quadrennial Defense Review processes”.

This question is out there, but to be decided by whichever Government emerges after the next election.

Palestine: Recognition

Lord Palmer of Childs Hill Excerpts

Thursday 29th January 2015 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, my noble friend Lord Steel asks the House to “take note” of a recent resolution in another place. Whatever the intention, in no way does “take note” mean “endorse”, unless noble Lords have a different dictionary from mine.

There is to be no vote in this House at this time recognising the state of Palestine, because that is not what we are doing. I support the creation of a state of Palestine in due course alongside Israel as being the current policy of recognising Palestine once it has been created in negotiations between the parties. I do not welcome the resolution simply because, as a friend of the Israelis and the Palestinians, I do not believe that there is any alternative to those two nations, with the support and pressure of the outside world, sitting down and settling their differences in negotiations, with painful compromises being made by both sides.

The noble Lord, Lord Sacks, who cannot be present today, said on “Thought for the Day”:

“Peace is a duet scored for two voices; and someone who thinks that one voice can win by drowning out the other just hasn’t understood what a duet is”.

Painful compromises would be on issues including borders, security, the compensation and resettlement of hundreds of thousands of Jewish and Arab refugees and the vexed question of Jerusalem. Israel has welcomed refugees, including 850,000 who fled Arab lands, those who fled eastern Europe and elsewhere, and currently the flood of refugees from France fleeing anti-Semitism. Likewise, the refugees in the West Bank and Gaza need to be granted full citizenship and rights in a new Palestinian state.

Passing a resolution in another place to recognise a Palestinian state in territory now controlled by Israel would do absolutely nothing to resolve those difficult issues, nor would it actually create a Palestinian state, as my noble friend Lady Warsi said. That is why I believe that the Palestinians’ attempts since 2011 to secure a unilateral declaration at the UN have been fundamentally mistaken and should not be supported. Nothing has changed since President Obama said three years ago:

“The only way that we’re going to see a Palestinian state is if Israelis and Palestinians agree on a just peace. And so I strongly believe that for the Palestinians to take the United Nations route rather than the path of sitting down and talking with the Israelis is a mistake; that it does not serve the interests of the Palestinian people”.

Indeed, my right honourable friend the Deputy Prime Minister, when he met Mahmoud Abbas in 2013, said that,

“the UK stands ready to do all it can to reach a negotiated agreement leading to a safe and secure Israel living alongside a viable and sovereign Palestinian state”.

The tragedy is that we know what a peaceful settlement to the conflict would look like, and a lot of compromise is needed, as other noble Lords have said. The four settlement towns, just on the wrong side of the 1967 truce line, would have to be incorporated into Israel with land swaps, and all the rest of the settlements would go. I think it would surprise some noble Lords, and certainly other people outside this House, to know that there is no dispute about the border with Gaza. Forty years ago, few would have believed that Israel would enjoy peaceful relations with Egypt and Jordan. That peace was achieved not by unilateral gestures by one of the parties but by both sides reaching out to the other in a genuine spirit of compromise. When one looks at other territorial conflicts that have resulted in the creation of a new state, East Timor, South Sudan and Bosnia are examples of such states being created through negotiations and the hard work of the international community, not as a result of a divisive and confrontational unilateral declaration.

Finally, when my noble friends the Minister and Lord Steel reply, I hope that they will answer this question: how does Israel negotiate peace with a so-called unity Government including Hamas, whose declared aim is the annihilation of the State of Israel and which, since Israel withdrew from Gaza in 2005, has launched more than 11,000 rockets at Israeli towns and villages? Certainly, I support a state of Palestine, but by a negotiated agreement, with pressure from all friends and enemies of both to get the two sides to sit down and actually hammer out an answer. That is the only way that we will have the realism of a Palestinian state.

Strategic Defence and Security Review

Lord Palmer of Childs Hill Excerpts

Tuesday 18th November 2014 Lords Chamber

[Lord Wallace of Saltaire]

The coalition Government promised in 2010 that there would be moves towards a regular SDSR. The noble Baroness will well understand that this is because the Labour Government did not have a strategic review between 1998 and the end of their 13 years in office. It is our intention that the next Government—however they may be constituted—should conduct a post-election SDSR as a matter of urgency.

[Lord Palmer of Childs Hill (LD)]

Could the Minister give the House the government assessment of the security risks from terrorism that will be included in the review?

[Lord Wallace of Saltaire]

My Lords, terrorism, just like transborder organised crime, is clearly one of the major threats that we have to consider. There is a domestic dimension as well as an international one, and the Government are devoting considerable resources to both those overlapping issues.

Israel and Palestine

Lord Palmer of Childs Hill Excerpts

Thursday 10th October 2013 Grand Committee

[Lord Palmer of Childs Hill (LD)]

My Lords, I have just come back from a visit to Israel and the West Bank, visiting many places including Jerusalem, Tel Aviv, Ramallah and Rawabi. I thank the noble and gallant Lord, Lord Stirrup, for tabling this debate and for his forensic analysis and detailed strategy which I unhesitatingly agree with. It is extremely positive that the two sides are back in the room. This is the first time that there has been a formal and sustained bilateral negotiation since 2008. Both sides have expressed their commitment to bringing about a final resolution to all aspects of the conflict. Although the parties face considerable challenges, there are reasons for hope. This is the feeling I have brought back from Israel and from the Palestinians. Both sets of negotiators are experienced in the process. Israel’s lead negotiator, Tzipi Livni, is Israel’s leading advocate of reaching an agreement with the Palestinian Authority. Her party’s election campaign stressed the importance of finding a solution to the conflict based on two states.

Prime Minister Netanyahu has, not always but repeatedly, spoken of his commitment to a two-state solution, which was so well advocated by the noble and gallant Lord, Lord Stirrup. He has spoken increasingly of the threat to Israel arising from the emergence of a binational state that could threaten Israel’s existence as a majority Jewish state. That is the clearest indication yet that he believes in an agreement based on two states for two peoples. It is in Israel’s best interests as well as those of the Palestinians. I must also acknowledge the work of the US and the personal commitment of US Secretary of State John Kerry.

An example of how a viable Palestinian state is being created came in a heartwarming visit last week to Rawabi, the first Palestinian planned city. It is the largest private-sector project ever to be carried out in Palestine. Initially, it will be home to 25,000 residents, and ultimately to 40,000 people. It is located 9 kilometres north of Ramallah and it needs a wider access road and a more assured water supply—points that I took up with the Israelis and our own helpful embassy in Tel Aviv.

A much improved atmosphere between the Israelis and the Palestinians has been created by the resumption of talks. A joint press conference was held following a meeting at the end of September of the Ad Hoc Liaison Committee on economic support for the Palestinian Authority at the United Nations in New York. It was attended by Israel’s Minister for Strategic Affairs and the finance Minister for the Palestinian Authority. The cordial nature of the joint press conference would have been unimaginable just a few months ago. Israel announced a number of measures to assist the Palestine economy, which included 5,000 new permits for Palestinians to work in Israel, bringing the total number of Palestinians earning a living from the Israeli economy to 100,000. It has extended the opening hours of the Allenby crossing between the West Bank and Jordan for goods and people, and it has already implemented 4 million extra cubic metres of water for the West Bank and had promised 5 million cubic metres more a year for Gaza. It has also agreed Abu Mazen’s request to allow the import of building materials to Gaza.

There is much more, which I will probably not have time to list even though our three minutes has been extended. However, I agree with the noble and gallant Lord that three issues exist and that we must all continue to emphasise a two-state solution, not allowing anyone to get off the track, wherever in the world they are, whether in Israel or among the Palestinians. It has to be an enduring agreement, and I hope that my noble friend the Minister will reply with a cautious, positive assessment of prospects for a lasting peace.

Local Audit and Accountability Bill [HL]

Lord Palmer of Childs Hill Excerpts

Wednesday 24th July 2013 Lords Chamber

[The Earl of Lytton]

My Lords, I had intended to add my name to the amendments tabled by the noble Lord, Lord Wills. I regret that probably I advised the clerks too late for that to happen. I start, therefore, by apologising to the noble Lord.

As did the noble Lord, Lord Tope, I declare my interests as a newly polished and appointed vice-president of the Local Government Association and a possibly somewhat more tarnished president of the National Association of Local Councils. The issue is one of not adding unnecessarily to costs, as the noble Lord pointed out. Part of me says that whenever locally—or at whatever level—a greater throughput of taxpayers or public money is being used, it is right that the level of scrutiny is proportionate. The reference to “significant private companies” is perhaps slightly less than I would have liked. I would have liked the figure itself to have been objectively significant rather than the company providing the service being significant. I am not sure that I know what a significant company is in this context, whereas I am clear as to what a significant figure might be.

However, it is right that auditors should have a degree of discretion in looking at this. As I said at an earlier stage in the Bill, we may be looking at quite small organisations that, for whatever reason—perhaps because of some project they are undertaking—may be responsible for deploying fairly significant sums. It is right that those should be subject to scrutiny. There is no place here for opacity in the way in which figures are presented. Therefore I very much support the principle of this amendment.

I will digress, if I may, onto the freedom of information issue. I am aware that one of the get-outs in relation to providing freedom of information data is when the request is considered to be vexatious. The standard of “vexatious” as a term of art seems to be a matter of self-assessment to a degree by the body that is providing that information; at least, that is how it seems to me. The noble Baroness opposite is shaking her head slightly; if I have got it wrong, I apologise. However, it seems to me that that is capable of a degree of latitude. I certainly have seen evidence of “vexatious” used as a reason for not providing information—although not in the context of local government—and the term ought to be made a little clearer. In general terms, I support what the noble Lord, Lord Wills, has put forward and am grateful to him for continuing to bring it to the attention of the House.

[Lord Palmer of Childs Hill]

My Lords, first, I declare an interest as the current chairman of a local authority audit committee. I shall chair a meeting later this evening. I shall add a touch of reality to the comments made by other noble Lords.

The first subsection of the amendment moved by the noble Lord, Lord Wills, states that the local auditor is to have right of access to the books and records of contractors. In the real world, any local authority worth its salt has in all its contracts a clause allowing it access to the documents of its auditors or the processes that those local auditors use. If a local authority does not have that, shame on it. What we are perhaps trying to do here is to put into legislation something that is a normal commercial attitude that local authorities or corporate bodies should do anyway. As my noble friend Lord Tope said, commissioning is coming on in so many local authorities, and the measure and size of some of the contracts will be very significant. With these large commissioning items, it is not the legislation that should be relied on but the normal contractual terms between the local authority and the contractor. The Government and the noble Lord, Lord Wills, are right to highlight that local authorities should deal with this with their contractors. As my noble friend Lord Tope said, when the Government review these matters, even after this Bill is passed, they should perhaps seek to encourage that within local authorities.

Subsection (3) of the amendment states:

“A local auditor must make available on request any audit documents, obtained under … the Freedom of Information Act 2000”.

That worries me somewhat because, if something is too rigid and too demanding, the net result in practical terms is that people do not put it down on paper in order not to be subject to freedom of information. That might discourage the local auditor from carrying out its job in a deep way. I am all for transparency, but it should be transparency as the auditor feels is right rather than being enshrined in law. Although I understand where the noble Lord, Lord Wills, is coming from, and I appreciate the amendment, I hope that it will encourage the Government to review matters before the Bill becomes law.

[Lord Beecham]

My Lords, I join others in declaring membership of the LGA vice-presidential mafia. I am also a member of Newcastle City Council’s audit committee. I strongly support my noble friend’s amendment, as did the noble Lord, Lord Shipley, a former leader of Newcastle City Council who, alas, is not in his place.

I congratulate the noble Lord, Lord Tope, on the ingenuity with which he has contrived some wriggle room to justify supporting the Government this afternoon as opposed to doing what the noble Lord, Lord Shipley, would perhaps have done had he been here and opposing them, but I do not think his arguments carry very much weight. He is particularly concerned about the cost of these matters, but the audit is carried out on these services whether they are provided as of now by the local authority or by an external body. There ought to be a level playing field in that respect in any event so that there will be a cost of proper auditing by the district auditor and it should not add to the burden that is currently experienced.

The argument that the noble Lord adduces about the need to assess the situation is perfectly fair, but of course it is provided for in the amendment. One could argue that my noble friend has been excessively generous in saying that the review should take place after five years. It may be that a shorter period will be short enough to assess the functioning of the system and, if there is still a question as to the costs, the costs. However, the principle of my noble friend’s amendment is clearly right.

Local Audit and Accountability Bill [HL]

Lord Palmer of Childs Hill Excerpts

Monday 15th July 2013 Lords Chamber

[Lord McKenzie of Luton]

My Lords, in moving the amendment, I will speak to the other amendments in this group as well. As noble Lords will doubtless recognise, Amendment 1 is a paving amendment and the substance is in Amendments 6 and 9. Amendment 9 is consequential on Amendment 6.

The proposition is straightforward, and we had understood there was consensus. Notwithstanding this, we have not seen a government amendment to give it effect. The amendments provide a route to securing a central procurement of auditors in the future. As we discussed on the first day in Committee, by the time the key provisions of this Bill come into force, it is expected that all the audit contracts with principal local bodies will be undertaken by private sector firms, under arrangements entered into with the Audit Commission. This will comprise some 800 principal authorities, including local authorities, NHS and police bodies, and so on.

The contracts—I think that there are 10 of them—run to March 2017, but can be extended for three years. When these contracts have run their course, the authorities will make their separate appointments, although there is flexibility for authorities to jointly procure, together with other bodies. It is generally accepted that the central procurement exercise undertaken by the Audit Commission has generated substantial savings for local bodies—some 40% reduction in fees—and had some, albeit limited, impact on broadening the diversification of provision in the audit market.

The Government’s own impact assessment has recognised that individual audit procurement is unlikely to match central procurement in generating reduced fee levels. Research shows that market concentration in audit services leads to higher audit fees, and while there is a credible argument that individual procurement will act against market concentration, major providers in the market are large, economically powerful entities with resources to invest in tackling the new opportunities.

One risk is that the larger authorities will fare well in this, because they will be more attractive clients to the big firms. In practice, smaller authorities will end up with less choice, being the junior partners in joint appointments and perhaps missing out on the services of the larger firms or being unable to afford them. The Government will doubtless remind us that authorities can group together. They can, but there is no clear framework to support this. Indeed, there is no explanation, for example, of what happens if there is joint provision when a conflict develops between one of the authorities and the firm involved.

The amendments, particularly Amendment 9, which is at the core of it, adopts the approach already included in the Bill for potential central procurement for smaller authorities. It enables regulations to specify a person to appoint auditors with relevant powers relating to fees, et cetera. It especially encompasses the prospect of authorities being able to opt either in or out of the arrangements, which we know is a key requirement of the Minister. The Minister has expressed an appetite for facilitating ongoing central procurement, provided that it is not mandatory, and a hope to be able to return on Report with some ideas. Perhaps we can now hear what they are. We know that the Minister and officials have been having discussions with the LGA, but we do not necessarily think that arrangements run by it are the only, or, indeed, the best approach. If we are to preserve central procurement, we need the legislative basis to do that. That is what the amendments provide. I beg to move.

[Lord Palmer of Childs Hill]

My Lords, in Committee, my noble friend said that the Government would commit to amend the legislation to create a framework to support a voluntary national procurement exercise. When she replies, I would appreciate it if she could put some meat on that earlier commitment.

Dealing with the point made by the noble Lord, Lord McKenzie, if one was always looking in terms of cost savings, which seemed to be the main thrust of his speech, we would have almost the demise of all local authorities. It would be a case of, “Let us have it all done nationally and then we would save some money”. We as a Government are committed to localisation. The idea that local authorities should be to a degree able to choose their auditor is part of that localisation. There was a feeling of despair in the noble Lord’s comment about how local authorities would be less hard negotiators than the Audit Commission. I doubt whether that will be the case. Many local authorities would be very hard negotiators on their own behalf in fixing the audit fees, the level of audit taking place and how it will dovetail with the internal audit systems of the local authority. A local authority that has a good local internal audit system can probably negotiate much harder with the external auditors, because of its knowledge of its internal audit system, than the Audit Commission has in the past.

I believe that the amendments are unnecessary, and I would welcome and wait for my noble friend’s comments on how the Government will keep the commitment that she made at an earlier stage of the Bill.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, I thank the noble Lord, Lord McKenzie, for introducing the amendments so succinctly and clearly and my noble friend Lord Palmer for reminding me—although I am not sure that I made a total commitment—that I said that we would return to the matter.

Both noble Lords have laid out the situation very clearly. The proposal in the Bill is that local authorities should be able to purchase or contract for their own auditor. They can do that individually, in conjunction with another authority or in a group. That is about as wide as the Bill takes it. The noble Lord and the Local Government Association have made strong recommendations that we should consider further the current situation, which is that the Audit Commission has purchased the contract for all local authorities. We have made it clear that there must be optional arrangements about this. Local authorities must be able to get their local auditors in the way that they wish. However we accept—and did accept—that there was potential for wider procurement, with a procurement body such as the Audit Commission, which did not require local authorities to purchase from it, but could be used by local authorities if they wished. So we accept that there is potential for such arrangements.

I have asked departmental officials to work with the Local Government Association to clarify what arrangements it envisages might need to be made and to get the detail right for any amendments that we would propose elsewhere. The Government intend to make an amendment to the Bill in the Commons, which will allow arrangements for optional centralised procurement to be made in regulations. I am happy to keep noble Lords who are interested in this informed.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I will speak also to Amendment 3. The more we delve into this Bill, the clearer it becomes that the decision to close the Audit Commission was taken without a clue as to how some of its functions were to be carried out in the future or how some of the savings that it has driven could be maintained.

We have just discussed how a central procurement function might be preserved, and we will come on to discuss how the commission’s efforts to prevent and detect maladministration and error can be carried out in the future. Amendment 2 focuses on three specific areas, which are,

“the management of existing audit contracts … the maintenance and updating of Value for Money profiles; and … certification functions currently undertaken by the Audit Commission”.

It requires that robust processes are in place for these before the Audit Commission is closed. We have discussed these before and received assurance that the Government have these matters in their sights, but we are again sadly lacking in detail as to what is proposed.

As we discussed in Committee, the management of ongoing audit contracts is not a straightforward, passive matter. It requires the availability of certain powers that are currently available to the Audit Commission; for example, in relation to fee setting. Given the public interest in local public audit, any successor arrangements will need to ensure transparency in audit quality monitoring. The FRC is to monitor major audits and it is unclear what public reporting there will be on this. All other audits can be subject to cyclical monitoring by the supervisory bodies but there is no commitment yet to any public reporting on the results of this monitoring. Perhaps the Minister will tell us now what is proposed in this regard.

In Committee, the Minister told us that,

“we are giving consideration to the transfer of current Audit Commission tasks, including the value-for-money profiles”.—[Official Report, 17/6/13; cols. GC 25-26.]

Now is the chance for the Minister to be a little more specific. The value-for-money profiles are widely used; there were some 9,000 visitors to the commission’s website in the past financial year. They bring together data about the costs, performance and activity of local councils and fire authorities. The profiles show how organisations are spending resources, what services they perform and how these cost and performance levels compare between organisations and over time. The commission is enhancing the visibility of these profiles by presenting information about how spending and activity have changed over time, how councils’ performance differs, and factors affecting variation in activity and cost. Can we be very clear on this: are these profiles to be maintained and, if so, how?

It is accepted that certification processes may diminish as grant funding streams are reformed and phased out but there will certainly be the need to deal with housing benefit funding before this is absorbed fully into universal credit. Can the Minister give us some assurance on just this one matter, if not the generality of the replaced certification regime?

We have so little hard information on these areas and the Bill is about to leave your Lordships’ House. We should remember that it is actually three years since the decision to close the commission was announced. In these circumstances, requiring these matters to have been satisfactorily dealt with before the Audit Commission is closed seems the very least that we can do.

The same applies to being satisfied as to how the new audit regime is to be co-ordinated across government and how accounting officers will be entitled to obtain assurances on the effectiveness of financial management arrangements. There will be no organisation to publish the outputs from the audits of over £200 billion of public money. Accounting officers will need to continue to have access to analyse the outcomes of local work, and individual government departments will need arrangements to receive the outcome of audits. We are entitled to be assured that this is all in place before the commission disappears.

That is all that this amendment seeks to achieve, but it is very important. I beg to move.

[Lord Palmer of Childs Hill]

My Lords, the purpose of Amendments 2 and 6 is clearly to try to improve the transitional arrangements. It seems to be felt that we need a certain overprotection for transitional arrangements, but when private corporate bodies change their auditors and way of management, some transitional arrangement always has to take place. It works in a natural way, without the Secretary of State being involved in every item.

Amendment 2 inserts three paragraphs. The first deals with,

“the management of existing audit contracts entered into with the Audit Commission”.

One of the main purposes of the Bill is to make the audits of the various local authorities much more the responsibility of the local authority. Its appointment of the auditor and dealings with the auditor, and the auditor’s dealings with the authority, will become a more localised matter. However, because there are a limited number of audit firms, there will be a consistency in the types of audit operated.

The main point that the noble Lord spoke about was,

“the maintenance and updating of Value for Money profiles”.

Value for money in the external audits of local authorities has been a very important and costly factor in terms of the time that the Audit Commission and private firms of auditors have spent on those activities and how much they have charged for them. Two or three years ago, the value-for-money audits carried out by external auditors were more limited. There was no large-scale review of the use of reserves, assets and finance. Under the current arrangements, external auditors do not have to carry out a prescribed list of value-for-money exercises.

Currently, before the Bill, that situation is very much localised. There is a virtue in that localisation. Different firms of auditors will possibly take a different view on what is needed within that particular local authority, and that view will have an effect on the fees charged to that authority and on how much work needs to be done. As the years progress, it will be interesting to see how different local authorities have their value-for-money details published. We hope that all local authorities will publish these, and there may need to be some national gathering of that information for comparison purposes. However, that does not necessarily need to be in the Bill. Although I understand where the noble Lord is coming from on this, I think that it amounts to a little too much control which is not needed.

[Baroness Hanham]

My Lords, I thank my noble friend Lord Palmer for bringing some rationality into this particular aspect. I support him very much in reminding the House that this is an intention to bring to a local level the management of an extremely important part of local government’s responsibilities, which is to have proper audited accounts, but to do it in a slightly different way from what has been done in the past, without the overall management of the Audit Commission but having to take into account the fact that these have to be properly done, whether they are done on the optional basis that we are talking about—having the wider procurement—or because they have taken account of having these on their own requirements.

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[Lord Palmer of Childs Hill]

My Lords, from these Benches we also look forward to the Minister giving that information. Although there is worth in the amendment, I wonder whether it needs to be in the Bill rather than being done by regulation at some stage in the future.

[Baroness Hanham]

My Lords, as the noble Lord said, I was sympathetic about his amendment in Committee. It would ensure that if the Government were to bring forward what might amount to a hybrid instrument under the powers in Clause 2, the bodies affected would be consulted before regulations were laid. This, indeed, would need to be through regulations. We do not expect that the need to bring forward regulations would be anything less than rare.

As I said in Committee, we recognise that in these cases there would be especially compelling reasons for the Government to consult. In our previous discussion I referred the noble Lord to our forthcoming response to the DPRRC’s report. We have accepted the committee’s point and informed it that we would announce our commitment, which I am doing, and consult affected bodies at Report. We confirmed that this will not entail the need for any amendment to the Bill. I am happy to give that commitment today, and to consult relevant persons on a draft of any statutory instrument containing regulations or an order falling under Clause 40(7) of the Bill. Any such regulation would be subject to the affirmative process, so Parliament would have the opportunity to scrutinise it. In the light of that commitment, I hope that the noble Lord will feel that we have satisfied his requirements.

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[Lord McKenzie of Luton]

This is a return, briefly I expect, to a drafting point. Under Clause 4 there is a requirement that,

“a relevant authority … must be audited … in accordance with this Act and … by an auditor appointed by that authority in accordance with this Act”.

The second requirement cannot be met before 2017 at the earliest when the appointments made by the Audit Commission come to an end. It could be three years later if any of these contracts are extended.

The concern is how the general requirements for audit provided for in the Bill can operate before local appointments are operative. I believe that we see eye to eye with the Government on the issue. The Minister’s letter of 25 June states:

“Officials believe that when the provisions are commenced, we will be able to commence different provisions for different purposes and as a result, we will be able to avoid any of the unintended consequences you highlight”.

I accept that there is flexibility on commencement of provisions but remain unclear as to how this would operate in the circumstances highlighted. Is it being contended, for example, that Clause 4(1)(a) could be commenced before Clause 4(1)(b)? It would be good to have some clarity on this issue before the Bill leaves your Lordships’ House. I beg to move.

[Lord Palmer of Childs Hill]

My Lords, I would also welcome the Minister clarifying some issues, particularly if there is, indeed, a problem of a practical nature. At present, most local authorities are audited by a professional firm. A fairly small proportion is audited by the commission. Those audited by professional firms will be audited under the continuing contracts until 2017. The local authority will then have the ability to appoint a new auditor. This is what happens in the commercial world. One has an auditor, the auditor audits for a period—generally for the year, in this case for slightly longer—and then there is a new appointment. This is quite the natural way of things. I am not sure—and I hope that the Minister and the noble Lord, Lord McKenzie, will clarify this—why we need to have this because, in a practical sense of the word, auditors are there for a period, they finish their term of office and then they, or another auditor, are appointed. That is the natural way of things whatever we decide or do not decide in your Lordships’ House.

[Baroness Hanham]

My Lords, first, I confirm that it is possible to introduce different parts of the Bill at different stages, and the order in the Bill can be switched around. I think the noble Lord asked whether Clause 4(2) could be introduced before Clause 4(1) and the answer is that it could—it is a case of whatever is convenient. The Bill introduces powers to commence different parts of the Bill at different times and to make savings on provisions relating to the Audit Commission Act 1998. Therefore, we would expect to commence this reference in line with the introduction of the local appointment, which I think we were discussing when the noble Lord, Lord Christopher, was here.

If the noble Lord wants to know our wider intention of how to manage the overall transition to the new audit framework, it may be helpful if I say a bit more about that. Our intent remains, as I said, to close the commission in spring 2015. The existing audit contracts will continue to run until 2017, but management of those will transfer to an interim body. We have discussed these over the three previous amendments. As the contracts will run until 2017, authorities will not need to make their own appointments until that stage, but they will have to have made those appointments so that there is a smooth transition between the contracts currently managed by the Audit Commission and whoever manages them subsequently, into the local authority’s own regime. We therefore expect that much of Part 3 of the Bill, which deals with local appointment, will not be commenced until closer to 2016, which then gives them a year to do that. It will be 2016 when procurement of auditors for 2017 is likely to begin.

The current intention is that the new eligibility and regulatory framework and provisions on the conduct of audit will come into effect immediately following the closure of the commission in 2015. It is our intention to make arrangements to enable us to do this under the powers in the Bill, subject to analysis of the transitional arrangements—again as we have discussed, there have to be transitional arrangements—that may arise.

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[Lord McKenzie of Luton]

I thank the Minister for her reply and the noble Lord, Lord Palmer, for his contribution. I say to the noble Lord, Lord Palmer, that my point was not about auditors and succession of auditors but on quite a narrow drafting point. One of the requirements in Clause 4 is that the audit must be undertaken,

“in accordance with this Act … by an auditor appointed by that authority”.

Obviously, until 2017, the auditors will have been appointed by the Audit Commission, and the question is how the system works under those circumstances. I accept the broad point that matters can be introduced at different stages but I am still a little mystified as to how the new framework is to operate from 2015, so long as Clause 4(1)(b) is there—unless that is simply excluded from what is introduced in 2015. Perhaps I should read the record and we might have a further discussion on this in due course if necessary.

[Lord Palmer of Childs Hill]

Before the noble Lord, Lord McKenzie, sits down, I will just comment on the point about the appointment of the auditor by the Audit Commission. In practical terms, the Audit Commission currently suggests who the auditor should be—for example PricewaterhouseCoopers, or Grant Thornton, which has a large number of these audits. The local authority is the one that appoints the auditor, under its own constitution, although it accepts in practice the auditor that has been put forward by the Audit Commission—whether it is the Audit Commission itself or a professional firm. I would have to go back to the constitution but, as I understand it, the local authority has a constitutional duty to appoint an auditor, which it currently does on “the instructions” of the Audit Commission. However, the appointment cannot be foisted on a local authority, because it is a legal body in itself.

[Lord McKenzie of Luton]

My Lords, the noble Lord makes an interesting point but my understanding is that the contracts for the audits are with the Audit Commission not with the local authority. If the noble Lord is right, that in fact unlocks this particular conundrum: although it is not a contract organised by the Audit Commission, if it is nevertheless an appointment by the authority, then I think the problem goes away. With respect to the noble Lord, I do not think that is the position but we might just follow up on that. Having said all that, I beg leave to withdraw the amendment.

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[Lord McKenzie of Luton]

My Lords, the purpose of the amendment is to test the scope of the term “independence”, although it is written in terms of an audit committee rather than an audit panel. I regret not having been able to attend the meeting which the noble Baroness, Lady Hanham, kindly organised to consider these issues, but I am grateful for the note which was provided.

We have reflected on the proposition that all principal authorities must have an audit committee whose functions include those required of an audit panel, and we see some merit in the Government’s argument that this could be too restrictive. We consider that all principal authorities should have an audit committee to undertake the range of functions with which we are familiar. Given that the appointment of auditors is a new function, the audit committee would be a natural place to provide the appropriate scrutiny and oversight of the relationship with the external auditor.

However, given the importance to that scrutiny and oversight role of the independence requirements, we think these should be paramount. These independence requirements are not mirrored in audit committee arrangements, and the CIPFA guidance is more focused on the separation of engagements of executive and scrutiny members. That guidance does not require a minimum number of independent, non-councillor members. So if we insist on audit committees to carry out the auditor panel role, and on the independence requirements to be satisfied, it seems to be the case that many local authorities would have to substantially restructure their arrangements. We encourage them to do so, but to require them to do so where audit committees are currently functioning well is perhaps against the spirit of localism.

The suggestion that the auditor panel might be a small sub-committee of an existing audit committee almost gets the best of both worlds, and may at least provide a transitional solution. However, the primary purpose of the amendment was to address the definition of independence. For this purpose, the Bill requires members of the audit panel to be independent of the authority for which the auditor is to be appointed. In the Bill independence is defined in terms of individual positions; that is, membership and relationships—so parent or grandparent. It does not cover influential business relationships, for example. The amendment is intended to open up this possibility.

It seems from the briefing note received just last week that it is intended for these other matters to be covered through a combination of regulation and guidance. This is welcome, but we should at least ask when we might see a draft of this. When will it be ready for colleagues in the Commons to consider, if not for ourselves? The Bill has spelled out in some detail the membership and personal relationships components of a definition of independence, but we have little or no information on these other components. I would be grateful to hear further from the Minister. I beg to move.

[Lord Palmer of Childs Hill]

My Lords, the amendment of the noble Lords, Lord McKenzie and Lord Beecham, says that an individual will be ineligible if that individual has a disqualifying interest. Yet it seems, by all the purposes of any law there is, that if you have a disqualifying interest you are by nature ineligible. I listened to the noble Lord, Lord McKenzie, and I still struggle to see why one needs to clarify and why one needs the amendment, because if one has a disqualifying interest one would be ineligible. I raised this matter at early stages of the Bill. As for who should sit on these panels, yes, the members of the local authority who are qualified may sit on the panel, and there then seems to be a great emphasis on independent members.

At this stage I declare an interest, and I probably should have done so earlier in the course of this debate. I am currently a chairman of a local authority audit committee. I do not think that this disqualifies me, and perhaps it qualifies me particularly to comment on this. One of the interesting things which I hope the Minister will address in her answer is that it is currently quite the custom in many local authorities, including my own, for a member of that local authority who is of a different political party from the ruling party to be the chair of the audit committee. That very often provides a very independent chairman or chairwoman of that committee.

I am worried that if we change that and require an independent committee chair, will that chair be as independent as an opposition chair? By the nature and appointment of audit committees, when looking for people who will be independent, particularly in the case of chairs, there is in some cases a possibility that those appointing will look among people they know who may have political sympathy with the ruling administration. The current arrangements seem to give chairs greater independence. This is probably wider than the amendment of the noble Lord, Lord McKenzie, but it seems to me to follow on from what is a disqualifying interest. I think we are giving that too much concentration, rather than the actual and real independence of the person who chairs that committee.

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[The Archbishop of York]

My Lords, on Amendment 12, if the statement is true, are not the words “fair view” fatuous? Could you have a true statement which needs qualifying as being unfair? If it is true, it is true. Are those warm words, are they warming up the word “true”? What do they add, those words “fair view”? If it is true, it is true.

[Lord Palmer of Childs Hill]

My Lords, unfortunately in accountancy there is a certain jargon. “True and fair view” is jargon used by firms of accountants and auditors from time immemorial, probably since the formation of the Institute of Chartered Accountants of Scotland, which was the first institute.

My query is whether this is not something which could be included in the external auditors’ audit report in the normal way. Currently, the external auditors’ audit report will say that the accounts have been true and fair and all the other jargon that goes with it in a format which has evolved over the years. The amendment seems to provide that the auditors must be satisfied that the local authority presents its accounts in a true and fair way. If that be the case, I wonder whether my noble friend can say, either now or in writing, whether the auditors’ report itself will need to be amended. Currently, the auditors’ reports just say that the accounts are, in their opinion, true and fair—or words of that nature. Now we seem to be saying that the external auditor must be satisfied that the local authority has presented its accounts in a true and fair way, which seems to be going beyond the opinion that those figures are true and fair. I know that we have a jargon and that the statement should be true but not fair seems completely wrong, but this is a form of words which has been used by accountants for years and is being replicated in the Bill.

The government amendments raise the question of other accounts which the external auditors are auditing at the same time and which are included in the audit of that local authority’s accounts. For instance, when a local authority’s accounts are audited, the auditor—it is not necessarily the same auditor, and if it is, it is a section of that auditor separated by a Chinese wall—audits the pension fund of that local authority. That is treated by external auditors as a separate audit. Because of national accounting requirements introduced about three years ago, those pension fund accounts had to be incorporated within the accounts of a local authority, producing some very strange figures and below-the-line amendments, which sometimes make accounts of a local authority understandable only by a very rare breed of people. I believe that there is someone in Whitehall who is meant to understand them. Will my noble friend comment on that inclusion within the audit report and how it affects the supplementary accounts which are amalgamated by law, such as pension funds of the local authority?

[The Archbishop of York]

Does not the noble Lord think that a legislature is entitled not purely to accept jargon, however old it is, because the law needs to be very clear about what it is stating? Yes, jargon may have been there for centuries. In the council of the Church of England, the jargon is well known, but when we draft a Measure to come to your Lordships’ House it will be in a language understandable by the people. So yes, that may be the jargon, but what is the meaning? What is it getting at? Do you still have to keep jargon when you are legislating?

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[Lord Shipley]

My Lords, I remind the House of my vice-presidency of the Local Government Association. I was unable to discuss this matter when it was raised by the noble Lord, Lord Wills, in Committee, but he is making a very powerful case. I hope Ministers will be able to respond in a way that meets the issues that he has so rightly raised.

It is clear in Amendment 18 that a private company that is contracted, let us say, to run a refuse collection service or to run a leisure centre will appoint its own auditors to carry out an audit of the service that it undertakes. However, I do not think that that will prove sufficient. The public interest requires, where public money is being spent on a service, that the auditor on behalf of the public sector should have access to information that lies with the body that is providing the service through a contract. This appears to be an attempt to prevent a local government auditor having access to information that would assist the undertaking of that audit because a service has been provided by a private sector company. That does not stand the test of public accountability.

The noble Lord, Lord Wills, has got it right with Amendment 18. It is reasonable to say:

“A local auditor has a right of access at all reasonable times to audit documents from private companies that the local authority have contracted services to during the last financial year”,

and it is reasonable to say:

“Local auditors only have a right of access to audit documents from private companies … that relate to the service provided to the local authority by that company”.

In both respects, that is a reasonable requirement for a local auditor to expect. The public interest is best served by the auditor having those powers because this is about contract compliance in financial matters and service delivery. It is a basic requirement if an audit is to be undertaken successfully. How else can the general public have confidence that public money is being efficiently and properly spent on their behalf? I hope that we will hear from the Minister something that will convince us that Amendment 18 is not necessary.

On Amendment 23, there should be no diminution in the rights under the Freedom of Information Act. When it comes to transparency, particularly in view of the matters that have occurred recently, of which the noble Lord, Lord Wills, reminded us, your Lordships’ House has a duty to ensure that transparency in public expenditure and the delivery of the public interest actually happen. I hope that the Minister can give us the assurance that the noble Lord, Lord Wills, is seeking.

[Lord Palmer of Childs Hill]

My Lords, this is a very interesting amendment. I just wanted to add one other perspective. Any local authority worth its salt, particularly in this time of outsourcing, when so much is being outsourced to outside companies and bodies, will insist—as I have always insisted in my own local authority—that it has a right within the contract with the outside contractor to be able to audit the documents of the outside contractor. The place to do all the things that my noble friend has suggested is very often within the contract between the local authority and the contractor.

How that works in practice is that the local authority and its internal auditors need to see what the audit processes are within that outside contractor. The idea that the auditor of the local authority will go in on a normal basis and delve into the detailed books and records of the outside contractor is probably stretching the imagination a bit. The trouble with audits—this is where the noble Lord, Lord Wills, really hits the nail on the head—is that they are, in general, historical and you are looking at what went wrong. The noble Lord, Lord Wills, gave two good examples of what went wrong. The question to the noble Lord, Lord Wills, is: if the Government or the local authority had the ability to go in and audit the sort of companies and organisations the noble Lord described, would they have found these particular problems at that stage?

The noble Lord, Lord Wills, is on to a very important point. But I believe—as I hope that my noble friend the Minister will tell your Lordships’ House—that those protections of being able to audit should be more properly contained within the contract between the local authority and the outside body to which it is contracting.

[The Earl of Lytton]

My Lords, I have some knowledge of procurement issues. I, too, declare my interest as a vice-president of the LGA, but my knowledge comes mainly from the All-Party Group for Excellence in the Built Environment, which last year looked at the question of public sector procurement.

One of the things that we identified was the difficulty that many local authority and public sector bodies have in getting these very complicated contractual arrangements right. If they were not got right, you had some form of mission creep. You had this wall of contractual arrangements that could not be looked at until long after the event; for instance, the provision of a sports centre or a school over quite a number of months. Things had gone wrong in a number of cases because there was not the ability to oversee the thing properly or the knowledge of these very complex matters within the particular procuring body—not necessarily local government—to get a real grip on these things. The question was raised as to whether there should be an external procurement adviser to steer the body through. As I say, it might have been a local authority or it might have been a charity or something like that.

The noble Lords, Lord Wills and Lord Palmer, have hit on a very important point here: at which point can you see through into the detail and at which point do you get to “thus far and no further” in terms of the audit not running into some sort of mission creep? It is plain to me that there must be safeguards. Some very significant sums of money are involved. The earlier that problems are picked up and the process can look at structures and get feedback, the sooner they can be put right or something put in place to limit damage.

If not necessarily for the same reasons, I think that the noble Lord, Lord Wills, has raised an extremely important point, and I hope the Minister will feel able to respond positively to that.

Defence: Trident Review

Lord Palmer of Childs Hill Excerpts

Tuesday 9th July 2013 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, I am not sure that major defence decisions should be driven either by the need to employ a large number of people to build aircraft carriers in Scotland or by the need to maintain employment in Barrow-in-Furness. There are larger issues at stake.

[Lord Palmer of Childs Hill]

My Lords, will my noble friend confirm that the purpose of that review, which is yet to be fully announced, is to reduce the number of nuclear weapons at sea and on land and that that is part of the non-proliferation effort that we are all engaged in? That is the purpose of the review, and I look forward to its outcome.

[Lord Wallace of Saltaire]

My Lords, of the declared nuclear states, Britain already has the fewest nuclear weapons. Under current plans we will further reduce the number of nuclear weapons deployed in recent years. We are therefore very much already at a minimum nuclear deterrent. The purpose of the Trident alternatives review, like the EU balance of competences review, which will also be published shortly, is to provide for an informed public debate. That is highly desirable on both major topics.