Safeguarding in the Aid Sector

Lord Bates Excerpts

Tuesday 20th February 2018 Lords Chamber

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

My Lords, with the leave of the House, I shall now repeat a Statement made earlier in the House of Commons by my right honourable friend the Secretary of State for International Development. The Statement is as follows:

“With permission, I would like to update the House on my department’s response to the sexual abuse and exploitation perpetrated by charity workers in Haiti in 2011 and the measures that we are taking to improve safeguarding across the aid sector. I would like to start by paying tribute to Sean O’Neill of the Times and the two sets of whistleblowers, those in 2011 and later, for bringing this case to light.

On 9 February, the Times reported that certain Oxfam staff, when in Haiti in 2011, had abused their positions of trust and paid for sex with local women. These incidents happened in the aftermath of the devastating earthquake in 2010, which killed hundreds of thousands of people and left millions more homeless and reliant on aid for basic needs such as food and shelter. This is shocking, but it is not by itself what has caused such concern about Oxfam’s safeguarding. It was what Oxfam did next.

In chaotic and desperate situations, the very best safeguarding procedures and practices must be put in place to prevent harm, but when organisations fail to report and follow up incidents of wrongdoing that occur, it undermines trust and sends a message that sexual exploitation and abuse is tolerated. We cannot prevent sexual exploitation and abuse if we do not demonstrate zero tolerance. In such circumstances, we must be able to trust organisations not only to do all they can to prevent harm but to report and follow up incidents of wrongdoing when they occur.

In this duty, Oxfam failed under the watch of Barbara Stocking and Penny Lawrence. They did not provide a full report to the Charity Commission; they did not provide a full report to their donors; they did not provide any report to prosecuting authorities. In my view, they misled, quite possibly deliberately, even as their report concluded that their investigation could not rule out the allegation that some of the women involved were actually children. They did not think that it was necessary to report to the police in either Haiti or the country of origin of those accountable. I believe that their motivation appears to be just the protection of the organisation’s reputation. They put that before those they were there to help and protect—a complete betrayal of trust. It was a betrayal, too, of those who sent them—the British people—and a betrayal of all those Oxfam staff and volunteers who put the people they serve first.

Last week, I met Mark Goldring, chief executive of Oxfam, and Caroline Thomson, Oxfam’s chair of trustees. I made three demands of them: that they fully co-operate with the Haitian authorities, handing over all evidence they hold; that they report staff members involved in this incident to their respective national Governments; and that they make clear how they will handle any forthcoming allegations around safeguarding, historic or live. I stressed that, for me, holding to account those who made the decision not to report but to let those potentially guilty of criminal activity slip away was a necessity in winning back confidence in Oxfam. As a result of those discussions, Oxfam has agreed to withdraw from bidding for any new UK government funding until DfID is satisfied that it can meet the high safeguarding standards we expect of our partners. I will take a decision on current programming after 26 February, as I will then have further information which will help me decide if I need to adjust how that is being delivered.

Given the concerns about the wider sector that this case has raised, I have also written to every UK charity working overseas that receives UK aid—192 organisations—insisting that they spell out the steps they are taking to ensure that their safeguarding policies are fully in place and confirm that they have referred all concerns they have about specific cases and individuals to the relevant authorities, including prosecuting authorities. I have set a deadline of 26 February for all UK charities working overseas to give us the assurances that we have asked for and to raise any concerns with relevant authorities. We are also undertaking, in parallel, a similar exercise with all non-UK charity partners, 393 organisations in total, and with all our suppliers, including those in the private sector—more than 500 organisations—to make our standards clear and remind them of their obligations. We are going to do the same with our multilateral partners too.

The UK Government reserve the right to take whatever decisions about future funding to Oxfam, and any other organisation, that we deem necessary. We have been very clear that we will not work with any organisation that does not live up to the high standards on safeguarding and protection that we require. I will also be sharing details of this approach with other government departments responsible for overseas development assistance spending. Although this work is not yet complete, it is clear from the Charity Commission reporting data, and the lack of it from some organisations, that a cultural change is needed to ensure that all that can be done to stop sexual exploitation in the aid sector is being done. We need to take some practical steps now. We should not wait for the UN to take action. We must set up our own systems now.

My department and the Charity Commission will hold a safeguarding summit on 5 March, where we will meet UK international development charities, regulators and experts to confront safeguarding failures and agree practical measures, such as an aid worker accreditation scheme that we in the UK can use. Later in the year, we will take this programme of work to a wide-ranging global safeguarding conference to drive action across the whole international aid sector. I am pleased to say that the US, Canada, the Netherlands and others have already agreed to support our goal of improved safeguarding standards across the sector. The UK is not waiting for others to act; we are taking a lead on this. I will also be speaking to colleagues across government and beyond about what more we can do to stop exploitation and abuse in the UN and the broader multilateral system. Our message to all parts of the UN is clear: you can either get your house in order or you can prepare to carry on your good work without our money.

I welcome the UN’s announcement on 14 February that the UN does not and will not claim immunity for sexual abuse cases. This sends a clear signal that the UN is not a soft target, but we must hold the UN to account for this. Further actions we have taken in the last week include the creation of a new safeguarding unit. We have also promoted our whistleblowing and reporting phone line, to encourage anyone with information on safeguarding issues to contact us. We have appointed Sheila Drew Smith, a recent member of the Committee on Standards in Public Life, who has agreed to bring her expertise and her challenge to support my department’s ambition on safeguarding. She will report directly to me.

I have asked to meet leaders of the audit profession to discuss what more can be done to provide independent assurance over safeguarding to the organisations that DfID partners with globally. I have held my own department to the same scrutiny that I am demanding of others. I have asked the department to go through our centrally held HR systems and our fraud and whistleblowing records as far back as they exist. I am assured that there are no centrally recorded cases that were dealt with incorrectly. Separately, we are reviewing any locally reported allegations of sexual misconduct involving DfID staff. To date, our review of staff cases has looked at 75% of our teams across DfID. It will complete within a fortnight. Our investigations are still ongoing and if, during this process, we discover any further historic or current cases, I will report on our handling of these to Parliament.

DfID, other government departments and the National Crime Agency work closely together when serious allegations of potentially criminal activity in partner organisations are brought to our attention, and we are strengthening this. The new strategy director at the National Crime Agency will take on a lead role for the aid sector. I am calling on anyone who has any concerns about abuse or exploitation in the aid sector to come forward and report these to our counterfraud and whistleblowing team. Details are on the DfID website and all communications will be treated in complete confidence. Later today I will have further meetings, including with the Defence Secretary regarding peacekeeping troops and with the Secretary of State at DCMS regarding the charity sector.

My absolute priority is to keep the world’s poorest and most vulnerable people safe from harm. It is utterly despicable that sexual exploitation and abuse continue to exist in the aid sector. The recent reports should be a wake-up call to all of us. Now is the time for us to act, but as we do so we should note the good people working across the world in this sector, saving lives, often by endangering their own, and all those, from fundraisers to trustees, who make that work possible across the entire aid sector. In the last week alone, UK aid and aid workers have helped vaccinate around 850,000 children against polio. We should also recognise that that work can be done only with the support of the British people. I commend this Statement to the House”.

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[Baroness Sheehan (LD)]

My Lords, we are all shocked that aid workers from a respected organisation such as Oxfam could abuse the trust of vulnerable people in Haiti, whose lives had been shattered by the earthquake in 2010. Action must be taken to ensure that such abuse at high levels of a world-renowned charity cannot be repeated, so I welcome the Secretary of State’s Statement.

However, having read the Statement in full, I am disappointed that it talks only about strengthening safeguards going forward. What we really need is a wide and far-reaching inquiry into the scale of historic abuse and that which exists in the sector today. All the indications are that this is but the tip of the iceberg and, to deal comprehensively with the situation, we must have all the facts. In 1999 the national crime agency said that the charity sector was susceptible to being targeted by paedophile rings. We must know if that is the case. Reports that men in positions of power have acted with impunity in exercising control over young women are rife in the sector. There are allegations of abuse in the awarding of short-term contracts by those in permanent senior positions. What we really need is an independent inquiry into the global aid sector—failing that, at least into the UK aid sector—that will leave no stone unturned. Unless we know what has gone on in the past and hold people accountable, we cannot hope to go forward with confidence.

This is also an issue about governance. Oxfam has been found wanting on many levels, and the whole sorry saga has highlighted the failure of good governance by those to whom it answers—the Charity Commission and DfID. Both accepted without question the charity’s version of events and did not probe further into what “sexual misconduct” meant. Both failed to ask the obvious question of whether minors, of either sex, were involved. Both have questions to answer and improvements to make if they are to avoid future failures. Any inquiry must encompass their role in the Haiti cover-up.

I welcome that the UK intends to work closely with the UN. This is a global issue which the global aid community must address collectively, so the proposal for a sort of passport for workers in the UK aid sector is welcome. Will there be government support for a global aid worker accreditation scheme? Inevitably, unless answers to these questions are forthcoming, attacks against the 0.7% of GNI that is devoted to overseas aid will increase. But this would not only be a kick in the face of the vast majority of aid workers, who work tirelessly to alleviate extreme poverty, but jeopardise some of the really worthwhile programmes bringing health, education and sanitation solutions to those in desperate need. We must not throw the baby out with the bathwater, so I ask the Minister about the Secretary of State’s decision to bar Oxfam from receiving new government funding. Last year it received £31.7 million from DfID. What assessment have the Government made of the impact on programmes serving the poor and destitute if support is withheld this year? What are they planning do to mitigate the extra hardship this will inflict on aid recipients?

I will mention just one other thing, which has disturbed me throughout the media coverage over the past few weeks, and that is the use of the term “beneficiaries”. Will DfID consider using a term other than beneficiaries, which sounds as though people are in receipt of an inheritance rather than baby milk? Perhaps “aid recipients” would better describe their vulnerable state. It is no more of a mouthful than beneficiaries: both have five syllables.

[Lord Bates]

I am very grateful for the comments and the general support of the noble Baroness, Lady Sheehan, and the noble Lord, Lord Collins, for the Statement and the action proposed. The noble Lord, Lord Collins, is absolutely right that we have to call for a significant culture change. It is about an abuse of power by men often in positions of authority, the likes of which we have seen in other settings around the world, and it needs to be addressed in robust and forceful ways.

The noble Lord, Lord Collins, asked about other government departments. This is very important. That is why the Secretary of State met the Secretary of State for Defence today and will be meeting the Secretary of State for Digital, Culture, Media and Sport. She will also be meeting the Minister for Civil Society in the course of this because there has to be a cross-government approach to ensure that we are entirely consistent in seeking the changes that we wish to see.

[Lord Collins of Highbury]

I am concerned specifically about the FCO, which has an increasing proportion of ODA spend: it has risen from 13% to nearly 18%. It is funding organisations that we need to look at very carefully.

[Lord Bates]

That is correct. The Foreign Secretary and the Secretary of State will be meeting tomorrow morning to discuss these matters, among others. But the noble Lord is absolutely right. I totally accept his urging in that area. We have received his advice on that point and it will be responded to.

The noble Lord raised a very good point about trade unions. As to whether the invitation would more probably be to the 5 March event, which is aimed particularly at UK charities and regulators, or whether it is more about how we engage them perhaps in the international conference later in the year, I will come back to him. But he is absolutely right to say that trade unions have a very important role to play in ensuring that people in employment, particularly on short-term contracts, understand what their rights are and can have representation. I will certainly take that back.

The noble Lord asked what requirements would be made of Oxfam before it would be considered for government funding. It is clear that it will have to fully co-operate with the Haitian authorities by handing over all the evidence it holds, that it reports staff members involved in this incident to their respective national Governments, and that it makes clear how it will handle forthcoming allegations around safeguarding, historic or live. That is the basis on which decisions will be made and the Secretary of State said that she will take those decisions next week, when she has received responses to those points.

I reassure the noble Baroness, Lady Sheehan, who said the Statement was about going forward, that we have taken steps. I point out that, in terms of DfID, we have gone through our centrally held HR systems and our fraud and whistleblowing records as far back as they exist, to check that no cases have escaped the scrutiny that they should have.

[Baroness Sheehan]

I was really asking for an independent inquiry. This will have a huge impact on the public mood about giving to charities and we have to show to the public that it is not just us investigating ourselves but that an independent eye has been cast over everything.

[Lord Bates]

Yes, that point is well worth making. It is one reason why we have brought in independent expertise from outside to strengthen our ability to review. I would also point out for the record that Oxfam itself has voluntarily agreed to withdraw, as opposed to being barred, from the position. As regards other government departments, the Permanent Secretary has written to all those that administer ODA, including the Foreign Office, to drive the cross-Whitehall message that there will be zero tolerance in this area, and asking them to mirror the actions we are taking at the Department for International Development.

[Lord Hayward (Con)]

In recognising the comments made by the noble Lord, Lord Collins, and the noble Baroness, Lady Sheehan, in relation to work that is undertaken in particularly dangerous and difficult circumstances, I was in Iraq last week, as my noble friend knows, where I met DfID, charity and voluntary workers. They are working in incredibly dangerous and difficult circumstances. It would be a disaster for the communities if the work being undertaken was deferred by even a few days or weeks. Will my noble friend therefore exhort all contributors, whether large or small, to continue to make donations to the charities to which they contribute, so that those charities can continue to make their crucial contribution to societies, whether in Iraq or around the rest of the world?

[Lord Bates]

I am very happy to give that undertaking. My noble friend is absolutely right that British people are generous to people around the world. In many ways, the great tragedy of what has happened is that the failure to act in a transparent and timely way has genuinely put lives at risk, because people might stop giving in the way that he talked about. Oxfam alone has around 10,000 people in 90 countries; it is working with DfID at present in places such as Yemen and South Sudan, delivering life-saving materials. In everything we do, we are going to ensure that our prime concern is for the people whom we are trying to help. We will not deal with contracts in a pre-emptive way until we are absolutely confident that those people who need our help, whether they are called beneficiaries or aid recipients, are our number one concern. They must be protected at all times. That is what the charities themselves should have been thinking all the way through.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, there are several references in the Lords register to my voluntary positions with charities in this sector, so I should reference that before asking my question. I will say, though, that I would like the Minister to convey to the Secretary of State that the way in which she has handled this issue in the last 10 days has been impressive. To take a constant position through these days that has put the interests of the children first and not used the issue as a political football or been defensive in any way about the role of the department or other agencies, has been the right approach. I hope that she will continue to do that.

The Statement today has been comprehensive and impressive on where we are right now. However, it contains one omission: what did DfID know in 2011? There is a reference in the early part of the Statement to the lack of reporting in full to the Charity Commission and to the authorities, but there is no reference to any reporting to DfID. What, if anything, was done by Ministers or officials with any such report? It is important that we have some clarity on that.

Secondly, it is important to be clear that when traffickers, and in some cases the Mafia, move into emergency zones in the absence of effective government—as with the earthquakes in Haiti or Nepal, or the typhoon in the Philippines, when hundreds of young children were targeted by traffickers to be taken immediately to brothels and slave labour elsewhere in the world—it is the large NGOs that are usually first on the spot to protect those children. In some cases, as on the Nepalese-Chinese border after the earthquake there, they have saved hundreds of children from moving into some form of slavery or perhaps worse. So it is important to register that, while this is essential work to expose the problems that have been going on, which demands a zero-tolerance approach, we should also reinforce our commitment to ensure that children will be protected by some of these NGOs, in the absence of effective government, in some of the world’s worst disaster zones.

--- Later in debate ---

[Lord Bates]

I am very grateful to the noble Lord and will certainly convey to the Secretary of State his remarks about her handling of the crisis thus far. I also recognise his deep experience of leadership in this field. He asked a very specific question about what we knew when. I should say that the chairman of the IDC in the other place has confirmed that the committee is commencing an inquiry into this, and we will be co-operating fully.

The Charity Commission is also going to undertake an inquiry into this. The elements of who knew what and when are very important issues, but they will be addressed at that time. At the moment, all we would say is that, although DfID was informed that the investigation had concluded on 5 September 2011 and that all members who had been found not to have followed Oxfam’s code of conduct had left the organisation, its letter states that no allegations involved beneficiaries or the misuse of DfID funds. That was the reason for the very strong line that the Secretary of State used in her Statement in the other place about how DfID was potentially misled in this respect. Again, that will be something on which there will be full disclosure and transparency so we understand what happened and when. We will be co-operating with the Charity Commission and the IDC on those inquiries.

[Lord Patten (Con)]

My Lords, I have a family interest to declare inasmuch as my daughter has worked for the Catholic Agency for Overseas Development for the past 10 years. That is not a material interest, but it is one I should properly declare. Does my noble friend share my view that there may be very inadequate ethical training in many of our charities? Ethical training is not a central part of their DNA, particularly in the larger and more bureaucratic charities. I entirely agree with the noble Lord, Lord Collins of Highbury, that cultural change is desperately needed, particularly in some of our larger charities. Bringing about cultural change takes a very long time. It takes years and it needs ethical training of the highest level. That is something which many charities need to turn their attention to urgently.

[Lord Bates]

My noble friend is absolutely right on this. There is a core problem which we have seen across different organisations. We have had to wrestle with these issues in recent years: the fear of asking the difficult probing questions when they are needed or the failure to be transparent about what has happened. Organisations are doing that—one does not like to say “for understandable reasons”—because they want to protect the reputation of the organisation. If anyone wants to know whether that works, ask Oxfam today when its reputation has been so tarnished and damaged by the failure to take that kind of prompt action and to ask the most difficult and searching questions in these areas at the right time.

[The Earl of Sandwich (CB)]

My Lords, this is a very painful affair for all of us who have been concerned with aid over many years. I have not worked directly with Oxfam, but I have worked alongside it and on this occasion I want to pay tribute to what the noble Lord, Lord Judd, achieved over many years in bringing standards up over that period. We must not forget what has already been done. The Secretary of State is new and it is quite right that she should send a powerful message to the aid agencies, especially those in receipt of public funds. It is obviously a shocking affair. However, the Minister has considerable experience and knows that there are limits on outrage that can be expressed. Does he not think that collectively the Government and the statutory agencies have gone over the top on this? It is not happening on the scale suggested by the noble Baroness, Lady Sheehan. As other noble Lords have said, the danger is that it is affecting the work that is going on all the time all over the world. The noble Lord, Lord Collins, made this point, and Andrew Mitchell said it, as did Anna Soubry. The Secretary of State seems to understand this, but only in the last sentence of the Statement.

[Lord Bates]

We need to communicate that, but the noble Earl will recognise that we have had many debates on these things and we are almost always on exactly the same page. The message needs to go out that there is zero tolerance on this. We need to come down very hard to change the culture within the aid sector. That was one of the reasons why the previous Secretary of State took such a strong approach on the allegations against UN peacekeepers and was at the forefront of driving that up the agenda, to the extent that it was at the UN General Assembly and the Secretary-General has taken action on it because it goes to the heart of the problem. People who are there have a duty to protect, not to exploit. As in every type of organisation and institution that faces allegations of this type, the very few people who are doing this are having a devastating effect on the 99% of people who are carrying out that work selflessly and, as my noble friend said earlier, putting their lives at risk to help others, which is in the great tradition. It is in their interests and for them that we ought to be so ruthless in rooting it out.

[Lord Judd (Lab)]

My Lords, I must declare an interest as from 1985 to 1991 I was director of Oxfam. I was a long-standing supporter of Oxfam before that and I remain a firm supporter of Oxfam. Last weekend, I was in my local shop in Cockermouth talking with the volunteers, who have obviously been affected by this story. For all of us involved in that work over the years—right back to 1942 in the middle of the war, when Oxfam was founded to try to get relief to the Greeks under German occupation—this has been a terrible nightmare. What happened in Haiti was wrong and despicable. It was a complete contradiction of the purpose of Oxfam in its exploitation of individuals, who will remain harmed. I am very glad that the organisation has not just issued an email but been to see the Government to talk to them about how genuinely sorry it is.

We must remember certain points. First, the Government have a responsibility for public funds, and that must be recognised by everyone. Secondly, it is terribly important to recognise that charities, not only Oxfam but right across the field, must be accountable, and, as the Minister has said, being accountable involves transparency, complete integrity and openness. Anyway, it is stupid to do anything else because, as we have seen, almost inevitably it will become known in one way or another and do even more damage than it would have done at the time.

I shall conclude by making a couple of observations. The current leadership, including Mark Goldring and the new chairman who took office only last year, were nowhere near the situation when it occurred; they have been dealing with a situation that they inherited. A lot of very hard work has been going on in seeing how proper standards, regulation and accountability can be put in place. If that is not sufficient, it is quite right that the Government should challenge it, and I am sure that if they work together it can be tackled. However, it is interesting to note that the highly esteemed Tufts University in the United States, which has done an inquiry into this problem, has said that during its inquiry it became convinced that the best regulations now in place were those of Oxfam. There is therefore a certain paradox in the situation.

I thank the Minister for the understanding way in which he has handled this Statement. It is quite right that the organisation has to look to its governance and its transparency. It also has to face up to its responsibility to those countless volunteers; the saddest part of the whole story is what these wicked people in Haiti did to their very own colleagues and the work that they were trying to do. I would like a reassurance from the Minister that in all that the Government are doing, and I totally understand that the Government have to be very firm in the public interest, their objective is to enable Oxfam to be in a convincing position to continue the work that started in 1942—it has been in the front line of so many situations, such as in Kampuchea, South Africa in the bad years, Latin America and the Middle East—and to face the public and speak with authority and morality again.

[Baroness Stedman-Scott (Con)]

I thank the noble Lord for his significant contribution. If he has a question, may we please have it? There are other people who still wish to ask questions.

[Lord Bates]

I thank the noble Lord. I realise that what is happening to the organisation to which he has given so much of his life must be breaking his heart, and that he feels passionately about it. I think his words, which he has said in forthright terms on the record, will speak more to the organisation that he cares for than anything that I can add, and I thank him for that.

[Lord Sheikh (Con)]

My Lords, I note that letters have been sent to charities which have received UK aid. I am a patron and supporter of a charity which is undertaking work in 12 countries. I had a long meeting with the trustees yesterday, and we decided to tighten and toughen our safeguards. My point is: could charities which have not received such aid be written to to ask them to tighten up? I am deeply concerned about what can go on, and if they are not UK-aided there are possible concerns and problems.

[Lord Bates]

That is a really good idea and I am happy to take it away and think about it. It may be something for the Charity Commission to take leadership on, but if there is anything we can do to support and strengthen safeguarding, particularly for charities working overseas, we will want to consider it.

[Lord Sheikh]

Would my noble friend consider taking further action?

[Lord Bates]

As I said, I am happy to take back that suggestion about what more could be done, but the very fact that my noble friend as a trustee is now asking those searching questions of his organisation, although it is not in receipt of government funding, bodes well for the approach which is being taken more generally to improve safeguarding across the sector.

[Viscount Waverley (CB)]

My Lords, the Minister said that difficult, probing questions need to be addressed. Is he aware that that there are not shy of 80 Metropolitan Police officers serving with overseas responsibilities? That does not include those seconded to the International Court of Justice investigating purported international crimes. Would he consider their being marshalled to make further in-depth investigation of the horrors that are before him and reporting back to the Government, who can then address them with host nations?

[Lord Bates]

I am very happy, as I set out, that we are in contact through the National Crime Agency, which has a dedicated director looking into the aid sector more generally. One of our arguments all the way through has been that the law enforcement authorities for those alleged to be guilty of wrongdoing should be informed, whether they are in Haiti or other countries. It is absolutely right that the authorities should be informed and involved as soon as matters come to light.

[Lord Leigh of Hurley (Con)]

I remind the House that this is not the first time that large charities have brought the sector into disrepute. It was only a short time ago, your Lordships will recall, that Olive Cooke threw herself off a bridge in Bristol because she was being pursued by large charities. At the time, the then Prime Minister asked me, the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Wallace of Saltaire, to form a short, sharp committee to investigate what had happened and produce our results, which led to the formation of the Fundraising Regulator chaired by the noble Lord, Lord Grade of Yarmouth. We managed to do that in three months, unlike a long investigation. Does my noble friend agree that it is the trustees’ responsibility? The trustees need to know what is going on and the trustees need to be held accountable for the actions taking place in their charities.

[Lord Bates]

The trustees’ responsibilities are onerous, detailed and should be taken very seriously. I would expand further on that, but I am conscious that the time limit has been reached and will therefore save my further comments in writing to my noble friend.

Personal Statement

Lord Bates Excerpts

Wednesday 31st January 2018 Lords Chamber

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

My Lords, with the leave of the House, I offer my sincere apologies to the noble Baroness, Lady Lister, for my discourtesy in not being in my place to answer her Question on a very important matter at the beginning of Questions.

During the five years in which it has been my privilege to answer Questions from this Dispatch Box on behalf of the Government, I have always believed that we should rise to the highest possible standards of courtesy and respect in responding to the legitimate questions of the legislature. I am thoroughly ashamed at not having been in my place, and therefore I shall be offering my resignation to the Prime Minister with immediate effect.

[Noble Lords]

No!

Water: Developing Countries

Lord Bates Excerpts

Wednesday 24th January 2018 Lords Chamber

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

My Lords, I join other noble Lords in paying tribute to the noble Lord, Lord Cameron, for the way in which he introduced this fascinating and compelling debate, which has been full of insight. Many of the insights were drawn from noble Lords’ experience of seeing activities and projects on the ground.

The noble Lord, Lord Cameron, reminded us of what a precious commodity water is and about the importance of managing it carefully and of community-based solutions. My noble friend Lord McColl stressed the importance of safe sanitation, especially for girls. The noble Earl, Lord Sandwich, talked about SDG 6 and climate change. My noble friend Lord Freeman spoke about faith organisations, particularly the Busoga Trust, and about the importance of maintaining things. The right reverend Prelate the Bishop of Derby spoke about the consideration which is given in wider infra- structure projects to the importance of the sustainability of water and of how we should engage more with small, passionate local organisations such as the one in his diocese.

My noble friend Lord Leigh spoke about the impact of water scarcity on education, particularly that of young girls. We all pay tribute to him and wish him well this Sunday as he embarks upon his half-marathon in support of WaterAid. He paid tribute to my fundraising efforts, but they were so good because he was such a good supporter. That was a very good plug to remind me that I can support him on his website, but it is also of course a great investment, because DfID will aid match the money given. We wish him well with that.

The noble Baroness, Lady Sheehan, quoted that very poignant proverb—when we drink water, we must remember the spring—and talked about sustainability. She also stressed the importance of data. The noble Lord, Lord Collins, wound up the debate by reminding us of the importance of working at a high level within international, multilateral organisations and of the work of the high-level panel.

Ensuring that everyone has safe water and sanitation is one of the most important functions of all Governments. Every day, the lack of safe water and toilets means that nearly 1,000 children aged under five die from diarrhoea, as referenced by the noble Lord, Lord Collins. Poor water and sanitation contribute to many neglected tropical diseases. It is women and girls who suffer most, as they must bear the burden of collecting water and place themselves at risk while having to find safe sanitation.

We were of course given an insight here about the passion of my noble friend Lord McColl not only in taking up the issue and supporting so many good causes but also in getting involved in direct action in Nepal and actually demanding change on the streets. The fact that he was joined by the noble Earl, Lord Sandwich, just shows that they have a better class of public demo in Nepal, with two Peers, including an Earl, among their number. It demonstrates the importance of the issue and their personal passion for it.

Investing in water and sanitation is good value for money, as so many noble Lords referenced. With each £1 of investment, there is a return of over £4. In many countries, the returns are even higher.

The world has made huge progress providing water and sanitation services. Between 1990 and 2015, 2.6 billion people gained access to improved water supplies, and 2.1 billion to improved sanitation. The UK played an important role in this by helping 64.5 million people gain access to these services between 2011 and 2015, as the noble Baroness, Lady Sheehan, referred to. Since 2015, we have helped nearly 30 million more people get access.

The noble Lord, Lord Cameron, spoke about the challenges the world faces in securing sufficient water to meet the needs of people, economies and the environment. The Water Resources Group in the International Finance Corporation estimates that water insecurity costs the global economy over £350 billion a year. But there is not enough investment in improving water governance and infrastructure. Indeed, it is estimated there is a shortfall of some £142 billion a year that we must address.

Through the water security programme, the UK Government are investing £51 million over six years to support improved management of water resources and are working with business to invest more to make water available for agriculture, industry and energy. The UK is also supporting a number of regional programmes to support better management of rivers that are shared by countries in Africa and Asia. For example, we are investing in the transboundary water management programme of the Southern African Development Community to help 3 million of the poorest people do more to cope with floods and drought.

Through research programmes funded by the Department for International Development and the Global Challenges Research Fund managed by the UK research councils, we are supporting ground-breaking research to improve knowledge on water resources and to improve their management. We are ensuring that our world-leading institutions such as the British Geological Survey, which the noble Lord, Lord Cameron, referred to, are providing the answers African countries need so badly. They are helping to build the capacity of those countries to address these problems in the long term.

At this point, I also pay tribute to the work of the small charities we heard of, particularly of the Busoga Trust, which my noble friend Lord Freeman referred to. As a former member of the congregation of St Michael’s, Chester Square, I of course know of its work and am very impressed by it. I should say immediately that I am very happy to meet with it, not just at its reception but at any time with my noble friend in order to discuss how we can work with it more.

But more needs to be done. The noble Earl, Lord Sandwich, was right to remind us of the call in the sustainable development goals for universal access to water and sanitation by 2030. The noble Baroness, Lady Sheehan, was right to remind us of the knock-on effect that supporting that SDG has on other SDGs, be they on gender equality or education. Achieving this goal will require countries to invest much more of their own resources in water and sanitation. The UK Government will continue to work with countries to help to allocate and spend more money from their public budgets and attract finance from private investors.

My noble friend Lord Leigh asked about the allocation of the UK’s aid budget to water and sanitation. DfID supports water and sanitation projects in 29 countries in Africa, Asia and the Middle East, spending nearly £185 million in the year 2015-16. We allocate the resources that are required to meet the results that we aim to achieve. As we know, many of these countries, such as South Sudan and the Democratic Republic of the Congo, are suffering from ongoing conflict. Our support will help to ensure sustained access to services by building the capability of Governments, businesses and charities, including faith-based organisations, to ensure that services can be sustained.

Several noble Lords, including my noble friend Lord Leigh, the noble Lord, Lord Collins, the noble Baroness, Lady Sheehan, and the noble Earl, Lord Sandwich, asked how DfID will implement the recommendations of the Independent Commission on Aid Impact’s review. I am pleased to say that DfID is fully addressing the recommendations of the ICAI review of DfID’s results in water and sanitation, and we will be responding to that fully.

On a point made by the noble Baroness, Lady Sheehan, we are collecting more data on the sustainability of services, and we will be commissioning an analysis to determine how many of the 64.5 million people whom we helped to get access have maintained it since 2015. We are collecting more data on the value for money of our programmes, working closely with all our partners to get better and more comprehensive figures. The UK Government also support programmes to improve the management of water services for agriculture, industry and cities. Our support is helping countries to make good decisions about developing and protecting their water resources, including ensuring that water services are resilient to climate change, which the noble Earl, Lord Sandwich, referred to.

We know that new challenges are emerging. As the climate changes, so services are at greater risk of disruption and damage from floods and droughts. DfID has recently started a new £27 million programme to support the development of more resilient water and sanitation services in Africa and Asia, including through better catchment management and upgrading infrastructure—a point to which the noble Lord, Lord Cameron, referred us.

I shall address some of the specific questions that were put to me. The right reverend Prelate the Bishop of Derby asked about the long-term provision of functional infrastructure. DfID is working with partners and the private sector on strategies such as smart hand pumps and solar pumping stations to maximise the functionality of water points. DfID supports community-led total sanitation to ensure that the toilets that are built will last, with support from private sector improvements—for example, the Toilet Board Coalition. Community ownerships ensure that project management reflects cultural priorities.

The noble Earl asked about the involvement of church organisations and faith groups, and we heard of many examples during the debate. Faith groups make a very important contribution not just in raising funds but in delivering on the ground. DfID supports more than 25 faith groups, including more than 20 Christian-based faith groups. I have referred to the Busoga Trust, which I am happy to meet. The noble Baroness, Lady Sheehan, asked about CDC. It is working on a new water and sanitation strategy, and DfID is engaging with it on this. The noble Baroness referred to leaving no one behind, and the data results methodology sets out clear requirements for DfID programmes to disaggregate on the people’s groups that are served by it, including by disability and gender.

The noble Lord, Lord McColl, asked about sanitation in Nepal. DfID’s programme in Nepal includes £19 million for rural and water sanitation for the poor, and it has funded work on reducing the risks of violence against women and girls related to poor sanitation and water access. The right reverend Prelate the Bishop of Derby asked about partnerships with business, and DfID considers the diverse range of business from individual entrepreneurs to multinationals. For example, as I have mentioned already, we engaged closely with the Toilet Board Coalition—a global business-like coalition to accelerate the scale-up of innovative solutions to sanitation.

The noble Lord, Lord Collins, talked of the importance of promoting water in multinationals and internationally. DfID supports the sanitation and water for all initiative, which aims to improve the targeting of financial aid and human resources for water and sanitation provided by donors and developing countries. Being able to drink water and have a private and sanitary toilet are surely among some of the most basic needs that we take for granted.

I hope that the debate will demonstrate not only the importance of the issue but that Her Majesty’s Government, DfID and the UK taxpayer are working hard with our international partners in this area to ensure that we meet our international obligations through the SDGs to which we have referred, and continue to provide leadership and, as the noble Lord, Lord Collins, said, ambition on an international stage to ensure that we get greater access and greater investments, and by doing so, we help to save lives and build livelihoods.

Sub-Saharan Africa: Public Services and Governance

Lord Bates Excerpts

Tuesday 23rd January 2018 Lords Chamber

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

My Lords, we know that the way in which power is shared and used in many sub-Saharan African countries can provide a major boost to or constraint on the provision of essential public services and inclusive growth. The UK is working to support more inclusive societies, with open and accountable institutions and peaceful political processes that are better able to meet the needs of their citizens and sustain development over the longer term.

[Lord Bruce of Bennachie (LD)]

My Lords, I thank the Minister for that reply and draw attention to my entry in the register of interests. Does he acknowledge that, in the past few years, humanitarian assistance has doubled, the commitment to private sector development is due to increase dramatically, more development spending will go to departments other than DfID and the value of the pound has fallen by 20%? In these circumstances, can the Government give an assurance that they will maintain their commitment to sub-Saharan Africa, and in particular to sustainable services, especially in health, education, equality, social security and good governance, because these are absolutely essential to delivering the sustainable development goals and ending absolute poverty?

[Lord Bates]

I can certainly give that assurance. Over the past few years, the amount going to overseas development assistance has steadily increased in sub-Saharan Africa in those areas of governance. I think the total is now in the region of £1.1 billion. That is very important because, as the noble Lord knows from his time as chair of the International Development Committee in the other place, it is essential to get that governance right so that economic growth can occur and countries can eventually stand on their own two feet.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, given the central importance of good governance to conflict prevention and conflict resolution, will the Government ensure that the objective of the sustainable development goals, in particular goal 16, which the UK did so much to include in the SDGs, will be reflected in the forthcoming security review, in the wider interests of security for the UK and elsewhere?

[Lord Bates]

My Lords, the pursuit of SDG 16, on peaceful and inclusive societies, is extremely important for the process. One of the things that we recognise throughout Africa—and, indeed, throughout the world—is that, by and large, conflicts are manmade and their impact on the female population is worse. Therefore, the Secretary of State announced last week a national action plan to engage women in peacebuilding and peace security, focusing on two or three countries initially in sub-Saharan Africa because women, as well as being victims, can also be part of the solution to negotiating sustainable peace in sub-Saharan Africa and elsewhere.

[Lord Collins of Highbury (Lab)]

My Lords, both noble Lords in their questions raised the important issue that an increasing amount of ODA is being allocated to departments other rather than the Minister’s own. I know that he can be extremely proud of DfID’s record of transparency and accountability, but can the same be said of other government departments? What are the Government doing to ensure that the FCO, which funds a lot of these programmes, follows the same level of transparency as DfID?

[Lord Bates]

That is very important. Following on the programme that was initiated under the previous Government, we set up the Conflict, Stability and Security Fund, for example, which is a cross-government approach that recognises that the issues are often not just development or humanitarian but involve security, and, in the Middle East or in sub-Saharan Africa for example, there is a diplomatic and political part to it as well. So it makes sense to have all the departments working together, but they must do so in a transparent way that meets the required standards set out in the aid strategy and is also overseen by the Independent Commission for Aid Impact.

[The Lord Bishop of Durham]

My Lords, given both the recent political instability and the current consultation on reforming the constitution in Burundi, and the forced displacement of more than 400,000 people, how do the Government intend to support sustainable public service through ODA in countries such as Burundi where conflict is preventing the basic functions of governance?

[Lord Bates]

I pay tribute to the right reverend Prelate for his long-standing work in Burundi and his advocacy for peaceful solutions. We are supporting initiatives there. We are helping the refugees, 400,000 of whom, as he said, have fled to neighbouring countries —Tanzania and Rwanda, for example. We are also supporting democratic institutions leading up to the elections, which we hope will take place in 2020 and offer some hope for stability in that country.

[The Earl of Sandwich (CB)]

My Lords, is not Zimbabwe a good example of what the noble Lord, Lord Bruce, was suggesting? The new President of Zimbabwe is looking for friends. Are we active enough in the Foreign Office at the moment in seeking ways of introducing longer-term development to balance humanitarian aid?

[Lord Bates]

When the opportunity came, after the former President Mugabe left office, one of the first there was Rory Stewart when he was a joint Foreign Office and DfID Minister. I know that the new Africa Minister, Harriett Baldwin, will be looking to make a visit early on. It is precisely the type of country that has been locked into instability for too long, and yet has immense potential in terms of education and its natural resources, which can be liberated.

[Lord Chidgey (LD)]

Is the Minister aware that there appears to be a growing consensus among international donors that development is stalling in sub-Saharan Africa because of a failure of governance and weak institutions? Does the Minister agree that ODA should prioritise institutional reform over good governance, providing the capacity to deliver change, following the fundamental principles of the Paris Declaration on Aid Effectiveness set out as long ago as 2005?

--- Later in debate ---

[Lord Bates]

Those principles are actively supported by the African Union, which is meeting in Addis this week. It has on its agenda the eradication of corruption and the upholding of democratic principles. Of course, it will always be better if it makes the case rather than anybody else. I would also say that we should remember that some of the fastest-growing economies in the world last year were in sub-Saharan Africa, such as Ethiopia and Tanzania. We also need to focus on the immense economic potential in those countries.

Palestine: Refugees

Lord Bates Excerpts

Tuesday 23rd January 2018 Lords Chamber

[Lord Judd]

To ask Her Majesty’s Government what additional support they are providing for key services for Palestinian refugees, including schools, health, and emergency food and cash distribution, following the decision by the government of the United States to cut funding to the United Nations Relief and Works Agency for Palestine Refugees in the Near East.

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

My Lords, we are consistently a major donor to UNRWA, having so far provided around £50 million in 2017-18 based on the agency meeting rigorous performance indicators. We contributed more than expected for this financial year to help to manage UNRWA’s funding gap in December. We are working closely with UNRWA and other key donors to do all that we can to maintain essential services for Palestinian refugees.

[Lord Judd (Lab)]

My Lords, I thank the Minister for that reply. I am reassured that the Government are working hard on closing the gap, but cuts of $50 million to $60 million are bound to have severe impacts on the ongoing work of UNRWA with women, children and, indeed, men. Will we do everything possible to make sure that these cuts do not have to take place? Will we recognise that cuts of that kind, coming so soon after the President’s precipitant action on Jerusalem, must inevitably raise anxiety and unrest about the level of commitment to the Palestinian people required of us by the Balfour Declaration?

[Lord Bates]

As the noble Lord will know from his immense experience in this area, the Government and officials are having meetings with their opposite numbers in the United States, seeking to understand the position in relation to that. As we understand it, a tranche which was due to paid of about $65 million was withheld, the basis for which can vary depending on who you talk to. Part of the reason from the US is that it wants to encourage more international donors to step up to the plate to help to fund UNRWA—and, on that point, I think that it has something to say. The largest bilateral donors are Germany with $76 million, Sweden with $61 million and the United Kingdom with $60 million, while the United States contribution last year was $364 million. It is a huge contributor to UNRWA and, as well as the international community rightly challenging the importance of the humanitarian assistance from the United States, we should recognise the significant contribution that the United States makes to UNRWA’s important work.

[Viscount Hailsham (Con)]

My Lords, at his next meeting with the American Secretary of State, will the Foreign Secretary encourage him not to build the American embassy in Jerusalem but rather to renew the funding to the agency referred to in this Question?

[Lord Bates]

The Prime Minister has already made her position very clear. On 6 December she said:

“Our position on the status of Jerusalem is clear and long-standing: it should be determined in a negotiated settlement between the Israelis and the Palestinians, and Jerusalem should ultimately be the shared capital of the Israeli and Palestinian states. In line with relevant Security Council Resolutions”.


That is why we took almost unprecedented action at the UN Security Council in supporting the Motion, and at the UN General Assembly. We regard the idea as unhelpful to the peace process.

[Lord Collins of Highbury (Lab)]

It is very clear that the reaction of the US authorities is obviously in relation to the UN General Assembly resolution; that was made clear in one tweet that was issued. If the State Department is saying that UNRWA requires reform, would not it be a good idea to engage positively with the State Department and see what kinds of reforms were necessary to ensure continued support for the Palestinian people?

[Lord Bates]

UNRWA is providing essential healthcare to 3 million people and education to half a million children. We recognise that UNRWA could do some things better; UNRWA recognises that it could do some things better. We took up a mechanism last year whereby we introduced a performance review element into our funding of £50 million. That may be a way forward for others to act—but it is for the United States and other donors to step up and act as they choose.

[Baroness Northover (LD)]

Does the Minister agree that it is likely to be preferable for Palestinian children in Gaza to be taught in UNRWA schools rather than Hamas-led ones? In the light of that, will the Government put pressure on the United States to encourage it to restore full funding for the UNRWA schools, which I hope the Minister has seen in operation, as I have?

[Lord Bates]

We have high regard for the work of UNRWA in Gaza; we have a no-contact policy with Hamas. We are supporting the Palestinian Authority as it seeks to re-engage and take responsibility in Gaza. We also work through UNICEF on the ground, providing water and sanitation. I support the noble Baroness’s views on UNRWA schools very much. They have been visited and audited by a number of Members of this House and found to be of a very high standard. We want to encourage that.

[Baroness Redfern (Con)]

My Lords, last year President Mahmoud Abbas of the Palestinian Authority pledged that he would not stop paying salaries to imprisoned terrorists and their families, even if it cost him his presidency. Does the Minister agree that there cannot be peace until the Palestinian Authority truly renounces violence and stops glorifying terrorism against Israelis?

[Lord Bates]

The United Kingdom Government support the Palestinian Authority financially, on the basis that it has a policy of saying that it will recognise the State of Israel and accept its responsibility to clamp down on speech designed to incite hatred and division. That is a condition of our funding; there is no question of any funds from the United Kingdom taxpayer going to support terrorists in prison. Our funding goes via a list of teachers and health professionals, carefully vetted by the EU, to enable them to provide care for people in great need in that area.

Health: Alma-Ata Declaration

Lord Bates Excerpts

Monday 22nd January 2018 Lords Chamber

[Baroness Watkins of Tavistock (CB)]

My Lords, on behalf of the noble Lord, Lord Crisp, and at his request I beg leave to ask the Question standing in his name on the Order Paper.

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

My Lords, achieving universal health coverage, including access to primary healthcare, is a priority for the Government. Our work to deliver the global goal of universal health coverage continues and we welcome the increased international attention on primary healthcare that the Alma-Ata Declaration’s 40th anniversary will bring.

[Baroness Watkins of Tavistock]

My Lords, I thank the Minister for his Answer but to what extent do the Government believe that, in our own four countries, sections IV and VI of the declaration are being achieved—namely, that communities have the right to be involved in planning their services and that primary care should be a central function of the overall social and economic development of the community?

[Lord Bates]

The assessment of the level to which that is the case is a reflection of the priority which we give to primary care, as 90% of healthcare interventions are through primary care. It is absolutely right that we should have community-based solutions. I recently attended an event for the one-billionth treatment of neglected tropical diseases by Sight Savers. It was interesting to learn there that it had community dispensing people who went round in each community with a small measuring stick, which measured the dosage based on the height of the recipient. Two things were found: first, that it was very quick and efficient but, secondly, that there was greater acceptance and take-up because the people were from within the community and there was therefore greater trust. That is a model of how things ought to continue.

[Lord Ribeiro (Con)]

My Lords, following on from the question about the role of general practice, and mindful of the fact that we recently combined the Department of Health with social care, is it perhaps not time to redefine the role of general practice to ensure continuity of care between the two sectors and avoid some of the problems we saw in our A&E departments over the Christmas and new year period?

[Lord Bates]

That coming together of health services is obviously important. We share that knowledge and expertise through international health partnerships with some of the poorest countries in the world so that they can learn from it as well. But my noble friend is absolutely right to say that those first points of contact are essential in a good, functioning primary healthcare system, which was the Alma-Ata aspiration.

[Lord Collins of Highbury (Lab)]

My Lords, building sustainable health systems is clearly critical to address health inequalities. Ebola in Sierra Leone has taught us many lessons. Just how are the Government responding to building sustainable health systems to ensure that the global community can withstand the next round of diseases that will hit it?

[Lord Bates]

That resilience work is important. We work closely with the World Health Organization and, importantly, with health organisations in the countries concerned. We are certainly putting more money into this than ever before and have made some big commitments: to the Gavi vaccine programme, with £1.4 billion; to the Global Fund, with £1.1 billion; and to the Ross Fund, which will do some pioneering work in researching this area of diseases, with about £1 billion as well. Significant amounts are going in but we need to do more.

[Baroness Nicholson of Winterbourne (Con)]

Since the Alma-Ata Declaration is based on the foundations of the National Health Service, albeit some years later than the foundation of the NHS, does the Minister think that our Government could promote the declaration within the concept of the National Health Service principles a great deal more than we do? It is, after all, the key rulebook of the World Health Organization and something that we helped to create.

[Lord Bates]

It is the key rulebook of the World Health Organization, but we should also remember that in the intervening 40 years we have had the sustainable development goals. Sustainable development goal 3 on health contains many of the provisions in the declaration. The sustainable development goals, unlike the millennium development goals, apply to all countries that sign them, not just least-developed countries.

[Lord Rea (Lab)]

My Lords—

--- Later in debate ---

[Baroness Sheehan]

Primary healthcare is critical in reducing child and maternal mortality through family planning initiatives, yet DfID has failed to provide funding this year to both the International Planned Parenthood Federation and Marie Stopes International. Should DfID not have safeguarded these essential programmes for women when remodelling the programme partnership arrangements, particularly in the light of the Trump Administration’s global gag rule?

[Lord Bates]

The noble Baroness particularly mentioned the programme partnership arrangements but we have changed that and distribute the money through a different mechanism to many similar organisations. I must put on record the fact that the UK Government and the people of the United Kingdom can be proud as they have done more in the area of family planning and providing access than any other Government. We initiated the first family planning summit in 2012, and we held the last one in 2017. We have made huge commitments in this area and are the second-largest donor, in overall terms, in this very important area of giving women control over their own lives and futures, which is important not only for the economy but for education.

[Lord Rea]

The Alma-Ata conference and declaration changed the attitudes of Governments and health planners by demonstrating the cost-effectiveness and humanity of universal primary care as compared with possibly more prestigious but very expensive secondary care hospitals. Is that not relevant to the situation we have in this country today, with hospitals full of patients with chronic diseases which could have been prevented and could certainly be cared for in the community if we had properly funded primary and social care?

[Lord Bates]

We need to remember that, in Alma-Ata in particular, we are referring to some of the poorest countries in the world. We have the best health service in the world. That is not just my word; that was recognised by the Commonwealth Fund, which produced that statistic saying that we have the best healthcare. It is a tremendous service. In many of the countries that we are dealing with, people have to travel for days or weeks to get any sort of health intervention. We need a priority to ensure that those people are brought into the ambit of the sustainable development goals so that they get the healthcare they need and we save lives as well as being mindful of the important responsibility we have in this country.

[Baroness Finlay of Llandaff (CB)]

Given the excellent public health record that now 91% of the global population has improved water—up from only 76% in 1990—does DfID still recognise that 2.3 billion people do not have access to a decent toilet and that it is important for our own health that the 9 million new cases of tuberculosis worldwide are diagnosed early and managed appropriately? Will DfID undertake to work with those of us in end-of-life care and pain relief to make sure that the 150 countries where there is virtually no access to any pain relief are encouraged to come into line with modern science in pain relief?

[Lord Bates]

I am very happy to do that. Of course, with these waterborne diseases, clean water and sanitation are important. They come under sustainable development goal 6, which we are committed to as well. We are dealing now with the Rohingya situation in Cox’s Bazar—the diphtheria outbreak there is waterborne. There is a massive outbreak of cholera in Yemen. These are important issues, which is why we are drawing on the resources of British taxpayers and ensuring that they are distributed to the people in need.

Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2017

Lord Bates Excerpts

Monday 22nd January 2018 Lords Chamber

Moved by

[Lord Bates]

That the draft Regulations laid before the House on 6 December 2017 be approved.

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

My Lords, the statutory instrument that I will discuss today follows the reforms introduced by the Government in 2015 to modernise and streamline the insolvency process. Those reforms were commenced in stages and these regulations cover the application of the 2015 reforms that came into effect in April 2017. The regulations will amend the financial sector insolvency regimes to take account of the April 2017 reforms.

For the benefit of noble Lords I will briefly set out where these regulations fit within the context of general insolvency law. As a starting point, insolvency law is based on the 1986 Insolvency Act which has been amended various times, including by the tranches of Government reforms instigated in 2015. This broader legal framework has been subsequently modified into specific insolvency regimes for different sectors, including for financial services. The insolvency regimes for financial services exist because general insolvency procedures are not always suitable for failed financial institutions. This is because general insolvency law does not necessarily reflect the complex nature of financial institutions and the impact that can arise from their failure.

I will now provide more detail on the 2015 reforms, explaining the genesis of the regulations before the House today. The 2015 reforms resulted in wide-ranging changes to the UK’s general insolvency regime, which broadly affected all sectors. These reforms were implemented in several stages: in May 2015, October 2015, April 2016 and the final tranche in April 2017.

The April 2017 reforms did multiple things. First, they removed the default requirement to hold a physical meeting of creditors as the decision-making mechanism in an insolvency proceeding. Instead, a deemed consent procedure has been introduced which allows actions to be taken in an insolvency unless the creditors oppose the action. If 10% or more of creditors object to the proposal then the office holder will use an alternative decision-making process, such as a virtual meeting, correspondence or electronic voting. These changes remove unnecessary burdens and enable the greater use of technology to reduce the cost of administering insolvency proceedings. Secondly, they enable creditors to opt out of certain notices for both company and individual insolvency. This reform reduces the expense of sending notices for the office holder and similarly reduces for the creditor the expense of dealing with unnecessary and unwanted notices. The regulations before the House today apply the reforms of April 2017 to the specific financial services insolvency regimes where appropriate.

I will now set out further detail on who the regulations will affect. For companies, partnerships or individuals carrying on insurance or other financial activities, the regulations work to align those specific regimes with the April 2017 reforms. By aligning the insolvency proceedings for these kinds of financial firms with the April 2017 reforms, the amended regulations ensure that the benefits of the broader 2015 reforms to UK insolvency law extend to the financial sector.

However, in the case of modified insolvency regimes for financial institutions which are not companies, partnerships or individuals, and specialised regimes such as those for banks and building societies, the regulations do not apply. Instead, the regulations keep the legislation as it was prior to the April 2017 reforms coming into force. Due to the considerable volume of legislation affected by the 2015 reforms, this approach is necessary while the impact of the reforms on these types of institutions is further assessed and decisions are made about their implementation.

These consequential amendments are required to update and maintain consistency in legislation that governs the insolvency regimes for financial sector firms. The Government are committed to improving public and business confidence in the insolvency process. Having clear legislation that governs this process is fundamental in achieving this confidence. I beg to move.

--- Later in debate ---

[Lord Tunnicliffe (Lab)]

My Lords, before I start I should apologise for what is going to be a rather scrappy and rambling speech. The reason for that is that rather lazily I started to look at this instrument only on Saturday, and I have to say that I pretty much regret that I did so. I had great trouble in trying to understand it, particularly the Explanatory Memorandum. Either these regulations are important or they are a trivial tidying-up exercise, but I could not work out which. They seem to centre on meetings and notices. I shall quote from the Explanatory Memorandum:

“insolvency law reforms enacted in sections 122 to 126 of, and Schedule 9 to, the Small Business, Enterprise and Employment Act 2015”.

Paragraph 7.4 sets out what the principal changes are. As the Minister said, they concern the removal of physical meetings for creditors and allowing them to opt out of receiving certain notices. That seems unobjectionable until one reads, together with paragraph 7.5, paragraph 7.6:

“This instrument therefore takes a staggered approach to the amendment of the Treasury’s financial services legislation, disapplying the reforms for the majority of its special insolvency regimes”.


The special insolvency regimes are enormously important. They culminate in the Bank of England’s approach to resolution, which is a combination of several Acts. I see the noble Lord, Lord Young, in his place. We have battled over the bits and bobs of these Acts—well, battled is not quite fair, but sought to understand them and how they fit together. Of course, the consequence of the Bank of England’s approach is that banks do not become insolvent. They are resolved before that. It is already quite complicated.

I thought, “Well, why don’t I break the normal rule and look at the regulations?”. It is pretty desperate when you have to look at the regulations because they are, as usual, pretty indecipherable, especially as they run to several pages, despite an apparently simple purpose of disapplying something in a particular place. Since it was so long I thought I would pick on something that I think I know a little about. That took me to page 5 of the regulations on the Banking Act 2009. Regulation 6(3)(a) requires that,

“the entry for section 141, in column 3 at the beginning insert … ‘Ignore the amendment made by paragraph 36 of Schedule 9 to the 2015 Act’”.

This is a form of legislation that I have never come across before. I am used to instruments changing the law and so on, but to say to disapply a law, or to read it as though it has not been amended, which is what this says, creates immediate problems. You can get into the Small Business, Enterprise and Employment Act and find out what is to be disapplied, but you then have to try to find what disapplying the Act means. It means going back to the Insolvency Act 1986 to see which particular amendments to that Act were in force before April came along and it was changed to something that these regulations want to change it back to. I failed. I could get a copy of Section 141 as enacted in 1986 and I could look up the section that now exists until these regulations become active. It proved why I am not a lawyer: while the words are different, I could not find any difference in the meaning.

It seems that the essence of this is: what is the damage if we do not approve? I hope that smiling and shaking of the head from the Minister means that he will write to me rather than try to answer me. I would like an answer to this in writing if the Minister cannot provide it tonight: what damage to the insolvency regime—particularly in the Financial Services and Markets Act 2000, the Banking Act 2009 and the other Acts mentioned in the regulations—would occur if we were not to approve these regulations? If the damage is trivial, that is fair enough. If the damage is that it puts in doubt the working of the special resolution regimes which the Treasury has developed and put into law, it is very serious. If those regimes are seriously damaged, the resolution approach which the Bank of England thinks it has may be at risk

One problem with bank resolution is that it is something that one never does. The trick is for the industry to know about it and think, “That is going to be so painful, we will be careful enough not to get into that position”. So we do not have any case law. However, we nearly had some case law: the Co-op Bank was within a whisker of going broke. The resolution regime worked in that the creditors, those who were owed money by the bank, thought that they would get an even worse deal under the resolution regime than by putting together their own deal, so they put their own deal together within hours of the point at which they would have run out of money. The resolution regime therefore worked by virtue of its existence, but is it fatally flawed until we approve this instrument?

If that is the case, it means that the 2015 Act contains a serious flaw, and we need to know how that happened. Was there not proper consultation in developing the Act? I assume that the original parent of the Act was BIS, as it was known then. The developer of the special resolution regimes is the Treasury. It seems to be either some trivial tidying-up or a serious mistake, for which I would look to the Minister to apologise. One thing I think I can ask him to apologise for is the Explanatory Memorandum. As a politician of average intelligence—you might call that a bear of little brain—I found it impossible to work out just how important this instrument is or is not.

[Lord Bates]

I am grateful for those contributions and for your Lordships displaying your usual assiduousness in these matters, which, as I outlined in my opening remarks, are technical in nature.

[Lord Tunnicliffe]

We should be clear that “technical” does not mean “trivial”. “Technical” can be at the essence of whether the law is working.

[Lord Bates]

I absolutely agree with that. Often in legislation we deal with the overarching principles and leave the technical aspects, which are not trivial but very significant, to be worked out through secondary legislation, which is the purpose of our discussion here.

I shall come on later to the points raised by the noble Lord but want first to address those made by the noble Baroness, Lady Burt, who asked about the general genesis of the regulations. Due to the considerable volume of legislation affected by the 2015 reforms, this approach is necessary while the impact of reforms on these types of institution is further assessed and decisions are made about implementation. In many ways, that is about trying to learn as we implement so that we do not overcorrect what we seek to introduce. Today’s regulations are consequential amendments to the financial sector insolvency regimes to take account of the April 2017 reforms. Given the limited amount of parliamentary time available, there are currently no plans to consolidate the legislation. Stakeholders who are directly affected by the legislation and therefore need a more granular understanding will be able to purchase consolidated versions of it from commercial providers.

I come to the point raised by the noble Baroness about impact assessment. BEIS carried out an extensive consultation before bringing forward the insolvency reforms. BEIS received information in this consultation which refined the policy, and it helped the impact assessment process to quantify the cost of these regulations. BEIS further undertook a full impact assessment for the changes brought in by the wider reforms and for the impact on the economy as a whole. It is a very important part of those principles that that is considered in that way.

[Baroness Burt of Solihull]

I am interested to know, since the Minister says that BEIS did quantify the costs, why that quantification was not included in the legislation itself, in this instrument.

[Lord Bates]

I shall double-check, but my feeling is that those impact assessments were published earlier in the sequence of legislation and reforms that I mentioned. I shall double-check but if that is not the case, impact assessments are normally a matter of public record and they will therefore be made available. The noble Baroness also asked how the financial sector will benefit from these changes. Where these regulations apply the reforms, firms in the financial sector will benefit from a modernised and streamlined insolvency process. The benefits include removing unnecessary burdens, such as requiring a physical meeting of creditors. Financial institutions will not be directly affected by these. As to the impact these regulations will have on the financial sector, these regulations apply the reforms where appropriate, ensuring that the benefits of the reforms are extended to the financial sector. Where the regulations do not apply the reforms, there will be no impact on the financial sector. As I mentioned, an impact assessment was undertaken.

I come to some points raised by the noble Lord, Lord Tunnicliffe. He focused on recalling the impact of the Banking Act 2009 and asked what the impact might be on the Bank of England’s resolution of banking problems to ensure smooth working. The insolvency regimes for financial sector firms that we are discussing today sit alongside the Bank of England’s powers under the special resolution regime established by the Banking Act 2009. Today’s regulations are required to update and maintain consistency in the legislation that concerns these special insolvency regimes. The regulations do not affect or amend the Bank of England’s powers under the special resolution regime.

The noble Lord also asked about the drafting of the statutory instrument, basically saying that it is not acceptable because you need to see the Banking Act 2009 before it was amended. Today’s regulations are consequential amendments that amend the financial sector insolvency regimes to take account of the April 2017 reforms. Given the limited amount of parliamentary time available, as I mentioned earlier, there are currently no plans to consolidate the regulations.

[Lord Tunnicliffe]

The thing that worries me is that the language the Minister uses suggests a progressive improvement while in fact this instrument disapplies—it does not update; it “undates”, for want of a better term, although I do not think that there is such a word. It suggests that the conclusion has been reached that the application of the 2015 Act in the area of financial services is actually doing harm. Nobody is going to disagree with the 2015 Act to the extent to which it reduces bureaucracy, but this instrument says, if I have read it properly, that it will not apply in these circumstances. It seems a very unusual instrument for that reason, and the only logic for it is that there is harm in it applying—unless I have totally misunderstood the instrument and the Explanatory Memorandum.

[Lord Bates]

The noble Lord has not misunderstood it, but in my opening speech I said that what is proposed here is to disapply while application of the other measures referenced went ahead. I would have thought that that could be supported. I accept the noble Lord’s point that it is perhaps unusual to do it in that way. However, it has been done in consultation with the businesses that are affected, which believe that this is an effective way forward. Clearly, that is why we are legislating in this way.

[Lord Tunnicliffe]

May I press the Minister just a little more? I recognise that we will not resolve this tonight—and, of course, as ever, we will not cause a constitutional crisis and vote against it. However, I would be grateful if I could have a detailed response by letter from the Minister setting out what would happen if this instrument were not passed. What harm is being done by the fact that the 2015 Act currently applies and has to be disapplied to the position before the Act in a set of particular circumstances, with particular reference to the Banking Act and the resolution regime?

[Lord Bates]

I am happy to do that. I will write in detail to set this out, and I hope that that will be helpful for the record. I am also happy to copy that to the noble Baroness, Lady Burt, as some comments were made about the Explanatory Memorandum, which I hope will be covered as well.

I reiterate that the impact assessments have already been published, and I will provide in my letter to the noble Lord, Lord Tunnicliffe, a copy of—or more probably a link to—that impact assessment. I hope that, with those reassurances and the commitment to write, noble Lords will accept these regulations, which I commend to the House.

Motion agreed.

Greece: Migrant and Refugee Support

Lord Bates Excerpts

Wednesday 17th January 2018 Lords Chamber

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

My Lords, the UK is supporting the European Union, which, with the UN High Commissioner for Refugees and other organisations, is working tirelessly with the Greek Government to improve the conditions for refugees. The EU has allocated more than €1 billion in emergency funding to Greece.

[Baroness Massey of Darwen (Lab)]

My Lords, I thank the Minister for his response and I know that he is genuinely interested in this issue. Perhaps I may focus on unaccompanied children in these hotspots. How many unaccompanied minors are in hotspots and what are the UK Government doing to liaise with organisations which support and protect these children?

[Lord Bates]

The Government are very concerned about the reports of conditions in the camps on the five hotspot islands which currently operate as receiving centres. The current numbers are 394, of whom 299 are unaccompanied children and 95 are separated children. The greatest number of unaccompanied children are on Lesbos island, where there are 168, along with 66 separated children.

[Lord Hylton (CB)]

My Lords, the Minister and I have been in correspondence about this precise situation and I thank him for his replies. Can he confirm, first, that the emergency aid which he mentioned will be concentrated on dealing with the worst camps on the islands? Secondly, does he agree that there should be no compulsory returns of refugees to Turkey but that, on the other hand, those who can voluntarily return to their countries of origin should be given all possible help?

[Lord Bates]

Following the intervention of the European Commission—we are working through the commission and the UNHCR in this regard—a number of urgent steps have been taken. The first is to speed up the rate at which assessments are taken; the second, to address the point of the noble Baroness, Lady Massey, is to identify vulnerable children and make sure that they are moved out of the camps and on to the mainland as soon as possible; the third point is to ensure that new accommodation is built and opened up. Those steps will go some way towards addressing what is obviously a horrific situation for the people who are living there and experiencing it.

[Lord Collins of Highbury (Lab)]

My Lords, one issue is the policy of containment on the islands. The conditions are deteriorating, particularly over the winter. Oxfam and many NGOs have been calling on the Greek Government to move people to the mainland, so that facilities can be improved. Have the Government had any discussions with the Greek Government about that, including giving financial support?

[Lord Bates]

In all these things, we work through our European partners to address these situations and they have been very involved. We also have people from the Home Office in the UK seconded on to the islands. They are acting as camp security and liaison managers, and helping to identify and register young people. But exactly those types of efforts are part of the prioritisation that I referred to in reply to the noble Lord, Lord Hylton, by ensuring that winter accommodation and heating are there for them now. The number currently on the islands is 14,000 and there are 48,000 on the mainland; that is 62,000 people in this position and we need real urgency to improve the humanitarian response.

[Baroness Sheehan (LD)]

My Lords, does the Minister agree that the rumour that the Home Office has closed the Dubs scheme is given credence by the fact that the majority of Dubs places remain unfilled, yet just one lone and very traumatised child has been transferred to the UK from Greece, and that only after litigation? If he does not agree, can he say how many lone children we can expect to arrive within the next six months under the Dubs scheme?

[Lord Bates]

The scheme to which the noble Baroness refers under Section 67 of the Immigration Act, after an amendment, ably proposed by the noble Lord, Lord Dubs, requires other member countries to make referrals to us. What has been established under it is a facility for 480 children to come to this country. Two hundred have already come, although I accept that they were categorised under the 900 as part of the agreement with France for the clearance of the site referred to as the Jungle. But that scheme remains open and is an important factor, along with four or five other schemes that are helping the most vulnerable people to get access to the help and security they need.

[The Lord Bishop of Durham]

My Lords, what steps are being taken to pressure the EU to accelerate family reunification processes? Our colleagues in the Anglican communion in Europe have noted that applications made for family members in Greece to come to this country are currently taking well over a year and that the processes have, sadly, slowed in the past 18 months.

[Lord Bates]

I am sorry to hear that. Our records show that some 24,000 people have come to this country through the Dublin regulations. That is an important part of the facility. However I say to the right reverend Prelate that we are talking about tens of thousands of refugees. Let us not forget that there are 13.1 million people in Syria who are in urgent need of humanitarian assistance, 5.4 million refugees from Syria still in the region and 6.1 million internally displaced people. That is why we are one of the largest donors, donating £2.46 billion, to those people in need. We need to keep both sets of people in our mind.

[Lord Dubs (Lab)]

Is there any reason why the children in terrible conditions in Greece, particularly on the islands, cannot be brought over here under Section 67? The Government have said that the limit is 480 children. So far, we have had 204 children, I think. Why can we not do that now?

[Lord Bates]

Under the mechanism of the rules to which the noble Lord referred, they need to be referred to us by the Greek Government once they have applied for asylum and their application has been proceeded with. That is part of the EU/Turkey agreement. Those are the rules. We have other schemes, such as the vulnerable persons resettlement scheme, which brought in 9,394 people last year, and the vulnerable children resettlement scheme, which brought in 412 children. These are all substantial steps to address that issue while at the same time remembering the great humanitarian issue in the region, which is children who are living in a war zone. We need to make sure that they get the help and support they need.

Syria: Refugees

Lord Bates Excerpts

Tuesday 16th January 2018 Lords Chamber

[Baroness Hodgson of Abinger]

To ask Her Majesty’s Government what help they are giving refugees and internally displaced persons in the countries bordering Syria who have been displaced by fighting and the actions of Daesh.

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

My Lords, the UK is at the forefront of the international humanitarian response to the Syria crisis. We are providing life-saving and life-changing support to millions of people displaced inside Syria, and to millions of Syrian refugees living in neighbouring countries as a result of Daesh and the ongoing conflict.

[Baroness Hodgson of Abinger (Con)]

I thank my noble friend the Minister for his Answer. Last September, I went to Kurdistan to observe its referendum and while in Irbil, I visited St Joseph’s Cathedral. There, the church is helping Christian refugees and internally displaced people who, I was told, are not able to go to the UN refugee camps as they are not safe there. I understand that this is the case in Jordan too. Is DfID aware of this situation and what are Her Majesty’s Government going to do to investigate these claims? Please can they take it up with the UNHCR and UNICEF to ensure that everyone, regardless of their religion, is able to get the help and protection to which they are entitled? Would my noble friend be willing to meet me and others who are interested in this, so that I can raise these matters further?

[Lord Bates]

I would certainly be willing to meet my noble friend. In fact just this morning, I met the All-Party Parliamentary Group for International Freedom of Religion or Belief and earlier I met with the noble Lord, Lord Alton, and my noble friend Lady Nicholson. I believe there is repeated evidence that there is no fair treatment in the refugee camps. That is deeply worrying because the UN Convention on Refugees advocates against any discrimination at all. Her Majesty’s ambassador in Amman, Jordan, is hosting a roundtable on 23 January with faith leaders and the UNHCR so that they can present their findings and the evidence they have received, so as to seek to remedy any discrimination against people fleeing the terrible actions of Daesh and other organisations.

[Lord McConnell of Glenscorrodale (Lab)]

My Lords, I think we can all agree that the best investment for refugees and internally displaced people is education, giving an opportunity for children who have been displaced across borders or within states to have a better future as time moves on. What are the Government doing to support education for refugees and internally displaced people not just in Iraq and Syria but elsewhere too?

[Lord Bates]

The noble Lord is absolutely right; this is a priority. There are good campaigns on this: Education Cannot Wait and No Child Left Behind. These initiatives are very important and we fully support them. Our efforts in Lebanon have provided education places for some 300,000 Syrian children and for about the same number in Jordan. The noble Lord is absolutely right that these protracted crises disrupt the future generation on which any peace will be built.

[Lord Alton of Liverpool (CB)]

My Lords, the ethnic and religious minorities in Syria who have been hunted down in a campaign of genocide are now caught in a vicious circle after not daring, as the noble Baroness said, to enter the camps because their lives will be at risk there too, and then they are excluded from the vulnerable persons resettlement programme. I welcome what the Minister has told the House, but how does he respond to official figures that show that in the third quarter of last year fewer than 1% of Syrian refugees resettled under that programme came from those hunted minorities—just 13 out of 1,583 refugees accepted in the UK—despite the fact that those minority groups made up some 10% of the Syrian population before the war began in 2011?

[Lord Bates]

Part of this is about collecting the data— that is very important—and the other part is to be very clear about what is going on. The special rapporteur on minorities in Iraq reported to the UN General Assembly:

“Overwhelming evidence supports claims of crimes against humanity, war crimes and genocide that must be fully investigated and appropriately addressed by the Government and the international community”.


That is why we support the investigation of Daesh crimes and the collection of evidence as requested by United Nations Security Council Resolution 2379 in September.

[The Lord Bishop of Leeds]

My Lords, is the Minister aware that there is a generational challenge here? When one visits Kurdistan, in particular, the older generation of those who have been internally displaced or who are refugees still have a conception of home to which they might wish to return. The younger generation, whoever you talk to, do not see that home as existing. They want to be somewhere else. Are the long-term implications of this, particularly in relation to the education of children, being taken seriously by Her Majesty’s Government?

[Lord Bates]

They are being taken seriously. They are also being taken seriously by the UNDP which has the funding facility for stabilisation in Iraq. It is working with the federal Government in Iraq and also the regional government in Kurdistan based in Irbil. It is looking at these plans. One aspect of hope that I was encouraged by is that more than half the people who were displaced as a result of the fighting and the conflict in Iraq have now returned home. The reason why many do not return home is fear over security. That is one of the issues that needs to be addressed.

[Baroness Sheehan (LD)]

My Lords, Palestinian refugees who fled from Syria are in a particularly vulnerable situation given their uncertain legal status. What are the Government doing to ensure that Palestinian refugees receive the same level of support as Syrian refugees and are not discriminated against simply because they have had to move home twice?

--- Later in debate ---

[Lord Bates]

That is a very good point. It is certainly something that I should look into further and I will write to the noble Baroness with an update.

[Baroness Berridge (Con)]

My Lords, I welcome my noble friend’s acceptance of evidence and cases in relation to the treatment of religious minorities that affect aid. However, as outlined by the noble Lord, Lord Alton, this also affects the resettlement programme. Is it not now time that the UK asked the United Nations to hold an independent investigation into these claims, so that we can know the truth as to whether or not the millions of pounds of aid that has been sent by the UK taxpayer has actually reached the people who most need it?

[Lord Bates]

We discussed that issue this morning. As I said at that meeting, I will look at the readout and the feedback from the meeting taking place on the investigation into the claims in Amman next week, on 23 January, to see whether we need to take further action with the UN to ensure that it upholds its own convention in not exercising any discrimination whatever on the basis of religious belief or identity.

[Lord Collins of Highbury (Lab)]

My Lords, the huge pressures on the host nations neighbouring Syria, particularly Lebanon and Jordan, are obviously of concern. Can the Minister update us on exactly what support we are giving to ensure that the host communities are not put at a disadvantage and to make sure that we do not end up with a conflict situation as a consequence of this terrible refugee crisis?

[Lord Bates]

That is a very good point. Turkey of course has the largest number of refugees—some 3 million—and there are 1.5 million in Lebanon and 660,000 in Jordan. We have given some £543 million to Lebanon and £429 million to Jordan. Perhaps more important for the long term are these compacts that we now have with Jordan and Lebanon, where we are providing not only for education but also for livelihoods, so that people can actually rebuild their lives while waiting to return home. That is very important.

Brexit: Customs Procedures

Lord Bates Excerpts

Monday 15th January 2018 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government what are the plans, timescale and budget of Her Majesty’s Revenue and Customs to develop and implement paper-free customs procedures for just-in-time freight between the European Union and the United Kingdom after Brexit.

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

My Lords, the Government have been clear that their priority is to ensure that international trade can move as freely and be as frictionless as possible after we depart the European customs union. Precise arrangements are a matter for negotiations. The Government recognise that many business sectors operate complex supply chains that are sensitive to administrative burdens and delays and are exploring the implementation of a technology-based solution that would allow trade to flow more smoothly across borders.

[Lord Berkeley (Lab)]

I am grateful to the Minister for that Answer. He will recall that a few weeks ago Monsieur Barnier told representatives of the industry that they should prepare for a cliff-edge Brexit even if that did not happen because it would be prudent to do so. I heard the same message from him earlier in the year. Is the Minister aware of 77 different examples of industry sector data that come from Customs? I have put a copy in the Library in case the Government do not have that information. Surely, alongside industry helping itself, it needs to have detailed discussions with the Government on each sector and each means of transport, particularly for the time-sensitive stuff, so that when this happens there is no hold-up. I hope the Minister can give us some confidence that that will happen.

[Lord Bates]

I can certainly give noble Lords that confidence. As one would expect, the Treasury and HMRC have had over 300 meetings with trade bodies and officials about preparedness. We have our own customs data service—the electronic response that we believe will be ready by January 2019 to take the strain. There is also potential for a back-up system alongside the existing chief system that is in operation. We believe that a lot of work has been done. There is a lot of work for the ports to do as well in terms of their own inventory systems. But as 99% of customs declarations are done electronically at present, there is a great opportunity for us to advance that part of the way we do business to ensure a frictionless way of transacting business going forward.

[Lord Bradshaw (LD)]

The logistics industry is one of the most efficient parts of our economy, mainly in road haulage but also in warehousing just-in-time distribution. Industry would be severely handicapped if supplies did not arrive at the factory gate or in the shops absolutely on time. Have the Government had detailed discussions with the Freight Transport Association, the Road Haulage Association and the ports authority to work out what would happen if things do not work as the Government hope they will?

[Lord Bates]

Those are exactly the types of conversation we are having. Noble Lords would expect us to have those conversations and we are having them. We have a cross-government border planning group planning for that type of evaluation. But on just-in-time, a lot of the goods come from outside the European Union area. The UK has had great success and has been a prime target for foreign direct investment into the European Union because of the efficiency and speed with which those goods are cleared. We need to ensure that that is now extended to goods coming from within the EU as well.

[Viscount Waverley (CB)]

My Lords, in declaring a pending declaration, is it anticipated that the UK’s system will be capable of integration into a wider, regional or global single window and of preventing fraudulent declaration of shipping data from third-party sources within global supply chains?

[Lord Bates]

That is a really good idea. There are some opportunities coming here. The noble Viscount will be aware that HMRC is moving to a making tax digital platform for VAT declarations. That type of joining up of the customs data with VAT will be something that could augment further trade with the rest of the world.

[Lord Hamilton of Epsom (Con)]

Will my noble friend confirm that the United States is a major export customer for this country with which we have no free-trade deal? There seems to be no hold-up in sending goods to America.

[Lord Bates]

Some 18% of our goods go to the United States. It is a very important market for us. Also, we are seeing significant investment from the United States into the UK. In the technology sector, Apple is coming here. Bloomberg is expanding its operations here, as is Facebook. There is a great opportunity for Britain to have a lead in technology and trade.

[Lord Davies of Oldham (Lab)]

My Lords, is the Minister aware that Parliament needs to be kept very fully informed about developments in this area? There is no way that Parliament can speak on behalf of industry and the workers in industry without a clear understanding of where the Government are at on these issues. Will he therefore recognise that there is an element of concern that the cross-border trade Bill, which is at present before the other House, may well be defined, in the way the Government have drawn it up, as a money Bill? Therefore, this House, with its expertise, will have a very limited ability to express its views on such matters.

[Lord Bates]

As the noble Lord will know, those are technical matters; it is officially for the Speaker in the other place to determine what is a money Bill and what is granted a certificate. On the importance of that Bill and debating it, he is certainly right. In the other place, the Treasury Select Committee and the Public Accounts Committee have been looking at and probing the system’s readiness, as they should. We published a trade White Paper, which had a tremendous amount of feedback that we have incorporated and learned from. We have also published working papers on future partnerships that we have shared with our European colleagues because we want to make sure that the borders work well together.

[Lord Newby (LD)]

My Lords, the Minister implied in his Answer that because additional requirements were to be dealt with online, there would be no additional cost. Those of your Lordships who have done things online find this a somewhat dubious assertion. Does he accept that for small businesses even doing business with Norway now, which is inside the customs union, involves a significant amount of additional time and that if we are not within the customs union, and certainly being outside the EU, small businesses will need to spend much more time filling in customs forms online? For many, that will make the difference between trade being viable and not viable.

[Lord Bates]

We have to try to reduce that. The fact that manufacturing output is now in its fastest growth period for 23 years and unemployment at its lowest level for 42 years shows that businesses—the majority of which in this country are small businesses—are doing well in this environment. This was a particular consideration of the making tax digital discussion that we had: obviously, we believe that technology does not impinge on small businesses to a degree that reduces their competitiveness. We believe technology can enhance competitiveness, not reduce it.