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Lords Chamber

Volume 694: debated on Wednesday 25 July 2007

House of Lords

Wednesday, 25 July 2007.

The House met at three o'clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Sheffield): the LORD SPEAKER on the Woolsack.

EU: Intergovernmental Conference

asked Her Majesty’s Government:

Whether the exclusive mandate given by the European Council on 23 June to the intergovernmental conference that opened on 23 July on the European Union is legally binding.

My Lords, the mandate for the IGC was agreed by heads of state and government at the June European Council. The mandate is a political commitment by the Governments of member states. The IGC was formally launched on 23 July at a meeting of EU Foreign Ministers in Brussels and will carry out its work in accordance with that mandate.

My Lords, I am most grateful to the noble Lord for that reply, but I do not think that he has really answered my Question. The mandate given by the European Council is invalid, I believe. Perhaps he would like to rephrase his Answer. Under Article 48 of the treaty on European Union, the European Council has the power only to ask for an intergovernmental conference, not to set the agenda for it. That is up to the member states. It is clear that the mandate and the Council conclusions are trying to set the agenda. Could the Minister make clear whether the Government agree that the mandate is legal or whether it is up to member states to set the agenda for this intergovernmental conference?

My Lords, the noble Lord is correct to say that it is a political mandate, not a legal mandate. It is an agreement by Governments to commission work to develop the treaty, which will then be subject to approval by both Houses as in other national legislatures.

My Lords, does my noble friend not agree that this is an extremely good political mandate? As my right honourable friend the Prime Minister pointed out at Question Time in another place, it preserves every single reservation that the British Government expressed in advance of the IGC at the Heads of Government meeting?

My Lords, I am very grateful to my noble friend for his question. I can concur with every fine point he has made. The Prime Minister was able to achieve his four red lines and, therefore, hand on to this House and the other House a process in which we can all have confidence.

My Lords, everyone surely agrees that this is definitely a political mandate. As the European Community already has its own legal personality, as do all 27 sovereign member states, can the Minister, who is a new Member of this House, explain why there is such extraordinary and neurotic fuss from the tiny minority of Europhobes—they are over there, mostly—in this House? Would it not be better if we all praised and supported the Government for standing up to the Murdoch myths now that Mr Blair has gone?

My Lords, this is a very new Member of this very distinguished House. Like in any new club, I would hesitate before offering an explanation about the behaviour of my elders and betters.

My Lords, does the Minister agree that it is in Britain’s interest that the agenda for the intergovernmental conference should be extremely tightly drawn, as it has been by the European Council, which is to be welcomed? Does he not find it rather bizarre that the noble Lord who asked the Question belongs to a party which wishes Britain to withdraw from the European Union but is not welcoming the drafting of a treaty which for the first time provides for a member state to leave?

My Lords, I thank the noble Lord for putting it that way. Obviously there are very strong differences of opinion in this House. This is a well drawn document, which will be subject to extensive debate here and in another place. Knowing the fine forensic legal skills on display in this Chamber, I am sure that it will be subject to a process of review and perhaps even refinement.

My Lords, I assure the noble Lord that it will be translated into English as quickly as possible. I am sure that the intention is to ensure that the English translation is as good as that very fine French original.

My Lords, does my noble friend agree with my suggestion, after 30 years in this House, that we have a long way to go on these issues; that, with luck, we shall only see where we are before December; and that it does not help debate to advance amateur psychological attacks on people with whom you disagree, calling them phobics and crackpots? We want rational debate on these matters, and I am sure that my noble friend will make a distinguished contribution to that.

My Lords, I thank my noble friend. As he knows, I have taken care not to use any such language. I am extremely respectful of the differences of opinion in this House and, as a newcomer, a little in awe of the wisdom that has contributed to the debate. I shall respect every point of view that I hear in this Chamber and try to address every question with equal attention.

My Lords, in an attempt to encourage such rational debate, will my noble friend emphasise that the proposal provides new opportunities for this House and the rest of the Palace of Westminster to comment on proposals from the European Commission? It is an enhancement of our democratic rights that will be developed, is it not?

My Lords, I thank my noble friend for that point. It is indeed intended as just such an enhancement of that right. I might, though, head off anyone who raises the fact that the extra power for national parliaments is poorly drafted in the existing document. Our colleagues in Brussels will work to try to improve the language so that there is no suggestion that any house of parliament anywhere is somehow beholden to the European Union. The relationship is obviously the reverse of that.

My Lords, I return to my original question on the treaty. The Irish Government said that it contained 90 per cent of the original constitutional proposals, which were rejected by France and the Netherlands; the Spanish Government have said that it contained 98 per cent of the original provisions; and the Luxembourg Government have said it contained 99 per cent. Which of those options do the Government consider right?

My Lords, I think that the Prime Minister has answered that question in another place, but let me just add that the human body is something like 96 per cent water; I don’t know about the noble Lord, but I am very attentive to the other 4 per cent.

Public Companies: Directors’ Remuneration

asked Her Majesty’s Government:

Whether they intend to require all public companies to disclose the pay gap between directors and their employees.

My Lords, in a Written Statement on 26 June about commencement of the Companies Act 2006, the Government announced their intention to require quoted companies to report more effectively on how pay across the company is taken into account in setting directors’ remuneration. Draft regulations were published on 19 July 2007, and these will be consulted on until 30 September this year.

My Lords, I thank the noble Lord for that Answer. Previously when he has answered Questions on this subject from me, he has adopted the traditional Pontius Pilate approach of the Government in washing their hands and saying, “Leave it to the investors”. Does he not agree that while Margaret Hodge’s Statement was most welcome and anticipated the regime change that has taken place, it would be useful to have greater elucidation as to how these companies will be required to explain their rationale for the remuneration? Finally, does he agree with the successor to the noble Lord, Lord Jones, as director-general of the CBI, that the growing extremes of wealth in this country are likely to lead to social unrest?

My Lords, of course the Government are concerned that we have a healthy society, which suggests that vast extremes of wealth present challenges to which the Government will respond. But the noble Lord will recognise that the Government are dealing with private companies with responsibilities to their shareholders. As he indicated, we are taking a step forward with the report on directors’ pay. The consultation document on the regulations is available now and we will legislate after 30 September.

My Lords, I am sure that the House will be grateful for an explanation as to why the noble Lord, Lord Jones of Birmingham, is not here to answer this Question. With the greatest respect to the noble Lord answering, the views of the noble Lord, Lord Jones, are of particular interest to the House. One reason for this is that the CBI, of which he was director-general, has argued that forcing all staff to disclose their salaries, while attractive at first glance, holds all sorts of pitfalls. Would the noble Lord like to expand on those pitfalls?

My Lords, the Government speak with one voice. The view of the noble Lord, Lord Jones, as regards requiring companies to reflect the salaries of all staff in their reports is also the view of the Government. Our view is reflected in the draft regulations—on which consultation is taking place—which indicate that it would be helpful and advantageous if directors’ remuneration was set against the general background of pay in the appropriate company.

My Lords, can I shed some light on remuneration committees? It is quite simple really: if I am on your remuneration committee, and you are on mine, we can sort out each other’s wages, can’t we?

My Lords, I shudder to think what mine might be if my noble friend were on my remuneration committee. The Government think that remuneration committees should consist of independent non-executive directors. Therefore, there should be an independent analysis of the value of the directors to the company. We have made our position on that clear. My noble friend may be indicating his anxiety that in the past remuneration committees have too often consisted of a rather closed group of people, in which case the Government agree with him. We are asking industry to widen the representation on such committees.

My Lords, does the Minister agree that there is frequently a discrepancy in pay between fund managers and people who raise the money and other people because if you want to keep them, they are much more expensive than part-time directors?

My Lords, that is certainly the case. Any regulations that cover business and industry cover a very wide range of organisations with different needs, levels of responsibility, numbers of employees, employee relationships and contracts. That very diversity of our business and industrial life means that regulation is something on which the Government must proceed with care.

My Lords, does the Minister accept that this ought really to be the Lord Dormand of Easington memorial Question, as he asked the same question on excessive director and executive pay twice a year, certainly for 10 years? Does he also accept it is a pity that, following Lord Dormand’s sad death, the Labour Party does not appear to care too much about the issue? On the wider question asked by my noble friend Lord Smith on relative degrees of poverty in this country, as highlighted by the Joseph Rowntree Trust, does the Minister recognise that this is a serious matter which deserves a better answer than that given by the Prime Minister in another place in which he seemed to indicate that it was all the fault of the Liberal Democrats’ voting behaviour?

My Lords, quite a lot of what goes wrong in our country is certainly due to the Liberal Democrats, as the noble Lord has said. Lord Dormand, in his latter years, recognised that his campaign was bearing fruit because the Government indicated their intention to legislate in this area. We have been making progress and the draft regulations to which I referred—the consultation on them will be completed by 30 September—are another stage in our attempt to get openness and fairness from companies in the way in which they remunerate directors. That is set against the background of the one issue uniting the House: remuneration should be related to merit and effectiveness.

EU: Justice and Home Affairs

asked Her Majesty’s Government:

Whether they will publish a paper setting out which aspects of the justice and home affairs provisions of the European Union treaties they have opted out of, and on which of those aspects they have formal or informal opt-in arrangements.

My Lords, the UK does not participate in proposals under title 4 of the Treaty establishing the European Community—namely visas, asylum, immigration and civil judicial co-operation—until it opts in. The opt-in must be exercised within three months of publication or with the consent of the Commission at any time after its adoption. We will deposit in the Library a list of measures to which the UK has and has not opted in.

My Lords, I thank the Leader of the House very much indeed for that detailed Answer. Will she confirm that the Government can reassure themselves that, with the departure of the previous Prime Minister, there is not so much necessity to schmooze well known journals on the right-wing side of the spectrum regarding their views on Europe and to pretend, for example, that we are opting out of most of the JHA agenda while we are quietly—and quite rightly, too—opting back in to as much as possible? I have here a list of 54 examples of JHA opt-ins over recent years. Does she agree that now is surely the time for the Government confidently to stand up and be counted for the good of Britain and a united Europe?

My Lords, I cannot answer about schmoozing; I did not see any schmoozing going on. I am answering this Question partly because I am responsible for not opting in to three of the civil judicial co-operation measures and therefore felt that I had some competence in the issue. However, I can say that we do not opt into measures on legal migration, visa policy or, for example, management of the EU’s external border, where those measures are incompatible with our national interest and our policy of retaining frontier control. In those issues we will wish to continue to take that stance.

My Lords, as these so-called treaties are more or less identical to last year’s rejected constitution, will the Government consider honouring the commitment which they gave in their manifesto to provide us with a referendum on this issue?

My Lords, that didn’t take long, did it? I am very clear that the mandate says in terms:

“The constitutional concept, which consisted in repealing all existing Treaties and replacing them by a single text called ‘Constitution’, is abandoned”.

That is our position.

My Lords, the Leader of the House is no doubt aware that the Government have so far declined to opt into the long-term residence directive despite strong advice from the European Union Committee that it would be in our national interest to do so. Does she agree that the recent proposal to extend that directive to refugees gives the Government a welcome opportunity to opt in after all?

My Lords, I have looked into the question as I anticipated that the noble Lord might raise it. At this stage, it is under consideration.

My Lords, perhaps I may ask my noble friend a question on a contiguous matter. I understand perfectly what she said about opting out and opting in generally. However, does the European Charter of Fundamental Rights have relevant legal issue in our jurisdiction or is it, as one former Minister said, on the same level as the Beano in legal debate? What is the Government’s position on the extent to which lawyers in this country should take careful note of the charter of fundamental rights, because it might be persuasive in our courts—or not?

My Lords, although the charter of fundamental rights is an important aspect of European work it is a backdrop to what is already happening within both the UK and the European Union as individual member states. We have made it perfectly clear that we do not see it as incorporating into UK legislation every aspect of the charter, and that position remains.

My Lords, how do the Government intend to ensure that, in the words of the White Paper the other day, the UK will continue to play “an active role” in the field of JHA with this proliferation of opt-outs? Do they not realise that there is a great risk of UK marginalisation in the building-up of an effective EU law enforcement capability? It also risks affecting UK MEPs, so that when the UK makes up its mind to opt into a subject, there will not have been UK influence in shaping that measure.

My Lords, I pay tribute to the work that the noble Baroness does in the European Parliament, but I disagree with her on the issue of influence. Certainly, we did not opt into the three measures on the civil justice side but, as she will know, we are actively participating in two of them. Our reasons for not opting in can be varied and very different; for example, we have not opted into the maintenance proposals in the European Union because we are currently in discussion with the Hague on a broader set of negotiations, including the way in which that could be addressed, and that issue would be in jeopardy. We are actively participating in all the working groups, so what the noble Baroness says does not follow.

My Lords, do the Government agree with the former Italian Prime Minister, Mr Giuliano Amato, who has said that the mandate is deliberately written in such muddled and devious language as to be incomprehensible to the people of Europe and particularly to the people of Britain? Did I understand the noble friend of the Leader of the House to say in answer to the first Question this afternoon that there will be binding debates in your Lordships’ House and the House of Commons to clarify what the eventual treaty means before it is signed?

My Lords, I do not necessarily agree with former Prime Minister Amato. My noble friend said “debates”, not “binding debates”.

My Lords, what competences, if any, are proposed in the new treaties to be transferred from the member states to the European Union?

My Lords, I think that that is rather wide of the Question on opt-ins and justice and home affairs, but I shall write to the noble Lord and ensure that he is given the answer.

My Lords, if the noble Baroness does not agree with the former Italian Prime Minister, does she agree with the present Swedish Prime Minister, who has said that the United Kingdom has been offered a clarification of the European Charter of Fundamental Rights, not an opt-out?

My Lords, the European Charter of Fundamental Rights is a different proposition. In my former role, I spent a lot of time discussing the fundamental rights agency and the charter. As I have said, it is very important to see the charter in the correct context of its role within the UK. Its legislative role is not to be seen as binding the UK Government, but it is a very important aspect of how the European Union works together.

Afghanistan: NATO Forces

asked Her Majesty’s Government:

What measures they have taken to encourage other NATO countries, such as France and Germany, to deploy extra troops to Afghanistan.

My Lords, my right honourable friends the Prime Minister, Defence Secretary and Foreign Secretary have spoken with their counterparts in France and Germany in recent weeks. These discussions included the need to ensure that commanders on the ground have access to the resources that they need to carry out ISAF’s mission. Military advice on force and capability requirements is provided by the Supreme Allied Commander Europe. The issue was most recently discussed at the Foreign Ministers’ informal meeting in Oslo in April and by Defence Ministers in Brussels in June.

My Lords, I am grateful to the Minister for that response. I speak at meetings and seminars, and often the subject relates to foreign affairs. My Question was prompted by my feeling that our military capability is not in line with our present overseas commitments. The UK, the US and some other countries shoulder a disproportionate amount of the burden in Afghanistan and there seems to be little sign of other NATO countries providing more substantial troop movements.

My Lords, have we examined carefully our deployment in Afghanistan and the need to increase the strength of our forces generally and provide them with adequate resources?

My Lords, the noble Lord’s concern is shared by many in this House. This is the third time that I have risen to discuss Afghanistan during my short tenure here. As the noble Lord knows, the UK is the second biggest troop contributor—second only to the United States—providing some 7,000 troops. However, we work continuously with our partners in ISAF to try to raise the deployment numbers of our allies in this endeavour.

My Lords, can the Minister confirm that, in spite of the commitments made in Riga and Seville, there is still a worrying and significant shortfall in capability on the ground in Afghanistan? Given that some of our NATO allies are unable to secure the political authority to back up their military commitments, what action are the UK Government taking to change or modify the resources, commitments and deployment of our troops in Afghanistan to mitigate the extra risks that they may well face?

My Lords, the noble Lord points to a concern we all share. It is extraordinarily important for all of us that our troops be as secure as possible. Efforts are under way to improve their equipment and to strengthen NATO support to them.

My Lords, is it not a fact that some countries will not involve their troops in areas of greatest danger? Apart from the numbers, there is the question of how and where they are deployed. Will the Government publish a list of the restrictions that some of our NATO partners place on the use of their troops in Afghanistan?

My Lords, the noble and learned Lord makes an important point. There are indeed caveats operating on many of the troop deployments in Afghanistan. They were most recently discussed at the summit in Riga, and many were removed or liberalised, but others remain. Some are already in the public domain, but, out of respect for our allies, it would not be possible to produce a fuller account than that which is currently available.

My Lords, does the Minister share the very deep concern that I felt when I read the report on Afghanistan of the Defence Select Committee in another place? It demonstrates clearly that despite our most valiant military efforts in Afghanistan, we lack the resources to hold on to, exploit and maintain the temporary advantages we can get. Does the noble Lord not think that the time has come to switch resources from Iraq, which will sink or swim without us, to Afghanistan, which probably depends on us to swim?

My Lords, I am pleased to hear that the noble Lord still interests himself in the reports of the other House. Her Majesty’s Government and our representative in Kabul have made clear that this will be a long effort and that we shall need to continue to reinforce our diplomatic and military presence in Afghanistan, as will all our ISAF partners. However, we must also bear in mind, as I am sure the noble Lord does, that many parts of Afghanistan are now much safer and more secure. The difficulties are concentrated in the southern region of the country.

My Lords, can my noble friend confirm reports that the major problem with the German troops is that they will not fulfil their responsibilities after dark?

My Lords, I regret that I cannot cast light on my noble friend’s view. I do not know whether they are equipped with torches.

My Lords, can my noble friend make clear that the Government are telling all our NATO allies that the credibility of NATO is on the line here and that there cannot be a two-tier membership system for NATO? We know the difficulties and sensitivities, but that message needs to be loud and clear.

My Lords, my noble friend makes an important point, as did the previous noble Lord who intervened. We shall continue to try to remove or reduce the caveats so that all forces deployed operate under similar rules of engagement and a two-tier operation does not develop.

My Lords, does the Minister agree with me that it would have been better to have dropped aid and not bombs on Afghanistan in the first place?

My Lords, the noble Baroness will recall the very difficult circumstances in the immediate aftermath of the events of 9/11 which led to the intervention in Afghanistan. I think that there was broad support for that intervention in this House, in this country and in the other House. In that sense, there was a need to secure the fall of the Taliban regime; but that does not remove the equal need for heavy investment in reconstruction and development.

My Lords, I am sure that the noble Earl is aware that the PRTs operate in different ways throughout the country. In the north, where there is now stability, there is a great evolution in their operation, and they have become broad-based but also integrated with government in their activities. In the south there are still some restrictions on their movement, and therefore their functions; we hope that those restrictions will be reduced as we succeed in restoring stability to Helmand.

My Lords, will the noble Lord acquaint himself with the effect on civilian politics in Afghanistan of the use of cluster munitions on military targets, as residue from those weapons has an enormous impact on civilian populations?

My Lords, the noble Lord makes a very important point. As something of a student of nation-building and reconstruction, I think that indiscriminate civilian casualties have terrible consequences for building legitimacy and support for a Government. We continue to press to minimise civilian casualties.

Business

My Lords, with permission, my noble friend Lady Ashton will repeat a Statement on national security immediately after I sit down. Immediately after consideration of Commons amendments to the Further Education and Training Bill, the second Statement, on the spending review and aircraft carriers, will be delivered by my noble friend Lord Drayson.

National Security

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

“With permission, Mr Speaker, on 29 and 30 June the professionalism, vigilance and the courage of our police and our security and emergency services thwarted a conspiracy to murder and maim British citizens.

“Britain—led by London and Glasgow—stood firm in the face of threats, and our calmness and steadfastness as a nation sent a powerful message across the world that we will not yield to terrorism nor ever be intimidated by it. These events were the 15th attempted terrorist plot on British soil since 2001.

“As previously set out, the police and security services are currently having to contend with around 30 known plots and monitor over 200 groupings or networks and around 2,000 individuals. I think the whole House will agree that our country—and all countries—have to confront a generation-long challenge to defeat al-Qaeda and al-Qaeda-inspired terrorist violence.

“In recognition of the continuing long-term threat, we have created a new National Security Committee to oversee the new Office for Security and Counter-Terrorism. Following the first two meetings of the National Security Committee, I want to report on changes that we now recommend to this House. First, let me confirm to the House that in future we will publish a national security strategy, and that the first will be published and presented in the autumn to Parliament for debate and decision in this House. At the time of the spending review we will announce a single security budget for our country.

“In line with the Butler report, we will separate the position of chairman of the Joint Intelligence Committee from policy adviser to the Government, so the sole responsibility of the chairman of the Joint Intelligence Committee will be to provide Ministers with assessments that have been formulated independently of the political process and, therefore, to improve across government the effectiveness of intelligence analysis.

“Today I am also publishing the Intelligence and Security Committee report on rendition. The Government are consulting on how in future the ISC should be appointed and should report to Parliament with, where possible, hearings in public, a strengthened capacity for investigations, reports subject to more parliamentary debate and greater transparency over appointments to the committee.

“To strengthen the counterterrorist capability of the police and security services, we have since 11 September doubled our overall investment to more than £2 billion a year. Dedicated anti-terrorist resources have also doubled. Even in advance of the spending review settlement for future years, the security service will by next year, be twice the size it was in 2001.

“The protection and resilience of our major infrastructure and crowded places require continuous vigilance. I can confirm that over 900 shopping centres, sports stadiums and venues where people congregate have been assessed by counterterrorism security advisers, that over 10,000 premises have been given updated security advice and that the police will continue high-visibility patrols.

“The counterterrorism Bill will include a new power allowing the Secretary of State to ensure additional protection for key utility sites, and we have asked Lord West to oversee over this summer a further review of how best we protect crowded places and our buildings and national infrastructure: roads, railways, tunnels, bridges, water systems and utilities.

“Since 1997, the Government have given the police new resources and Parliament has provided new legal powers to arrest and try terrorists. Thanks to the hard work, dedication and commitment of the men and women in the police, security and intelligence services and the prosecuting authorities, this year alone in nine cases a total of 30 individuals have been convicted. The forthcoming counterterrorism Bill will propose additional penalties for terrorists charged with other criminal offences.

“Our first line of defence against terrorism is overseas at other countries’ ports and airports, where people embark on journeys to our country and from where embassies issue visas. To protect us in routes and places where there is the greatest threat of harm, I believe that we now need to accelerate our plans, completing the move from old and ineffective paper-based systems to real-time monitoring, which will allow us to act immediately and in a co-ordinated way across immigration, police and intelligence. The way forward is electronic screening of all passengers as they check in and out of our country at ports and airports so that terrorist suspects can be identified and stopped before they board planes, trains and boats to the United Kingdom.

“After a review of counterterrorism screening, and as part of the overall spending settlement for security to be set out in the autumn, the Home Secretary will enhance the existing e-borders programme to incorporate all passenger information to help track and intercept terrorists and criminals as well as illegal immigrants. While new biometric visas are already in place for immigrants from high-risk countries, I can confirm that within nine months, from March next year, we will extend biometric visas to all visa applicants and from 2009 we will introduce a new, enhanced system of electronic exit control linking the checking of passports to checking against the warnings index.

“The second line of defence is at our borders where biometrics—not just fingerprints but iris recognition—are already in use. To strengthen the powers and surveillance capability of our border guards and security officers, we will now integrate the vital work of the Border and Immigration Agency, Customs and UK Visas overseas and at the main points of entry to the UK and establish a unified border force.

“I have asked the Cabinet Secretary to report back by October on the stages ahead in implementation and whether there is a case for going further while ensuring value for money. But as a result of our announcement today, the first change people will see is that, starting from next month, when arriving in Britain, they will be met at the border, either a sea port or airport, by a highly visible, uniformed presence, as over the next period we move, for the first time, to one single primary checkpoint for both passport control and customs.

“But this, our second line of defence, has also to be complemented by a third line of defence: ID security within our own borders. While for UK citizens the first biometric ID cards will start during 2009, from the end of 2008, any foreign nationals coming to the UK for more than six months will be required to have a biometric ID. Such an identity scheme will help prevent people already in the country using multiple identities for terrorist, criminal or other purposes.

“In the identification of potential terrorist suspects, there should be maximum co-operation internationally with maximum possible use made of alerts and watch lists. While Lord West’s review has found no systematic failings in our procedures for checking potential suspects, it has highlighted the importance of enhancing existing co-operation to share more information between police and immigration services and internationally across countries within the EU to enable British law enforcement authorities to access immigration information on existing EU databases, bilaterally with other member states mutually to exchange information, and joining up criminal records databases throughout the EU so that our authorities can quickly identify individuals charged with crimes, no matter where in Europe they are convicted. At a cost of £5 million, we will link the UK watch list to the Interpol database of lost and stolen documents.

“In addition to the nine foreign nationals recently deported under immigration powers on grounds of national security, a further 21 foreign nationals are currently subject to deportation proceedings on national security grounds. On the same grounds, we are preventing 124 individuals coming to our country and refusing to admit another 52 for glorifying terrorism or other unacceptable behaviour. Overall, 4,000 foreign prisoners are likely to be deported this year. Having agreed repatriation arrangements with Jordan, Libya, Lebanon and Algeria, we will now press ahead to sign more agreements.

“Mr Speaker, liberty is the first and founding value of our country and security is the first duty of government. The British way is that every measure we take to enhance security is complemented by additional protections against any arbitrary treatment and in defence of the liberties of the individual. So we want to consult widely and we look forward to seeking and obtaining all-party consensus on how we treat intercept evidence and new provisions for pre-charge detention and post-charge questioning. The independent and cross-party review into the use of intercept as evidence in court will be led by Privy Counsellors Sir John Chilcot, the noble and learned Lord, Lord Archer of Sandwell, the noble Lord, Lord Hurd, and the right honourable Member for Berwick-Upon-Tweed, Mr Alan Beith.

“While it is already a criminal offence to seek training for terrorism overseas or in this country, we will consult on tightening up bail conditions and, in particular, the restriction of travel in any cases where people are suspected of complicity with terrorism.

“We have in place a regime which allows pre-charge detention up to 28 days. There is already general agreement that the circumstances in which the police will need to go beyond even 14 days will be rare and will be subject to special procedures, both of judicial oversight and of parliamentary accountability. There is also, I detect, a growing weight of opinion—including from the noble Lord, Lord Carlile, the independent reviewer of anti-terrorism legislation—that there may be some circumstances in which detention beyond 28 days could be necessary: where the police have to intervene early to avert an attack; where there may be huge quantities of material evidence to be analysed; and where there is a need for assistance from other countries. The 2005 case, cited in previous debates on this issue, involved investigation of some 60 mobile phones, 268 computers, and 920 DVDs. However, the airline investigation last August involved 200 mobile phones, 400 computers, 8,000 CDs, DVDs and disks containing 6,000 gigabytes of data, searching nearly 70 businesses and open spaces, with inquiries across three continents. Another case involved 3,000 statements, examining 6,000 documents, with over 8,000 exhibits and inquiries across nine countries. During the recent period, six people had to be held for 27 or 28 days.

“While one of the proposals we are bringing forward, with broad support, is to allow post-charge questioning for the explicit purpose of securing evidence in a terrorism trial will reduce the risk that we need to go beyond 28 days, the Home Affairs Select Committee which investigated these matters concluded that this step will not eliminate the risks entirely. It is right to explore whether a consensus can be built on the most measured way to deal with this remaining risk. I hope the House will agree that we should not return to the proposal rejected by the House, but I also hope that the House will agree that there has to be a maximum limit set by Parliament.

“We today put forward four options for consultation over the coming months. One proposal that we cite in the consultation document from Liberty—to which we are grateful for engaging constructively in the debate—is that if this risk materialises, we should declare an emergency under the Civil Contingencies Act 2004 and allow for a period beyond the 28-day limit, for up a further 30 days, although that would require the declaring of a state of emergency.

“We are also proposing for consultation—this would not require a state of emergency—an extension of the current limit for up to 28 days more, or a lesser period, but only if, in addition to the requirement that a judge must approve every seven-day extension, the case is notified to Parliament and subject to a timely report to it of all circumstances, and with the option of a later parliamentary debate. This means that any extension would not only be subject to a specific case being made by the Director of Public Prosecutions, subject every seven days—up to the agreed limit—to the approval of a High Court judge and subject to the regular report of the independent reviewer, with an annual debate in Parliament, but also subject in each and every instance to a specific parliamentary notification procedure, to a further statement to Parliament on the individual case, a review on the specific case by the independent reviewer and with the provision for this House to scrutinise and debate the report and all the circumstances.

“However, Mr Speaker, more important even than consensus here in this House is the consensus we will seek in all the communities across this country. Since the attacks of 7 July 2005, communities in Britain and across the world have come together in a common front against terrorism and against the propaganda that fuels it. This requires not just the security measures we are outlining, but that we work with all communities and all countries through debate, discussion, dialogue and education as we tackle at root the evils that risk driving people, particularly vulnerable young people, into the hands of violent extremists. Here, colleges, schools, universities, civil society and faith groups—indeed, every institution in our country—have a part to play.

“Last week, President Sarkozy of France and I agreed to propose the formation of a joint working group with Germany and others to share our experiences and develop ways to expose and defeat terrorism. We will report later this year on this work but we can make a start today. Over the next three years, we will provide an additional £70 million for local authorities and community groups to improve the capacity of local communities to resist violent extremism. This will include developing leadership programmes for young people, strengthening the capacity of women’s groups, and local projects to build citizenship.

“There are perhaps as many as 1,000 madrassahs in Britain, educating between 50,000 and 100,000 young people in after-school classes. In Bradford, an agreement was reached to include citizenship education in their curriculum and we will now offer to work with other communities on similar programmes. We will also support a new skills qualification in citizenship and community cohesion for faith leaders, sponsor English-speaking imams, propose inter-faith bodies in every community in the country to build greater understanding, and update guidance to universities before the autumn on how they can do more to protect safety and security, particularly of vulnerable young people. I can also confirm funding for a BBC Arabic channel and an editorially independent Farsi TV channel for the people of Iran. Following further discussion, the Government will report back to Parliament on further measures that can isolate extremists who preach and practice terrorism.

“Mr Speaker, our priority as a Government is a Britain strong in security, robust in our resolve and resilient in response, so that as a nation we both defeat terrorism and isolate violent extremism wherever we confront it and whatever its support. I hope that in doing so, an all-party consensus that will extend into every community of our country is possible so that, together, we create a stronger, safer, more cohesive Britain”.

My Lords, that concludes the Statement.

My Lords, I thank the noble Baroness the Leader of the House for repeating that Statement. There was a great deal in it—it was a long Statement, and understandably so—and it will need time for reflection. This is, of course, an area where we will work together, as my right honourable friend Mr Cameron indicated in another place.

If the noble Baroness will permit me, I must say one thing. There was a measured tone to the Statement which differed from some of the more hysterical pronouncements that we have become used to over recent years. However, I am afraid that, outside Parliament, we have seen some of the old spin—“Prime Minister challenges opposition parties to stand up against terror”, and so on. Spin of that kind helps no one because it undermines the consensus that the noble Baroness and the Prime Minister say they are trying to create and it belittles the difficult judgments that lie behind all this as to the balance between our ancient liberties and the challenge of terrorism. The debates in which this House perhaps above all others has distinguished itself are not about will but about method; they are not about party politics but about what is right and what is most effective. I hope that the noble Baroness will use her influence to rein the spin doctors in.

The noble Baroness is right to say that we face exceptional challenge and new methods of attack but, equally, this fine old country has faced a few challenges along the way, and we have seen them off without compromising our essential freedoms, which were so hard won and defended at a cost far greater than any we have seen in recent years. It is easy to lose a freedom. Once lost, it is no longer a birthright and its return becomes a concession from the state. That is to change fundamentally the whole nature of British liberty, which is not enshrined in conventions and rights but in the rule of law and parliamentary constitutional government. I have no doubt that this House will approach these questions with that in mind, and it will be right to do so.

The security services, the police and, indeed, courageous members of the public have distinguished themselves in recent weeks in thwarting terror. The whole House will thank them for that. I have no doubt that they will be called on again, and we welcome the additional resources that have been announced today. However, can the noble Baroness confirm that funding for Special Branch, which carries out much vital surveillance work around the country, will be included in that budget? It urgently needs to expand. To defeat terrorism will require tough, consistent and rigorous action at every level. It will need intelligence, and I very much welcome the revised arrangements for the Joint Intelligence Committee. It will need to tackle extremism and the preachers of extremism. We will look carefully at the ideas in the Statement, but we need to be firm; far firmer than we were for far too long in dealing with the Abu Hamzas of this world. It will need effective policing, including at our borders. We welcome the apparent acceptance by the Government of the idea being put forward by our party of a unified border police. Perhaps the noble Baroness will therefore explain why the Government have spent years resisting and rubbishing that idea.

How many illegal immigrants, and among them how many potential terrorists, have got in under the wire while the Government were playing nimby politics over effective control of our borders? Can the noble Baroness tell us the Government’s current estimate of the number of those in this country without lawful authority, the number of former foreign criminals released into the community who have not yet been traced, and the number of those under control orders currently on the run? Will the Government draw on the work of the Conservative Party’s commission under the noble Lord, Lord Stevens, to prepare and implement that policy?

It will not have escaped the notice of the noble Baroness that we have the UK Borders Bill before this House at the moment. Now that the Government have dropped their opposition, will they consider recommitting the Bill in the autumn to enable the creation of the border police on the fastest possible timescale? I have not been able to consult my colleagues in another place but, if it is practical and if the Government really mean what they said, we in this place would be ready to discuss in the usual channels any reasonable measure, including carry-over, to enable this important provision to be made.

We welcome the fact that, on intercept evidence, the Prime Minister has accepted another of our proposals, for a Privy Council committee. Will the Government legislate immediately if the committee finds a way of lifting the ban on the use of this vital evidence in court? The noble and learned Lord, Lord Lloyd of Berwick, has played a major part in this argument. I hope that he, too, will be consulted in this review. Again, however, why did the Government resist this proposal for so long?

We cannot agree on the question of ID cards. This House laboured hard to try to inject some sense into this debate. It is immensely disappointing that the new Prime Minister is not prepared to think over this again. The costs are spiralling; its effectiveness is questioned; and, behind the scenes, a giant surveillance apparat is being planned and created, quite unprecedented in the free world. Surely the money could be better used to bolster security and public safety elsewhere. On ID cards as on money laundering, child protection and so much else, the Government are obsessed with giant computer projects, placing every citizen under surveillance and imposing a presumption of potential guilt that is as corrosive of trust as it is of liberty. They are building giant haystacks in which the lethal needles go unnoticed. No evidence has ever been presented that ID cards would have prevented any of the major outrages we have seen.

Use of such instruments needs to be far more focused, and we will look at the measures on people coming to this country, but why do they apply only to those here over six months? Surely an act of terror can be planned and perpetrated in less than six months. We will also explore carefully what is proposed on controls on terror suspects travelling abroad. The ID card system makes travel abroad for UK citizens conditional upon submitting to permanent domestic surveillance. Surely the priority is to target resources on the suspect and suspect organisations. When will Hizb ut-Tahrir be banned?

We agree very much with the need to win hearts and minds. Not enough has been done to integrate new arrivals to our country. Our country, our history, our language, our culture, our freedoms become their treasure, too, and the birthright of their children. We must sweep away zany ideas in education that have diminished teaching of our national traditions. We might begin by keeping Churchill in the history curriculum. He fought for the freedom of every religion, race and land, and people of every religion, race and land fought alongside him.

I welcome the decision to finally take up our proposal to allow the questioning of a suspect after they have been charged. Is this not the most important way of ensuring that the police can get their job done without introducing what could in time start to look like executive internment? Certainly we have to frame carefully the rules on the use of this power so that it is not abused, but should we not consider the effectiveness and value of this and other instruments before returning to the totemic question of 28 days?

We will look at these consultation papers carefully, but both Houses struck a difficult compromise only two years ago. What has changed since last December, when the then Home Secretary, the then Attorney-General and the Lord Chancellor all agreed that fresh evidence was needed before any further change could be justified? Should not this House ask that Ministers prove that all existing laws are being used before they reach for new legislation? After all, it was a Victorian statute that helped to stop Abu Hamza. Our liberties are precious, and one of the greatest ironies of recent years is that some of them are being eroded because of the operation of the Human Rights Act. Will the noble Baroness admit that this Act is frustrating our fight against terror and will she undertake to include reform of that, too, in the ambit of any cross-party discussions?

Security is necessary, but liberty makes us the country we are. If we erode that, no one wins but the terrorists who are our enemies. That is the difficult balance we must strike—where the role of Parliament, properly, is to be sceptical; and the role of government is not to chide Parliament for doing its job, but to heed its occasional wisdom.

My Lords, I, too, welcome the Statement made by the Leader of the House. We learn that the Government intend to consult widely and to seek all-party consensus. That is key, and must of course be welcomed. However, consensus does not mean, “Everyone else, adopt our policy”; it means listening and sometimes changing policy, and we will judge this policy of consensus according to that criterion. I also hope that the Government will accept that this House in particular has special experience and a special role to play in examining these matters.

I start almost at the end of the Statement by welcoming the various initiatives to go into communities. A couple of weeks ago, I received as part of an educational programme a Muslim lady who was a social worker. After I had shown her and a number of others around, we talked generally and she told me that she had an 18 year-old son who was very keen to join the police. She then paused and said, “But of course he would not dare say that down at the mosque”. For me, that sent a chill that must be addressed. Young Muslims should be able to think of joining the police, our Army and other parts of our national life without fear of mentioning it down at the mosque. We also have a special job to do in universities where some very dangerous extremism is given root. There is a need for an educational role there. The noble Lord, Lord Strathclyde, caught part of the mood of this. We understand the statistics on the number of plots and terrorist gains; our scepticism arises when the Government have to rush to make new and fresh legislation every time a plot is discovered. Surely the point of the previous legislation was to deal with those very points. Legislation on this must not become a ratchet or an ever-incoming tide. We must look very carefully at each case.

We of course welcome the publication of the national security strategy and the review of counterterrorism measures, but I hope that once the noble Lord, Lord West, with all his experience, has looked at how ID cards and their costs are unfolding and has reached the conclusion that resources might be diverted more effectively to other parts of counterterrorism, the Government will have the courage to accept such advice. They have heard our advice and are going down that road but, as the noble Lord, Lord Strathclyde, indicated, there have been some spectacular and costly failures in the use of new technologies, and it would be a pity if the more mundane parts of the service, such as Special Branch, were starved of resources simply because the Government did not have the courage to admit that they had got into a costly cul-de-sac.

Again, we welcome the review of intercept evidence. I shall not tick off all the ideas that we or the Conservatives had first because, if we are working towards consensus, we should all take the credit. I notice that the noble Lord, Lord Carlile, is given special mention; he is almost heading for sainthood so far as the Government are concerned. However, there are other experienced views on the 28-day rule on these Benches, not least those of my noble friend Lord Dholakia, who pointed out only yesterday—at col. 758 of the Official Report—that we have moved very quickly from 14 days to 28 days, and that 56 days are now proposed. The voice of the noble Lord, Lord Kingsland, carries at least as much weight as that of the noble Lord, Lord Carlile. Yesterday, in the same column of Hansard, he pointed out that we already have the longest holding period without trial of any liberal democracy. I therefore hope the Government realise that we on these Benches will test very carefully the arguments on 28 days and that we will look for the evidence that an extension is needed.

I suppose, however, that it ultimately comes back to the theme in the Prime Minister’s intentions, and certainly to the spirit which the noble Lord, Lord Strathclyde, mentioned. Around both Houses and across the country there is a real pride in the term “liberal democracy”, in the broader sense, and what it means for our freedoms. There is a real determination which goes beyond any political party to defend and not to lose the things that make a liberal democracy worth defending. It will be a very difficult balance.

I echo the last point made by the noble Lord, Lord Strathclyde—by their fruits will we know them. Leaflets suggesting that the Liberals are soft on terrorism and press briefings suggesting that only the Government have national security at heart are what will destroy the consensus. We will listen, we will watch, we will participate—but by your fruits we will know you.

Indeed, my Lords, and I expect nothing less. I am conscious that I have a short time to try to respond to some of the key points. I will respond further later.

There is no question that the Government are attempting to spin anything; we seek a genuine consensus. Frankly, I do not care who came up with which idea. The difference for those in government is that we get a chance to look at ideas and how to implement them properly. If we can work together on these important issues it will be a credit to all noble Lords, to the Government, especially, and to Parliament. That is what we should seek to do. I am extremely grateful for the general warmth with which both noble Lords received the proposals, with all the caveats that they put forward.

I want to make it clear that we are talking about a unified border force, not a unified border police. We are saying that border control, Customs and UKvisas will come together. Special Branch, as I said, will have a role within that. I have figures on funding which I will send to the noble Lord. As my right honourable friend said in another place, the work of the noble Lord, Lord Stevens, is important in trying to look at all the evidence and all the views. We will be keen to ensure that we do that. I, too, pay tribute to the noble and learned Lord, Lord Lloyd of Berwick, who I am sure will have much to say on these issues. I look forward very much to discussing those with him.

On biometric data, my noble friend Lord West will not hesitate to tell the Government if he believes that there are different avenues to be explored. That is precisely why he is in your Lordships’ House and doing the enormously important work that he is undertaking. However, I also know that the importance of biometric data should not be underestimated. Such data have already proved incredibly valuable in the current work and I think that noble Lords should consider how to take the issue forward in that spirit.

As noble Lords will know, since December we have had not only the Home Affairs Select Committee report but circumstances in which it has not been possible to deal with those about whom we are worried until the 26th or 27th of the 28 days. On their own, those are two good reasons why we should consider the issue again. There is no question of rushing legislation through. We have brought this forward today in a measured way so that, over the summer, noble Lords and Members of another place can consider the proposals and build what we hope will be a genuine consensus on taking these issues forward. I agree completely on the issue of what we have described as hearts and minds and on the importance of working with all institutions—particularly those in education and especially universities—to support vulnerable young people who may be at risk from those who would seek to change them into supporters or joiners of terrorist organisations. That is a core part of the work that will be going forward.

I am sorry that the noble Lord, Lord McNally, does not wish to confer sainthood on the noble Lord, Lord Carlile, but I am sure that he will agree that it is right and proper—and I accept that the noble Lord, Lord Dholakia, has much to offer—to draw attention to the remarks of the noble Lord, Lord Carlile, because of the role that he has undertaken and performed so well.

My Lords, will the Intelligence and Security Committee remain a committee of parliamentarians, effectively a creature of the Executive, reporting to the Prime Minister and publishing reports, or will it become a committee of Parliament, effectively a Select Committee? Can we be assured that reform of the ISC will not be circumscribed by the Intelligence Services Act 1994?

My Lords, noble Lords will know from the Statement and from our debate on the previous Statement that I made—the noble Baroness, Lady Park, was particularly concerned, and she may wish to comment on this again—that we seek to enable greater debate and openness within Parliament while recognising the importance of the committee’s work. My noble friend said “creature of the Executive” in a particular tone of voice. We want noble Lords and Members of another place to have greater confidence in the committee’s role within Parliament while not losing sight of the value and importance of its work and so preventing it from fulfilling the role we wish it to perform.

My Lords, I, too, welcome the Statement. It is a huge relief to discover that the Government are not contemplating a detention period of 60 or 90 days and have accepted that only on rare occasions should the period exceed 14 days, so 28 days must not be regarded as the norm—I hope it never will be. However, it is said that, on even rarer occasions, it might be necessary to go beyond 28 days. I accept that that might be so.

It seems to me that the safeguards now proposed are such that they might form the basis of a consensus across all the parties. I cannot conceive of any circumstances that would justify an extension of a further 28 days, making 56 days in all, which, as I have said on many occasions, would be clearly contrary to Article 5 of the European convention.

There is one other possible safeguard that would do much to convince me. In Ireland, there used to be an office known as the Independent Commissioner for Holding (Detention) Centres, who did more than anyone to ensure that within detention centres the police complied with the law and got on with the job. I suggest that we should have a similar arrangement at Paddington Green.

Finally, I welcome the appointment of the review committee on interception of communications. I cannot imagine four men more likely to reach a sensible result.

My Lords, I am grateful for the comments of the noble and learned Lord, Lord Lloyd of Berwick. His comments about what happened in Ireland are very valuable. That is exactly the kind of dialogue we wish to have and the sort of input we wish to receive from noble Lords and Members of another place in considering what might be done. I confirm that we are talking about 28 days’ detention as rare. The reason for our proposals and options in the paper is that the combination of what the Home Affairs Select Committee has said and recent real-life experience makes it right and proper to give Parliament the possibility of extending the 28-day period in the way my right honourable friend has described, but with all the safeguards mentioned and, indeed, additional safeguards that might be suggested. I look forward to discussing these issues further with the noble and learned Lord.

My Lords, I remain deeply concerned about the implications of public discussion of intelligence matters, and I should like a reassurance from the Minister that, when the Government say “consulting”, they mean that we shall be consulted in October and not returning to a fait accompli. If not, I can only say that no agents will come forward, no foreign intelligence services will trust us and it will be a disaster. This has to be considered further, and I should like to be reassured that “consulting” does not mean that two or three people will meet in the recess and make a decision. This is a major issue.

My Lords, the noble Baroness has raised this with me previously. I assure her that we are starting the consultation but there will not be a fait accompli. Some issues can be debated and discussed fully over the summer, of course; but the noble Baroness has rightly raised issues from her great experience, and it would be completely wrong not to take them on board. I think that we need to do that separately as well. If I may, I shall talk to her about that today.

My Lords, there is an impressive international architecture in place, notably UN Security Council Resolution 1373 and the UN convention, but there are gaps because many countries do not have the capacity to implement those conventions. My noble friend mentioned co-operation with the French; is it not something that we and our French colleagues could do? Mainly the non-complying states are in Africa, and we through the Commonwealth and the French through the Francophone countries could offer mentoring and technical assistance in helping them to implement the relevant UN conventions and Security Council resolutions.

My Lords, my noble friend makes an important point. We need to discuss with our European colleagues, including the French, Germans and other members of the 27-strong European Union, our influence and how we can support other countries.

My Lords, I welcome the Statement. Have the Government considered asking Parliament for a detention period longer than 28 days, with judicial supervision but increasing the period by stages, by affirmative resolution, as the evidence of need emerges?

My Lords, again, that is precisely the kind of contribution that we are looking for. Two documents have been released on paper and two more are available on the Home Office website. We hope that noble Lords will look at what the Government are saying in the round and consider the implications of the evidence before us and how, in parliamentary terms, to tackle some of the underlying concerns raised. In particular, the noble Lord, Lord Strathclyde, raised the need to ensure that we are not moving inch by inch towards a different kind of state. The noble Lord’s comments will be taken on board.

My Lords, it is welcome news that the Government are finally going to link up our terrorist watch list to the Interpol database of stolen passports, given the robust criticism from the director of Interpol a couple of weeks ago about our consistent failure to do that. However, we have other failures in information exchange. I recently learnt that the DVLA is refusing to exchange vehicle registration details with its EU counterparts. Perhaps the Minister would look into that.

The Minister also referred to EU access and exchange of immigration data, but the UK is not allowed to access Schengen information system data on persons to be refused entry because we are not in the Schengen zone, as has been brought out in a Lords EU Select Committee report. Will the Government not at least develop some long-term strategy and express an intention regarding the Schengen zone, with caveats about secure external borders, to perhaps advance our access to the Schengen immigration data?

My Lords, the noble Baroness will know that we are currently before the courts on a data-sharing issue. The Government have made their position on Schengen very clear. In the longer term, they will keep everything under review, but we recognise the importance of sharing information with our European Union partners. Whether we are in or out of Schengen should not affect our opportunity to share information that could be vital in tackling serious and organised crime and terrorism.

As for the DVLA, we must ensure that the legislation under which we have brought in bodies, or in which we have laid out the ways in which they can operate, enables them to share data. All the data sharing implications, including those within the context of data protection, need to be looked at. We shall come back to Parliament on that.

My Lords, I regard this as the greatest civil liberties outrage in modern times. It is quite outrageous. Whatever conciliatory noises my own Front Bench makes, I shall be a renegade on this. There is absolutely no way that I regard even 28 days as appropriate. Seven days is, in its own way, far too long. What is wrong with hours rather than days? I cannot believe that this will lead to anything other than sloppy and bad policing. I am in favour of good policing. If you allow the police 56 days to agree what should be done, I cannot believe that they will do anything for 55 days other than sit on their hands. That is simply wrong. I do not believe that day one is day one. What will the noble Baroness do, or am I simply alone in believing that 56 days is an outrage, and that she ought to be ashamed of herself?

My Lords, the noble and learned Lord speaks on this matter with enormous passion. I am not at all ashamed of myself. It is very important that the noble and learned Lord’s voice and that of other noble Lords, who may feel equally passionately in the same direction or another, is heard. That is an important value of your Lordships’ House. It is important to examine the circumstances of cases that have come before us. My right honourable friend’s Statement sets out some of the difficulties and issues that have been raised.

I have far greater faith in our police forces than the noble and learned Lord. They work incredibly hard and have done a huge amount to keep us as safe as possible. In that context it is important to listen to and talk to them about what they believe they need. We should not necessarily always do everything that they say but we should put it in the right context. As I indicated, the comments of the Home Affairs Select Committee and the evidence that we have on people who have been charged suggest that we have a problem. It is right for Parliament to consider this, to deliberate in a measured way and to look at what needs to be done and the right and proper safeguards that need to be put in place. I hope that the noble and learned Lord will voice his passionate feelings in those debates.

My Lords, I join with the majority of noble Lords who welcomed the Statement’s measured and restrained tone and the breadth of the ways in which the issues are to be addressed. I am somewhat anxious that if we are to go beyond 28 days a state of emergency will have to be declared. It seems to me that that could be misused or misunderstood by the public. I wonder whether that is the best mechanism to adopt if we have to go beyond 28 days. I welcome the measure on working with the Islamic community, especially in this country, consulting carefully about what happens in the madrassas and potentially sponsoring English speaking imams. I believe that for some years the French Government have worked with the Islamic community in sponsoring French speaking imams. I suggest that there may be other ways in which working very closely with the moderate voices in the Islamic community could be as key a part of the strategy as the more direct security measures referred to.

My Lords, I am grateful to the right reverend Prelate. My personal reaction is that the state of emergency issue is over the top. There may be particular circumstances involving an individual in which that could apply if Parliament agreed, but with the safeguards that I indicated. I am not talking necessarily about a series of plots resulting in the declaration of a national emergency. However, we indicated in the documents that we want to discuss these issues fully and we will do so. I could not agree more with the right reverend Prelate about working with the Muslim community in the context of interfaith relations and looking at how we can support communities and vulnerable young people who could be drawn into difficulties. We very much look forward to working with the right reverend Prelate and other representatives from different faiths to see how we should do this.

My Lords, I once had the pleasure of debating these issues with the noble and learned Lord, Lord Fraser, at Durham University, and he was equally wrong then. Given the evidence of the police having to go to the wire in many detention cases, does the Minister agree with me that, if they had to release important suspects simply because of lack of time, the public would be outraged if they were endangered as a consequence? Equally, does she agree that the greatest threat to civil liberties is that of being blown to smithereens?

My Lords, I agree with my noble friend that the Government’s first responsibility is to keep people safe, above anything else that we do; therefore, it is right and proper for the Government to consider the measures that need to be taken, to bring them before Parliament and debate them properly. My noble friend is right in all that he said about the importance of ensuring that the public have confidence in the measures taken by Parliament and Government to keep them safe. The balance that we are seeking to strike is that, in changing the nature of what we do, we do not lose sight of the value and importance of individual liberty, on which this country is founded.

My Lords, against the threat of illegal or suspect immigration across the 300-mile land border with the Republic of Ireland, are we currently primarily reliant on Irish immigration control?

My Lords, I am not, as the noble Lord would expect, as familiar with the work that is happening in Ireland as he might like, and I will therefore write to him on that.

My Lords, I apologise that I was unable to be present when my noble friend repeated the Statement, but I have read it. Having served on the Intelligence and Security Committee in the last Parliament, I put it to her that it is a second-order issue whether the ISC is technically a Select Committee or a committee appointed by the Executive. However, I cannot conceive, given the matter under its consideration, that public hearings could be other than rare and, at best, ceremonial.

There are three factors which govern the ISC’s effectiveness. First, it needs the power to see, without question or argument, the material that it requires in the course of its investigations. It must have that information freely supplied to it on request, by the agencies and by the Government. Secondly, it must have the resources at its disposal within its secretariat and, through the co-operation of the agencies and the Government, to pursue its inquiries thoroughly. Thirdly, it must have the will to pursue its inquiries with the utmost thoroughness. Provided that those three conditions are met, the ISC will be an extremely valuable instrument.

My Lords, I agree completely with what my noble friend has said. The Statement refers to “where appropriate”. I saw the noble Baroness, Lady Park, nod in agreement with my noble friend. These are important issues. The committee must be able to do its work effectively, but I am also mindful that we must get it right. Where there are appropriate means by which the committee is able to say things in public, it should be able to.

My Lords, I reiterate what the right reverend Prelate said about this Statement being measured and restrained. It makes me feel more comfortable that the Government are pursuing the first objective, which is to ensure people’s security. I think that it is a focused Statement but, not having read it, I believe that there is a problem: £70 million is to be given to local authorities for involvement in youth leadership schemes, extension of women’s groups and citizenship education, all to deter extremism. I am worried that that might take people’s eyes off the main ball, which has been the focus of the Statement. Could this not be hived off to local authorities without being involved in this exercise?

My Lords, I am grateful that the noble Baroness has welcomed the measured tone of the Statement. Work will be done over the summer to look at how best to use the available resources and to ensure that we are able to support organisations appropriately and that we do not, as the noble Baroness fears, take our eye off the ball.

My Lords, does the Minister accept that, if the Republic of Ireland authorities do not upgrade their controls on illegal immigrants, those immigrants will be able to cross into the United Kingdom over the land border without any checks whatever by police or immigration personnel and then take a ferry boat to Liverpool?

My Lords, we are in discussion with the Irish Government, and further work is taking place on these issues.

Further Education and Training Bill [HL]

My Lords, I beg to move that the Commons amendments be now considered.

Moved accordingly, and, on Question, Motion agreed to.

commons amendments

[The page and line references are to HL Bill 75 as first printed for the Lords.]

1: After Clause 16, insert the following new Clause—

“Intervention: England

Before section 57 of FHEA 1992, insert—

“56A Intervention: England

(1) This section applies if the Learning and Skills Council for England is satisfied as to one or more of the matters listed in subsection

(2) in the case of an institution in England within the further education sector; and it is immaterial whether or not a complaint is made by any person.

(2) The matters are—

(a) that the institution’s affairs have been or are being mismanaged by the institution’s governing body;

(b) that the institution’s governing body have failed to discharge any duty imposed on them by or for the purposes of any Act;

(c) that the institution’s governing body have acted or are proposing to act unreasonably with respect to the exercise of any power conferred or the performance of any duty imposed by or under any Act;

(d) that the institution is performing significantly less well than it might in all the circumstances reasonably be expected to perform, or is failing or likely to fail to give an acceptable standard of education or training.

(3) If this section applies the council may do one or more of the things listed in subsection (5).

(4) If the council does one or more of those things, it must at the same time give the institution’s governing body a notice stating—

(a) the matter or matters listed in subsection (2) as to which the council is satisfied;

(b) the reasons why the council is so satisfied;

(c) the reasons why the council has decided to do that thing or those things.

(5) The council may—

(a) remove all or any of the members of the institution’s governing body;

(b) appoint new members of that body if there are vacancies (however arising);

(c) give to that body such directions as it thinks expedient as to the exercise of their powers and performance of their duties.

(6) The directions that may be given to a governing body under this section include a direction requiring a governing body to make collaboration arrangements (within the meaning of section 166 of the Education and Inspections Act 2006) with such bodies and on such terms as may be specified in the direction.

(7) Directions may be given to a governing body under this section despite any enactment making the exercise of a power or performance of a duty contingent on the body’s opinion.

(8) The council may not direct a governing body under subsection (5)(c) to dismiss a member of staff.

(9) But subsection (8) does not prevent the council, where it considers that it may be appropriate to dismiss a member of staff whom the governing body have power under their institution’s articles of government to dismiss, from giving the governing body such directions under this section as are necessary to secure that the procedures applicable to the consideration of the case for dismissal of that member of staff are given effect to in relation to that member of staff.

(10) A governing body must comply with any directions given to them under this section.

(11) An appointment of a member of a governing body under this section shall have effect as if made in accordance with the instrument of government and articles of government of the institution concerned.

56B Intervention policy: England

(1) The Learning and Skills Council for England must—

(a) prepare a statement of its policy with respect to the exercise of its powers under section 56A,

(b) keep it under review, and

(c) if it considers it appropriate in consequence of a review, prepare a revised statement of its policy.

(2) When preparing a statement or revised statement of its policy, the council must—

(a) undertake such consultation as it thinks appropriate;

(b) consider any representations made to it about the policy to be set out in the statement.

(3) The Secretary of State may give the council guidance in relation to the exercise of its functions under subsections (1) and (2), and in particular in relation to the form and content of the policy.

(4) It is the duty of the council to have regard to any guidance given to it under subsection (3).

(5) The council must send a copy of the statement or revised statement prepared by it to the Secretary of State.

(6) If the Secretary of State approves it he shall lay a copy of it before each House of Parliament.

(7) The council must publish—

(a) the statement of its policy approved by the Secretary of State;

(b) where the Secretary of State approves a revised statement of its policy, the revised statement.

(8) The council must have regard to the statement most recently published under subsection (7) in exercising, or deciding whether to exercise, any of its powers under section 56A in relation to an institution.

56C Directions

(1) This section applies if—

(a) the Secretary of State is satisfied as to one or more of the matters listed in section 56A(2) in the case of an institution in England within the further education sector, and

(b) the Secretary of State is satisfied that the circumstances are such that it would be appropriate for the Learning and Skills Council for England to do one or more of the things listed in section 56A(5) in relation to the institution.

(2) In such a case the Secretary of State may give to the council such directions as he thinks fit as to the exercise of the council’s powers under section 56A.

(3) Where the Secretary of State gives the council a direction under this section, he must at the same time give the council a notice stating the matter or matters listed in section 56A(2) as to which he is satisfied.

(4) The council must comply with any directions given to it under this section.

(5) Where the council does a thing listed in section 56A(5) in relation to an institution in compliance with a direction under this section—

(a) the council must give the institution’s governing body a copy of the relevant notice under subsection (3), and

(b) the requirement to give a notice under section 56A(4) does not apply.””

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. I shall speak also to Amendments Nos. 2, 4, 6, 7 and 8.

The powers of intervention provided for in these amendments are essential to achieving reform in the further education system. We share a determination in England and Wales to improve the quality of further education for learners and employers. To do that, we must have clear intervention policies in place which set out unequivocally our expectations of the system and the actions that the LSC in England and Welsh Ministers in Wales will take to ensure the quality of provision and safeguard the interests of learners. It is simply not good enough that, in spite of continuing improvement, some 40,000 publicly funded learners in colleges in England today are not receiving a high enough standard of education or training.

Although there are currently no failing colleges in Wales, it is anticipated that the enhanced intervention powers may be needed in future to ensure the rise in standards. If anyone is under any misapprehension about the Government’s determination to ensure the highest standards in FE and to ensure that those who do not meet them are dealt with robustly, they should bury that misapprehension now.

The need for provision on interventions in this Bill is clear. It is provision that has been developed as a result of discussions in this House, another place and more widely. I know that the Minister responsible for further and higher education is very grateful for the contributions that have been made, as am I. As a result of those discussions, the provision before the House today has been improved compared with what was considered previously.

The area that has been modified concerns giving the LSC and Welsh Ministers powers to direct the governing body to dismiss senior post-holders. We have listened very carefully to the debate on this issue and have made explicit provision that the Learning and Skills Council or Welsh Ministers may not direct a governing body to dismiss a principal or senior member of staff; instead, where the LSC and Welsh Ministers consider that it may be appropriate to dismiss a senior member of staff, they can issue a direction to the governing body to initiate dismissal procedures in respect of a senior post-holder. I make it clear to the House that this can apply only where the governing body has the power under its articles of government to dismiss that member of staff.

We would expect any governing body that received such a direction from the LSC or Welsh Ministers to commission a thorough investigation to gather and weigh any evidence in considering the merits of the case. The governing body alone would be responsible for the outcome of that process.

In this House and the other place, we have been told that there is no evidence to suggest that poor performance of colleges, where it occurs, is generally attributable to inadequate leadership. Let me provide that evidence. In its 2005-06 annual report, Ofsted said:

“There is a close link between the quality of leadership and management and the overall effectiveness of colleges. In all but two colleges inspected in which overall effectiveness is good or better, leadership and management are also good or better. In all but one of the colleges judged inadequate overall, leadership and management are also inadequate”.

I can also confirm that in all but one of the cases where the LSC is now working to support improvements in colleges which are currently graded inadequate, the action being taken includes addressing problems in management and leadership.

Similarly, the Welsh Assembly Government’s commitment to continuous quality improvement requires that Welsh Ministers can intervene in relation to the leadership of a college. So while the intervention powers are a backstop, they must be there to provide for those rare occasions where a college fails to improve satisfactorily.

In past debates, some have said that because the Secretary of State has not used these powers there is no need for the provision in the Bill. That is wrong for two reasons. First, it is wrong to say that the Secretary of State has never made use of his powers. In the past, the threat of intervention has been a vital tool in addressing the worst cases of failure. In 1999, for example, the Secretary of State’s threat to intervene in a college precipitated the dismissal of the principal and vice-principal and the resignation of the governing body. Those responsible for the failure of that college did not wait for the umpire’s finger—they walked. Secondly, the fact that the powers have been used to good effect by the Secretary of State does not mean they cannot be used to better effect in future. We should always be prepared to take the opportunity to improve.

In the past there has been no clear strategy for intervention. The rules of intervention lack transparency and apply only in cases of severe failure or mismanagement. They are also slow and cumbersome. We do not have the luxury of holding on to students for three, four or five years while the provision is made good. Students are with us for just one or two years and we must make sure that no cohort of students suffers from poor provision just because the intervention system is too slow to remedy a problem. However, the widely supported aspiration set out in our White Paper goes beyond this. We aim not just for no college to be failing but for all colleges to be good or improving. We aim that no student should ever have to be educated in poor provision.

The 157 Group, which represents the country’s largest colleges, is adamant that,

“the guidelines on intervention mean that well managed colleges where governance is effective and appropriate have nothing to fear”.

That is the attitude we are seeking to embed across the sector, and that is the explicit view among the colleges most likely to achieve foundation degree awarding powers. Currently, however, 10 per cent of colleges are graded unsatisfactory by Ofsted. Thirty-seven per cent are graded satisfactory but of those some 17 per cent are not improving compared with the previous inspection round; and some 9 per cent have actually got worse. We expect the LSC to address this underperformance through challenge, through support and, should it be necessary, by being in a position to intervene.

The intervention policy for which we are making provision is transparent and arguably more accountable than is currently the case. It is right to transfer intervention powers to the LSC and to vest it with new ones, as the entity legally responsible for funding post-16 provision other than higher education in England. The House will know that in future we shall transfer the funding for 16 to 19 learners to local authorities’ ring-fenced budgets. However, we estimate that there will be at least three full academic years before we will be able to give effect to the full legislative changes that follow from this announcement. As the LSC remains legally responsible for the allocation of funds, it remains right to continue with our plans to transfer these powers of intervention to the LSC so that we can sustain our progress on improving standards.

We have been grateful to the Association of Colleges, the organisation which represents colleges, as it has worked with us to develop the intervention policy. The AOC has been a valiant lobby for further education generally throughout the passage of the Bill and it is now clear that it is sensible to transfer these powers to the LSC. The AOC notes that the power to dismiss governors,

“provides protection for the public in extreme circumstances”.

It also says that the LSC,

“has a legitimate role in ensuring college provision is of a satisfactory standard”.

The LSC is already directly accountable to the Secretary of State. New Section 56C provides that the Secretary of State may direct the Learning and Skills Council in the exercise of its duties under proposed new Section 56A, and he may also direct the Learning and Skills Council generally in the exercise of its powers. As the AOC has pointed out, the LSC can also be held accountable in the courts via a judicial review. I can therefore tell the House that there is neither a real accountability gap nor a legal gap.

The LSC will not be carrying out these processes behind closed doors. Where a college has been identified as underperforming, the LSC will consider whether it has the capacity to improve and whether it can do so within an acceptable timescale. In undertaking this consideration, the LSC will consult as appropriate with local stakeholders. This might include the local authority, employers, learners and other interested parties, such as the sector skills council, if the failing provision falls within a key industry footprint in the area. My honourable friend the Minister for Further and Higher Education will be asking the LSC to develop its detailed proposals for this as part of its consultation on the council’s policy for exercising its intervention powers. He will also extend his practice of writing to local MPs when a college is identified as inadequate as a result of an Ofsted inspection. In future, he will also write if underperformance is identified through other routes, such as where a significant proportion of a college’s success rates fail to meet the minimum performance level or a college’s performance against the new framework for excellence is inadequate.

During earlier debates the noble Baronesses, Lady Walmsley and Lady Sharp, raised the important matter of the interpretation of new Section 56A(2)(d), which refers to an institution which is performing significantly less well than it might in all the circumstances be reasonably expected to perform, or is failing or is likely to fail to give an acceptable standard of education or training. The LSC’s judgment about a college’s performance will not be subjective. The LSC will have evidence provided by an inspection by Her Majesty’s Chief Inspector of Education, Children’s Services and Skills as well as other evidence provided against the criteria, which I will return to in a moment, set out in the LSC’s intervention policy statement. Before it comes into effect, this statement will be subject to consultation in accordance with Cabinet Office guidelines and to approval by the Secretary of State. To strengthen the learner’s voice in the improvement of further education, we intend that the national learner panel will be consulted specifically as part of the consultation. To strengthen the input of providers, the LSC will involve the further education sector-led practitioner panel or its successor body under a self-regulating system in the development of the first and subsequent versions of the statement. The consultation arrangements will include an interactive forum. The LSC will have to consider any representations made on the policy.

Let me return briefly to the criteria. We have made an illustrative draft of the policy available and I can today indicate to the House that the consultative draft of the document will, for the sake of even greater transparency, include suggestions for specific initial thresholds that might be set as triggers for intervention. These include, for example, the outcome of an Ofsted inspection, such as where a college was awarded grade 4 for overall effectiveness and is hence deemed to be inadequate; where a college had been repeatedly awarded grade 3 for its overall effectiveness and was awarded grade 4 for its capacity to improve; where a college’s performance levels were unsatisfactory, such as when 25 per cent or more of long-course provision failed to meet the LSC’s minimum performance level; where there were problems with the financial health of a college, such as when the LSC auditors or auditors commissioned by the council have reported that financial stability rated category C; and, once the framework for excellence is fully operational, where a college’s performance against it indicated unsatisfactory performance through an overall performance rating of Grade 4, which is inadequate.

I have already described to the House how the LSC will ensure that the further education system is fully involved in the development of the council’s intervention policy. We are also determined to ensure that the system plays its full part in implementing that policy. The Minister for Further and Higher Education will therefore be asking further education colleagues to work up proposals for the self-regulation of further education, specific proposals for how the system itself could provide help and support to institutions so they are able to avoid being in receipt of a notice to improve from the LSC, and proposals to provide help and support for those that have been issued with a notice to improve.

These amendments make provision for interventions in England and Wales. We need them to secure effective intervention regimes in both nations. Our proposals take full account of representations made by this House and by the sector. The proposals are fully supported by the Association of Colleges for England and fforwm in Wales and they are explicitly supported as an appropriate compromise in all the circumstances by the 157 Group, which is plainly uncomfortable with any assertion that misrepresents its position. The provision is needed to safeguard the interests of learners and other stakeholders. There is consensus that further education plays a vital role in equipping individuals with essential life and vocational skills. It helps them play a full and active role in our society and can help them to achieve personal prosperity and well-being. Given that, we cannot, we will not and we should not tolerate inadequate or failing further education provision. These amendments will build on the Secretary of State’s current powers to enable us to achieve our goal of eliminating unsatisfactory provision by 2008. I commend them to the House and beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 1.—(Lord Triesman.)

rose to move Amendment No. 1A, as an amendment to the Motion that the House do agree with the Commons in their Amendment No. 1, leave out “agree” and insert “disagree”.

The noble Baroness said: My Lords, I shall also speak to Amendments Nos. 2A, 4A, 6A, 7A and 8A. First, I welcome the Minister to his new role. He is much admired in your Lordships’ House and was highly respected for his dedicated work at the Foreign and Commonwealth Office. I am sure that he will bring the same skills and qualities to his new brief, which is of great importance to the future economic success of our country.

When the Bill passed through this House a few months ago, your Lordships successfully removed a clause that gave the Learning and Skills Council considerable new powers to intervene in the running of a college. The amendments that we are now discussing reinstate almost all those powers, with some noteworthy limitations. I thank the Government for working so hard from the start to address many of the concerns about the clause. In particular, the Learning and Skills Council no longer has the power to remove members of a college’s governing body.

The Government have printed a 10-page draft policy statement that lays out the intended stages of the intervention process and it includes an impressively complicated flowchart showing the different routes that such intervention could take. All this is immensely helpful. It is now clear how the Government intend the LSC to use these powers and the process is much more transparent than when I first read the original clause. However, it is a damning indictment of the provisions that such an extensive document is necessary to explain the simplest facts about their implementation. Such a complicated process makes it highly unlikely that such powers will ever be used. Does the Minister really believe that any intervention will progress to the end of stage 4 and the ultimate threat of the Learning and Skills Council considering strategic options? If he does not, why does he think that these provisions are necessary? It is certainly not a good strategy to give punitive powers that are not needed.

Improvements notwithstanding, we on these Benches still disagree entirely with these amendments. Many of our concerns were indeed caused by lack of clarity and the potential for inappropriate use. However, those concerns are dwarfed by our principled objection to giving an unaccountable and unelected organisation increased powers of intervention over the decisions made by a college’s governing body.

The Government have often attempted to justify their decision to award the LSC these powers by comparing the powers to those wielded by LEAs over schools or even by policing boards over local forces. These comparisons are simply not accurate. The LSC is in no way comparable to the LEAs or local police boards. The latter are elected and directly accountable to the families and children who use the schools and the communities that they police. Quite bluntly, the LSC is neither democratic nor accountable to the wider public. I question whether it is even accountable to the employers who we hope will employ the students.

The comparison with the LSC and LEAs also highlights the Government’s assumption that it is a good thing for colleges to become more like schools in this respect. Why they choose to reduce the FE sector’s powers in this part of the Bill while simultaneously expanding them enormously in Clause 17, where they allow foundation degree awarding powers, is mystifying. On these Benches we have no such inconsistency. We hope that colleges continue to expand in size, expertise and responsibility. We would rather that the Government took higher education institutions as their model rather than schools, with all the associated powers of self-regulation and the responsibility that that implies. I beg to move.

Moved, as an amendment to the Motion that this House do agree with the Commons in their Amendment No.1, leave out “agree” and insert “disagree”.—(Baroness Morris of Bolton.)

My Lords, we support the Conservative Party in its objection to Amendment No. 1. In doing so, I welcome the Minister to his new position and accept that the Government have moved considerably in bringing forward amendments to these proposals. Our main reasons for opposing the inclusion of the amendments and supporting the Opposition’s Motion is that the Minister began by saying that these amendments are necessary if we are to maintain powers of intervention.

The Secretary of State, under Section 57 of the existing act, the Further and Higher Education Act 1992, already has reserved powers of intervention. The Minister made that clear. For the past seven years, the Learning and Skills Council has used the possible threat of intervention, via these reserved powers, to effect substantial changes within the college sector. The Minister, in fact, instanced a number of occasions when these have been used to date very effectively. We recognise that, but the threat of intervention powers stands behind that.

On Report in the Commons, the Minister for Higher Education and Lifelong Learning said that,

“I strongly believe that clause 17”—

the amended clause, if we accept the Government’s amendment—

“is an essential component of our reforms of the FE system in England. It is vital if we are to be able to deliver our promises to eliminate inadequate provision by 2008”.

In other words, “We want it now because otherwise we cannot effect the reforms that we want to make”. That was the point made by the Minister. However, the Minister in the Commons went on to acknowledge that substantial reforms had been achieved. He said,

“We have made real progress. Nevertheless, where there is real and fundamental failure, it is right that we retain these powers of intervention”.—[Official Report, Commons, 12/7/07; col. 1647.]

It is not a question of retaining powers of intervention: the powers are already there. What we are looking at is actually a subtle extension of the powers of intervention on behalf of the LSC. On the one hand, under Section 56A(6), we have the power to direct collaborations. Collaborations are extremely important, but whether direct collaborations are the right way forward is a moot point.

More substantial is the question of intervention. Under the original legislation the Secretary of State could intervene, and one of the triggers for intervention was when the Ofsted or ALI report said that the college was in serious weakness or failing to provide an acceptable standard of education. The new powers given to the LSC—as the Minister indicated, they were debated both in Committee and on Report in this House—apply when an institution is performing significantly less well than might in the circumstances reasonably be expected. The new draft guidance that has been issued spells out a little those obscure phrases to tell us what they mean. Paragraph 14 refers to underperformances identified by Ofsted through an inspection judgment of overall inadequacy; and by the LSC where a college has failed to meet its published minimum levels of success rate or performance, and in relation to financial health and control.

All the discussion of the need for the LSC to be able to intervene to carry through the agenda of reform for colleges stems from the proposals under the Leitch and Foster reports. Within the college sector, there is already a substantial move towards self-regulation. Every college has to produce a self-assessment report each year. The process is that the LSC sets targets for the colleges and monitors them closely. The draft framework makes it clear that, where there is underperformance, there will be what Foster called a “staged approach to intervention”. In the first place, the LSC would then issue a notice to improve to the college, and support would be given from both the LSC and the Quality Improvement Agency on how the college might improve its performance. The college leadership and governors would also be helped to take action to identify and resolve any problems. The LSC could reinforce the governing board and appoint new governors to help to address the inadequacies. It is only where insufficient progress is made under all those measures that any intervention is needed.

The draft guidance tells us that, if intervention is needed, the LSC will write formally to the college board, giving it 30 days to respond and possibly requiring the dismissal of a named individual. Again, it is consulting the board of governors, as the Minister made clear. If after 30 days’ consultation the LSC decides that it needs to proceed with intervention, the matter then goes from the local or regional LSC up to the national one, where the decision is taken. The Secretary of State would then be required to be formally notified about intervention.

Lengthy processes are proposed which already exist within the college sector. If the Government feel the need for them to be clarified—there is a need for clarification and transparency here—they can be set down perfectly well in guidance. Much of this follows from an LSC document issued in January last year called Identifying and Managing Underperformance.

I shall go through our basic argument. Under present legislation, the local LSC identifies poorly performing colleges and works with them to improve performance. Often that means a merger or collaboration with a better performing institution; collaboration is a frequently used mechanism. If the college fails to come up to scratch, the LSC can withdraw funding and put that provision out to competition. In the last resort, the LSC may ask the Secretary of State to use their powers of intervention, and it has clearly done on one or two occasions, although it has never proved necessary for the Secretary of State to issue a formal direction of intervention.

The only difference between the current situation and what is being proposed is that the national LSC takes the decision and issues the intervention notice instead of the Secretary of State. Why do we oppose that? The national LSC is an unelected and unaccountable quango. The Secretary of State is answerable directly to Parliament. There must be some element of democratic accountability. Given that the power is not used very much, the democratic element is vital.

On top of that, it is clear from the statements issued earlier this month on further education and subsequently in response to the Leitch report that new legislation is coming down the pipeline fairly soon to implement the proposals of the Foster and Leitch reports which will change substantially the role of the LSC. In particular, 16 to 19 education and training in further education colleges will be transferred back to local authorities, with the respective funding stream also being transferred back. The LSC will remain only a conduit for finance for post-19 education and training, with decisions on provision of courses for post-19 being transferred on the one hand to employers through Train to Gain and, secondly, to individuals through the proposed new learning accounts.

On Report in the other place, the Minister said:

“I estimate that we will not be able to give effect to the full legislative changes until the academic year 2010-11”.

The Minister here said that it will be two to three years before we get there—

“In the three full academic years between now and then, the LSC will retain the legal responsibility for securing and funding all forms of post-16 education and training outside higher education. In particular, it will retain the duty to secure the proper facilities for young people aged 16 to 19”.—[Official Report, Commons, 12/7/07; col. 1638.]

We accept that, but we maintain that for the past seven years the LSC has had that duty under a regime in which the reserved powers of intervention have resided with the Secretary of State and that the regime can perfectly well continue for a further three years.

My Lords, I rise to comment on the amendments coming from the other place. The Bill left this House in considerably better condition than when it arrived. It has now returned to this House in a condition that I regard as satisfactory. That means that I cannot support the amendment tabled by the noble Baroness on behalf of the Opposition. My noble friend Lord Dearing cannot be with us today. Appropriately, he is giving a keynote address at a conference celebrating the 10th anniversary of the Dearing report. He could hardly absent himself from that. We discussed this in some detail earlier today, and I can reasonably say that I speak also on his behalf.

There are two issues of principle in the amendments as they have come back; one concerns intervention and one concerns progression. I agree with the Minister that, in the case of intervention, poor college effectiveness is almost always related to inadequate leadership. There are good teachers, staff and administrators out there. If a college is ineffective, the direction in which it is moving is almost always the problem, although there will no doubt be exceptions. If that is so, the Government must properly take account of it. Intervention was in the original Bill. It was a matter of significant concern, and it led to an exchange of letters between me and the Minister then responsible, the noble Lord, Lord Adonis. I am grateful to him for the trouble that he took over that correspondence.

The amendment from the other place proposes a change that embodies, for me at least, a significant point of principle. Perhaps I diverge from the noble Baroness on the Liberal Democrat Benches here, because it is rather important to get the Secretary of State out of this position. I would not want a politician to be intervening in the local management and administration of an individual college. To have a buffer between the Secretary of State and that college when matters get serious is a good principle to follow.

I have also seen a case in which a candidate for a vice-chancellorship in a university was turned down at a late stage of the process following a sotto voce telephone message from the then University Grants Committee. When a public body wishes to intervene in such an important and delicate matter, I would much rather have a transparent, public process that can be challenged openly—whether by judicial review or whatever. Of course, that example was from before the appointment; I am instancing it as an example of what has happened to my certain knowledge. I am sure that in other ways similar hints have occasionally been given after appointment.

The transfer of the powers from the Secretary of State to the Learning and Skills Council will certainly benefit the sector. I would not have thought that the Secretary of State would want to be involved in such a detailed discussion of staffing in an individual college. Were he to be the focus of such powers, it implies, too, that there is some inadequacy or flaw in the governance structures. If there is, it should be dealt with much more directly than giving the Secretary of State a reserved power. The Government have moved, and in ways that at least two of us who debated this in some detail in Committee and at other stages feel is adequate, possibly satisfactory. There is a significant distinction in Ofsted judgments between those two terms. Let us say satisfactory. The Government have moved in ways that we find acceptable.

Progression, which comes up in this context, was again of considerable importance to many of us. The context is that, in extending the powers for FE colleges to give such an award, there is then an issue of the brand of the UK higher degree system and the kinds of degree offered in this country. The protection of that brand was central to our concerns in the discussions. The noble Lord, Lord Dearing, thought up the rather elegant and eloquent way of dealing with this by insisting that there should be evidence of possible progression from the courses in FE colleges to courses in other HE institutions, including universities. He thought this should be built into the condition of the FE college being given powers to make such awards. This effectively means that the current higher education system will be involved in the quality assurance process.

Finally, the actual drafting says that the Privy Council must consider that the proposals for progression are satisfactory and are likely to be carried out. I wish that this was put even more strongly, but perhaps certainty in this area is an unattainable goal. I take it that there is a safety net in the six-year review of any powers so granted. The reservations I expressed have been met in a satisfactory way and I am happy to support the Bill.

My Lords, for a variety of reasons, I have not had the opportunity to participate in earlier consideration of this Bill. I chaired the Hamlyn Foundation National Commission on Education, which reported in 1993. Many of the provisions were taken up by the Dearing committee, which reported some 10 years ago. Among our recommendations was the establishment of learning and skills councils with powers similar to those now enshrined in this Bill. The noble Baronesses, Lady Sharp and Lady Morris, made the point that the learning and skills councils are not elected bodies, but in public life there are a huge number of non-elected, appointed bodies with authority to carry out the same kind of procedures enshrined in this Bill.

I was, I confess, concerned about the earlier stages of the Bill and some of the powers enshrined in it. The noble Lord, Lord Triesman, who has taken on the poisoned chalice of looking at the whole further education and training sector, has completely persuaded me with the points he made about the amendments that have been introduced and the changes to the Bill. I also support the points that have been made by my noble friend Lord Sutherland, and for that reason cannot support the amendments proposed by the Conservatives and Liberal Democrats on this occasion.

My Lords, I, too, am concerned that the Conservative and Liberal Democrat Front Benches have chosen to continue with their opposition to intervention. When the amendment was sent back to the House of Commons, a powerful argument was made on all sides that the Association of Colleges, the powerful national representative body of colleges of further education, had serious reservations about intervention. These issues were well debated, and this House expressed the strong view that this needed to be considered. The amendment went back to the House of Commons, which gave it due consideration, and we hear today that the Association of Colleges is now happy with the Government’s proposals. That should satisfy this House that, because of our work on these issues, they have been dealt with adequately.

I hope that this House will now feel, as the Association of Colleges does, that justice has been done and that we should give the Bill a fair wind. This legislation can then go forward to improve the lot of colleges of further education and those 3 million students in further education who need the support of this House and the House of Commons.

My Lords, I do not think that anybody is challenging the principle of intervention. My noble friend Lady Morris is challenging the extension of the powers of intervention and their delegation to the Learning and Skills Council. As the Minister for Lifelong Learning said in another place,

“in extremis, when all else fails, there has to be a back-stop power of intervention”.—[Official Report, Commons, 12/7/07; col. 1650.]

That was the Minister’s justification for the amendments.

I do not think that anybody is challenging the backstop power of intervention; instead, it is proposed that it should remain with the Secretary of State, contrary to the belief of the noble Lord, Lord Sutherland. I feel that that is the right place for it. The provisions go far further than dealing with something “in extremis”—a backstop position. As pointed out by my noble friend Lady Morris, there can be 61 steps on the route to intervention. No doubt that is a very sensible set of procedures for the Learning and Skills Council to have. However, throughout the Bill’s progress, there have been questions about whether it is sensible to increase the powers available to the LSC. It remains difficult to agree that it is either stable or confident enough to be entrusted with the proposed power of direction.

In another place, the Minister indicated that further legislation would be needed, perhaps within three years. The LSC is also continuously being reorganised. There is recent evidence of this. Although the chief executive signed its report and accounts early in July last year, the LSC told me just today that it did not have a date on which the 2006-07 accounts would be available. That is surely a sign of change, instability and a lack of confidence. It would not be wise to delegate this important power to make directions to the LSC, so I support my noble friend’s amendment.

My Lords, I thank the noble Baronesses, Lady Morris and Lady Sharp, for their good wishes. I shall certainly do my best. I also thank the noble Lords, Lord Sutherland, Lord Walton and Lord Bilston, for making the point that we have moved significantly in our discussions. That is acknowledged. The question, of course, is whether we have moved far enough. I shall be as factual and objective as I can in my assessment.

The noble Baroness, Lady Morris, quite rightly pointed to the detail of the flow chart. When I read it, I wondered for a moment whether my eyesight had failed or whether it was as complex as it appeared. It is complex; as the noble Viscount, Lord Eccles, said, there are very many steps in it. However, I realised, and I ask the House to recognise, that the discussions among all the interlocutors, perhaps most especially with the Association of Colleges—I will not accuse it of being a trade union for heads of institutions; none the less, it plays a very strong and, in its way, vital role in ensuring that their interests are properly regarded—have ensured that the intervention steps embody not only the kind of judgments that are needed about failure of quality but all the steps required in employment law.

I say that with some feeling, having drawn up both agreements and flow charts that have all the steps of employment law in them. No doubt your Lordships know that that results in a pretty complex document. It is no easy matter to get around that. None the less, there it is. It is full because it is thorough, and unless significant parts of employment law had been left out it would never really have done the required job. That job was summed up very well by the noble Lord, Lord Sutherland, who, with his huge experience of running one of the beacon universities in the United Kingdom, offers a very important insight into the quality of leadership that institutions need to achieve the very high standing that we want from them.

I shall deal with the key arguments made. First, it is suggested that the proposed intervention mechanism is less democratic than keeping the powers with the elected Secretary of State. The current reserved direction powers of the Secretary of State do not provide for directions to be given to deal with unsatisfactory senior postholders. They cannot deal with the principle, and they cannot be used on the basis of the existing reserved powers. It would therefore be a mistake to believe that we can simply fall back on a mechanism that is already there and is entirely satisfactory.

The reality, as the noble Lord, Lord Walton, made very clear, is that the country has a very long and proud tradition of having professional and other bodies that are not elected by the public but which we expect to do a significant job in the public interest. We have bodies that set standards and oversee performance—bodies in which the public have invested their trust—and we rely on them to earn that trust properly. Indeed, the public are entitled to expect from them a service that is assured for quality. I shall give a few examples of those bodies, because the point made by the noble Lord is so important: the General Teaching Council, the General Medical Council, the Financial Services Authority, the Office of Fair Trading, the Competition Commission, the Charity Commission and the Bank of England. A mixture of different kinds of bodies, they provide a variety of services, but not one of them is elected by the public or a body on which we do not rely for its good sense and proper judgment in matters that are absolutely vital to the public. It would not be right to claim that it is unusual or novel to give powers of oversight and regulation to bodies other than the Secretary of State. That would be an assertion without foundation. Democracy, in that sense, cannot be the issue for the administration of a great deal of our important public life.

On the points made by my noble friend Lord Bilston, we are bound to consider what the professionals working in this area have to say. They are clear and the AOC has said that the LSC is best placed to exercise the powers, which go more widely—as the noble Baroness, Lady Sharp, said—precisely because it is important to get a holistic take on this and to ensure that all the things which we need done are done properly. The AOC is clear, and I think that the 157 Group is also now absolutely clear. All I ask is that the House takes this decision not on the basis of suppositions but on the evidence of what the professionals have said is good for the sector.

The other big advantage, in the view of those two key professional groups, is that the powers that they wish now to see with the LSC—which would be deleted by the opposition amendments—provide a much better platform on which we can build our shared ambition of a self-regulating sector. The AOC and the 157 Group recognise that the mechanism is much better in that respect than one that the Secretary of State could have in a thoroughly centralised and dirigiste model. Indeed, any successor body—and there will be those, because this sector will always change and, because education always moves on, it will never have a simple, settled solution—including a self-regulating body will have a much better chance of success based on the proposed model, which is firmly rooted in the further education system. That is the underlying point, which those groups are right to make by drawing on their expertise in running that sector.

This is the platform for the future; it is robust, transparent and fair. I ask the House to judge on the evidence. It is not a matter for anecdote or supposition, but one of saying how this sector can work best in the view of those who are going to make it work, and how that will be the platform for the future. The balance we have in these amendments gives the House the opportunity to take that decision today in a way that will be applauded around the sector, and will hasten these new foundation degrees. We will return, in Clause 4, to the progression question that the noble Lord, Lord Sutherland, raised. This gives the basis for a sector that is improving all the time, and full of ambition to do the job that we expect of it.

My Lords, I thank the Minister for his full and frank reply. When I made my opening remarks about the Minister transferring his notable skills to his new role, I had in mind his skills at the Foreign and Commonwealth Office, not as a former general secretary to the Labour Party. He certainly knows how to pull the levers. All I can say to noble Lords who have spoken is that universities would not put up with such powers of intervention. Despite the Minister’s undoubted powers of persuasion, we remain unconvinced.

In his excellent review, the noble Lord, Lord Leitch, did not mention the Learning and Skills Council until page 71. It was not mentioned at all in the recent Statement on world-class skills, so I wonder very much about its future. As my noble friend Lord Eccles said, we are not soft on underperforming colleges, but the power to intervene should remain where it currently resides, with the Secretary of State. This, in our view, is completely unnecessary, unhelpful legislation and is a classic case of Parliament doing too much, which is hardly surprising given that this Government pass a new law every three hours. For that reason, I wish to test the opinion of the House.

2: After Clause 16, Insert the following new Clause—

“Intervention: Wales

(1) Section 57 of FHEA 1992 (intervention) is amended as set out in subsections

(2) to (4).

(2) In subsection (2) (conditions for intervention), for paragraph (d)

substitute—

“(d) they are satisfied that the institution is performing significantly less well than it might in all the circumstances reasonably be expected to perform, or is failing or likely to fail to give an acceptable standard of education or training.”

(3) After subsection (5) insert—

“(5A) The directions that may be given to a governing body under this section include a direction requiring a governing body to make collaboration arrangements (within the meaning of section 166 of the Education and Inspections Act 2006) with such bodies and on such terms as may be specified in the direction.”

(4) After subsection (6) insert—

“(6A) The Welsh Ministers may not direct a governing body under subsection (5)(c) to dismiss a member of staff.

(6B) But subsection (6A) does not prevent the Welsh Ministers, where they consider that it may be appropriate to dismiss a member of staff whom the governing body have power under their institution’s articles of government to dismiss, from giving the governing body such directions under this section as are necessary to secure that the procedures applicable to the consideration of the case for dismissal of that member of staff are given effect to in relation to that member of staff.”

(5) After section 57 of FHEA 1992 insert—

“57A Intervention policy: Wales

(1) The Welsh Ministers must—

(a) prepare a statement of their policy with respect to the exercise of their powers under section 57,

(b) keep it under review, and

(c) if they consider it appropriate in consequence of a review, prepare a revised statement of their policy.

(2) When preparing a statement or revised statement of their policy, the Welsh Ministers must—

(a) undertake such consultation as they think appropriate;

(b) consider any representations made to them about the policy to be set out in the statement.

(3) The Welsh Ministers must lay before the National Assembly for Wales a copy of any statement or revised statement prepared by them under this section.

(4) The Welsh Ministers must publish any statement or revised statement prepared by them under this section.

(5) The Welsh Ministers must have regard to the statement most recently published under subsection (4) in exercising, or deciding whether to exercise, any of their powers under section 57 in relation to an institution.””

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2.

Moved, That the House do agree with the Commons in their Amendment No. 2.—(Lord Triesman.)

rose to move, as an amendment to the Motion that this House do agree with the Commons in their Amendment 2, leave out “agree” and insert “disagree”.

The noble Baroness said: My Lords, I beg to move.

Moved accordingly, and, on Question, amendment agreed to.

3: Clause 17, page 11, line 38, at end insert—

“( ) After subsection (2A) (as inserted by subsection (4)) insert—

“(2B) Where the Privy Council is considering whether to make an order

under subsection (1) above specifying an institution as mentioned

in subsection (1)(b) above, the Privy Council may not make the order unless—

(a) the institution gives the Privy Council a statement setting out what it proposes to do as regards making arrangements for securing that any person granted an award under or by virtue of any power that would be conferred on the institution if the order were made (other than the power described in subsection (4A) below) has an opportunity to progress to one or more particular courses of more advanced study, and

(b) the Privy Council considers that the proposals are satisfactory and are likely to be carried out.””

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 3.

This amendment fulfils a commitment given by my noble friend Lord Adonis when the Bill was last before this House. My noble friend acknowledged that the issue of foundation degree graduates progressing to higher-level study is such an important matter that it deserves to appear in the Bill, and that is what the Government have sought to provide through the amendment that is now before your Lordships.

Amendment No. 3 provides that in order to grant foundation degree-awarding powers to an FE institution in England, the Privy Council must first have received a statement from that institution setting out how it proposes to secure opportunities for progression to at least one course of more advanced study for any person awarded one of its foundation degrees. The Privy Council will also need to consider that these proposals are satisfactory and are likely to be carried out before it can grant foundation degree-awarding powers. When considering whether to make an order granting foundation degree-awarding powers, the Privy Council will take advice from the Quality Assurance Agency, (QAA).

In practice, it is expected that the statement about proposals for ensuring progression would form part of a “critical self-analysis”, which all institutions applying for degree-awarding powers are asked to carry out. This self-analysis will also be the basis for any application for foundation degree-awarding powers. Therefore, Amendment No. 3 does not place any substantial new burden on applicant institutions.

To maintain standards and safeguard the interests of the learner, it is vital that we strive to preserve the flexibility and potential for innovation that have already made the foundation degree such a popular and highly valued qualification. Institutions, the courses they offer and the needs of employers and learners can and will change over time. With this in mind, Amendment No. 3 has been drafted so that the proposals are to cover not just progression arrangements in respect of foundation degree courses being contemplated at the time of the initial assessment but how the college plans to ensure progression arrangements as it introduces new foundation degree courses over time.

The amendment deliberately avoids creating an entitlement for foundation degree graduates to a place on a course of higher-level study. This is consistent with the commitment made by my noble friend Lord Adonis at Third Reading. Admissions policies and procedures remain the prerogative of individual institutions, and the amendment is framed so as not to infringe this.

The amendment is not prescriptive about how a college should approach the question of progression. There is already diversity of practice, and we would not want to stifle that. It will be for the awarding institutions themselves to determine how they go about achieving progression opportunities for every person awarded a foundation degree, and it will be for foundation degree graduates to decide whether they wish to take up the opportunities for progression that are presented to them.

Progression need not always be to an honours degree. The published draft guidance states that progression is expected to be to at least one bachelor’s degree with honours, with an expectation that this should not normally exceed 1.3 years for a full-time equivalent student in England, or to an appropriate professional or other qualification at level 6 in the National Qualifications Framework.

I am sorry that the noble Lord, Lord Dearing, is not in his place, but I know that he is at a conference which is analysing the 10 years since his quite exceptional report. He has written to me suggesting that the wording of paragraph 12 of the draft guidance be amended slightly to reflect more closely the wording of paragraph 30 of the foundation degree benchmark statement—included as Appendix 2 of the guidance—which also addresses progression.

I undertake that we will incorporate the noble Lord’s suggestions in the next version of the guidance, which will be issued as a working document to the QAA, following completion of the Bill’s passage. At the end of the first sentence of paragraph 12, we will insert the following form of words, which will replace the second sentence of that paragraph:

“Progression routes should be established when Foundation Degrees are validated, and identify the link(s) between the Foundation Degree and other qualification(s). Such links may be to qualifications awarded by higher education institutions and/or by professional and other educational bodies. Institutions awarding Foundation Degrees will normally guarantee progression to at least one bachelor’s degree with honours, with the expectation that this should not normally exceed 1.3 years for a full time equivalent student in England. Alternatively, progression may be to an appropriate professional qualification or other qualification at level 6 in the National Qualifications Framework”.

I also take this opportunity to thank the noble Lord, Lord Dearing, for his valuable contribution to the development of the proposals on foundation degree-awarding powers throughout the passage of this Bill. His helpful and constructive suggestions have informed several improvements made by the Government, both to the provisions in the Bill and to the non-statutory guidance and criteria. I look forward to continuing working with the noble Lord, Lord Dearing, and other noble Lords who have assisted with this and with whom other government colleagues have worked.

Returning to Amendment No. 3, the applicant institution’s statement needs to be forward-looking, setting out the institution’s strategy for securing progression routes from foundation degree programmes which it might establish in future as well as from those it has already established and developed.

In determining whether an applicant institution’s proposals are satisfactory and likely to be carried out, the Privy Council might also consider whether the institution’s academic management is sufficiently strong to ensure that progression routes are and will be established. In making its determination, the Privy Council may also wish to consider what the applicant institution proposes to do about renewing progression arrangements or seeking new ones, if the old ones should lapse, if necessary, with the help of a third party organisation such as Foundation Degree Forward.

A mechanism needs to be in place that can monitor whether, once a college has been granted foundation degree-awarding powers, it continues to act in accordance with the statement it made at the time of application. Failure to do so and, more generally, a failure to secure opportunities for progression for its foundation degree graduates, would be a grave matter.

A lapse in progression routes from any foundation degree would be picked up by the QAA, whether through its regular audits of HE provision in FE institutions or through its procedure for handling causes of concern in institutions providing higher education.

A cause for concern can be declared at any time. There is no need to wait until the institution’s next audit to investigate whether there has been a transgression and, crucially, to make the necessary intervention if that is required. If, on investigation, the cause for concern is established and substantiated, swift and proportionate action can be taken to rectify the shortcoming.

The consequences for a foundation degree-awarding college that fails to ensure progression from its foundation degrees are set out in the QAA’s published procedure. In all cases, the QAA will discuss the outcome with the institution concerned and request an action plan, with targets for rectifying the shortcoming. HEFCE will be informed of the action to be taken in the case of institutions it funds. The department will be informed of this action in all cases. The QAA will monitor and sign off all action plans and decide whether the institution’s next scheduled audit should be brought forward.

The substantiation of a cause for concern carries a serious reputational risk to any provider of higher education and it would have a negative impact on that institution’s ability to recruit new students. QAA intervention is a real deterrent to serious lapses in standards, which is what a failure to ensure progression would amount to. The QAA has commented:

“The recommending of an institution for foundation degree-awarding powers would be on the assumption that an FE institution would operate its powers in the manner anticipated when its application was assessed. The failure to ensure progression routes would be a serious matter and might constitute grounds for QAA intervention. The review of the cause for concern would look at the issue of persistent failure and make recommendations accordingly”.

We have brought forward a sensible, robust package of statutory and non-statutory measures, which signal clearly the continued centrality of progression to the foundation degree qualification. A strong, effective mechanism is in place for monitoring the performance of foundation degree-awarding institutions and intervening where this is not satisfactory, not only at the time of application for the new powers but on an ongoing basis. I therefore urge your Lordships to agree to the amendment.

Moved, That the House do agree with the Commons in their Amendment No. 3.—(Lord Triesman.)

My Lords, this amendment was brought forward in another place to address concerns raised in your Lordships’ House—especially by the noble Lord, Lord Dearing— regarding the Government’s intention to give colleges the power to award foundation degrees. I thank the Minister for appreciating the depth of feeling on this issue and for taking such a constructive approach to the debate surrounding these degrees. The guidance published by the Government and the assurances given by the Minister have done a great deal to reassure those concerned that the powers will be implemented judiciously. I look forward to seeing foundation degrees continue to grow in popularity and provide a route for many more students to gain a credible qualification that leads naturally to higher education. I am therefore pleased to welcome the amendment.

My Lords, it is well known that we on these Benches had some reservations about granting powers to further education colleges to award foundation degrees in the first instance, but we have been reassured by the concessions that have been made in this House and the other place and carried through into the Bill. In particular, we very much welcome Amendment No. 3, which goes some way towards guaranteeing routes to progression and endorsing the comments made on Report by the noble Lord, Lord Dearing.

In particular, I very much endorse what the Minister has agreed to do in the guidance. I am pleased that the much more explicit statement in paragraph 30 of Appendix 2 will be incorporated into the text at paragraph 12 so that it is stated much more clearly that routes for progression should be in place.

I hope that it is in order for me to ask the Minister a question about the guidance concerning the power to award foundation degrees, although I do not know whether he will be able to reply. As he knows, colleges of further education span a great many different areas, and only a few of them pretend to offer higher education qualifications. It is clear that, when the colleges go for foundation degree status, they seek the power to award those degrees in areas where they currently offer higher education qualifications, and the quality assurance procedures are geared to that. On pages 15 and 16 of the draft guidance concerning scholarship and pedagogic effectiveness, it is made clear that the applicant organisation will be required to provide evidence that all teaching staff engaged in the delivery of its higher education programmes have the relevant academic qualifications and so forth. Can we assume that exactly the same requirements are to apply if a further education college, having attained the power to award foundation degrees, moves into awarding those degrees in other areas where it is does not currently offer higher education provision?

Perhaps the Minister would like to write to me on this issue. I realise that it is a red herring in relation to the Commons amendments. It was the first time that I had seen the draft guidance. In going through the draft guidance, it was an issue that occurred to me. These Benches retain, as does Universities UK, some reservation about all the procedures, but we are glad now that we have moved forward to granting these powers. We look forward in particular to seeing how they operate in practice.

My Lords, I will take up the offer to write to the noble Baroness. It would be ill judged for any institution to believe that it could move from no presence in a higher education area into a position where it could conceivably offer degree level. That would need the most careful scrutiny before anyone thought that possible. But I express here my sentiment about the requirements for quality in the general sense. That can no doubt be filled out properly in writing. I shall ensure that both leaders on the Front Benches have that information.

On Question, Motion agreed to.

4: Clause 30, page 20, line 8, at end insert—

“( ) Section (Intervention: Wales) comes into force in accordance with provision made by the Welsh Ministers by order.”

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 4.

Moved, That the House do agree with the Commons in their Amendment No. 4.—(Lord Triesman.)

rose to move, as an amendment to the Motion that this House do agree with the Commons in their Amendment 4, leave out “agree” and insert “disagree”.

The noble Baroness said: My Lords, I have spoken to this amendment with Amendment No. 1A. I beg to move.

On Question, amendment agreed to.

5: Clause 32 page 20, line 29, leave out subsection (2)

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 5. This is the privilege amendment.

Moved, That the House do agree with the Commons in their Amendment No. 5.—(Lord Triesman.)

On Question, Motion agreed to.

6: Schedule 1 page 22, line 23, at end insert—

“ (1) Section 57 (intervention) is amended as follows.

(2) In subsection (1), after “an institution” insert “in Wales”.

(3) In subsection (2)—

(a) in paragraph (a), for “the Secretary of State is” substitute “the Welsh Ministers are”;

(b) in paragraphs (b) and (c), for “he is” substitute “they are”.

(4) Omit subsection (3).

(5) In subsection (4), for “the Secretary of State” substitute “the Welsh Ministers”.

(6) In subsection (5)—

(a) for “He may” substitute “They may”;

(b) in paragraph (c), for “he thinks” substitute “they think”.

(7) In the heading, after “Intervention” insert “: Wales”.”

7: Schedule 2, page 23, line 26, at end insert—

“Section 57(3).”

8: Schedule 2, page 23, line 39, at end insert—

“Education and Inspections Act 2006 (c. 40)

In Schedule 14, paragraph 18

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 6 to 8.

Moved, That the House do agree with the Commons in their Amendments Nos. 6 to 8.—(Lord Triesman.)

rose to move as an amendment to the Motion that this House do agree with the Commons in their Amendment Nos. 6 to 8, leave out “agree” and insert “disagree”.

The noble Baroness said: My Lords, I have spoken to these amendments with Amendment No. 1A. I beg to move.

On Question, amendment agreed to.

Defence: Spending Review and Aircraft Carriers

My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Lance Corporal Timothy Flowers, Senior Aircraftsman Christopher Dunsmore, Senior Aircraftsman Peter McFerran and Senior Aircraftsman Matthew Caulwell, who were killed on operations in Iraq last week, and a member of the Armed Forces who was killed on operations in Afghanistan today.

With the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Defence Secretary. The Statement is as follows:

“Mr Speaker, I am pleased to inform the House that the Ministry of Defence has agreed with HM Treasury a Comprehensive Spending Review settlement for the next three years. The total departmental expenditure limit for defence over the CSR period will be £34 billion in 2008-09, £35.3 billion in 2009-10 and £36.9 billion in 2010-11. This is an additional £7.7 billion for defence by 2011 and a 1.5 per cent average annual real terms increase against our CSR baseline, excluding the costs of operations met from the reserve and the time-limited defence modernisation fund.

“In addition, the Treasury will continue to fund from the reserve the additional cost of operations over and above the defence budget, having already funded from the reserve some £6.6 billion in supporting the front line since 2001. This settlement continues the longest period of sustained real growth in planned defence spending since the 1980s—evidence of the Government’s commitment to defence and to the men and women who serve with the utmost bravery in our Armed Forces.

“The result of Labour’s consistent funding for defence is that the defence budget will be significantly higher in real terms than the budget we inherited from the Tories in 1997—on average, a billion pounds more for defence every year for 10 years. Compare this with the last five years of the Tory Government, when the defence budget was being cut by around £0.5 billion a year.

“Our priority remains success on current operations. This settlement gives the MoD the financial certainty required to continue delivering that success. Over the past year I have been able to announce to this House important enhancements in protected vehicles, helicopters and surveillance. This settlement will enable us to do more in all these areas and others. It also allows for additional investment in the support that our service personnel deserve—building on recent improvements in pay, in the new tax-free operational bonus, in medical care for our wounded personnel and in accommodation.

“At the same time as ensuring success on current operations and support for our people, this settlement also enables us to invest in those capabilities we will need for the future. I am pleased to be able to confirm today that we will now place orders for two 65,000-tonne aircraft carriers to provide our front-line forces with the modern, world-class capabilities they will need over the coming decades. These will be named HMS “Queen Elizabeth” and HMS “Prince of Wales”. This delivers on the Government’s promise in the 1998 Strategic Defence Review. The carriers represent a step change in our capability, enabling us to deliver increased strategic effect and influence around the world at a time and place of our choosing. They will be a key component of the improved expeditionary capabilities we need to confront the diverse range of threats in today’s security environment. They are evidence of our commitment to ensuring that our Armed Forces are modern, versatile and equipped for the future.

“In parallel, we will continue to work closely with France. Our co-operation has already yielded real benefits. We have shared the costs of developing the common baseline design, to which we are committing today, and we have capitalised on our huge collective technical and military experience. Our industries are now exploring further opportunities for mutual benefit, including joint procurements of equipment for the carriers and shared support arrangements. We look forward to making a joint announcement on further co-operation in the next few months.

“The carrier programme will sustain and create some 10,000 jobs across the United Kingdom, but we have always been clear that the carriers cannot be built without change in the maritime sector. As we set out in the defence industrial strategy, we need further improvements in efficiency to ensure that the taxpayer is getting value for money. We need to ensure that the UK maritime industry is the right size and shape so that it is sustainable in the longer term.

“I am pleased that VT Group and BAE Systems intend to form a joint venture in naval shipbuilding and support. The creation of such a joint venture will enable the Royal Navy to work with industry to deliver the infrastructure that the Navy will need to support the fleet in the future while retaining all three of our existing naval bases at Portsmouth, Devonport and Faslane. This will be good news for the three communities and for the service, civilian and contractor personnel employed at the bases. None the less, some reductions in the 17,800 personnel currently employed will be necessary and will be taken forward in consultation with trade unions in the usual way. We aim to rationalise infrastructure and spare capacity, streamline processes and build on partnering and other commercial arrangements. For example, today we are also announcing a £1 billion partnering arrangement with Rolls-Royce for the in-service support over the next decade of the nuclear steam-raising plant that powers the Royal Navy’s submarines.

“I am also determined to ensure that more of our money is spent where it is really needed, reducing overheads to put more into the front line and into supporting our people. To enhance the spending power which this settlement gives us, we will make savings against the department’s overheads, including a 5 per cent year-on-year saving in our administrative overhead over the next three years and a 25 per cent reduction in our head office. These are additional to the £2.8 billion efficiencies delivered over the spending review 2004 period.

“A priority through the CSR period will be the continued investment in improving accommodation for our people and their families. We expect to spend some £550 million on this over the three-year period, including plans to upgrade more than 18,000 barrack-type bed spaces. This builds upon the achievements of recent years in providing upgrades to our service families’ homes and our plans to spend £5 billion over the next 10 years on upgrading and maintaining accommodation. We also intend to explore with the Treasury and the Department for Communities and Local Government how we can best support the wishes of many service men and women to own their own home. Full details of the CSR settlement for defence will be announced in the autumn, alongside the outcome for all government departments. Today, however, I am providing a summary for the Library of the House.

“Our Armed Forces are admired and respected worldwide. I am conscious that, with operations in both Iraq and Afghanistan, we are currently asking our Armed Forces to do a lot. In return, we must ensure that the Government do all they can to support them and their families. This significant additional investment shows that this Government are determined to do just that and to ensure that the Armed Forces maintain their well earned and deserved reputation for being the best in the world in the years ahead”.

My Lords, that concludes the Statement.

My Lords, I thank the Minister for repeating the Statement. We on these Benches also send our condolences to the families and friends of the service personnel killed in Iraq and Afghanistan.

We supported the carrier project from the outset and welcome this overdue announcement. We also welcome the commitment to retain the three current naval bases. Aircraft carriers are essential to maintaining Britain’s expeditionary military capability and ability to operate forces around the world as well as to provide humanitarian relief. I regret the long time that it has taken the Government to reach this point. It seems to identify a less-than-constructive relationship between the MoD and the defence industry. We on these Benches have on numerous occasions asked the Government to announce the order for the carriers to allow the industry to consolidate, rather than having the industry consolidate first. When does the Minister expect contracts to be signed and the construction of the carriers to begin? We welcome co-operation with France, particularly if there are cost savings, but provided it does not delay the in-service dates.

The carriers will support the new joint combat aircraft. How many of those aircraft will the carriers hold and what are their current target in-service dates? Noble Lords will remember that the ISD was revised from December 2012 to December 2014. With current recruitment and retention difficulties, can the Minister guarantee full manning of the carriers? The carriers will require adequate protection and will form part of an integrated future Navy fleet with, in particular, the Type 45 destroyers. To date, only six Type 45s have been ordered. Is the Minister satisfied that we will get eight? I know that the noble Lord, Lord West of Spithead, was very keen to see that happen when he was First Sea Lord, and I am very pleased to see him in his place.

The MARS programme will address the support demanded by the new carriers and Type 45s. In February 2006, three companies began competing for the role of prime integrator. That process was not expected to last more than nine months. Can the Minister confirm the current status of the process?

These projects form but a small part of the equipment programme. Can the Minister say whether the FRES project is still on track? We cannot be complacent on other programmes across all services that are vital to future military effectiveness, and the other services will want assurances that they will not suffer heavy cuts to allow the carrier project to go ahead. In December last year, the Minister gave a commitment to publish the equipment programme. Can he confirm that? As part of the Comprehensive Spending Review have the Government assessed whether the funding announced will be enough to meet all the pressures within the equipment programme and the costs of ongoing operations? The Minister will be aware that the unit cost growth of major weapons systems and procurement projects is typically 10 per cent per year in real terms. He will also be aware of continuing concerns about whether the costs of ongoing operations are fully funded from the Treasury special reserve, and that the urgent operational requirements process for ongoing operations often ends up being in competition with the equipment programme. Will he assure the House that funding for contingent operations neither draws on the defence budget nor will negatively impact on it at a later date?

In the Statement, the Minister gave us the total departmental expenditure limits for defence. Can he give the House the cash equivalent budgets?

My Lords, I add the condolences of these Benches to the families and friends of service personnel who have lost their lives in Iraq and Afghanistan. I thank the Minister for the Statement, which we welcome. An announcement about the aircraft carriers under the CSR has long been awaited. The Statement confirms, at long last, that this project will proceed.

Many noble Lords will be familiar with those parts of the United Kingdom associated with naval shipyards and will know how enthusiastically this news will be received. I can vouch for the confidence boost this will bring to the defence industry skill base in Hampshire—where, as the Minister will know, my roots are to be found—particularly in the Royal Naval Dockyard and other facilities. It will be a boost not just to the shipyard in Portsmouth, where the presence of the naval base and its facilities results in some 17,000 people being employed and where tens of millions of pounds have been invested by the private sector over recent years, but to the entire sub-region. It is clear that there will also be a great deal of synergy for the carriers to be based at Portsmouth, close to the skilled workforce engaged in their construction and most able to maintain them to the highest standards.

In the context of the Minister’s Answer on 9 July to my Written Questions HL4550 and HL4551 concerning the Government’s defence industrial strategy, I hope that the Minister can confirm that any plans for minimising the Portsmouth base can now be shelved. In that context, when will he announce the specific implications of the Statement for the skilled workforce in the region, who have invested their energy and commitment in the shipbuilding industry on the south coast, in many cases over their whole working lives?

We welcome the announcement, not least because it is a vital component of the sustainability of the Government’s expeditionary concept; but there are concerns over the factors that may compromise the realisation of that policy. A major concern relates to the aircraft that will be available to accompany the carriers. I understand that naval experts have confirmed that the future aircraft carrier design will be greatly determined by the selection of aircraft to fly from the vessels. In that regard, I understand that the Ministry of Defence considered a wide range of options, including marine versions of the Eurofighter, the American F-18E, the French Rafale and an updated Harrier. From all these, they have selected the STOVL variant of the Joint Strike Fighter as the best option. It may be the best, but will it be available in the timescale for the completion of the aircraft carriers? That version of the JSF is not due to start test flights until 2008, and, with programme costs rising, entry into service has been pushed back from 2014 to 2017. Can the Minister provide some assurances that contingency plans are available so that our carriers will not be operating empty?

There are also concerns that, while these aircraft will benefit from American “stealth” advanced technology, so far there appears to have been an embargo on the transfer of that technology to other parties. Can the Minister confirm that there is no prospect of political intervention from the United States that would prejudice the operational scope of the JSF once procured by the UK?

I am advised that Britain’s Harrier Jump Jets are so busy in Afghanistan, or training, that our current carriers apparently sail without planes for about 80 per cent of the time, relying on allied aircraft flying from the ships to keep our crews in shape. Given that that situation may continue for some years, can the Minister confirm how it is intended to fill a potential gap in the availability of the JSF? Is it the intention to extend the service of the Harrier GR9 beyond 2019, and, if so, would that compromise or limit the potential capabilities of the future aircraft carriers? Will the Minister confirm how arrangements for alternative configurations for ski-jump or catapult-assisted flight decks constrain the aircraft that can operate from the carriers, and how that limits expeditionary options? How realistic is it to propose that these options can be changed within an acceptable operational timescale?

Finally, I note that today the Government are also announcing that it is their intention to sell DARA’s rotary wing and components facility at Fleetlands, in Gosport, Hampshire. Is the Minister aware that, to my personal knowledge, the workforce provides highly specialised engineering skills associated with naval helicopters that are not feasibly transferable to other locations, nor readily replaceable, and that it would not be in the UK’s interests to dissipate?

My Lords, I am grateful to noble Lords for their welcome of the Statement. I will do my utmost to answer their questions.

The noble Lord, Lord Astor, asked about the contract. I am pleased to inform the House that, following the announcement, BAE and VT have confirmed the creation of the joint venture to the London Stock Exchange. The heads of terms have been signed and people can have confidence that the project has been brought together. I accept the points that noble Lords have made about the time it has taken to get here. I accept that the project has been worked on for a number of years, but the benefit will be the way in which we have reduced the risk in the project. We now have an excellently configured project. There has been tough negotiation to get it to this point, but it has required the whole UK maritime industry to work in a way in which it has never done. I pay tribute to the management and the workforces of the yards involved for how they have been prepared to work together with the Ministry of Defence to enable the announcement today.

The clarity on the outcome of the naval base review, with the joint venture and the aircraft carrier orders, gives us what we need to build a globally competitive maritime industry in this country to support what the Navy will require.

Both noble Lords asked me about the aircraft to go on to the carrier. I accept that the Harriers are extremely busy in Afghanistan and are doing an excellent job. Our intention is to replace the Harriers next year with Typhoons. We have a project to configure the Typhoons to have ground-attack, close-to-port capability. That is how we will address the Harrier issue next year.

I accept the importance of ensuring that the Joint Strike Fighter project proceeds in a way satisfactory to the United Kingdom. We reached a very important agreement last year with the United States on technology transfer. We built on that with the new treaty between the UK and the United States on technology transfer and co-operation across IP in defence. Both those things are positive, but we retain the so-called contingency plans, or plans B. I will be going to Washington later in the year to see the progress being made on technology transfer, and we will absolutely ensure that we receive the necessary operational sovereignty on these aircraft to operate them in the way we need. We will not place orders for these aircraft until they have completed those test flights and we are satisfied at the progress of the project.

I am very pleased to confirm that the two new aircraft carriers will be base-ported at Portsmouth naval base. The confirmation of the joint venture to the stock exchange gives the workforce in Portsmouth absolute clarity on its future. The fundamentally important and perfect marriage of the support ethos from VT with the experience in ship design and building from BAE gives the right basis for going forward.

FRES is on track. We have the trials next week, and I hope to see noble Lords at those trials. I will make sure that that project stays on track because it is clearly the most important project for the British Army. It needs to stay on track.

These announcements today enable us to move forward more rapidly on other projects, such as MARS. The industry needs such clarity on base loading, enabling businesses to value themselves and put the joint venture together.

We are in negotiations about further Type 45s, so I am sure that noble Lords would not expect me to make additional commitments about that while negotiations continue.

Today’s announcement reflects the Government’s commitment to defence, but we should recognise the challenges that we face in defence. As my right honourable friend emphasised, we recognise the need to focus further on operations and the need for flexibility to put the emphasis on the equipment programme to operations. Of course, we will also focus on minimising and dealing with any unit cost growth that we see. I hope that I have answered all the questions. If I have not, I will write to noble Lords

My Lords, as someone involved in the aircraft carrier project for a few years, I congratulate my noble friend on the announcement he has made today. It will be widely welcomed, not just in the Navy, which deserves such a declaration, but around the country too. Does he agree that the orders for the two new aircraft carriers—I believe that they are the largest ships ever to be built for the Royal Navy—are not only great news for UK defence, and for the Navy, but are a huge boost to the towns and cities where they will be built; namely, Glasgow, Rosyth, Portsmouth and Barrow? It will also be a huge boost to British industry and the British defence industry in particular, which has a very proud record that is not always recognised.

My Lords, I thank my noble friend for those comments and I pay tribute to his contribution as my predecessor in the role of Defence Procurement Minister. A sustained effort has been required over a number of years to bring us to this point today and I agree with him that it is a happy day for our Navy and for our Armed Forces generally.

My Lords, I do not want to sound churlish at all, because there is clearly a lot that is very good in the Statement and will naturally be welcomed by those who admire our Armed Forces, appreciate the wonderful job that they do and know that they deserve absolutely the best. I am certain that Her Majesty’s Government come in that category. However, now that the future defence funding is clear, with a nuclear deterrent to be paid for out of the defence vote, and a singled-out decision taken to go ahead with two fleet carriers—presumably with the aircraft to go on them, although that was not actually mentioned, otherwise their value would be reduced—can the Minister give some indication what other badly needed items of equipment, vital training exercises or overdue improvements in manning will not now be able to remain in the programme because of funding restraints, if not in the very short term then at least in the crunch period of 2012-13? At that time, for instance, an important future rapid effects system for the Army is due to come into service.

Can the Minister at least enlighten us on which areas hard and painful choices—I am sure that he would want to use that phrase—will have to be taken in because of what he has got into the programme and what we still badly need? Were he to say that no hard choices need be taken—that there was plenty of funding for all the things that we need—I would be mindful of the great Duke of Wellington and his famous comment.

My Lords, the noble and gallant Lord will permit me a smile relating to his final sentence. I am sure that it is clear to the whole House that decisions will need to be taken on our equipment programme in the light both of the changing circumstances that we encounter on operations and of how we need to rebalance the programme to make sure that we properly prioritise those needs on operations. By that, I am not confusing the funding for operations that comes from the reserve and our UOR programme; I mean those matters that directly relate to what we regard as the nearer-term needs. Within that, let me be absolutely clear about FRES—the future rapid effects programme. As I have said, I recognise that the FRES vehicle—the future armoured fighting vehicle—is the single most important project to the British Army. It has seen delays but is now on track and I am determined to keep it on track to meet the Army’s requirements. Today’s announcements in terms of the CSR will not allow that to delay FRES, under my management of the project.

I shall not get into a list of what specific projects need to be looked at, because there need to be negotiations with industry in terms of the contractual basis. From industry, we need recognition of the flexibility required to ensure that our equipment programme stays relevant to the challenges that we face now. They are often different from the priorities that may have been set a few years ago. It is that kind of flexibility that we now see from industry and that today’s announcements reflect.

My Lords, the Government initiated a naval base review because they felt that there was considerable overcapacity. The Minister will know that the review is of profound importance to the Royal Navy and the economies of Plymouth, north Devon and, in fact, the entire south-west region. If the review is now complete, what impact will it have on DML Plymouth Appledore? If it is not complete, is there more to come and when will it be published? Finally, if the two carriers are to be base-ported at Portsmouth, what about the other service ships?

My Lords, the noble Lord is absolutely right that we have overcapacity in terms of the naval bases—he knows it from his experience—and the naval base review addressed that issue directly. My right honourable friend the Secretary of State directed that the review should end up with a level of capacity and support for the Royal Navy appropriate to a modern fleet, supported using the more innovative practices that we are introducing and some of the changes taking place within the Royal Navy. The conclusion from that was—following the decision relating to the aircraft carriers, which allowed the joint venture to be put in place—that we could have clarity that the most cost-effective method was not to close one of the naval bases, but to remain with a three-base solution and to expect the companies running the bases to work with the Royal Navy to develop innovative support programmes that allow greater efficiency and flexibility.

An example of that is the way in which the Royal Navy is using crew swaps—one ship having more than one crew, reflecting the fact that, with increase in maintainability of ships, ships do not have to come back for maintenance as frequently. Those swaps can take place at sea. We must make sure that the companies on the bases—DML in Plymouth, or the JV in Portsmouth—are incentivised to improve that efficiency over time. I cannot give the noble Lord a direct answer today, because these things need to be negotiated now that we have given clarity on the three-base solution. However, I am confident that the facts that the communities and businesses at each base now know what they will be focusing on, and that they have a long-term future, enable them to work with us to deliver the outcome that I believe we both want.

My Lords, I am grateful to the Minister for repeating the Statement. I remind the House of my interest as a serving TA officer. I am disappointed with the content but, unfortunately, my party will not offer more or cut the commitments.

This is a disaster. The Statement refers to a 1.5 per cent average annual real-terms increase. Does the Minister agree that gross domestic product has been increasing at a much faster rate? Why has defence expenditure not at least kept pace with the growth in GDP? Will the Trident project attract extra funding to the current budget?

The Statement refers to the carrier. Noble Lords should not hold their breath waiting for the Minister to place the order. What progress has been made in placing the order for that shipwreck of a project, the future strategic tanker aircraft? Where are we with that?

Defence planning assumptions provide for one medium-scale and one small-scale operation, with medium-scale a brigade and small-scale a battalion. We are actually doing two medium-scale plus, and they are both difficult. How long will it be before the wheels come off because of doing too much? We cannot continue doing double medium-scale plus when we planned and are provided for one medium-scale.

The Statement refers to a 25 per cent reduction in head office. Does that mean that head office has been 25 per cent too big since the SDR? What did the 3 per cent year-on-year efficiency savings of the SDR do if there is still room for such a cut?

My Lords, I do not agree with the characterisation of the Statement given by the noble Earl. I agree that GDP is growing at a faster rate, but that is not a reasonable basis for spending decisions. This is a real-terms increase in the defence budget. As we said when we announced the replacement for the nuclear deterrent, funding for it has been allocated and does not come at a cost for the conventional forces, so is clearly separate.

To describe the FSTA in those terms is unfair. That project has passed into the fundraising stage for what is one of the largest PFIs ever in the City. Therefore, it has passed the stage of approval in the Ministry of Defence to allow that fundraising to take place. We hope and expect that fundraising to be completed this year. We will then be able to pursue that project, which is complex and innovative. It is on track, as I have described.

Noble Lords will have noted from the Statement that funding for operations from the reserve will be maintained. That is a separate issue to the issues relating to the defence budget. I accept that the Armed Forces are under pressure. The sustained operations in both Iraq and Afghanistan test our ability to maintain this level of operations over a period and I accept that that is beyond the planning assumptions. However, through the success that we are having in both those operational theatres, I believe that we are showing our ability to do that. Of course, we take into account the fact that sustaining those over a long period is a significant challenge. I do not agree with the way in which the noble Earl characterised those points. We have the resources to make the decisions that we have to make in the circumstances with which we are faced in the world today. The announcements that we have made on the aircraft carrier and the naval base review show our ability to make those decisions.

My Lords, like my noble and gallant friend Lord Bramall, I welcome much in the Statement, and I am sure that it will give particular pleasure to the Royal Navy. Like my noble and gallant friend, I am minded of the descriptions of “affordability” used in the Ministry of Defence. Can you afford it, or can you afford to give up what you have to give up in order to afford it? The decisions to buy this expensive equipment, like the decisions to buy the expensive Eurofighter, the Astute submarine and the Trident replacement, were taken before current operations in Iraq and Afghanistan began.

Frequently in this House, questions are asked about equipment related to that operation. I always remember talking to the divisional commander who went into Basra in the second Gulf War. I asked him, “What was the battle-winning equipment as far as you were concerned?”. He replied, “The American Marine air wing that was put under my command, because it had precisely the equipment that we needed for this type of operation, which was not available in our inventory”. Therefore, since the Minister mentioned the need to rebalance the programme, will that include taking into account the lessons from the current operations in Iraq and Afghanistan and the implications of those for our future equipment programme and its affordability?

My Lords, not only will we take them into account, but they will be our number one priority. That is the clear challenge that we have to manage in our equipment programme. We accept that we will have to make decisions about things that we will not do, but the priority will be those things that are most relevant to the operational theatres in which we are engaged at present and in which we are likely to be engaged in the near future.

My Lords, having served my time as a shipwright and having worked in the shipbuilding industry for 36 years, I assure my noble friend that the much delayed decision about the aircraft carriers will be welcomed in the shipbuilding industry as a whole. Can he confirm that shipyards in the Tyne and Tees area will be able to tender for some of the fabricated work for those two boats?

Yes, my Lords, substantial parts of the construction of the two aircraft carriers are open to competition and will be open to companies to tender for.

My Lords, like other noble Lords, I warmly welcome the decision about the aircraft carriers and the three-base solution. I hope that the Minister will realise what misery people have been through, at least in the Plymouth base, about which I know much more, and probably the others as well, with the uncertainty that has been hanging over them for many months. I assume that, for the aircraft carriers, there will be what I call the birth-to-death approach—through-life care—by those who are responsible for their building, so that there is continuity and they cannot just walk away if there are any design defects over the lifetime of the aircraft carriers. Secondly, have the current users of aircraft carriers been fully consulted about the design and about the way in which the arrangements have been made? I am delighted to see the noble Lord, Lord West, in his place, but many of those decisions must already have been made.

My Lords, I recognise, as the noble Baroness said, the uncertainty that there has been over these decisions in those communities, and I am grateful for the forbearance of those communities and for the way in which they have engaged in the review process, which has enabled us to come to the decisions that we have announced today. However, that clarity that we are now able to give gives those communities the ability to plan for the future with confidence.

With regard to through-life care, that is absolutely the case. The creation of the joint venture brings together those two organisations, which will enable us to contract with an entity from now on—not only for this project but for future shipbuilding projects—in a way that is completely through-life, from the design of a ship through to its manufacture, upgrade and eventual disposal. This will enable us to get best value for money for the taxpayer and maximum capability for the Royal Navy.

We absolutely consulted. It has taken time to get to this point. We have been able fully to consult with the current carrier strike force and to recognise that we have a very potent force that has tremendous experience in using these types of ships—albeit that the current carriers are much smaller ships—and we recognise the incredible flexibility that this type of capability provides us. They have been fully involved in the design process, which is now done. Let us be absolutely clear about this. We are now moving into the phase of manufacturing these ships.

My Lords, I thank the Minister for the Statement and for all the help that he has given. I also thank him for the 24 hours a day, seven days a week help that his department gives to your Lordships’ defence committee. Can he confirm now, or put it in writing if he runs out of time in the last minute, that the GR9 will be the aircraft on board the two carriers? Can he further confirm that the arrangements for training the pilots from the old Sea Harriers in 800 and 801 Squadrons are proceeding satisfactorily? Can he give me some indication of the programme for one, two or even three versions of the new Joint Strike Fighter? One is to be air and the second is to be short take-off and vertical landing. Am I right that a third version is planned of the F-35 that is due to be carrier-borne? Can he give me some indication of that? If not tonight, can he write to me?

My Lords, briefly, I will do so, and I will also answer a question from the noble Lord, Lord Astor, which I did not answer earlier. The plan is for the Harriers to run on until they are replaced, so to speak, by the Joint Strike Fighter. We have designed the aircraft carriers to have flexibility, through the so-called Delta design, and to have a contingency plan B if there is any issue relating to the Joint Strike Fighter STOVL version. We hope that there is not; we will be watching it very carefully. The carriers have been designed to give us the necessary flexibility to cope with any need to move to a contingency. I will write to the noble Lord with any further information that I can give him on that.

Local Government and Public Involvement in Health Bill

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Tordoff) in the Chair.]

Clause 235 [Exercise of functions by local councillors in England]:

242K: Clause 235, page 164, line 16, leave out “any member of a local” and insert “a member of the”

The noble Baroness said: The amendment seeks to make a minor drafting correction to Clause 235. Before I speak to the amendment, I will say a little about the intention behind the clause. Your Lordships will know by now that there is a consistent policy theme underlying the Bill, which is our desire to enable ordinary members of local authorities to be more effective champions of and advocates for the communities that they represent. This innovative step is another measure in that direction. We want local authorities to be able to make arrangements by which they can enable their ordinary members, the back-bench councillors, to take action that will directly resolve some of the problems in their local areas. One model for such arrangements would be to make small budgets available to councils, coupled with ground rules defining what it may be used for, how it might be administered and so on. However, some authorities might want to consider other approaches. Within limits, we are content to leave it to authorities to set up the arrangements that best suit them.

Such an approach is not entirely new because many local authorities already provide budgets for their members to disbursed to the community by way of small grants. Staffordshire County Council’s local members’ initiative scheme, for example, is a good and worthwhile measure to provide just that. This clause does something different, and goes further. If authorities so wish, they will now be able to authorise their members to act on behalf of the council, for example to invoke the services of a contractor. We originally conceived this clause as an adjunct to the community call for action. It seemed to us that there were many minor issues of practical concern to communities about which they might rightly look to their councillors for help. The community call for action involves reference to an overview and scrutiny committee, but sometimes that will not be an appropriate response. It will sometimes be a problem such as an unresolved incidence of fly-tipping or the need for practical help for a community which wants to clean up the local park. People want to see immediate action from their councillors in such circumstances. This clause enables authorities to set up a framework of delegation for such things.

The clause is drafted in general terms to allow arrangements to be made for the discharge of an authority’s function by an individual councillor. It is important that the generality of that part can be constrained by the Secretary of State, who will have to make an order if so moved, as provided for in Clause 235(4). I shall say more on that in the next group of amendments. A small budget will sometimes be attached, but it does not necessarily involve that.

The amendment is necessary because the clause’s original drafting contains a minor defect which Amendment No. 242K will correct. The clause as drafted appears to allow the delegation of one local authority’s functions to a member of another local authority. That was clearly not the policy intention. The amendment makes it clear that such a delegation can only be to one of the authority’s own members. I beg to move.

I apologise to the Minister; I was not here as the debate tipped over and missed the first couple lines of what she said. As I understood the last passage, any member of “a local authority” could be interpreted as “any local authority”, and the provision should read “a member of the” local authority. It is interesting because they are being entitled to perform a wide range of functions. “Any function” of a local authority could be anything at all. If they are going to be allowed to be charged with it, let us hope that this is adequate. I thank the Minister for her explanation.

On Question, amendment agreed to.

In calling Amendment No. 243, I should point out to the Committee that, were it to be agreed to, I should not be able to call Amendment No. 244 because of pre-emption.

243: Clause 235, page 164, line 19, leave out subsection (2)

The noble Baroness said: I shall also speak to Amendments Nos. 244, 245 and 245A. I am not at all surprised by the warning about pre-emption. I realised last night that my noble friend Lady Scott of Needham Market, who cannot be here this evening, tabled one pair of amendments, I tabled another, and both pairs have the same function. I apologise to the Minister if that made it harder for her officials to write a brief. I am sure that they all got the point.

In introducing the previous amendment, the Minister said that the Government want to leave it to authorities to set up their own arrangements and used the term “authorities” throughout her speech. My amendment is to provide precisely that in terms. It will be the whole authority and not an executive member—the relevant executive member or whatever—who makes the delegation. This is an important constitutional change. It should be for the council collectively as an authority to take the decision to pass certain functions to individual members and to take decisions on functions subject to the orders which we are used to.

The bigger picture of a council’s constitution is largely a matter for the authority itself. As an authority, whatever the executive arrangements, it has, and will continue to have, certain major functions, including determining the budget. The council can currently promote decentralisation, even devolution, to neighbourhood committees and it sometimes even allocates budgets to neighbourhood or area committees. As I said, it is right for the council as a whole and not for an individual to take the decisions.

In Committee on this clause in another place, the Minister gave an example which the noble Baroness did not give here. I did not think that it was a good example. It was a situation where a local councillor, approached by a constituent who needed to have window locks fitted, used his budget to fit them. If that is how this provision will go, it is a very bad idea. It will leave individual members open to difficult pressures to spend money on that sort of individual matter rather than as part of the community spend. It is not unlike the argument about charities. Should one give to charity, as it will let government off the hook in dealing with the issue? The noble Baroness gave the much better example of how this could be used more appropriately. The Minister went on to use the argument that it is not right for a body that does not have a responsibility for a function to delegate it and that the executive member who has the function should have the right to delegate it as well. This is potentially such a significant matter that it ought to rest with the council. I beg to move.

I slightly jumped the gun in replying to the Minister’s amendment because I, too, have considerable concerns about the breadth of the proposal. “Any function” of a local authority could cover a wide spectrum of services. If this can be passed down to “a member” of the local authority and “through an executive member”—so it is clearly not the executive member who will be doing it—where will accountability lie for what the member is doing? If it is limited in scope to a small aspect of the local authority’s responsibility, that is a different matter. But that is not what the Bill says. We need some clarity on whether the function might start as a little mouse and finish as a roaring lion. There has got to be a middle point where a member cannot be responsible for a function.

I take the point of the noble Baroness, Lady Hamwee, that this should not simply be passed through an executive member. If the principle is that a member can perform a function, then that should have the full authority of the local authority. Otherwise the issue of accountability will be very difficult to understand.

I shall deal with those points first because they straddle the amendments. There was always going to be tension between whether this measure went too far or not far enough. We have tried to provide discretion for the council; we know that some already use a version of this power, but this is a specific way of delegating the authority’s own power.

As for whether the measure goes too far, the clause allows us to prescribe. If we so wish, we can take powers to prescribe the delegation of some functions. That is an important reserve power. We will discuss with the sector whether any functions should be prescribed at the outset. That power would be available to us if we thought that councils were acting in a disproportionate way or for some reason—which is hard to imagine—did something bizarre by way of delegation. We would not expect any functions connected with billing, childcare or highways to be delegated.

I think that people understand that the purpose of this measure is to give local councillors a local power to act. An individual can say to a councillor, “The community is suffering because there is a persistent problem with litter. It is not worth taking it to the overview and scrutiny committee. We think that with your small budget, or just with your power, you can get something done”. I take the point that it is actually a community function rather than one that supports individuals.

The power that we have kept to make it possible to contain some of those powers is very important, and I shall return to it later. Some of the most appropriate powers would be environmental, in terms of the cleanliness of the community, the state of the local parks, and so on. That is the context in which we envisage the provision being used and the circumscription surrounding it.

We noticed some inconsistency in the amendment, which has now been explained. We are missing some of our regular cast this evening. Amendments Nos. 243 and 245A suggest that the power should rest with the whole council rather than the executive model. In framing the clause, we adopted a fairly straightforward principle, which we have discussed in many instances during the Bill’s proceedings. Arrangements for delegation of a function should be settled by whoever is ultimately responsible for that function. In an authority operating executive arrangements, that person is, for the vast majority of functions, the senior executive member. The powers of that person to arrange for delegation to members of the executive or to committees are set out in Section 14 of the Local Government Act 2000. The Bill updates the terminology of Section 14. We are using a generic term—“senior executive member” covers leaders, elected mayors and directly elected leaders. It does not change the substance. We are arguing, from the point of view of consistency, that as the executives have that power, that is where this power should rest as well.

The clause is drafted in very general terms. It permits local authorities to operate in a very different way from that which was contemplated when the 2000 Act was passed. In those circumstances, we think it would be rash to put it into law without retaining any power to influence the way it is used and to prevent people using it inappropriately.

Moreover, if these amendments were to be adopted, we would be in the very strange position of the 2000 Act vesting in the senior executive member power to delegate functions to executive members, committees and officers, with the Bill going in the opposite direction of travel and vesting power in the whole council to delegate to individual members. That cannot be right. It would allow a situation in which the whole council might choose to delegate some function to individual members which the senior executive member chooses not to delegate at all and would keep to himself or herself. For example—and it is a perverse example, which I use just to make the point—we would not tolerate a situation in which control of daycare centres for vulnerable children were delegated to a local councillor against the wishes of the council leader and the executive member responsible for social services. I cannot imagine that that would happen but we have to ensure that it does not. If Amendment No. 245A were accepted, the Secretary of State would be powerless to straighten things out, which is a reason for opposing the amendment.

We expect the clause to be used to empower individual members to take executive action and, in some circumstances, to sort out quickly minor problems afflicting their communities. It provides local authorities with the flexible means to make that happen. I hope that Members of the Committee will accept that we have the balance and the range of powers right.

The previous clause, which the Minister amended, refers to “any function”. Does the Minister consider it would be worth amending that to “a function”? There is a great difference between “any function”, which has an extremely broad scope and “a function” which can be delineated. You cannot claim that you can do anything under the Bill, but specifying “a function” allows you to be specific about what it is. I remain concerned that the clause still goes very wide, despite what the Minister has said.

I am not entirely sure of the implications. May I take it away, think about it and check with our lawyers? It may not be much more significant than we both think, but I should like to discuss it.

I knew that I would not win on this amendment. One reason was that I realised as I listened to the Minister that we have different views about the notion of leadership and the desirability of the models which we have been debating for seven and a bit days. It was telling that in answer to the noble Baroness, Lady Hanham, the reassurances about the scope of the clause are in the fact that the Secretary of State can prescribe what shall not be transferred. That says a lot, and the noble Baroness put her finger on it when she talked about accountability.

We will take a view over the summer on whether we will continue to press the matter. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 244 to 245A not moved.]

Clause 235, as amended, agreed to.

Clause 236 agreed to.

[Amendment No. 245B not moved.]

[Amendment No. 246 had been withdrawn from the Marshalled List.]

Clause 237 agreed to.

Clause 238 [Contracting out]:

On Question, Whether Clause 238 shall stand part of the Bill?

I have given the Minister notice that I will speak to Clause 238 stand part as I want to try to get in something sensible about registered social landlords.

The preamble to the Bill states that it will make provision for local government and the functions and procedures of local authorities. Yet one area is missing—the function of local authorities in respect of registered social landlords. I think we have all agreed during the Bill’s proceedings that local authorities should be the community champion in their area. It is up to them to ensure the quality and delivery across all housing providers and tenures, including registered social landlords.

For local authorities to meet their targets on housing, they need to be able to ensure that registered social landlords are performing against agreed local set targets and priorities, as set by the local authority. In particular, there are two key omissions that we feel should be addressed. First, there is a need to give local authorities powers to ensure that social housing providers conform with important local strategies that have a bearing on housing. We touched on this throughout the other stages of the Bill. Secondly, a local authority should have the power to serve a notice on a poorly performing registered social landlord, so that he would have to explain himself to the local authority and so that the local authority could recommend what action the registered social landlord needed to take.

Currently, local authorities do not have powers to ensure that social housing providers, housing associations or other social landlords engage with and contribute to local strategies. Despite the key importance of these organisations—we have all agreed that they are important in delivering the targets at local level—problems with poorly performing social housing providers are particularly evident where those providers have only a few units in a particular area. They tend to focus more on managing areas in which they have more stock at the expense of their tenants who live outside those areas. We have given these figures before, but I shall repeat them: there are 390 registered social landlords in London, of which 266 have fewer than 10 units in some local authorities. One can easily imagine that poor management by housing associations or registered social landlords and failure to deal with anti-social behaviour can have a knock-on effect on other residents living nearby.

We do not believe that local authorities have adequate powers that would enable them to take action against poorly performing RSLs who let housing in their areas. All social housing tenants deserve a good service and a landlord who is responsive to their needs. While council landlords have to perform against national performance targets and are always in the lead in improving tenants’ quality of life, RSLs do not have the same obligations. Local authorities are accountable to their communities, so they should also be accountable for RSLs. Given that RSLs are an important part of housing provision and receive a large amount of public money, does the Minister accept that local authorities need to have powers to ensure that they meet priorities and targets? Although my remarks are probing for today, it might be helpful if I table amendments at a later stage for the Minister to consider so that we might get this issue, which we have discussed all the way through our deliberations, into the Bill.

I shall be brief. I note that in the previous sitting Clause 234 in Part 15 was not debated. It is not my duty to debate it now, except to say that I welcome all the transfer of powers to the Welsh Assembly contained in it. Some MPs in the other place have said that these aspects of the legislation are slipping through the net, but I note that the Secretary of State for Wales has said that he will now brief Welsh MPs on those aspects of Bills such as this.

Proposed new Section 79B in Clause 238 actually defines local authorities in Wales and how the legislation is brought about in relation to Wales. It was certainly not my wish to drag civil servants here from Cardiff to listen to what I was going to say, because that would be unnecessary, but the clause relates to contracting out, which is important in a Welsh context in which contracting out is well established, as in other local authorities in other parts of the UK. I am sure that Members of the National Assembly for Wales will have wished to have had some input into this part of the legislation, as contracting out can be contentious. I have a Welsh Assembly briefing note on new powers for the Assembly in which best value is matter 12.5. The briefing note—“Annex A: memorandum on new powers for the National Assembly for Wales” in the 11th report of the Select Committee on Delegated Powers and Regulatory Reform—talks about best value in the context of the Beecham review on local government in Wales, and states:

“The Assembly Government strongly agrees with the principle behind many of the proposed reforms”.

I note that it refers to the “Assembly Government”, but there is no comment on what other Members of the National Assembly for Wales felt about it. I would be very grateful if the Minister would write to me and let me know what consultation there was with anyone who is not a Member of the Assembly Government and what they think about this. I realise that the agreement in Wales for the Assembly Government has only just been completed. None the less, the briefing note, which is dated May, refers to it, and I simply wonder how the Assembly Members have been consulted.

The noble Baroness, Lady Hanham, talked about bringing housing associations and requirements on them within the scope of the legislation. I have two or three comments to make. First, we encounter the problem of landlords’ poor performance and not dealing with anti-social behaviour in the private sector as well as in what I like to think is a very small minority of cases in the social housing sector. There is no suggestion that private landlords, who I admit receive no subsidy but who do receive tax relief to help them to produce homes, would be encompassed by any part of this legislation.

I made the point earlier that the social housing grant available to the registered social landlords is now also available to housebuilders and developers, and it is very tricky to bring them within the scope of requirements in this legislation. So there are hazards in extending the legislation to embrace registered social landlords, although I am rather sympathetic to the idea that local authorities and the registered social landlords in their area should work in a more cohesive partnership in the future. Will the Minister say whether these issues might be addressed by the Government’s response to the Cave review on the regulation and inspection of housing associations, and whether relevant legislation is likely to be laid as early as November? That might be the time to mop up several of these issues.

This is an important debate because of the importance of housing and the contribution that RSLs make to the provision of housing. The relationships between local authorities and RSLs are critical. We have discussed in debates on previous parts of the Bill why the RSLs are private, not public, bodies and the implications of that. These not-for-profit bodies often have charitable objectives and are not part of the public sector, and I have said before that it is not appropriate to treat them as such. The noble Baroness raises a very serious issue, and she is right that improving conditions for tenants in the sector is absolutely vital. I will address the point about the Cave review in a moment.

One of the things that has marked the past 10 years has been the ability of the RSLs to raise capital outside the confines of the PSBR. That has been an enormous boon and has helped enormously with our capacity to provide decent homes. They engage with local authorities in different ways; indeed, there are some extremely robust and excellent partnerships. The corporation can make new regulatory demands on them if needed, though we are committed to minimising the burden.

While I am completely sympathetic to the Opposition’s intention here, the problem can be picked up in the point raised by the noble Lord, Lord Best. We are sure that the regulation of RSLs needs to focus more on tenant protection and empowerment. That is the burden of the Cave review, and we have already taken in what was said there by proposing to accept much of it. One key thing was that, when Cave considered how the regulatory regime could be reformed to ensure better outcomes for tenants of all social landlords, he quite rightly recommended that the regulatory system should focus more on empowering and protecting tenants—and the need for a constructive engagement between social landlords and local authorities. So, when we launched a consultation on 19 June, we had already acknowledged that we proposed accepting, for example, that there needed to be a statutory independent regulator and that social housing regulation should be separated from investment.

It would be premature to try to legislate for that in this Bill, as the Cave review is so important in enabling us to look at both what constitutes smaller but better regulation—I am thinking in particular of those small RSLs that the noble Baroness talked about—and how we can ensure that whichever regulatory regime is put in place focuses not just on place shaping but on a better deal for tenants. That is the real burden of the Cave review—to be much more tenant-focused, with local authorities working much more positively with social landlords and engaging in joint roles.

The Cave review determined that it is the job of the regulator and the ombudsman—and no one else—to take action regarding how well an RSL performs, including how well it engages with local authorities on place-shaping issues. He therefore addressed the role of local authorities in some detail. The problem is that giving other bodies direct power to impose requirements and enforce penalties on RSLs, as is suggested, would be a confusing development when we are trying both to simplify regulation and to make regulation consistent.

The review and the Government recognise the important role that local authorities may play in bringing poor performance by landlords to light. So, the review recommends that local authorities and tenants have a right to trigger intervention by the regulator against a landlord, if there is evidence of misconduct or mismanagement in areas including tenant involvement, delivery of housing standards, efficiency, viability and engagement with local authorities. In his review, Cave proposes that this reformed regulator has a wider range of remedial powers to deal with poor performance. At present, when the Housing Corporation steps in, it tends to focus on emergency powers; under the new system, the regulator would have new and positive powers including improvement and enforcement notices, and administrative penalties such as fines. In extremis, it can require a change of management or ownership. That is, of course, part of the consultation—and a positive step forward in the direction that the noble Baroness wants.

The Government have proposed to accept these recommendations, and to legislate shortly. To pick up another point, Cave recommended that collective for-profit private bodies can now get a grant to build social housing, and that they be given the chance to register with the regulator instead. We want to ensure that tenants are protected to the same extent by the regulatory system, whether under contract or registration. We have promised to legislate as soon as possible and are having a thorough consultation. Many of the issues have been picked up by the Cave review and we have already responded to those. We look forward to bringing legislation forward when we can.

I thank the Minister for that detailed reply. I want to look at it, as I could not take it all in. I am also grateful to the noble Lord, Lord Best, for his intervention, which pointed out the issue that we have always had about money going off to private developers. That leads us into a completely different area, as we all knew that it would.

I thank the Minister for addressing this as closely and sympathetically as she has. I am very aware of the Cave review and that it has many details. I am also aware of the concerns raised with me by London Councils, which also knows about that review and its implications. It is clearly not happy about waiting to see how long that will take.

I apologise for interrupting, but it is worth telling the noble Baroness that we are looking to put this into the housing regeneration Bill this autumn, but we obviously cannot rush it; we need a proper consultation, because there are implications and details like those which the noble Lord pointed out. However, it will be quick.

I thank the Minister for that, but I may come back to this in some way at the next stage, if there are some things that will not impinge on what that housing Bill is going to do. If there are some assurances that most of this will be included there, that would be helpful.

Before the noble Baroness sits down, I must apologise to the noble Lord, Lord Livsey, for completely forgetting him. I will certainly do what he said, since the Beecham review has only just reported. Best value is treated slightly differently in Wales, and there are clear issues over who has been consulted. We will certainly write to the noble Lord about that.

Just to conclude, I was going to say that it was also nice to have the noble Lord, Lord Livsey, intervene with his nice Welsh burr, which livened up that debate enormously. I thank the Minister for that reply.

Clause 238 agreed to.

246A: After Clause 238, insert the following new Clause—

“Secretary of State to report on local government targets and plans

(1) The Secretary of State must prepare an annual report on progress during the previous 12 months to reduce the administrative burden for local government of compliance with duties under Part 5 of this Act and section 4 of the Local Government Act 2000 (c. 22) (strategies for promoting well-being) and any other duties of a similar nature that require local authorities to have regard to guidance, provide information to the Secretary of State or to a body acting on the Secretary of State’s behalf or obtain the approval of a Secretary of State in relation to the discharge of a function of the authority.

(2) The Secretary of State must annually lay before each House of Parliament the report he prepares under this section, the first report being laid before the Houses of Parliament on the anniversary of the commencement of this section.”

The noble Lord said: Amendment No. 246A seeks to insert a new clause in order to support deregulation, and to add parliamentary accountability. It requires the Secretary of State to report on local government targets and plans, and to prepare an annual plan to report that to Parliament in order to reduce the administrative burden.

All sides of your Lordships’ House have, in the past, supported the reduction in the centrally imposed burden of regulation. We all feel strongly that such a burden of control on local government has held back an improvement in public services, and denied the ability of local people to make local decisions or to assess local needs and circumstances. It has, therefore, denied local choice. At the same time, it has wasted public money. Again, I think that all sides of the House have talked of the United Kingdom being quite unique in that centrally imposed system.

Therefore, last summer, in its document People and Places, the Local Government Association proposed a reduction in those controls. We had constructive meetings with the department for local government and the Treasury, and were very pleased that the White Paper, when it came out in October, sought to reduce the current 1,000 performance indicators and targets imposed on local authorities down to 200, with some 35 national outcomes. Yet it is not just those; there are the plans that must be submitted, the financial bid system, the guidance that comes down, and the whole burden of control.

I was a little confused to read—since that document had come out in October—the front-page headline in the Guardian last week about a dramatic reduction in central control, and of moving on from the Blair years. I wonder how that reduction announced in October to 200 targets has been reduced further, or are we still where we were in October? Was this a reannouncement of an old announcement already made in a White Paper in the autumn?

Nevertheless, the noble Baroness in the past has supported strongly a deregulatory agenda and parliamentary accountability. This amendment seeks to do that and we hope to have the support of the noble Baroness. I beg to move.

My name is not added to this amendment. I have a great deal of sympathy with my noble friend Lord Bruce-Lockhart’s proposal. I do not think that we need to commit to this and the other amendments in Committee, but they are probing amendments for a serious discussion on this area of deregulation. My noble friend has been very agile in moving this amendment and in providing us with this opportunity.

If my noble friend Lady Scott were here, she would say, because she said it before she went, “We have to, why shouldn’t they?”, as regards reporting. If my noble friend Lord Greaves were here, he would remind us that he raised the issue of consolidation. If local government legislation were consolidated, it would show dramatically the administrative burden. I shall not add my own comment.

I respect very much the intention of the amendment, but I wonder whether it takes fully into account the recent trend towards that intention. When I read the amendment, I am grateful that it includes the part of the Local Government Act which says,

“(strategies for promoting well-being) and any other duties of a similar nature that require local authorities to have regard to guidance, provide information to the Secretary of State or to a body acting on the Secretary of State’s behalf or obtain the approval of a Secretary of State in relation to the discharge of a function of the authority”.

I just wonder what would be left. As I see it, there is a dilemma. Colleagues are urging that burdens be lifted from local authorities to allow them to get on with the job. At the same time, a local authority which has been doing that is to have imposed on it a duty to report regularly on what it has done.

In the world of local government, I imagine everyone knows what is being done. I attended the recent meeting of London Councils under the chairmanship of Councillor Merrick Cockell. Frankly, I have never looked at a more respectable or more determined group of men and women than those representing London Councils. They would certainly use me, the noble Baroness, Lady Hamwee, and the noble Lord, Lord Jenkin, if this was a burning issue, but I do not think that it is. When I look at what the Government have done—I am not talking about magic dates or issues—they appear generally to have recognised what the noble Lord is trying to do. They allow local authorities to get on with the job and try to lift some of the burdensome legislation or duties placed on them.

That may not be happening fast enough, but I cannot imagine that the Government and the department want to retain unnecessary power a minute longer. When the Government, after consultation, decide that there is no longer any need for reporting, monitoring or guidance, there will be a common consent that they are done away with. I respect where the noble Lord, Lord Bruce-Lockhart, is coming from, but at the moment I cannot see what this will add to the good relationship between councils and the Government.

Not for the first time my noble friend has put his finger on the spot. He has exposed very eloquently the paradox of the amendment. I was going to start by saying that under the amendment the Secretary of State would pick up a new power to add to the bureaucratic process, and then demonstrate in inordinate detail the whole process we have been through, which the noble Lord knows far better than most, to reduce the burden of bureaucracy with which local government has had to deal.

The other expectation is that the amendment somehow will pave the way to a situation where all duties relating to local area agreements and community strategies will somehow wither away; that is, the state in its local form will finally wither away. The noble Lord will also know that that is unlikely and not appropriate because there are very important duties on local authorities which have to be maintained.

The direction of travel since the local government White Paper in 2001 has been to implement a range of measures which incrementally have freed local authorities from plan requirements and consent regimes, and given them greater financial freedoms to charge, trade and borrow. We have reduced the separate number of plan requirements by 75 per cent against the 2001 figures—for example, the annual library plan and the contaminated land strategy. Today, we have laid a legislative reform order, subject to debate after the Recess, which will remove a further four measures—for example, prosecutions under taxi licensing provisions.

We have legislated to enhance charging, trading and borrowing freedoms through the Local Government Act 2003. The comprehensive performance assessment is proportionate and risk-based now instead of the 1,200 targets. We have rationalised area-based initiatives through the local area agreement. I know that all this has been very welcome indeed. It was reinforced by the Chief Secretary to the Treasury when he set out on 18 July a reformed approach to national target setting. It was not new, but shed more light and picked up on the non-LAA service providers as well.

We are looking at setting targets at a national level where they genuinely drive up improvement on the ground. I know that Councillor Merrick Cockell, the chair of London Councils who has been praised by my noble friend, has welcomed this.

Hansard will be very confused by the pronunciation. The name is Councillor Merrick Cockell. He is getting called all sorts of things and I happen to know him quite well.

I am very grateful for that intervention. I apologise to the gentleman and I shall try hard to get it right next time.

The noble Lord wants to achieve knowledge about progress being made. The most recent White Paper implementation plan sets out how we will work with the LGA, representatives of local authorities and their local partners to keep guidance to a minimum. We all need to work together. That plan promises regular updates on progress against White Paper delivery. That sort of information will be useful, robust, informative and most helpful. The updates will be published on the White Paper section of the Communities and Local Government website. That is the way to do it. I do not think that the Secretary of State should have a role because it is not appropriate and is another layer. Ultimately, it will achieve what the noble Lord wants.

I thank the Minister for that. The noble Lord, Lord Graham, put his finger on it by saying that there is not a common understanding here, which is why we need a reporting mechanism. Central government thinks that the burden of bureaucracy is getting less and local government feels that it is getting more. The whole point of doing an annual report is to clarify that, so that we do not argue about it and can get on with improvement, and reporting that to Parliament I feel would be helpful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

246C: After Clause 238, insert the following new Clause—

“Abolition of statutory codes of recommended practice as regards publicity

Section 4 of the Local Government Act 1986 (c. 10) (codes of recommended practice as regards publicity) is repealed.”

The noble Lord said: In the absence of my noble friend Lord Hanningfield, I shall take on the burden of moving this amendment, which I hasten to add for the Minister’s ease is an exploratory amendment, perhaps to give her an opportunity to take some action over the Summer Recess, which would help local government greatly.

The amendment would repeal Section 4 of the Local Government Act 1986 and the code of practice in relation to publicity, which is now a generation old. Some extraordinary characters bestrode the stage of local government in those days, and life—as I remember very well—was on occasions extremely interesting; but it was not always in the best interests of the public. I am bound to say that everything that I observe today about the present generation of councillors shows that they are far more responsible and do the job in a much more reasonable way.

The code of practice was devised in those days to be somewhat restrictive, but the whole process of how councils have worked as a consequence of a raft of legislation has made them much more flexible. They must now work much more by getting public consent for what they are doing. The local area agreements, which we have proposed in this Bill, will dramatically widen that need for consultation. It has got to the point when the code of practice in this field is too restrictive and it would be very useful if it could be relaxed.

That is the simple purpose of this amendment—to put to the Minister that we have an opportunity to do something about this, and there is plenty of time to do it because the Recess is coming. If she could give some assurance that she will consider this matter and see whether something can be done about it when we meet again in the autumn, it would be very encouraging for everybody. I beg to move.

I strongly support the amendment in the name of the noble Lord, Lord Hanningfield, moved by the noble Lord, Lord Dixon-Smith. I am not sure whether I have declared my interest as president of the Local Government Association. The time has come for local government to boldly proclaim the good news about what it does and not feel inhibited or restrained by this code. As was rightly pointed out, the code arose at a time when—I think that we have to be honest—the GLC and Mrs Thatcher were at loggerheads. Those days are long gone. Local government has grown up and there are better relationships between local government and central government. Those in local government are now the place-shapers and community leaders, and they need to feel uninhibited in putting out good information and using the power of communications, whereas this code greatly inhibits people from doing just that.

The code is interpreted in different ways; it is ambiguous, even though it is very narrowly confined. The heads of communications in local authorities take different views on what is in and what is out and how far you can go. Lawyers, when consulted, always take the most cautious possible view. It is important for local government to defend itself robustly when myths and misinformation are put out, not least by the BNP, on issues such as housing. We hear statements that are simply falsehoods in relation to local authority practices—for example, that they house only members of black and minority ethnic communities. Local authorities need to be able to robustly challenge misinformation and to feel uninhibited in so doing.

Members of the other place now receive the opportunity to spend a communications allowance of £10,000 on publicising the good work that they do, which is in interesting contrast to local government, in which people feel very inhibited. When the press often carries the bad news and negative stories about local government, it is very important that that inhibiting code be removed and the opportunity is given to say the good things about local government.

I, too, support the amendment. Democracy simply does not work without information, so this is an important amendment. We have heard a great deal, quite rightly, from the Government about the importance of strong leadership—indeed, it is a theme throughout the Bill. You cannot have strong leadership and people setting out clear visions and making hard decisions unless they can do so in the press. The amendment is absolutely right.

I do not oppose this amendment, but it is worth those of us in London reflecting sometimes on how we feel about the publicity put out by the Mayor of London, which is a very extreme example of the case. It is not all quite as straightforward as we may have heard. Of course, in part the view that you take of the publicity depends whether you are running the administration or in opposition. It is absolutely right that a council should be able to communicate as its own citizens feel appropriate, but the issues raised about the use of council resources and the facilities made available to other parties on the authority, and so on, require some attention as part of the overall approach.

I think that I can give the noble Lord, Lord Dixon-Smith, some support and good news, which he can pass on to the noble Lord, Lord Hanningfield.

When we consulted in January on the general principle of a central code, the overwhelming response from local authorities was that a national code was still important, because there needs to be consistency in how certain things—particularly the areas around political usage and types of information—are treated. So there is still continuing recognition of the value of that. However, it was also clear that there is concern about the content, style and ownership of the code, and I am very happy to indicate that we are now going to consult not only on the content of the code but on whether it is necessary for the code to be issued by the Department for Communities and Local Government, or whether it could be a matter for local government representatives.

We will maintain consistency through a national code, while thinking about what really needs to be in the code, exploring suggestions on the content of the code and on how it might be updated from the world of local government and the stakeholders, for the reasons given by the noble Lord, Lord Dixon-Smith. We will think about how it could be simplified or clarified to support new roles such as advocacy, for example. We are ready to consult local authorities before issuing any new code, and about what form that might take. We are very keen to address robustly the challenge of misinformation—and clearly that will be one very important thing that we want to get right. In this context the help of the LGA will be invaluable as we come to frame a new code.

I am most grateful to the Minister for that very helpful reply. It is particularly good to know that the Government are intent on consulting local government and doing something about this matter. She has not put a timescale on it, but perhaps that would be going too far.

I note the reservations expressed by the noble Baroness, Lady Hamwee. The Mayor was one of the persons—I nearly used an unparliamentary expression—who probably gave rise to the code as we have it, but that is one of the ironies of life.

I am grateful to the noble Lord, Lord Best, and my noble friend Lord Bruce-Lockhart for their interventions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

246CA: After Clause 238, insert the following new Clause—

“Independent Commission for Local Government Finance for England

(1) There is to be a body corporate called the Independent Commission for Local Government Finance for England.

(2) Schedule (The Independent Commission for Local Government Finance for England) (which makes provision for the Commission) has effect.

The noble Lord said: This amendment proposes an independent commission for local government finance. We have not heard very much in Committee about the Lyons inquiry. The Minister will remember that in April there was an opposition debate and that Sir Michael Lyons has said that the present local government finance system for council tax was not broken but that it was discredited. We start with the problem that the current system lacks transparency, has little credibility on distribution and equalisation and often runs up to 10 years behind on population and demographic change. It is seen to be unfair by the public, who do not understand it. They feel that they have picked up a disproportionate share of national taxation, partly because of the burden of cost imposed through national legislation, policy and demands from central government. This leads to a lack of clear accountability about who is responsible for council tax rises. We know what happens every year—local government blame central government and central government say that it is up to the councils.

Independent commissions exist in Australia and Denmark and work well there. I feel that such a commission would work well here. In Australia it deals with the issues of distribution and equalisation mentioned in my new schedule. It ensures the most up-to-date use of statistics on population and demographic change. How useful that would have been with the escalating immigration over the past half dozen years. But perhaps most importantly of all, it identifies and independently establishes the cost to local government of complying with national legislative change, policy and directives. An independent commission would be seen to be fair and independent.

When we last discussed this in April the Minister was concerned that the commission could not be responsible for value for money issues, service improvement and local responsiveness. That is absolutely right. The greater accountability of knowing who was responsible would strengthen local accountability.

I was grateful to the Minister for saying that she might consider whether some other body might do this. That was helpful. I know that the Audit Commission has been suggested. However, we need to be bold about this. We need to add that accountability for council tax and to localise it. Therefore, an independent commission, which was proposed for the Government’s consideration by Michael Lyons, would be the best way to proceed. I beg to move.

Proposed new Subsection (1D) of the amendment states:

“The powers mentioned in subsection (1B) may include any of the following”,

which obviously implies that they could include all of the following. When I realise the enormous cost implications of decisions that might be taken independently, but which have to be carried financially by the Government, I sometimes wonder where we are getting to. At the end of the day, he who pays the piper calls the tune. If decisions which ultimately are the responsibility of central government—as they inevitably are—are influenced, guided or directed by others, we get into dangerous waters. Other mechanisms may provide some form of independence but if—

I always hesitate to interrupt the noble Lord, Lord Graham. I think that he is talking to Amendment No. 246CB, which looks as if it follows on from Amendment No. 246CA, which is about the independent commission. However, the independent commission is carried on in Amendment No. 252B. I think that the noble Lord is talking about the devolution of the community strategy, including welfare and pensions. If I am wrong about that, I hope that he will forgive me. My noble friend Lord Bruce-Lockhart will want to have a crack at the next amendment, in which case the noble Lord, Lord Graham, can have another go.

I assure the noble Baroness that I do not intend to come back to this and repeat my remarks because, standing on its own, I think that it was a very good contribution. I rest my case.