House of Lords
Monday, 29 June 2009.
Prayers—read by the Lord Bishop of Bradford.
Introduction: Lord Kerr of Tonaghmore
The right honourable Sir Brian Francis Kerr, having been created Baron Kerr of Tonaghmore, of Tonaghmore in the County of Down, was introduced as a Lord of Appeal in Ordinary and took the oath, supported by Lord Hutton and Lord Phillips of Worth Matravers.
Introduction: Lord Freud
David Anthony Freud, having been created Baron Freud, of Eastry in the County of Kent, was introduced and took the oath, supported by Lord Sterling of Plaistow and Lord Garel-Jones.
Working Time Directive
My Lords, the NHS has made excellent progress in implementing this important health and safety legislation, which ensures that patients receive safe, high-quality care from staff who have not worked excessive hours. Only doctors in training remain to become fully compliant by 1 August and two-thirds of them are already working a 48-hour week averaged over 26 weeks. Our overriding principles are patient safety and the quality of care. This is paramount to all that we do.
My Lords, has the Minister noted the severe warnings from the president of the Royal College of Surgeons and bodies representing junior and hospital doctors who are far from pleased about the arrangements that have been made so far and who should know what they are talking about? They say that this diktat will mean surgeons not being properly trained, patient safety being severely compromised and hospitals closing. Does the Minister really think that the problem should continue to be met by junior hospital doctors being ordered by their NHS bosses to lie about the hours they work in order to keep to the restrictions? Why cannot the Government simply refuse to accept these rules or ignore them as other countries do?
My Lords, I am aware of these debates and refer to a publication from the Institute of Medicine in the US, which is the US academy. It stated that the surgery profession was concerned about the shift in work mentality, loss of professionalism and decreased access to quality surgical care; but that it was difficult to assess how much of the complaining represented rhetoric and resistance to change rather than valid criticism.
I am here to share evidence with noble Lords. The evidence is quite clear from the Institute of Medicine’s publication—the error is human. In 1999, between 44,000 and 98,000 people died in hospitals from adverse effects. The single and most important contributor is sleep deprivation and fatigue. The reduction to 48 hours a week is to enhance patient safety and, let us not forget, to enhance the social well-being of doctors, who have the highest rates of divorce, addiction and depression.
My Lords, will the Minister tell the House how many services requested derogation in January this year, and what has been set as the trigger for an extension of the numbers to request derogation for other services, given the anxiety that has been expressed by the Academy of Medical Royal Colleges?
My Lords, there have been 200 successful applications across 13 specialties, which represents about 3 per cent of all the rotas. I could write to the noble Baroness with details of which regions and what specialties. The 3 per cent is what we believe needs to be derogated by 1 August. However, if there are strains on services within a period of 26 weeks—we calculate the 48-hour week over a period of 26 weeks—the employing organisation could request further rotas to be derogated.
My Lords, I am sure that many of us in the House who have had medical training will welcome the introduction of the 48-hour week. I well remember the hours that I worked as a junior hospital doctor—they were the hardest times of my life. Will the Minister enlarge a little on what he has just said? Many hospital trusts are still not ready to introduce a 48-hour week for their junior doctors in training. Why is this so, when they have had 10 years of unprecedented increase in their funding? Will any action be taken against those managers who fail to introduce the directive?
My Lords, I am grateful to the noble Baroness for raising the issue. She is correct that we have had 10 years to get these rotas compliant. There are 200 rotas and, to be fair to the service—I am sure that the noble Baroness will agree—there are some sub-specialties for which we find it extremely difficult to make these rotas compliant: for example, transplantation in children and some neurosurgical disciplines. As a result, we have requested derogation for another few years. This is a health and safety directive, so if an organisation is not compliant, the accountable officer, who is the chief executive, will be accountable for breaking the law in relation to the 48-hour week.
My Lords, I am told that the directive was introduced in Europe at a time when impact assessment was not a part of the introduction of European legislation. However, I share the noble Lord’s concerns about its impact on the quality of training for the future generation of surgeons, which is an important issue. To address that, we need to start a dialogue not around the numbers of hours of training, but on how we can improve the quality of the hours of training. The noble Lord is well aware that some units across the country which have a dedicated curriculum may separate elective from emergency services or use simulation, all of which are training tools. Some organisations have different training cultures in addressing the quality of training. My right honourable friend the Secretary of State recently asked Medical Education England to look at the impact of the European working time directive on the quality of training.
My Lords, while the doctor’s clinical practice is obviously of great importance, also of great importance is the ability of the doctor to liaise outside the clinical practice—for example, in the social care arena. Will my noble friend assure the House that that side of the doctor’s practice will not suffer from the 48-hour directive?
My Lords, I am grateful for the noble Lord raising that important issue. Anaesthetists should get more rest than surgeons. Some of us may enjoy the odd nap here, but it is a dangerous thing to do in an operating theatre. The answer to the question is valid: a number of rotas have been requested for derogation in anaesthesia, but we hope that within two years we will be able to resolve some of these issues.
EU: Mobile Roaming Charges
My Lords, an amendment to the 2007 European roaming regulation will put an upper limit on operators’ wholesale charges of €1 per megabit of data transmitted from 1 July this year. This will reduce to 80 cents and 50 cents per megabit on 1 July 2010 and 2011 respectively. Consumers will also benefit from obligations to provide greater transparency on pricing on the cost of data roaming.
My Lords, I thank the Minister for that Answer. It is encouraging that these prices are coming down, but data roaming charges in the EU are still twice those of voice roaming charges, which are significantly more than domestic prices. It strikes me that that is something of a rip-off. In a world of Twitter, YouTube, Facebook and all the rest of it, it is essential that these prices are brought down. First, what are the plans to have these prices reduced further? Secondly, it appears that these network operators are acting in concert. Are there any plans within the EU to investigate their activities?
My Lords, the noble Lord makes a number of points. He is right in his observation that there are an increasing number of alternative sources of communication across this country and Europe. He is also right to identify that, while voice roaming prices are coming down significantly in some areas, data roaming prices are still higher. During the current framework review, there was a debate across Europe as to whether retail price capping should be introduced on data roaming in the same way as it has been on voice roaming. A decision was made not to do that but to apply regulation on the wholesale rates in the first instance to see whether that brought the necessary competitive benefit at the retail level. At the retail level on voice charging, we are seeing significant increases in competition and lower prices. Many Members of this House will have seen advertisements from a range of operators advertising free roaming across Europe this summer. As to the suggestion of collusion between operators, that would be a serious breach of competition law and I believe that action would be taken if it had been happening.
My Lords, I appreciate that this is a structural problem in the department that the noble Lord is about to leave, but does he accept that there is a problem when one department protects, on the one hand, the interests of the mobile phone operators, whose interest is to maintain higher roaming charges—and mobile phone operators are a significant player in UK business—and, on the other hand, the interests of the consumer, who has an interest in those charges being dropped? How can one department look after the interests of both?
My Lords, I am not sure that I recognise or accept the conflict as described. As the noble Lord is aware, this sector is regulated by an independent statutory regulator, which is a competition authority in its own right and can therefore not only apply forensic regulation for the sector but do so within the frame of competition law. As far as the department is concerned, it is perfectly possible for it to recognise both the industrial strength and advantage that we have in this sector and, at the same time, the fact that there are consumer interests that need to be protected.
My Lords, while everyone will, I am sure, welcome cheaper roaming data and call charges, have the Government given any thought to whether putting a cap on charging in one area might risk the communications companies increasing charges elsewhere in their businesses or reducing quality to compensate? What discussions have been held with the EU about this?
My Lords, the noble Lord raises a relevant point, which was central to the Government’s decision not to support the imposition of retail price caps on data roaming at this stage, because, as he rightly observes, regulation applied in one area can have a displacement effect in another. In relation to voice roaming charges, many of the mobile network operators argued that we would see a significant increase in the price of handsets or increases in other prices, but the evidence is that this has not happened. However, that does not mean that we should not keep an eye out for it happening in other examples.
My Lords, it undoubtedly is a piece of pan-European price regulation, but it would be fair to say that the specifics of voice roaming charges across Europe lend themselves almost uniquely to the requirement to have a pan-European solution. Indeed, many voices—including my own, in other lives—argued strongly for the European Commission to take a lead on this, because it would be invidious for any individual country to take a leading position, as that country would have ended up doing what the noble Lord, Lord Razzall, was suggesting, and disadvantaging its own commercial interests in favour of other European country players. Therefore, this requires a European approach. As to whether it sets a precedent for others areas, I think that there are few other markets with the same characteristics.
Alcohol: Supply of Beer (Tied Estate) Order
None, my Lords. The decision to repeal the beer orders, in the Supply of Beer (Tied Estate) (Revocation) Order 2002, was taken on advice from the competition authorities. Any decision to re-evaluate the market will be a matter for the OFT.
My Lords, does the Minister accept that since the so-called beer orders were introduced in 1989, there has been a significant change in the market that often disadvantages particularly the consumer or the tenant of public houses? Is he aware that the Business and Enterprise Committee of another place has recommended that this should be looked at again? In particular, what does he have to say about the committee’s recommendation that the Secretary of State should refer the matter to the Competition Commission for urgent investigation by a body which has no vested interest in “defending its earlier position”?
My Lords, I have been increasing my knowledge of the beer market with enthusiasm in anticipation of this Question, and the noble Lord is right to point out that since the so-called beer orders were revoked, the market has changed significantly. The noble Lord rightly points to the Business and Enterprise Committee report, which raises a number of general issues along with that of the beer tie. As he knows, my department is due to respond to the report within 60 days, subject to further developments on this matter.
I suspect that he is also aware that the Campaign for Real Ale, known as CAMRA, is for the purposes of this discussion a designated body under the Enterprise Act 2002 and is therefore qualified to submit a super-complaint to the Office of Fair Trading. It has indicated that it intends to do so shortly on issues related to the beer tie. That would result in the Office of Fair Trading having to consider the complaint very carefully and respond within 90 days. On the specific point about an organisation being able to look at the matter again in an open-minded fashion, I have every confidence in the ability of the OFT in that regard.
My Lords, in 2004, the Trade and Industry Committee concluded:
“At this stage we do not think a legally binding code of practice is necessary … but if the industry does not comply with the voluntary code, the Government should consider a statutory code”.
I mention this in light of the fact that the FSB, in its report to the current inquiry, states that a recent survey found that 99 per cent of the publicans who responded said that the situation had not changed or improved. Is it not now the time for strong and clear action?
My Lords, the noble Lord makes a point about the change in circumstances since this was last looked at, and he is absolutely right to highlight the fact that the published research shows that a significant number of strong voices rightly make the point he has alluded to. The position of the competition authorities on this is rightly that if there is new evidence that there has been a significant change in circumstances, the evidence should be submitted. As I said in response to the noble Lord, Lord Razzall, we have seen an indication that that evidence will be provided in the case of a super-complaint. If that results in the need for stronger action, then stronger action will duly be considered.
Courts: Summary Jurisdiction
The Government are piloting “virtual courts” that allow magistrates’ courts in London to hear cases where the defendants appear by live video link from a police station to the court. A second pilot will begin in Kent in the near future. The pilots will be subject to robust evaluation. If successful, this technology could be used in other parts of the country. There are no other proposals for courts to sit outside a formal courtroom.
My Lords, I thank the Minister for that reply. What has been the reaction so far of the Law Society and the Bar Council to this proposal? In particular, can he summarise the position of those practising in the criminal courts, and can he respond to the criticisms that have been voiced by both the Law Society and the Bar Council?
My Lords, we have been working to actively engage defence practitioners, normally solicitors, and their representative bodies in the development of the pilot. We particularly appreciate the constructive input provided by practitioners and the Law Society itself. There has been a good response from defence solicitors wishing to participate in the scheme and in the rota. However, the representative bodies have expressed some concerns about elements of the pilot. These include concerns to ensure that the process is fair for the defendant; concerns about practical and policy issues around the process, such as the health and safety of defence representatives in the police station; and concerns about the operation of the legal aid system for virtual court hearings.
We are very alive to these concerns. We are committed to ensuring that the process is fair to defendants, works effectively in practice and provides value for money for the taxpayer. To ensure fairness, the court ultimately maintains control of whether to proceed with the virtual court.
My Lords, does the Minister agree that in many areas outside the big cities, such as shire counties, where very few real security issues arise in magistrates’ courts hearings, summary justice could at last be brought much closer to local communities by holding hearings in community facilities, such as school halls and village centres? Does he agree that kind of approach would save the cost of building centralised and inconvenient palais de justices, which are often no more than an exhibition of an edifice complex?
My Lords, as always the noble Lord comes up with a fascinating idea. We have no proposals in the manner that he describes. He will know that the community justice schemes that began in north Liverpool and Salford have now been extended to 11 more venues. Apart from the north Liverpool one, which was in a special building, the others are all in the ordinary magistrates’ courts. Can I take his ideas back to the department and write to him in due course?
My Lords, the magistrates’ courts have been consulted already and will be consulted again when the pilots are completed in about a year’s time. The courts, whether with a magistrate or a district judge sitting, have the power to decide whether it is suitable for a particular case to be heard in this way. If they decide that it is, but change their minds, then they can say so and the case stops there and then.
My Lords, without in any way detracting from the relevance of the point made by the noble Lord, Lord Carlile, is it not the case that part of the answer with regard to unnecessary delay in the administration of justice in magistrates’ courts lies with the need for a greater number of district judges sitting as stipendiaries? Will he give an undertaking that appointments will be made in such numbers, and for such places, as are necessary in the circumstances?
My Lords, are there proposals to have any more domestic violence courts where both the criminal and the family side of domestic violence are held under the same roof? These courts benefit both the litigant who has been subject to violence and also the defendant.
My Lords, I am grateful to the noble and learned Baroness for her question. As I understand it, those courts have been a success where they have been tried out. I do not know what the proposals are for the future. I shall write to her with that information.
My Lords, in London, that is unlikely to be the position. The solicitor is with the accused in the police station. The court remains open to the public; it is a public hearing. The solicitor sits with and takes instructions from the accused in the normal way. It is very early days, but up until 25 June, some 19 cases were dealt with in this way, of which 75 per cent were guilty pleas with immediate sentence. This brings justice, but quick justice, and seems to be an experiment worth carrying on with.
Arrangement of Business
Holocaust (Return of Cultural Objects) Bill
The Bill was brought from the Commons, read a first time and ordered to be printed.
Driving Instruction (Suspension and Exemption Powers) Bill
The Bill was brought from the Commons, read a first time and ordered to be printed.
Online Purchasing of Goods and Services (Age Verification) Bill [HL]
Bill passed and sent to the Commons.
Business Rate Supplements Bill
14A: Page 22, line 35, leave out paragraphs 19 and 20 and insert—
“19 In an initial prospectus—
(a) a statement as to whether there is to be a ballot on the imposition of the BRS;(b) if there is to be a ballot, a statement as to whether there is to be one by virtue of paragraph (a) or (b) of section 7(1);(c) if there is to be a ballot by virtue of paragraph (b) of section 7(1), an explanation of why the authority thinks that there should be one; (d) if there is not to be a ballot, an explanation of why the authority thinks that there should not be one.20 In a final prospectus—
(a) a statement as to whether there was a ballot on the imposition of the BRS;(b) if there was a ballot, a statement as to whether there was one by virtue of paragraph (a) or (b) of section 7(1);(c) if there was a ballot by virtue of paragraph (b) of section 7(1), an explanation of why the authority thought that there should be one;(d) if there was not a ballot, an explanation of why the authority thought that there should not be one.”
My Lords, I am of course aware that the amendment of the noble Lord, Lord Tope, would reintroduce the requirement on levying authorities to hold a ballot before introducing any BRS or varying any existing BRS. However, as your Lordships will be aware, the other place has disagreed with the Lords amendments requiring authorities to hold a ballot before levying a BRS or making a variation to an existing BRS, except in the case of Crossrail, and has offered this House an amendment in lieu.
During consideration of the Lords amendments in the other place, the Government clearly set out their thinking on ballots. However, for the sake of completeness, I should like to reiterate the key points. In developing BRS, the Government have balanced the need to protect business interests with ensuring that the requirements on levying authorities are practical and proportionate. It is right that where businesses will contribute a relatively large proportion towards the cost of a project they should have the power to vote on whether they should make that contribution. That is why we believe that levying authorities should be required to hold a ballot in those cases where the supplement will fund more than one-third of the estimated total cost of a project.
As an aside, I mention that this goes further than the recommendations made by Sir Michael Lyons in his review into local government and the Communities and Local Government Select Committee. Both considered that the decision to hold a ballot should be left to the discretion of levying authorities. However, the Government decided to require a ballot in certain circumstances to protect businesses and ensure a fair deal. Where a ballot is required, there is a risk that financial institutions and funding partners will be unwilling to commit themselves as one element of the funding package is uncertain. Even where an authority is confident of businesses’ support, the outcome of a ballot can never be guaranteed. While the Government consider that it is right that there must be a ballot where the BRS is funding a relatively large proportion of the project, it would be disproportionate for an entire funding package for a project to be put in jeopardy by a ballot on one small element of it.
Holding a ballot will not be a quick or inexpensive process. Making a ballot mandatory in all cases potentially creates unnecessary obstacles to using BRS as a small part of a funding package and prevents levying authorities determining the most appropriate course of action in their area. This could discourage levying authorities from using BRS as part of a funding package in circumstances where a small supplement might make a real and positive difference to an area.
This could have particular repercussions for levying authorities outside London. As your Lordships may be aware, rateable values are typically lower outside the capital. As such, the potential revenue raising power of BRS is lower outside the capital. This increases the likelihood that BRS will form part of a wider funding package. Therefore the potential problems caused by requiring a ballot in all cases could be more significant outside London and deter the use of BRS other than in the capital.
As we made clear during the passage of the Bill, both in this House and in the other place, even if there is no ballot, levying authorities will not have the freedom to levy a supplement irrespective of the views of local businesses. Levying authorities will be required formally to consult businesses and we commit that the statutory guidance will make clear that levying authorities must consider how they will engage with businesses over and above the statutory consultation requirements.
Business interests are also protected though other safeguards, such as the national upper limit of 2p, the £50,000 threshold for liability to a BRS in England and the fact that the supplement can be used only for economic development and to fund additional projects.
We must trust levying authorities to do the right thing. What is appropriate in terms of engagement will depend on the nature of the project that BRS will be funding and the needs of the local area. For this reason, the Bill sets a minimum standard for engaging with businesses, but leaves the rest to levying authorities. This localised approach reflects the diversity of local areas. However, noble Lords and Members of the other place have expressed real concern that there must be genuine engagement with local businesses before a supplement is introduced. In recognition of that, we propose that in those cases where a ballot is not required, by virtue of the fact that the supplement is expected to fund less than one third of the total cost of the project, the authority should be required to set out in its BRS prospectus whether or not it intends to hold a ballot. Importantly, the amendment will also require the levying authority to provide an explanation as to why it proposes that course of action.
While the Government believe that it is right that levying authorities should have discretion as to whether or not to hold a ballot in certain circumstances, we acknowledge that the decision-making process must be transparent to those who would ultimately be liable for the supplement. This amendment will provide local businesses with an explanation of the levying authority’s decision, ensuring that authorities are accountable to local businesses for their decision on whether to hold a ballot.
The amendment requires the levying authority to set out its proposed course of action and the reasons for its approach on ballots in the initial prospectus. This gives businesses an opportunity to challenge the levying authority’s thinking, should they wish to do so, at the consultation stage. The decision on balloting is not something which should be explained only after a BRS has been imposed. As such, the decision of ballots is as much part of the consultation as the other aspects of the project and the levying authority will have to justify its approach. That will be just as important in cases where, for example, a BRS will fund only 5 per cent of a popular project over a few years—when it will have to justify using its resources for a ballot if it decides to hold one—as in cases where it decides not to hold a ballot. This amendment gives businesses the confidence that the decision-making process on ballots will be transparent and, at the same time, gives levying authorities the scope to respond to the specific circumstances of individual projects. I beg to move.
Amendment to the Motion
My Lords, in moving Motion A1, I thank the Minister for his full and careful explanation, to which we all listened very carefully. I again declare my personal interest; I am still a serving councillor in the London borough of Sutton, as I have been for the past 35 years, and a member of the executive on that council. I declare that interest not just because I need to be open and transparent and declare my interests but because I am not only a friend but very much an active part of local government. It is from that standpoint that I come to move this Motion.
Secondly, once again I place on record that I and my noble friends have, with qualifications, been supporters of this Bill throughout, and certainly support its application throughout the whole of the country and not simply to London and Crossrail. I say that on record to make it clear that this is not in any way intended to inhibit let alone to wreck the Bill. We think that it is a very important principle and a very important and necessary part of the process for approaching this.
We have debated these issues in this House and in the other place a great deal, and there has been very welcome progress during the course of the debate. I recall commenting at Second Reading that I regretted how polarised the two positions seemed to be. On the one hand, we had the business interest appearing to take the view that arrogant, out-of-touch local authorities would impose unwelcome and unneeded taxes on helpless businesses. On the other hand, we seemed to have the local authorities and the LGA equating a business vote to a business veto and saying that under almost no circumstances should there be a business vote. I think that we have moved a long way since that time and all of us recognise that, for any project to which a BRS may apply, whether or not there is a vote, it has to be developed in partnership with the local businesses. They will work together on the concept of the project, on developing a prospectus for the project and developing the budget—and, by the time it comes to a vote, one would hope that the leaders of the business community would be campaigning for a yes vote, such was the support. That may be an idealistic position but, if the partnership is working as good partnerships should, that is what should be the case.
So why do we need a vote? We need a vote, first, to give reassurance to the business community. Whether we like it or not—and personally I do not like it at all—consultation these days tends to have a rather unhappy reputation. There is too much an attitude that consultation means that you tell people what is going to happen and, regardless of what they say, it still happens. That may not be fair—in many cases it is not fair—but it is a very real perception at all levels, local, regional and national. The knowledge that there is reassurance there and that a ballot will come and businesses will have their say is important. Secondly, it is important for the process as well. To know that there is going to be a vote and that you will have to win it and persuade people to vote as you would wish them to is a very important part of engagement. There is nothing that concentrates minds better than to know that at the end of the process you are going to win or lose and that you have a vote to win. Therefore, the engagement is bound to be more meaningful if there is knowledge on the one hand that they have to persuade, not just to consult and, on the other hand, that if they really do not like it, they can stop it.
We need to remember that a vote does not have to be unanimous. There seems to have been some suggestion, particularly in the other place, that a vote is won or lost depending on what 100 per cent do one way or the other. Some of us in politics might wish that was the case, but it is not. It is a majority vote. We are not talking about necessarily having to win over every single business voter—much though one might aim to do that.
I understand very well why the Government have set the limit at one-third of the total cost of the proposed project. Inevitably, that, as any limit would be, is an arbitrary limit. One-third is quite a high threshold. Most likely to be of greater importance to the business, if not to the envisaged project, will be the amount of extra tax that business has to pay, rather than the proportion to which that tax contributes. I suggest that if there is to be a threshold then maybe one-third is too high. Those businesses will be paying an extra tax regardless of what proportion it contributes to the actual project and it may very well be a significantly higher extra tax. If it is, as is likely, to be a significant and substantial project—that is what we are primarily talking about with the Bill—they are likely to be paying it for many years ahead. For those reasons, it is right and proper that they should have an effective say in the decision on whether to levy the rate.
I understand why the Government would not want to see—neither would local authorities want to see—disproportionate cost for a relatively small contribution to a project. It may be that we need to look again at the threshold, but I do think that one-third is too high.
The Commons amendment is a helpful move in the right direction. In as far as it goes I am prepared to welcome that, although, for the reasons I have stated, it does not yet go far enough. However, it recognises that there is an issue of quite proper concern to the business community. I believe that, working together in partnership with local government, which is why I stressed at the beginning where I personally come from, we can still find a better solution and a better compromise that will meet the quite proper and understandable concerns of local business, and the equally proper concerns of local government, that they should not have imposed on them disproportionate cost and effort for relatively minor benefit.
We are on the way with the Commons amendment. I do not think that we are there yet. I have brought this Motion to your Lordships today in the hope that we will give the Commons an opportunity to continue with their thinking and perhaps to make still further progress. I beg to move.
My Lords, I, too, thank the Minister for his helpful introduction of Motion A standing in his name. I support the noble Lord, Lord Tope, in his Motion. Like the noble Lord, Lord Tope, I place on record my interests in these matters as a director of three companies in the north-east of England that pay business rates.
I have read the interesting debate that was held in the other place on this issue. A number of new points were raised and this revised amendment has been brought forward. That is all very welcome. However, a couple of key points of concern remain. I put these forward in support of the amendment and for the Minister to respond to when he replies.
First, this measure creates an anomaly. The business rate supplements are analogous to the business improvement districts, which have been championed and advocated by my noble friend Lord Jenkin of Roding. In the business improvement districts, there are ballots on each investment. In fact, an integral part of the case being made is that there is going to be a partnership, which would be undermined if a scheme were to be imposed on a business community that was not welcoming of it. Therefore, we are breaking that sprit of partnership in this business rate supplement. We are introducing an anomaly, which may have ramifications when we come to consider the sections that relate to business rate supplement and business improvement districts.
Secondly, some of the language that is being used here and, indeed, in the other place is concerning, because it talks about business not making a significant contribution and having a veto. However, one-third of the cost of a capital project could be a very significant sum—perhaps £10 million, £20 million or £100 million. On Crossrail, the potential contribution is a few billion pounds. The sums could be very significant. It behoves any successful scheme to engage the business community when such a large amount of money is being considered. The notion that a scheme might be pitched by the local authority so that it comes in just below the one-third threshold to avoid the difficulty of having to go through a ballot—a concern quite rightly raised in Committee by my noble friend Lord Cathcart—remains a real concern.
The next point is similar. We are looking at getting business on side, but it is clear that a number of large business organisations, such as the CBI, have expressed serious concern. We are talking about a ballot of a cohort of businesses on which this investment measure, which is designed to improve their lives, may have an impact. That begs the question. Which business on earth would vote against something that was designed to improve their situation and improve economic regeneration? It has to be very much in their interest. Why would a levying authority not want to have the mandate of having business on side?
We are not talking about every business. That is an important point to get on the record. We are talking about a relatively small group. The threshold for those liable to the business rate supplement is a £50,000 rateable value. In terms of square footage and, possibly, the number of employees, a business with a £50,000 rateable value is a pretty significant one. This will probably disproportionately impact a lot of retail businesses. We are not talking about tens of thousands. Therefore, some of the arguments that the Minister has made about the difficulties of undertaking the ballot may not arise. However, tens and hundreds of businesses in an area will be paying a significant amount of money to improve that area. Our argument is that they should be considered.
The Government started from a position of saying, “No, local authorities can be entirely trusted with this responsibility; there is no need to put any obligations on them at all”. However, as a result of the Committee and Report stages and scrutiny in the other place, the Government have moved a long way to the position that we have been arguing for. In their amendments in lieu, they say that there should be an involvement. In other words, you cannot just walk away from a ballot; you have to give a reason. They say that there will be a statutory responsibility to engage with local businesses. That is a very helpful point.
The levying authority must also provide assurance that it is not levying a sum that is in addition to. That is an important check of the ballot. One of the great concerns among those of us on this side of the House is that, far from being dreamt up by a great enterprising department as a means of finding new ways of regenerating our inner-city and urban areas, this scheme has been generated by the Treasury as a means of finding new ways of raising money. The principle set out in Clause 3 deals with additionality and says that, in addition, funds cannot be used on housing, social services, education services, services for children, health services and so on. That further restricts the levying authorities’ room for manoeuvre.
So the Government have travelled a very long way as a result of the scrutiny that both Houses have brought to this issue. However, they have not moved far enough. That is why Amendment A1 is required. It would provide an additional safeguard. Most important, it would provide a way of involving businesses and motivating them to engage in partnership with local authorities to promote their area. I should think that that will be widely welcomed.
My Lords, I support Amendment A1. I remain in favour of the principle of the Bill—to provide a mechanism for business to make a financial contribution to local infrastructure provision where it is in favour of that infrastructure. But that is the crux: are they in favour? As noble Lords are aware, I am chief executive of the non-profit-making business membership organisation London First. I therefore hear the concerns of businesses from many different sectors every day.
At a time of economic uncertainty it is not helpful to be threatening additional costs on businesses alongside the planned effects of revaluation, loss of empty property relief and a general uplift in rates. Businesses, particularly those disproportionately exposed to rates, which includes most retailers, are very concerned about the prospects of being bounced into paying for unnecessary or even unhelpful projects from well intentioned but sometimes misguided local authorities. A ballot of businesses is the best safeguard to prevent that from happening. I join the noble Lord, Lord Tope, in asking the Government to think again.
My Lords, I would hope—not with great prospect, I am bound to say—that I could persuade noble Lords who have spoken to Amendment A1 not to press it.
I start with the contribution of the noble Lord, Lord Tope, and acknowledge in what he said that he is supportive of the thrust of the Bill. Indeed, I acknowledge his position in local government—with more than 30 years’ service, I think, and still going. He made an important point in recognising that the provisions as they stand require engagement with the local business community. There is no prospect of a BRS just being introduced effectively over the heads of local businesses whatever their views. All the consultation guidance makes that clear. I refer noble Lords to the Business Rate Supplements: A Consultation on Draft Guidance to Local Authorities, which we published in January 2009. It sets out the fact that any projects that come forward should relate to and be embedded in the regional strategies that are in place and the local strategies that an area would have. In particular, the paragraph about the engagement of business in some of the assumptions states:
“Ultimately, business will have the scope to challenge prospectus assumptions at the consultation stage and for that reason it is in the levying authority’s best interests to ensure the robustness of its business case and to ensure work on the preparation of the prospectus involves detailed discussions with local business and other interested parties”.
That must inevitably follow and I believe that that should allay the fears of noble Lords.
I understand that the noble Lord, Lord Tope, was saying that the Government’s proposed amendment in lieu was a helpful step and that, of itself, it is something that he would support. However, although he is moving an amendment to say that there should be ballots held in every case, I thought that the tenor of his comments was also that the one-third threshold was too high. I do not know from that whether his position is that, if the threshold were lower, he would have a different view on mandatory ballots. As it stands, the proposition before us is about mandatory ballots.
To a large extent, the arguments have been ranged over in the other place and in your Lordships’ House. There are probably no great new points of substance to bring forward, but we have moved in a material way to address noble Lords’ concerns by the amendment in lieu that I moved earlier. We hold fast to our objections to mandatory ballots in every case.
The noble Lord, Lord Bates, supported the Motion moved by the noble Lord, Lord Tope. I think that beneath that was support for the thrust of the Bill, notwithstanding our residual disagreement. He says that we have created an anomaly with BIDs. We need to see the substance of that. BIDs are much more likely to be localised projects and, as the history of BIDs suggests, business-led rather than more strategic, local authority-led projects. I have not been through each of the BIDs in operation, but the thrust of them has very much been business-led in more localised areas. As has been discussed before, they are more likely to provide a significant element of the funding than might be the case in some of the BRS situations.
On the argument that we must have a ballot in every case because, if there is a threshold above which ballots have to take place, the authorities will be manoeuvring around it, given the robust approach that must take place—the development of a business case, the consultation on it and the initial prospectus—it would become pretty apparent if anyone was trying to pitch a scheme in a way that circumvented the threshold, wherever it were put. Notwithstanding that, the number of businesses that might be involved in a ballot depends on the scale of the BRS and the particular area; I do not know. However, ballots, even if the numbers are relatively small, do not come cost-free.
The noble Baroness, Lady Valentine, expressed her support for the amendment moved by the noble Lord, Lord Tope, although I understand that she is still happy for Crossrail to be outwith the basic position that we took. However, I take issue with the concept that businesses will be threatened with extra rates. The ethos of the Bill is not about threatening local businesses to extract money from them; it is about trying to identify projects for which additional spend will have beneficial impacts on business development in an area. Together, all the locks that are there to protect local business—the threshold, the 2p cap and it needing to be extra spend—are a genuine series of protections. It is not right to say that the Bill is just about seeking to extract resources from local businesses.
I remember from my days on a local authority, when the domestic rate was set locally, there was a brief engagement with the business community when it was set—normally over a cup of coffee with the borough treasurer. There was not a focus on strategic issues; it was a million miles from that. Local authorities have come a long way with all the engagement through LSPs. I do not have the number in front of me, but a not inconsiderable number of LSPs are chaired by the business community. We are in a different situation. We are not about threatening businesses. For all those reasons, I hope that the noble Lord will feel able not to press his amendment. However, I am not sure that I have moved him sufficiently on this matter.
My Lords, I thank the Minister for his attempts to move me, at least. I remember with nostalgia the days before NNDR, when we did not have to have a consultation with business rate payers. That was made statutory as soon as local authorities had no say whatever over the level of rate, which always seemed to me somewhat bizarre and, to them, even more pointless. However, I digress.
As the Minister said, we have covered fairly exhaustively all the points in this debate, but I should just like to comment on where we have got to. The Minister spent part of his speech taking issue with the use of the word “threat”. I understand why, and in a way I very much share his view, but the fact that that word came from, if I may say so, another friend of the Bill—a qualified friend but a friend none the less—is an exact illustration of my point that we need to provide reassurance for businesses in statute. The language should reflect the way that they feel about this and there is a need for reassurance.
Should the vote be mandatory? That is the thrust of my amendment and it is what I believe should happen. As the noble Lord, Lord Bates, pointed out, we are not talking here about every small business that happens to have a business premises or a huge exercise involving balloting every NNDR payer. I took the trouble to find out how many business rate payers would be affected in my own London borough. It is a smallish, outer London borough. It is not a huge centre of business but it has a fair number of businesses. In the London Borough of Sutton, 429 businesses would require to be balloted. I recognise that my local authority would not want to be engaged in something completely disproportionate but, on the other hand, we need to be clear and to understand that we are not talking about a huge, complex and vastly expensive exercise involving a ballot of a large number of people. As I said, in a borough with a little over 4,000 NNDR payers, we are talking about 10 per cent, which I understand to be fairly typical across the country.
I want to ask the House to agree to my Motion. If it is agreed, no doubt there will be further discussions. That was the tenor of what I was saying and, for the reasons that I have stated, I should like to test the opinion of the House.
Motion A agreed.
My Lords, Amendments 11 and 12 were the subject of a comprehensive debate in this House on Report. They were intended to prevent BRS liability increasing retrospectively where a rating list is amended with effect from an earlier day. Members across the House set out their positions and there was a debate about the situation in some ports, where backdated rates bills have been issued. For the Government, my noble friend Lord Davies of Oldham described the key issue of principle; that is, it is right that businesses will be asked to pay the BRS due on their property and to pay at the correct level. My noble friend argued that the alternative is a situation where we have businesses occupying properties at the same rateable value being liable for different bills.
After it was accepted by this House that the amendments will return to the other place for consideration, there was a further lengthy debate on the principle of the amendments. Members from across the House put their positions both in relation to the amendments and the wider issues that they reflect. On Division, the other place voted to reject the amendments.
My honourable friend, the then Minister Sarah McCarthy-Fry, reminded the other place that BRS builds on the non-domestic rating system. She said that rating lists can be changed by valuation officers to ensure accuracy and, with that, the accuracy of rates liability. Sometimes this can lead to backdated increases in rates liability; sometimes it can lead to backdated decreases and, therefore, refunds. She acknowledged that there is the possibility of backdated increases in rateable value causing higher BRS bills than businesses were anticipating. However, the practicalities involved in ascertaining the need for changes to a rating list and then establishing what change is required mean backdating is an essential part of the normal functioning of the system. That is why the Government consider it should apply to non-domestic rates and to BRS equally.
The principle of these amendments has been debated fully in this House and in the other place. However, as noble Lords are aware, the Speaker of the other place designated the amendments as infringing financial privilege. As a consequence, the message that has been sent to this House is that the reason the amendments have been rejected is that they affect the levy of local revenue. In those circumstances, as noble Lords are aware, this House cannot insist on its amendments and, bearing that in mind, I beg to move that the House does not insist on Amendments 11 and 12.
My Lords, I cannot welcome that statement from the Minister. I appreciate that he is reading the advice he was given from on high, but it is a shameful way to treat the opinion of this House on a matter that is of profound interest to many businesses in this country. We need to put this in some context. Many businesses are today laying off people or making them redundant not as a result of external trading conditions, the banks or the recession, but of this Government’s action in not agreeing to this amendment, which was sent to the other place.
My remarks to the Minister will cover three topics: first, the technical issue of privilege and whether it relevant in this case; secondly, the history of this amendment; and, thirdly—however uncomfortable the reminder may be to him—the impact that this is having on the many businesses that have written to the Minister and to me to draw attention to it.
In the other place, it was pointed out that the amendment is not to do with financial privilege. The wording of the reason is:
“Because it would affect the levy of local revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient”.
The answer to that is that this amendment “could”, not “would”, affect the levy of local revenue if the Valuation Office Agency, as a result of a cataclysmic series of errors and mistakes, did not place on the list businesses that should have been valued, revalued and placed on it. It could have an impact. However, to say that it would have an impact is disingenuous.
Clause 16 already states that where there is an error on the part of the Valuation Office Agency, there should be no retrospective element in non-domestic rates. Our amendment simply continues that principle into the current legislation. That is what is done by an amendment that was passed in this House by a majority of 60. It has nothing to do with financial privilege. We are not costing any money, but rather making sure that a piece of legislation brought forward by Her Majesty’s Government is consistent with other legislation brought forward by them on previous occasions. The other place should have acknowledged that, rather than hiding behind a draconian 17th-century technical measure to block further debate on an issue that is causing suffering and hardship to businesses in this country.
The noble Lord, Lord Mandelson, who seems to wield ever-growing influence in the Government, said on 14 January 2009:
“UK companies are the lifeblood of the economy and it is crucial that government acts now to provide real help to support to them through the downturn and see them emerge stronger on the other side”.
With this measure, he does not have to go to the £10 or £20 billion guarantee, or the £5 billion support stimulus package. He merely has to not backdate a measure that should not have been backdated in the first place. That is what we are asking for. It is completely within the gift of the noble Lord, Lord Mandelson, to do this.
In response to the Minister, and with no reflection on his position, I suggest that he puts this case to the noble Lord, Lord Mandelson, to see whether he would be prepared, independently of this debate, to undertake a review of the circumstances under which this error occurred and retrospective liability was incurred. I would be grateful if the Minister would respond to that suggestion.
The noble Lord, Lord Mandelson, is responsible for business. His language on previous occasions has been very supportive of doing everything that he can to support businesses in these tough times. He would—or should—be horrified that this is happening in a Government where he has significant and growing influence. Would the Minister put that proposal to him, given that the possibility of debate in this House is being stymied by a technical provision? As the Minister responsible for government—that was a Freudian slip, because I think that he is responsible for government—or rather, as the person responsible for business, could the noble Lord, Lord Mandelson, be encouraged to hold a cross-departmental inquest into what has happened with the Valuation Office Agency in respect of the retrospective levying of taxes?
That is a serious proposal that warrants consideration. We are talking about the potential impact on 1,600 portside operators in 55 ports around the country that are already suffering immensely because of the global economic downturn, changes in rates and the cost of commodities. To impose a further levy would be wholly terrible. It is an act of political spite—I cannot think of a stronger way to put it. It is equivalent to cutting the nose off the economic face of the nation in an act of political spite, and it sends a dreadful message to many hard-pressed businesses in this country.
This House had expressed a clear view on this issue on not one but two occasions in the Division Lobbies. The ports and the portside operators then heard that there could be closures because of an arcane rule on financial privilege where no financial privilege is at stake. All we are talking about is a mechanism of legislation, which would bring this Bill into line with the way in which other Bills should be, but which was not applied in the case of the portside operators. I urge the Minister to take cognisance of the great anger which is felt out there.
This feeling of anger is exacerbated and not abated by admissions of guilt by the Government. Successive Ministers in the other place, this place and in Committee have come forward with their apologies. They have said, “It has been a dreadful mistake. We have got it completely wrong.”. In the non-domestic rating regulations debate, the noble Baroness, Lady Andrews, said:
“I start by saying that the Government are deeply concerned”,
about the retrospective element. She continued:
“Those concerns were set out in a letter from the right honourable Stephen Timms and the right honourable John Healey, from my own department, to the Treasury Sub-Committee on 10 February. They said:
‘We have consistently said, in the current economic conditions, the Government is concerned about the impact of backdated rates liability on the trading prospects of businesses and we believe that there is a general case to assist businesses receiving large, unexpected backdated liabilities that have to be paid immediately, as the position for a number of port occupiers has demonstrated’”.—[Official Report, 18/3/09; col. 299.]
The Government have admitted culpability of the need for action. The amendment which we tabled and sent down to the other place was entirely consistent with that view declared by the Government. The Valuation Office Agency initiated this mistake. Again, I call on the noble Baroness, Lady Andrews, the predecessor of the Minister who will respond today. I mention those remarks just in case he wishes to repeat them. The Valuation Office Agency is not under the control of the department. The noble Baroness made the point that it is in the control of Her Majesty’s Revenue and Customs. She said:
“The VOA has acknowledged, in response to the Treasury Select Committee, that there were serious failures of communication, particularly with the occupiers, and by implication that too much reliance was placed on information being provided by the port operators. Andrew Hudson, head of the VOA, indicated to the Select Committee:
‘With the benefit of hindsight we have learned a lesson and please God this does not come up again’”.—[Official Report, 18/3/09; col. 300.]
It is too late for hundreds of jobs that have already gone in our ports and for the many businesses facing hundreds of thousands of pounds of backdated claims. But Andrew Hudson is saying that,
“with the benefit of hindsight”,
it will not happen again. Why should it have happened at all? In 2005, a business believed that it was not liable, but found out that it has liability only by accident in 2008 as a result of a court case. Then the sums, which were incorrectly calculated leading to an incorrect assessment, are backdated and the business is required to pay a significant sum—estimated at £200 million.
In our mailbags, we have received responses from the portside operators. It is not me who is making these protests. These statements come from businesses which are at the sharp end and are in very difficult situations. I received a letter from Barry Holt, director of TTS Shipping, who noted that the House voted against the amendment placed before it. He also noted his great affection for his business and the livelihood of his staff. He said that he uses 42 stevedores in Hull who rely on his business and that he employs hundreds of hauliers and contractors on a subcontract basis. He believes that as many as 250 members of staff may now be faced with a backdated claim, which may run into hundreds of thousands of pounds.
I turn now to TransAtlantic, which wrote to the noble Lord, Lord Mandelson, about this. It wrote to say that,
“TransAtlantic is now facing rates bills in excess of £1.1m on the properties that we occupy in statutory docks and harbours in the United Kingdom”.
This is something which has had a very significant effect, as was picked up by the Daily Telegraph. It has reported that many people, including the Liverpool Chamber of Commerce, have written en bloc to express their concern about the real impact on Mersey Docks. They have an action group—Mersey Docks Rating Group—which is campaigning about the effect that this is having. Most worrying of all are the many representations from overseas operators who are now making representations to the Government to say, “Listen—we are just going to take our business elsewhere”.
The Government may or may not realise—I am sure that they do—that actually shipping is the most mobile of all businesses. They can take their business across to Rotterdam very easily, and they are doing that: there is evidence that that is happening. There were threats that it might happen by DFDS, P&O and other organisations. This is a very serious situation. Sitos has made the following representations:
“The unloading of the ships in Hull is undertaken by Global Shipping Services Ltd at an extremely competitive price to us. As Global have received backdated demands of £1.9m, we fully expect to see a sharp increase in costs to us as they struggle to meet these payments. This in turn we would attempt to pass back to”,
clients and customers, thereby making it uncompetitive.
The scale of this problem is very significant, and very real, as is the anger which is going to be felt because this amendment—which was passed by a majority of 60 in this House, and which is trying to save real jobs—is being stopped from being debated further in this House because of a technical measure. There are other people who wish to make similar points on this, but I do think it is a shameful way for the Government to treat this House, when the House has considered this issue extremely carefully and arrived at a considered view in respect of these hard-pressed businesses.
The Government should have some guts: if they actually feel that they have the case on their side, they should allow the amendment to go ahead, and for the opinion of the House to be tested again. The fact that they have not got the stomach for that, despite admitting that they were in the wrong, and hearing and acknowledging the siren cries coming from ports around this country about the impact on real jobs, shows a cowardly streak in this Government—one which is deeply offensive and will not be forgotten. Our only hope now is to place this whole case at the mercy of the noble Lord, Lord Mandelson, in the hope that he can exercise some judgment, and intervene on behalf of port-side businesses in this case.
My Lords, my noble friend has made an extremely powerful speech on the merits of the issue we are discussing. As he has said, the reason why we are deprived of the opportunity to reinforce the vote, which we had at an earlier stage, to pass the amendment, is that the Commons has pleaded financial privilege. I took the same point as my noble friend did when he read the words, “because it would affect the levy of local revenue”. He said that it really is no more than “could have”. It is as weak as that. But I am advised that the final words of the reason,
“the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient”,
are the traditional words of a House of Commons determined to assert its financial privilege.
The House will not be surprised that I shall touch once again on the issue of financial privilege being claimed by another place. I am delighted to see the Leader of the House in her place. I hasten to say that she is not here to listen to me because she has other business, but I am pleased to see her here. I hope that noble Lords will forgive me if I return for a moment to the previous instance where a claim for privilege on behalf of another place was hotly criticised in this House, or at least to the extent that the rules allow. I should like to bring us up to date on what has happened since then.
I refer of course to what was Part 11 of what is now the Planning Act 2008, which introduced the community infrastructure levy. The Bill provided that only another place should approve the regulations, of which there will be a great many. I do not intend to recapitulate the whole sad history, but the issue came to a head at the Report stage of the Bill in this House when an amendment to provide that both Houses should approve the regulations was defeated by six votes. I moved an amendment at Third Reading which recognised that while we could not oppose the vote by the House on Report, the House should at least have a say. The amendment was carried by three votes, but another place rejected even that modest request.
The significance lay in what was said during the debate in this House on 25 November 2008. I should like to draw the attention of noble Lords to one or two quotations. My noble friend Lord Strathclyde said that:
“Parliament should not accept the use of the privilege amendment in cases of doubt simply to stifle debate”.
He went on to say:
“I ask the noble Baroness”—
he was referring to the Leader of the House—
“to consider this matter carefully with her colleagues in another place, with Members of this House and perhaps with the Clerk of the Parliaments and his opposite number in another place to see how this issue can be resolved”.
The noble Lord, Lord Goodhart, who was working with me on the amendment and who at the time was the chairman of the Delegated Powers and Regulatory Reform Committee of this House, said:
“Whatever the outcome of this debate, however, I believe that today should not be the end of the matter. We are facing a constitutional issue of some real importance and I believe that your Lordships’ House should consider the problems which arise from this Bill”.
He then went on to mention the Counter-Terrorism Bill, where exactly the same point had been made: a Lords amendment returned because it was claimed to be subject to financial privilege. The noble Lord, Lord Howarth of Newport, whom I am delighted to see in his place, also made a powerful speech, but he cited the noble Lord, Lord Filkin, the chairman of the Merits Committee of this House, as saying that he,
“notes that we see very many statutory instruments which impose fees and charges which have never hitherto been seen as outside the purview of this House and the Merits Committee”.
Coming from such a source, that was a powerful argument. The noble Baroness, Lady Hollis of Heigham, was extremely disturbed and said:
“I find this the beginning of an extraordinarily slippery slope and I am profoundly worried. I hope that my noble friend the Leader of the House can find a way through this”.
The noble Baroness, Lady Andrews, who was in her place a few moments ago, had a very uncomfortable time trying to defend what had been put in front of her, but she did so by saying:
“They raise issues that go far beyond the Bill’s narrow limits in the precedents they raise”.
When I wound up the debate, I said:
“We have established that these wider constitutional concerns are felt in all parts of the House and, as my noble friend Lord Strathclyde said, this issue cannot be allowed to rest. This is unfinished business”. Official Report, 25/11/08; cols. 1359-67]
So it is, and that is why I have come back to the issue today.
The noble Baroness the Leader of the House was kind enough to write to me the next day in her own hand, and I have her permission to quote from her letter:
“I recognise, of course”—
she said on 26 November—
“the importance of yesterday’s debates in terms of the wider questions of ‘respective rights, rules and privileges of the two Houses’”.
Those were my words in the debate.
“I will give careful consideration as to how best we can pursue the matters raised”.
She was as good as her word. Early in the following Session, on 14 January, she invited me to meet her to discuss the issues. I made a careful, short note of the meeting, in which I reported:
“The leader made it clear that she is very well aware of the seriousness of the issues surrounding the Commons claims of financial privilege and also of the strength of feeling in all parts of the House following the debates on Part 11 of the Planning Bill last Session. She intends to have discussions with a number of concerned Peers and others in the House before approaching her colleagues in Government. This will include, among others the chairman of the Merits Committee … She sees her task now to seek to avoid, so far as possible, similar conflicts in future legislation and believes it may make sense to involve, as well as her colleagues in Government, others such as parliamentary counsel. The aim would be to identify, and if possible, head off potential problems at an early stage as possible”.
I hope I have recorded accurately the sentiments which the noble Baroness expressed to me on that occasion. The next month, on 10 February, she issued a memorandum to the House and attached to it a paper from the Clerk of the Parliaments setting out the history, the scope, the practice and the procedures affecting claims of financial privilege. Significantly, that paper had attached to it a table of figures which I certainly found very interesting. They were the figures of where privilege had been claimed, or might have been claimed. It is arranged in two columns. It runs from 2000-01 to 2007-08. The two columns are: “Number of Lords’ Amendments agreed to by the House of Commons where financial privilege was waived” and “Number of Lords’ Amendments rejected and a financial privilege reason was sent to the Lords”.
The number of amendments that were waived was nearly 300, actually 293; the number where the Commons insisted on it was only 42. The overwhelming number of Lords amendments potentially involving privilege had actually been waived by the Commons. I will come back to that in a moment.
I saw the noble Baroness the same day. She was kind enough to give me advance notice. I quote again from a note:
“She explained that she has raised the issue with Members of the Government and with First Parliamentary Counsel. In future he will draw his colleagues’ attention to the matter so that they are aware of it from the outset … She explained that she is now trying at all times to pre-empt cases where there might be a possible questionable use of financial privilege”.
I suggested to the noble Baroness that perhaps a good starting point for this would be the Cabinet Office’s Guide to Making Legislation. This is a very substantial document indeed. I may be wrong, but I got the impression that the noble Baroness perhaps had not seen it before. It is a detailed compendium of instructions and advice to departments planning legislation. Curious enough, in its 150 pages—I counted them this morning—there is no mention of Commons financial privilege. It is not an issue which the Cabinet Office has thought necessary to draw to the attention of departments. However, the noble Baroness was kind enough to say that she would take this matter up, and my question for the Minister who is replying to this debate is whether the guide has now been amended to reflect the issue of Commons financial privilege. I gave notice of that question this morning.
The case before us has been admirably and forcefully stated by my noble friend. The issue has arisen over the amendment to the BRS Bill. It was not part of the Bill when it was first introduced and, therefore, the pre-emptive strike which the Leader of the House would perhaps otherwise have been able to make could not arise. The issue, as my noble friend explained, is the retrospective application of the business rates legislation to ports operators all over the country. I endorse what he said: I have had a lot of letters, too, from ports around the country expressing their huge disquiet. The amendment was simply to make it clear that the regulations to be made under the Bill,
“may not impose … retrospective liability to pay a BRS without error or default on the part of a ratepayer”.
I, too, have read the debate in the other place. It was significant for the number of government supporters, some of them of considerable standing and experience, who expressed themselves forcefully to be against the Government’s position. They were the honourable Members for Great Grimsby, for Cleethorpes, for Brigg and Goole and for Birkenhead—Frank Field—yet the Lords amendment was rejected on a whipped vote. The Commons have given us their reason that it,
“would affect the levy of local revenue”.
However, this whole Bill concerns the raising of local revenue by local authorities, so why is it regarded as beyond the scope of this House to debate and vote on a particular amendment that deals with a particular hardship? I shall not repeat what my noble friend said. It seems to be completely absurd, so I have two further questions, of which I have again given notice so that the Minister will have them.
Why was this not amenable to the waiver procedure? The noble Lord, Lord Filkin, whose words I quoted a moment ago from the speech of the noble Lord, Lord Howarth, said that the Merits Committee is always dealing with all sorts of subsidiary legislation which raises charges of various kinds. Given that on the vast majority of potential privilege cases another place has waived the privilege, why could it not do it in this case? Was it because, as my noble friend Lord Strathclyde said, it wanted to dodge an uncomfortable debate and vote?
On my second question, I believe that it has been suggested that the other place, even when it is determined to plead financial privilege, might also give the reasons why it cannot accept the Lords amendment—not just the technical reasons such as it affecting the levy of local revenue or on account of it imposing a charge on public funds but why the substance of it is unacceptable. If it did that, there might be grounds for it to be debated in this House. As it is, we have no option under the conventions but to yield to the Commons plea of financial privilege. It has aroused enormous anger among those to whom I have had to write back to say, “I’m sorry. We can’t vote again. The conventions do not allow us to vote again”.
I am sure that I am not alone in finding this an extremely unsatisfactory procedure.
My Lords, I look forward to hearing the Minister’s reply. I add my plea that he and my noble friend the Leader of the House think seriously and urgently about the issues that have been so cogently described by the noble Lord, Lord Jenkin, to whom everyone in this House owes a debt of gratitude for his vigilance in these matters. We must be concerned about the propensity of the other place—indeed, it is of the Government rather than the other place as whole, because I think that most Members of Parliament are unaware of what they have been doing in this regard—to extend the scope of assertion of privilege. I am unhappy, for my part, to see the rights and responsibilities of this House salami-sliced in fits of inadvertence. I hope very much that my noble friend the Leader will resume her excellent campaign to protect the interests of this House.
My Lords, I should declare an interest as an accountant and as a director of businesses paying business rates. I have also been a councillor for 10 years. I was not going to speak to this Motion, but I am afraid that I simply cannot resist.
The Government’s position seems to defy all logic in three areas. First, when the Climate Change Bill was going through this House, we debated at length whether to include aviation and shipping within the reduction targets in the Bill. It was decided not to, because of the international nature of the businesses and because it was thought that an international solution was needed. What was agreed, on all sides of the House, was that the carbon footprint from shipping was considerably less than that from aviation. So it is amazing that the Government’s policy is to have their foot hard down on expanding aviation, at Heathrow and Stansted, and, with this policy, to drive a nail into the coffin of the ports businesses. Surely the logic should be to nurture shipping and its associated businesses, so that, when we come out of this recession, we have a healthy import and export shipping industry poised to take advantage of the upturn. But no, the Government seem hell-bent on doing the very opposite. I am sorry that the noble Lord, Lord Hunt, is not in his place, because he would be grappling with his conscience over this extraordinary government policy.
The second piece of government logic that I want to question is that, despite the Government’s stated policy of supporting businesses and jobs in this time of deep depression, here we have a policy that does the very opposite. The public are getting fed up with the Government saying what they think the public want to hear but then either doing nothing or, as in this case, doing the very opposite. The public are seeing through this and are now browned off, not believing a word that the Government say any more. Surely it is time that the Government put their money—or, rather, our money—where their mouth is. I am sorry that the noble Lord, Lord Mandelson, is not in his seat, because even he might have difficulty squaring this circle. This policy makes a complete mockery of his claims to be helping businesses and saving jobs.
Thirdly, the Government say that they want to win the forthcoming election. Logic would say that they would want to nurture their Labour heartlands, so it is surprising that, with this policy, they are doing the very opposite. It will be interesting to see how those with businesses and jobs in and around the ports, the traditional Labour heartlands, will react to this government policy come the general election. My noble friend Lord Bates talked about the anger out there on this issue. Maybe, since I am speaking from this side of the Chamber, I should be pleased that the Government are pressing their own self-destruct button, but surely this is too great a price to pay. The Government are hell-bent on driving a nail not only into the coffin of the ports businesses but also into their own.
I feel sorry for the Minister, who must defend this extraordinarily illogical policy in a few minutes. Perhaps he will hold up his hand and say, “Sorry, we’ve got this wrong—we will look at it again”, but the Government seem pathologically incapable of ever admitting that they are wrong, so I will not hold my breath. They seem to be acutely embarrassed by all the bad publicity that the policy is getting and, to stifle any further debate at Westminster, as my noble friend Lord Jenkin said, they have now at the 11th hour invoked the privilege amendment procedure so that there is no possibility that the amendment can return to the other place to be further debated, thus prolonging their agony. Is it not ironic that it takes a Conservative amendment, tabled by my noble friend Lord Bates, to try to save jobs in the docks, with the Labour Party in the other place voting against it? What a sorry state of affairs.
My Lords, I agree with everything that my noble friend Lord Cathcart has just said, except in one very narrow instance. He said that we should feel sorry for a Minister, but that flies in the face of proper practice. One should never feel sorry for Ministers under any circumstance. I am not at all sorry that I heard my noble friend’s speech, or the extremely forceful speech of my noble friend Lord Jenkin of Roding, who set out all the arguments that we need to have in front of us.
In a few moments we are about to hear a Statement from another place bringing forward proposals for constitutional reform of your Lordships’ House. There is no mention anywhere in the Statement, a copy of which has fallen into my hands, of reform of another place and its procedures. I see my noble friend Lord Bates nodding, which is a very great accolade—and I thank him for it. If there was ever a case for reform of the other place happening first, so that procedures are properly treated and your Lordships’ House is treated with respect, this is it. I entirely agree with the noble Lord, Lord Howarth, that the Leader of the House has been splendid in what she has tried to do to protect our liberties. I am very pleased that she is in her place. It is up to her now to try to put this right.
My Lords, I associate the Liberal Democrat Benches with pretty well all that has been said thus far in this short debate. The only point on which I would disagree is the description by the noble Earl, Lord Cathcart, of the ports as “Labour heartlands”. I am not at all sure that the people of Liverpool, Bristol, Hull or Newcastle would recognise that description any more—but that is a detail.
All the points have been made fully and well. I have no need to make them again and could not do so as well as the noble Lords, Lord Bates and Lord Jenkin, have done, on the use of the privilege on this occasion or the substantive issue that brought about this situation. Like other noble Lords, I, too, have had innumerable representations from various ports. Many have been cited and it probably does not add much to the debate to quote more, but in one instance in Liverpool a company that has already gone into administration faces a backdated demand in the region of £1.1 million, with the consequence of 27 job losses for that company. As I think the noble Lord, Lord Bates, said, the Liverpool Chamber of Commerce described in some detail the desperate efforts of an accountant trying to find some justifiable reason for not qualifying the accounts of the company whose statutory accounts he was trying to prepare, because of the backdated liability. Sadly, it is not reported whether he was successful.
These are not things that might be going to happen or the usual worst-case scenarios that we all plead in aid from time to time. They are actually happening now. I join noble Lords who have spoken already, regretting—though they spoke perhaps in anger rather than regret—that we are not further able to debate these issues or express a view on them today. However, this is not the end of the matter; I am sure that in other ways and at other times we will return to the issue and will look to the Government to find a more satisfactory solution than has been found thus far. In the mean time, I associate these Benches with what has been said. Whether I feel sympathy for the Minister, who is the latest in the long line of people trying to defend the indefensible on this issue, is not relevant. I await his latest attempt in trying to defend the indefensible.
My Lords, two issues arise in respect of these amendments. One is financial privilege and the other is the ports and what happened in the review of how rating impacted on them. So far as concerns financial privilege, noble Lords will be well aware that this is a matter for the House authorities and not the Government. Page 919 of Erskine May Parliamentary Practice, 23rd edition, states:
“The Commons have long included not only bills dealing with public expenditure and revenue but also Bills which deal with local revenues or charges as matters to which their privilege extends”.
That was in place long before this Government came into being. In answer to the noble Lord, Lord Jenkin, I say that financial privilege is a matter for the House of Commons. That is why the Cabinet Office does not provide detailed guidance on it for government departments.
My Lords, is the noble Lord saying that there has been no change to the Cabinet Office guidance because it is a matter for the House of Commons? The whole of that guidance is about people who are going to introduce Bills into the House of Commons. I cannot understand his argument.
My Lords, I was going to go on to say about the guidance that I am not aware that particular changes have been made in this regard, but what I can say to the noble Lord is that it is open for representations on issues and that is where he may wish to pursue his inquiries.
I was about to say that the advice of the House authorities is that all the amendments that were considered in respect of the latest round of debates were considered to be an infringement of privilege. The issue about the ports has been debated in your Lordships’ House—and certainly in the other place—on more than one occasion. Therefore, this is not about stifling debate. Is it shameful to adopt this because this place has expressed a view on it? The reality is that the other place has expressed a view on this as well and has not agreed with your Lordships’ House. It has a view on this as well.
Let me get to the heart of the matter. This is why I find this whole debate so bizarre. I can understand noble Lords opposite wanting to keep the issue of the ports alive to try to embarrass the Government. I noticed that the noble Earl, Lord Cathcart, was trying to come to the aid of the Government, or so he expressed it. He said that he was not prepared to speak, but he seemed to have a script in front of him when he was giving us the benefit of his views.
Let me be clear. If the amendments passed at this end had been accepted by the Government, they would not have impacted one little bit on the ports issue. The amendments deal with the impact of the business rate supplement. The business rate supplement cannot possibly come in until April of next year. It would have no impact on what happened to the ports in that review in 2006 and 2008 and the adjustments that were made in 2005. To try to use this as a mechanism to open up debates around the ports is entirely outwith how we should be approaching these matters.
As to “would” or “could”, the amendments in the Bill in effect impacted on how the rating list and adjustments to it would come about. Anybody who knows anything about the rating system knows that there will be changed situations between one revaluation and another. A property may have been extended, which could impact on its rateable value. If that happens, there is currently no formal reporting requirement on the person who generated that extension, but these things are reviewed by the valuation office. To say that you could not adjust the valuation list if there were no default on the part of the occupier or the person subject to liability would fundamentally change how the valuation list is maintained. Many of these adjustments are inevitably retrospective. When the valuation office comes around to doing its work and identifies that there has been a change, that leads to an adjustment to the valuation list.
That is a general point. There is a separate debate on the issue of the ports but that is not before us today. That issue is not impacted on by these amendments; it is not impacted on by this Bill. The Bill focuses on the business rate supplement, which does not come in until April of next year at the earliest. Apart from the GLA and the Crossrail levy, I understand that nobody as yet said that they are proposing to introduce a business rate supplement.
It is entirely false to have another go at the issue of the ports on the basis that we are perpetrating a great injustice by not accepting these amendments. Had these amendments been accepted, they would not have changed the position one little bit in respect of the ports. Noble Lords may feel that the action that the Government have taken, particularly in relation to the eight-year repayment period for those liabilities, is not what they would like to see. I am always happy to talk to my noble friend Lord Mandelson to make sure that he is acquainted with these issues. However, that is a separate issue from the Bill.
My Lords, is that an undertaking from the government Bench—given that the noble Lord, Lord Mandelson, is now in his place—that the Government will be willing to engage in a cross-party discussion chaired by the noble Lord, Lord Mandelson, to see what can be done to save jobs and British ports?
No, my Lords, the noble Lord cannot take that from what I said. I said that I would bring it to the attention of my noble friend. The noble Lord says that this Government should be about supporting jobs and business. That is exactly what we have been about as a Government, sometimes in the face of opposition from the party opposite. We are not going to take any lessons on that issue. There is a whole irrelevancy about the impact of these amendments on the issue of the ports. It is about time that we were very clear about that.
I accept and note that there are concerns generally about how financial privilege is operated. I agree with the noble Lord, Lord Patten, that my noble friend Lady Royall has been assiduous in trying to support and protect Members’ interests. I am sure that she will continue to do that.
I have dealt with the issues. There are separate issues around financial privilege. The issues around the ports have become conflated with these amendments, which, frankly, they should not be. These amendments are to do with the BRS. The BRS could not, and would not, operate back to 2006; it will not operate until 2010. If I have not done justice to noble Lords who spoke, I am very happy to try again, but I hope that noble Lords will accept that it is a matter for the House authorities to determine financial privilege. However, there is nothing that I have heard or read that suggests that there was anything inappropriate in that determination. We have not sought to stifle debate around the ports issue; there has been plenty of debate on it. These amendments have nothing to do with that issue anyway.
Building Britain's Future
My Lords, with the leave of the House, I will repeat a Statement made in another place by my right honourable friend the Prime Minister. The Statement is as follows.
“With permission, Mr Speaker, I should like to make a Statement on the draft legislative programme—our plans to build a stronger, fairer and more prosperous Britain.
In the last year we have taken action to prevent a collapse of banks, protect homeowners against recession and maintain vital investments in public services at the time people need them most. Now as we seek to move our economy out of recession we are setting out the steps we are proposing to support growth and jobs in the economy.
In the last two recessions tens of thousands of young people were written off to become a generation lost to work—a mistake this Government will not repeat. And so today we are announcing new measures—to be paid for from the spending allocations made in the Budget and from switches of spending—to meet new priorities that include creating new growth, new jobs and new housing. Targeted investments to support jobs and strengthen growth are also the surest and fastest way to reduce deficits and debt in every country.
So my first announcement is about new jobs for young people. Starting from January, every young person under 25 who has been unemployed for a year will receive a guaranteed job, work experience or training place. In return—and I believe there will be public support for this—they will also from next spring have the obligation to accept that guaranteed offer. This is the first time that any Government have guaranteed that jobs and training will be available to young people and, crucially, have also made it mandatory for young people that, if there is a job available, to take this work up or have their benefits cut if they do not.
To underpin this guarantee, as part of the investments we announced in the Budget, £1 billion is being set aside for the Future Jobs Fund that will provide 100,000 jobs for young people, with another 50,000 in areas of high unemployment. From this September, we will realise our pledge to all school leavers that every 16 and 17 year-old will receive an offer of a school or college place or a training place or apprenticeship. And from this September we will also offer 20,000 new full-time community service places. This complements the help for adults who have been unemployed for six months—who will get access to skills training or a jobs subsidy, part of around £5 billion we set aside in the Budget and Pre-Budget Report for targeted support with jobs and training.
In total, through the action taken so far, and by rejecting the view that government should cut investment in a recession, we are preventing the loss of around 500,000 jobs. And our continued investment in giving immediate help through Jobcentre Plus to people made unemployed is already making a difference, with each month around 250,000 people moving off unemployment.
New jobs for the future will also come through making the necessary investments in low-carbon energy, digital technology, financial services, bioscience, advanced manufacturing and transport—the building blocks of the competitive economy of the future. So we will use the coming Queen's Speech to ensure the British economy is best placed to take up these opportunities.
First, the new energy Bill will enable us to support up to four commercial-scale carbon capture and storage demonstration plants for Britain. The Bill complements the £1.4 billion of public investment provided in the Budget and up to £4 billion now on offer from the EIB. In addition, following our reforms to the policy, planning and regulatory regimes, we will see between now and 2020, as we meet our renewable energy targets, around £100 billion invested by the private sector. These investments will make Britain a major global player in the low-carbon market, with another 400,000 green jobs by 2017, taking total British employment in the sector to well over a million.
Secondly, the digital economy Bill will help underpin our commitment to enable broadband for all by 2012, working towards a nationwide high-speed broadband network by 2016, with additional government investment unlocking new jobs and billions of extra investment from the private sector.
Thirdly, a new innovation fund will be announced today by the Science Minister—£150 million of public money which will over time lever in up to £1 billion of private sector investment in biotechnology, life sciences, low-carbon technologies and advanced manufacturing. Over the coming weeks the Transport Secretary will set out plans to advance the electrification of transport, cutting rail carbon emissions on newly electrified lines by around one-third. Lord Davies will lead a new drive to improve the country's infrastructure, and so increase the efficiency with which projects are taken forward, with the establishment of a new body, Infrastructure UK. Further, an asset sales board will work with the Shareholder Executive to achieve our £16 billion assets sales target—money that can be redirected to public investment.
These investments will strengthen our economy and create new jobs. And we believe investment by government and the private sector will enable the economy to create over the next five years 1.5 million new skilled jobs in Britain.
In every part of the country there is an urgent need for new social housing and for new affordable home ownership. So the Housing Minister is announcing that in the next two years—from the reallocation of funds—we will more than treble the extra investment in housing from the £600 million announced at the Budget to a total of £2.1 billion today, financing over the next 24 months a total of 110,000 energy-efficient, affordable homes to rent or buy, and in doing so creating an estimated 45,000 jobs in construction and related industries. By building new and additional homes we can now also reform social housing allocation, enabling local authorities to give more priority to local people whose names have been on waiting lists for far too long. We will consult on reforms to the council house finance system to allow local authorities to retain all the proceeds from their own council house sales and council rents. We want to see a bigger role and responsibility for local authorities to meet the housing needs of people in their areas.
We will continue to take forward the far-reaching reforms of financial supervision that we have embarked upon, domestically and globally, since the financial crisis hit in mid-2007. For those who argue that this crisis is falling off the agenda, let me make it clear: sorting out the irresponsibility and regulatory weaknesses that led to the crisis remains an urgent imperative and one that we will continue to prioritise both at home and abroad.
The financial services and business Bill will ensure better consumer protection, including a ban on unsolicited credit card cheques and, in addition, the FSA is taking action to ensure there can be no return to the old short-termist approach to executive pay in the banking sector. To help tackle tax avoidance, the Treasury has also published today a new tax code for banks.
Alongside our strategy for growth and jobs, we will introduce new legislation: for education, to address child poverty; and a policing, crime and private security Bill. In doing so we will create a new set of public service entitlements for parents, patients and citizens, securing for them more personal services tailored to their needs. For patients in the NHS this will mean enforceable entitlements to prompt treatment and high standards of care: a guarantee that no one who needs to see a cancer specialist waits more than two weeks; a guarantee of a free health check-up on the NHS for everyone over 40; and a guarantee that no one waits more than 18 weeks for hospital treatment.
The Health Secretary will bring forward, later this year, proposals to further focus the NHS towards prevention and the earliest intervention; to extend the choices for people to have treatment and care at times that suit them and, whenever possible, in their own homes; to reform and improve maternity and early years’ services; and we will shortly consult on far-reaching proposals for how we need to modernise our health and social care systems so that our country can meet the challenge of an ageing society.
The second set of public service entitlements will be for all parents, with the guarantee of individually tailored education for their child as part of our far-reaching reform of our schools system. I want all our children to have opportunities that are available today only to those who can pay for them in private education. It is right that personal tutoring should be extended to all who need it, so there will be a new guarantee for parents of a personal tutor for every pupil at secondary school and catch-up tuition, including one-to-one, for those who need it. So that every school is a good school, and so that we meet the national challenge to eliminate underperforming schools by 2011, we will see the best head teachers working in more than one school as we radically expand trusts, academies and federations to increase the supply of good school places throughout the country.
The third set of new public service entitlements is the offer neighbourhood police teams can make to all citizens in every community. Already, since April last year, there are 3,600 teams in place, offering to every part of the country policing tailored to the community's needs. We will now go further, and guarantee local people more power to keep their neighbourhoods safe, including the rights to hold the police to account at monthly beat meetings; to have a say on CCTV and other crime prevention measures; and to vote on how offenders pay back to the community. Our policing, crime and private security Bill will give the police more time on the beat by changing and reducing the reporting requirements for police officers on stop-and-search forms. New rights to ensure that women are better protected against violence will take account of recommendations made in response to our violence against women and girls consultation, to be published this autumn.
We will also legislate to ensure protection for children, with a new and strengthened system of statutory age ratings for video games. Because British citizenship brings responsibilities as well as rights, we will now require newcomers to earn the right to stay, extending the points-based system to probationary citizenship. Very simply, the more you contribute to your community the greater your chance of becoming a citizen.
The Foreign Secretary will introduce legislation to prohibit the use, development, production, stockpiling and transfer of cluster munitions, bringing into British law the international agreement we led the way on signing last year.
Finally, building Britain’s future must clearly start here—in this Parliament—with our commitment to cleaning up politics and establishing a new and strong democratic and constitutional settlement to rebuild trust in politics. I can announce today on the House of Lords that we will legislate next Session to complete the process of removing the hereditary principle from the second Chamber and to provide for the disqualification of Members where there is reason to do so. We will set out proposals to complete Lords reform by bringing forward a draft Bill for a smaller and democratically constituted second Chamber.
There is a real choice for our country: creating jobs or doing nothing; driving growth forward or letting recession then take its course. We will not walk away from the British people in difficult times. I commend this Statement to the House”.
My Lords, that concludes the Statement.
My Lords, I thank the noble Baroness, the Leader of the House, for repeating this quite long Statement. I know that it is conventional on these occasions to say that it is an important Statement. It certainly has a very puffed-up and important title: “Building a Stronger, Fairer and More Prosperous Britain”. I am sure that I have heard that before somewhere but that may not be the case.
However, I am afraid that it is not an important Statement; it is a self-evidently dismal and desperate Statement. It is the last sad relaunch and the last hoorah of a dying and directionless Government. It is a mixture of old ideas that never were and new wheezes that never will be. There is nothing in it that restores our very bruised national pride as a result of recent failures or to help our hard-pressed Armed Forces in the difficult wars that they have been fighting, or anything on that side. The Government have so lost touch with reality that they are now coming to Parliament with a programme for a Session that they will never complete. You can spin as much as you like but you cannot spin out the 11 months before this Parliament ends.
Anyway, it is not the next 11 months that people are angry about, as they are, with their jobs going, their pensions in danger, their homes going and their hopes dying. That is not what is worrying people. It is the fruit of the past 11 years of mismanagement of the economy by the Prime Minister and his predecessor that has reduced our national finances to chaos and blighted prospects for the younger generation; it is the disastrous failed foreign policy that has so dismally set back our standing in the world to the point where it is embarrassing having to explain UK affairs at international conferences, as I have found recently on more than one occasion; and it is the never-ending stream of bossiness, silly targets—now, I understand, abandoned; it turns out that targets were not the thing after all—regulations and interference that have hit every part of our nation and weighed down on so many of the very sectors, such as policing, health and schools, that this Statement claims to want to help. This culture of short-termism, spin and broken promises has degraded the honourable calling of politics, as it used to be, and, frankly, made politicians little more than a laughing stock. This Government’s credibility is completely bust. To confirm that, just ask the Governor of the Bank of England. It is also tragic that our country has very nearly been brought to the point of going bust. It is not a new press launch that Britain needs; it is a new Government.
Of course, in this long Statement—it could hardly be otherwise—there are aspirations with which we agree: on the new low-carbon technology, although whether the methods for achieving it are right, I am not so sure; on smart meters; on the impartiality of the Civil Service; on more flexibility in housing; and on the cluster munitions ban, which is very good news. We on this side have been urging these ideas—in some cases, for years—and we welcome them. However, do not the Prime Minister and his advisers understand that what is wrong with this Government is not that the Prime Minister cannot pinch policy ideas—anyone can do that; we can all pull together a policy agenda—but that he and his Cabinet are so bad at basic administration, so inept at following through one-day headlines and so hopeless at seeing the glaring divide between the world as they think it should be and the world as it actually is that the Civil Service is demoralised, the administrative machine of this nation is stalling and people are getting really frightened at the uncertainty all around them.
We have just spent weeks in this House discussing the privatisation of Royal Mail. What has happened to that legislation? Please would the First Secretary of State tell us why he is not proceeding with this measure either in another place or here? We hear the usual argument about lack of parliamentary time, so if there is no time for that, how can there be time for this second-rate Statement of vacuitous quality.
The one person whom I do not want to criticise is the noble Baroness, who has a difficult job. She is a good and much respected servant of this House. Frankly, we may need her very much in the days to come with some of the nonsensical proposals that we hear on constitutional change. She knows that much of this Statement cannot be taken seriously. How can one take seriously a programme, announced by an Administration that in one breath say they will spend, spend until kingdom come, but who have not even the minimal sense of responsibility to come to the country with a comprehensive spending review, which is a concept that has been opposed or abolished to oblivion by the First Secretary of State? It is yet another menu without prices, of the sort that we have seen so often.
The public know perfectly well that you have to balance the budget in the end. They understand that there are bound to be public-spending reductions to bring the books back in balance, whoever holds power or office. The difference is not that one side will control spending while the other will let it rip, but that under Labour, thanks to failed statist policies, we will see a shrinking cake, with an economy continuing to stagnate, collapsing growth and blooming borrowing, and inevitably higher interest rates to clip off the green shoots all too soon. Under Labour the state will take more of less. We need a new Government in a new Parliament of freshly elected Members to carry matters forward with authority. This Parliament is now bereft of authority, which is obvious to everyone except the Government Front Bench. In the few months of life left to them, the Government cannot do much good, but they can do some damage. Putting off plans to tackle the deficit will do much damage.
As for constitutional change and renewal, political reform is one area where we truly risk rushing into dangerous errors, and where your Lordships’ House can play a vital role as a cooling Chamber. Incidentally, what has happened to that great constitutional matter of the Lisbon treaty? There is no mention of the mini-treaty to be tacked on to the Croatian accession treaty, to please the Irish, which is supposed to be coming along. We will not welcome it if it arrives on our watch.
Meanwhile, as my noble friend Lord Strathclyde said the other day, this House should just not accept that if a Government are in trouble in another place they should have a go at your Lordships’ House as a substitute for their own repair. I agree with the comments of Professor Vernon Bogdanor, a notable constitutionalist whose new book is reviewed in today’s FT. He said that there was no logic in proposing constitutional reform to deal with expenses fiddles. I agree, too, with the noble Lord, Lord Rees-Mogg, in today’s Times. There are great risks in reversing the liberties over our Executive, which were won in the Bill of Rights of 1689, by setting up unaccountable quangos to dictate to Parliament and by letting the courts into deciding not just pay and allowances—that is perfectly sensible—but the whole pattern of how MPs behave and what they may safely say in Parliament without it being used in evidence against them. That undermines the very foundations of our representative democracy. What MPs say is the business and privilege of voters and electors who sent them there, not of executive agencies, the courts and the state.
Legislate in haste, repent at leisure. The House should look with extreme care at some of the constitutional implications of what is about to come before us. The court of public opinion, to which Ministers are fond of appealing, would certainly not forgive us if we failed to do so. They would ask louder than ever what the House of Lords was supposed to be for. To rush through this Parliament deep constitutional change would be inappropriate at any time, but for a dying Government to try to ram it through just before this Parliament expires is completely unacceptable and improper.
I say again that we need a newly elected Parliament of men and women with a fresh mandate to grapple with such great matters. Overall the Statement brings once more the familiar flood of mindless tinkering and overhasty political change that is the hallmark of this Government and their so-called strategists. There is a tide in political affairs, as William Shakespeare and, for that matter, Jim Callaghan a former Labour Prime Minister, remarked. With this tide the Government are now being washed out and they should float away with some dignity before they do our nation any more great harm.
My Lords, it is a pleasure to see the noble Lord, Lord Barnett, in his place because I know that on an occasion such as this he is ready to ask a helpful question of the Government. I have no intention of being rude to the noble Baroness, Lady Royall. Up to almost 30 seconds ago the author of the Statement was listening carefully. Today’s Financial Times, which is authoritative because it has an interview with the noble Lord, Lord Mandelson, so he must have checked over what Mr George Parker was going to write, states that,
“Lord Mandelson delayed publication of the document, complaining that it was lacking in policy and devoid of political ‘narrative’”.
He has not achieved much by delay. There is another interesting quote in the same article from an unnamed government official, saying:
“There is a fixation on producing endless policy documents—a total lack of interest in delivery”.
That is the real problem. These tactics have been used before. Those with long memories remember the Government’s annual reports: great glossy things with lots of pictures. They quietly died. Then I heard, which shows how successful the Government are, a journalist on the radio the other day saying that the Government would be publishing the traditional early look at the Queen’s Speech. That tradition is about two years old. It is all part of the same thing: the Government believe that they have two bites at the cherry: one in the summer and another in the autumn, giving an idea of dynamism and action. The problem was that last year, by the time the autumn came, most of the promises that had been made in the pre-Queen’s Speech in the summer had been jettisoned.
So it was with some degree of scepticism that I listened to the Statement. I agreed with a great deal of it, but it sounded like the manifesto for a party seeking office rather than one defending 12 years of its stewardship. For example, the commitment on social housing is entirely welcome. I say that as a vice-president of Shelter and I see another in the Chamber. The Government have one of the worst records on building social housing of any Government since the war: 3,000 council houses were built the year before last. It is deathbed repentance with a vengeance. The promise to allow councils to spend the money from council house sales was one of the big arguments in the 1980s and one of the issues on which we attacked the Tories most of all: that councils were not able to recycle the money into new council house building. But we get that in the 12th year of a Labour Government. As Harold Wilson once memorably said, where have you been, Rip van Winkle?
Let us have a look at climate change. My right honourable friend Nick Clegg said the other day that he went to one of the new North Sea wind farms and although he searched in vain he could not find a single piece of British-made equipment on the wind farm. It was all made in Denmark and Germany. If Denmark and Germany have managed to get ahead of the game in that kind of investment, where have we been? Why is it now to be put into such a commitment? We support rail electrification and we have the right man to do it in the noble Lord, Lord Adonis—
You want to look at his antecedents, my Lords. They are very interesting and noble Lords will understand where he gets all his good ideas from. However, the price tag comes into the question. As my honourable friend Vince Cable pointed out the other day, we are dealing with a Government with rising debts and falling revenues, yet here they are today signing blank cheques and spending money like there is no tomorrow. It is very dubious.
I feel strongly about youth unemployment. I saw a forecast by the Centre for Cities that stated that the number of young people who have been out of work for a year or more will almost treble by 2011. We will look at this commitment very carefully because one of the biggest dangers we face is a generation that is either unemployed under 25 or saddled with debt under 25. Coming from a generation that benefited greatly from state support, I think that is a bad legacy to give this generation in the 21st century.
On Lords reform—
The noble Lord, Lord Hoyle, makes a great horse laugh, my Lords. It is very sad that, in their dying months, a Labour Government suddenly commit themselves to something they should have done 12 years ago when they were not being outmanoeuvred by Lord Cranborne and Lord Weatherill. The truth is—and I say this with some sadness—that the Prime Minister is now the Archie Rice of politics. He is going through an old routine that the public have grown tired of.
When people made promises they could not keep, my old mentor Jim Callaghan liked to use a quote:
“I can call spirits from the vasty deep.”
“Why, so can I, or so can any man;
But will they come when you do call for them?”
We have had some pretty vast spirits summoned in this Statement, but there is great doubt about whether the Government have either the capacity or the time to deliver them.
My Lords, I shall start on the note on which the noble Lord ended: vast spirits. Now is the time for vast spirits. There is so much to do. We are in the middle of a global economic crisis. Most of the people out there would understand why it is important for the Government now to refocus on growth and jobs. That is precisely what this Statement does.
I entirely refute the words of the noble Lord, Lord Howell, that this is an unimportant Statement. It is hugely important, and most people out there who are worried about their housing, their jobs and the future of their children will understand its importance. As for his statement that people throughout the world are condemning what we are doing on the national stage, that is not the case, especially in relation to things such as climate change. Most people would understand that we are leading the charge on climate change. Together with our European colleagues, we are leading the charge before the important meeting at Copenhagen.
The noble Lord also discredited targets. Without targets, where would we be? We might well be in a situation where people were still waiting 18 months for an operation, not a maximum of 18 weeks. We might well be where people were dying of cancer because they had not seen their consultant within two weeks. This is what is happening now, and we are determined to ensure that people will be entitled to have operations within that time. That is the newness of this Statement. Targets have improved outcomes.
There are a huge number of new policies in the Statement. When noble Lords read it carefully, they will see this. I thank the noble Lord, Lord Howell, for his support for legislation on cluster munitions and housing—that will be extremely useful as the legislation comes through the House in the coming months.
We understand that people want real help now and that they want the Government to provide it. That is why they will welcome the Statement. The noble Lord asked about the Royal Mail. My noble friend Lord Mandelson said on the radio this morning that the Bill is jostling for space in the legislative programme, but we are committed to implementing the Hooper review.
The noble Lord took us to task, as did the noble Lord, Lord McNally, for spending money and investing, but we believe that it is of fundamental importance to invest now in people, jobs and infrastructure in order to get us out of the recession and ensure that we come out the other side as a nation capable of taking advantage of new opportunities. We were criticised for putting off dealing with the deficit, but tightening spending too early could prolong and even deepen the recession. To ensure sound and sustainable public finances in the medium term, once economic shocks have worked their way through the system, the budget plans will halve borrowing within five years.
On the subject of constitutional renewal, the noble Lord mentioned the need for a mini-treaty to ratify the protocol for Ireland. That will come once talks have progressed with Croatia and possibly with Iceland on membership of the European Union. That is what we are waiting for in relation to a treaty. The noble Lord asked what the other place was doing in terms of reform. I draw the attention of noble Lords to the Wright committee. I mentioned Iceland because there are talks about Iceland at present—I will come back to that in future.
As far as concerns a parliamentary standards authority, I was under the impression that there was a broad consensus that it was right to go ahead with a parliamentary standards authority now in order to put the other place on a new footing to deal with the financial problems that it has encountered over the past months. I hope that, given the views expressed today, the consensus is not falling apart. On the subject of House of Lords reform, I understand the scepticism expressed by the noble Lord, Lord McNally, but the forthcoming legislation will build on the cross-party consensus that all parties have agreed on. The Government intend to present their proposals for comprehensive reform shortly and will produce a draft Bill in the next few months, having consulted the other main parties.
The noble Lord, Lord McNally, criticised us because he felt that this was a manifesto. This is not a manifesto. It is entirely appropriate, following two unprecedented events—the global economic upheaval and the crisis of confidence in our parliamentary institutions—that the Government should set out new policies. We would deserve to be criticised if we did not do that. I am proud that we are still in government after 12 years and we intend to continue for much longer. I reflect that the Liberals have not been in power for some time.
The noble Lord asked about wind farms and what we were doing to ensure that British technology was used. I hope that the innovation fund mentioned in the Statement will provide public money to assist with wind power projects.
On the question of youth unemployment, of course we all fear for the employment prospects of our children and their peers. Again, that is precisely what the Statement does—it sets out our policies for ensuring that young people today do not suffer from the recession in the way that young people suffered in the past. With that, I look forward to further questions.
My Lords, I thank the noble Baroness for repeating the Statement and apologise for raising a parochial matter. Would it not be highly desirable to establish a retirement plan for the House of Lords before the next election so that numbers in the House might be kept within limits that would be acceptable to a wider public?
My Lords, I understand the attractions in principle of a retirement plan, which is sometimes bound up with statements about resignation and retirement. It would be fair to say that the Government are still reflecting on that, and we will come back with proposals in due course.
My Lords, will there not be a very warm welcome across the country for the energy and practicality with which the Government are addressing themselves to ensuring that there will be jobs for the people who have been hardest hit by the recession, promoting growth in what ought to be the lead sectors of our competitive economy in future and ensuring the provision of more social housing?
On the question of restoring trust in politics, does my noble friend share my view that one reason why many people have become somewhat jaundiced about politics at Westminster is that, for the best part of half a century, central government has interfered unduly with the structures and freedoms of local government? Should we not therefore welcome the enlargement proposed in the Statement of the role and responsibilities of local authorities to meet housing needs and the possibility that they may be allowed to retain the full proceeds of sales of council houses and rents? Is not the new policy of stating what citizens should be entitled to expect from local service deliverers, while allowing local service deliverers greater freedom to determine how they will provide those entitlements, a constructive move to balance fairness with local discretion? Will it not help to renew the culture of our local democracy and therefore our democratic culture as a whole?
My Lords, I agree with everything that my noble friend has said. In the coming days, there will be a White Paper on local democracy. I think that he will be very happy because many of the views that he has expressed are in the White Paper.
My Lords, bearing in mind that the Statement contains a number of important aspirations to improve the economic prospects of the under-25 generation—that is to some extent its thrust—why did the Government think it appropriate to add, in the 45th paragraph of a 46-paragraph Statement, the only substantive proposal for the reform of our system of parliamentary democracy, which is in deep trouble? I refer to the promise to publish a draft Bill containing proposals for a smaller and more democratic House of Lords. Is it imaginable that we shall say goodbye to the noble Lord, Lord Myners, who is sitting on the noble Baroness’s right; to the noble Lord, Lord Malloch-Brown, who has been a distinguished participant in the House; to the noble Lord, Lord Davies, who has just arrived in the House; and, perhaps most notably, to the noble Lord, Lord Mandelson? Does the noble Baroness expect these gentlemen to be elected to one or other House, and what will she do to ensure the quality of government?
My Lords, the quality of the Government is beyond doubt. It is hugely to our advantage that we have on these Benches people such as my noble friend Lord Myners. The proposals that we will bring forward are under discussion and we will consult on the issues.
My Lords, in the programme that the noble Baroness the Leader of the House has set out, she said that the Government will halve government borrowing in five years. Will the Government publish an annual profile of the projected reductions in government borrowing?
My Lords, I welcome the emphasis in the Statement on jobs. It is good that even in a time of recession the Government are putting forward policies to create new jobs, particularly in social housing. The increase in spending that is occurring in social housing and the fact that we will build 110,000 houses in the next two years is most welcome, as well as the fact that we will look for local people, many of whom have been languishing on the waiting lists for far too long, in order to give them priority.
I can understand that there should be no difficulty now as regards House reform because all the Opposition are in favour of reform and a democratically elected House. Perhaps I may give the Minister some advice: do not take too much notice of the doubting Thomases on the other side.
My Lords, I can assure the noble Lord that I will take into consideration the views of noble Lords on the other side, but I will not be dispirited in any way. When I talk to people in my village and in towns, jobs and housing are the issues about which people are concerned. They say, “Why aren’t you as a Government doing something about creating jobs for our young people and finding houses for the people who live around here”. That is precisely what we are doing. We are delivering the goods that the people want.
My Lords, I feel a little bit of an alien here today. There is building England’s future, but we have not heard a word about how resources and what additional resources are to be channelled to the devolved Parliaments of Scotland, Wales and Northern Ireland. How will they also be helped in the present circumstances?
My Lords, the grandiose nature of this Statement’s title must surely imply a strategic view of the future; but that is clearly impossible to assess unless we have costings of what is proposed. It is quite extraordinary that the Government should launch this Statement when we have been told—perhaps the noble Baroness will confirm whether it is true—that we are not to have a comprehensive spending review. Without that, we cannot assess the validity of what the Government propose. If we are not to have a comprehensive review, can we at least have the costs of the various items over, let us say, the next five years, which the noble Baroness has set out in the Statement today? Surely it cannot be the case even for this Government to produce what was in the Statement without the departments concerned having given any indication whatever of costs or how their claims will be balanced against the competing claims of other departments.
On the point raised by my noble friend on the Front Bench about the implications of the Government’s, I feel bound to say, panic reaction to the expenses scandal and so-called constitutional reform—I leave on one side the question of the House of Lords because my views on that are very well known—there is surely grave cause for concern about the constitutional implications of what the Government are now proposing in a Bill which apparently is to be rushed through both Houses. I hope that both Houses, but certainly this House, will make their positions clear on what would be nothing less than a constitutional revolution if what the Government now propose comes forward.
I understand that the Clerk of the House of Commons has given advice to the House of Commons on the implications of what the Government now propose. Will the noble Baroness say whether she will ask for similar or alternative advice, as the case may be, from the Clerk of the Parliaments before the Bill comes before this House?
My Lords, in relation to the budgetary aspects of the Statement, the comprehensive spending review is clearly a matter for the Chancellor. It should be remembered that we introduced the concept of a comprehensive spending review. Before that, it was much more difficult for people to plan, because they had only annual budgets. As the Chancellor has repeatedly said, given the degree of economic uncertainty, now would be the wrong time to set departmental budgets through to 2014. I should add that many of the proposals covered by today’s Statement have already been costed in the current budget from a reprioritisation of the budgets already announced.
I understand the concern expressed by the noble Lord about the legislation on the Parliamentary Standards Authority. There will be ample opportunity to debate the issues raised in this House. I am well aware of the letter from the Clerk of the Commons. Many of the issues that he has raised will be dealt with satisfactorily by the Government in the other place. I will certainly reflect on the noble Lord’s request that the Clerk of the Parliaments should be asked for his views before the Bill is debated in this House.
My Lords, I, too, welcome my noble friend’s emphasis in the Statement on housing, jobs, health and education. I think that the whole House would welcome the priorities that the Government have placed in those areas. On a more personal and focused level, the points on cluster munitions, on measures about violence against women and on climate change are very much to be applauded. But I, too, turn to the end of the Statement and the commitment to cleaning up and to rebuilding trust in politics. The only measures I hear about that are to do with removing the hereditary principle in the House of Lords.
I do not like the hereditary principle any more than other Members in my party, but perhaps my noble friend would reflect on this being prioritised in the way that it has. It was not hereditary Peers who became creative over their expenses, nor did they have inappropriate conversations with people purporting to come from companies dealing with public relations. We in this House dealt with those who had those inappropriate conversations. We dealt with them under my noble friend’s leadership very quickly and very decisively. Perhaps my noble friend will reflect on whether this really is the constitutional priority that we need in cleaning up politics.
My Lords, I understand the concern expressed by my noble friend about the fact that the only issue raised in the Statement in relation to cleaning up politics is reform of the House of Lords. I would have to agree with her that this House—not me as the Leader—has been exemplary in the way in which it has dealt with several problems which have arisen. We continue to do that in the way in which we have sent our expenses issue to the SSRB, and we have the Leader’s group and so on. I, too, muse on the fact that perhaps the House of Commons should reflect a little more closely about the reforms that are needed in the other place.
That notwithstanding, I also reflect that there is a need for this excellent House to have some democratic element. These issues have been widely addressed over a long period of time. There has been a consensual position reached by the Front Benches as a result of the work in the cross-party working group. It is time for the Government to move on these issues.
My Lords, does the Leader of the House agree that the point that the noble Lord, Lord Higgins, made on budgets would have been a lot more acceptable if the Tory party was prepared to indicate where it would make cuts or tax increases as and when, or if, it comes to power? Would she not also agree that the elephant in the room in this Statement is that everybody knows that, at some stage, nasty spending cuts and tax increases are on their way, whoever forms the next Government? It is all right for the noble Lord, Lord Myners, to shake his head in the way he has become accustomed to doing in this House, but sometimes we have to nod as well.
If one wants a list of things that the Government ought to be looking at and ought to be referring to in this Statement, how about the Trident replacement, how about the NHS IT scheme, how about ID cards, how about other databases like ContactPoint, how about baby bonds, and how about tax credits, many of which do not go to the worst off in our society?
My Lords, I am grateful to the noble Lord for reminding me about the lack of spending proposals from the Bench opposite. Indeed, we have been waiting for their proposals for some time. We have made our spending commitments clear until April 2011, and it is within that envelope that we are now working.
My Lords, it does not stop in 2011, but the reason we are not saying exactly what we are going to be spending in each department after 2011 is that we do not know what the economy is going to be like. We are living in a volatile, ever-changing situation, and it would be irresponsible for us to say exactly what money will be available after 2011.
I note the proposals for reprioritisation that the noble Lord has mentioned. Maybe some of those will be considered: I do not know. The fact of the matter is, however, that we are already reprioritising some budgets, and that is how we found the money to do these excellent things for young people and employment.
My Lords, will my noble friend confirm that history teaches us that the worst thing that any Government can do at times of peril for families, for children, for young people, for jobs and for homes, is to throw up their hands and say, “There is nothing we can do”?
I remind my noble friend that when I was a constituency MP, I asked a postman once how many giros he delivered through the doors of a big council estate adjacent to a pub where we were having a drink. He replied, “It’s easier to tell you how many I don’t”. I say to my noble friend that we should never forget those experiences, particularly in areas like mine in Castle Vale, which has 34 tower blocks and the highest unemployment in the West Midlands. It was transformed, mainly through the initial efforts of the noble Lord, Lord Heseltine. He took the view that one could not just leave things alone, because if they were left alone, they rotted. He set up six housing action trusts, and the Castle Vale Housing Action Trust is an exemplar of what can be done when private and public money are used to cut unemployment, to cut crime, to improve the schools, and to add five years to people’s life expectancy.
My Lords, my noble friend makes the case very well for investment now, to invest our way out of this recession and to invest in the people of this country, because their talents and lives must not be wasted as they were in previous recessions.
My Lords, when I looked through this document, I was reminded of the words of the Duke of Wellington who—when approached by a stranger who said, “Mr Jones, I believe”—replied, “If you believe that, you will believe anything”. I look at Annex C, which has got the key deliverables over the next year. There are 59 of them. I look at Annex D, which has the key deliverables over the following 10 years. There are only 42 of them. That is really past credibility, so would the noble Baroness, in order to help us, select just three of the key deliverables over the next year, which she regards as being of crucial importance?
My Lords, I share the concerns which have been expressed around the House about youth unemployment. However, I noticed that recent figures of the 16 to 18 year-olds not in education, employment or training have risen in the first three months of this year from 13.6 per cent to 15.6 per cent. In the light of that adverse trend, I wonder whether the noble Baroness could say how the Government can guarantee jobs, work experience or training places, and where these jobs are going to come from.
My Lords, I do not have exact facts and figures as to where the jobs will be coming from, but I did say during my briefing that if I am making statements that we are going to expect young people to have a job, education or training, we have to ensure that the jobs, education and training schemes are in place. I was assured that they will be.
The figures that the noble Baroness quoted were, I think, for 15 to 24 year-olds. I think there has been some misquoting of the unemployment levels in the press, because the press have given us to believe that we have the highest unemployment levels in the EU 27, but that is not the case. The UK might have the highest 15 to 24 year-old unemployment levels in the EU 27, but that is due to the population of 15 to 24 year-olds in the labour market. In February 2009, the UK unemployment rate for 15 to 24 year-olds was 17.6 per cent, which is the same rate as for the euro area and slightly under the rate for the EU 27. It is very important to make that point, because we are often criticised on it.
The one other thing I forgot to mention in key deliverables was all the things on health, which are of fundamental importance to the people of this country.
Apprenticeships, Skills, Children and Learning Bill
Committee (3rd Day)
Clause 39 : Employee support for employee study and training
79: Clause 39, page 17, line 37, at beginning insert “Where an employer does not have acceptable annual arrangements for discussing employees’ training needs in place through annual performance reviews or other arrangements,”
Amendment 79 would quite simply protect those businesses whose good practice in arranging time for their employees to train should give them the right to exemption from too much of the regulatory burden that has been created with recalcitrant businesses in mind. Indeed, much of this part of the Bill seems to make an assumption that businesses need to be bullied or forced into doing the Government’s bidding. The reality is that most employers know well—without the Government or anyone else having to tell them—that it is in their own best interests to ensure that their people are properly trained and equipped. The majority of them not only know this but actively pursue it.
The most recent data from the CBI education and skills survey show that 89 per cent of businesses have training and development plans. The vast majority of employers in this country are strongly committed to investing in skills, a fact that is reflected in the £39 billion per year invested by businesses in skills training. Many of these employers have existing arrangements for discussing employees’ training needs, be they at regular appraisals or, perhaps, at annual performance reviews, as both the IoD and the CBI have told us.
While we certainly are generally happy with the objectives of Clause 39, as my honourable friend Nick Gibb said in another place, the figure from the CBI of £39 billion spent on training, compared with the calculated benefits of this new right, which the impact assessment has put at between £200 and £400 million, shows that what is already being spent is up to 100 times greater than the anticipated benefit of the new right. I suggest that we should avoid creating a greater regulatory burden for those companies that are already more than fulfilling any reasonable expectation of them for training and skills. Where good practice does exist, there is no need for increased regulation. In such cases, training needs should be dealt with through existing programmes, negating the need for legislation. The CBI argues that this approach has worked well for flexible working. Six million people now have a legal right to flexible working; the number increases to 14 million if you count those who do so in practice. Can the Minister explain why this should not work in the case of training and skills? I beg to move.
We have quite a lot of sympathy with this amendment. However, on reading the debate on the same amendment in the other place, we recognise the importance placed by the Minister there on the need for employees to take some responsibility for their own training. He said that we were in a sense trying to change the mindset and behaviour of employees as well as employers. Certainly we are with the Conservative Party in feeling that good employer practices such as proper appraisal systems are important, but we are worried that young people aged between 16 and 18, having had an appraisal and entering into an agreement, may find that things change rapidly and that what they really need is another kind of training course. The wording of the amendment is inflexible in that, once a training programme has been agreed, everyone must stick to it. Employees would have no opportunity to say that they would like time off to do something else. We should look at all the reasons why something is not agreed. Therefore, while we have sympathy with the amendment, we do not go along wholly with it.
I agree totally with the noble Baroness. This amendment deals with a situation where the ideal arrangements are not in place, but I worry because a lot of the work being done to ensure that employers engage with apprenticeships takes place through union learning reps, whom I know the party opposite also favours. They should be part of the ongoing arrangements or audit of the report. In the absence of such arrangements, I suppose that Investors in People or another type of facility in the workplace might be able to help. However, the amendment is restrictive in that it closes things down rather than opens them up.
My issues on proposed new Part 6A go somewhat wider and, while I agree with the noble Baroness, Lady Sharp, that the amendment might not be exactly the right way to loosen up these provisions, they nevertheless need to be loosened and I want to make the argument for why the amendment moved by my noble friend on the Front Bench at least gets us started along the way.
New Part 6A is very detailed and prescriptive. We would all agree that there are difficult employers, if I can put it that way. If an employer is “difficult”, that is usually someone’s opinion of the case. Is the opinion to be that of the unmentioned sector skills councils, where presumably the problem would lie in not enough training being done or in its being done badly? There are many possible reasons for an employer to get into that situation. There may be financial problems; it might not have been a wise decision to take on new employees just starting out on their careers when the bank is saying, “We give you six months and no more”. The company might be in the process of being sold or taken over, the managers could be nearing retirement or there could be a major reorganisation under way. Indeed, I wonder how the Learning and Skills Council is getting on at present in terms of taking on new recruits. In that context, I point out that there have always been problems about who is doing sufficient or insufficient training, as well as who feeds into and who takes out of the pool. Over the time I have been involved in industry, we have always accepted the necessity for a trade-off between those companies that make more than the average contribution and those that, for good reason on occasion, do not.
Another worry that I have about this new part is that the psychology is wrong. While I can see the argument of the noble Baroness, Lady Sharp, that it puts responsibilities on to apprentices, I would be wary of loading too many on to them. That would go against the grain. In the process of putting duties and responsibilities on employers, quite a lot of this part assumes that there will be conflict and sets out the ways in which those conflicts can be solved. A lengthy list is set out in new Section 63F(7), on which we will debate amendments in due course, but do we really expect there to be a balanced and productive discussion between an employer and an apprentice on “planned structural changes” in the company, or indeed under paragraph (j) on,
“any other grounds specified by the Secretary of State in regulations”?
Over what I see as the positive and worthy efforts of both employers and apprentices is the brooding presence of the Secretary of State, who has the power to change the rules at any time, as well as that of the tribunals.
Much of this complex system is arguably unenforceable, at least against apprentices. For my part, I am happy that it would be unenforceable against them because there is no way that a responsible employer would seek to go to law or even look to a tribunal hearing against an apprentice. That is simply not a sensible way of spending time and money and, indeed, the level of emotional involvement might get completely out of hand.
I point out to the noble Viscount that my reading of this part of the Bill is that it applies not just to apprentices but to all employees. The Minister may correct me on this, but I think that this right is going to be introduced for all the employees of a company.
I apologise, because I have always been in the habit of talking about people being trained rather than apprentices, but on this occasion I have fallen into error in confining my remarks to apprentices. I accept fully that this would apply to all employees.
My third issue is that of regulations. These make 12 appearances, which is not bad in eight clauses. How many statutory instruments would they generate? I suggest that there might be eight of them with some consolidation. At around five pages each, they would come to up to some 50 pages. This mass of secondary legislation goes directly contrary to government policy. Where in all this is the Cabinet Office with its policy of less and better regulation, its policy towards reducing burdens and its regulatory reform programme? It takes a long time to see the regulatory reform of one statutory instrument, but here we are to have another eight, or even 12. This proposed new part needs to be thought through again because it is overly detailed and prescriptive and could turn out to be very costly in its regulatory impact. We need to support my noble friend’s amendment and so relieve good employers, and their good apprentices, from this nightmare entitled, “See you at the tribunal”.
We must invest in our nation’s talent to succeed in the highly competitive global economy. There is consensus in this Chamber on that point, which flows from the Leitch report. I was disappointed when the noble Lord, Lord De Mauley, said that we would be bullying employers, because nothing is further from the truth. Indeed, we applaud those employers who, as he rightly drew to our attention, invest significant sums of money in training. They do a very good job, whether it is for apprentices or for a whole range of other workers in their employment. However, they are not the group that we seek to impact on.
Despite the progress that we have made in the past decade, our nation’s skills base has not yet met our aspiration to be the best in the world. Too many adults struggle with low or out-of-date skills. Perhaps the most depressing statistic is that one-third of employers do not train their staff at all, which seems absolutely astonishing. Eight million employees in England go without training every year. We cannot allow that situation to continue. We have to change the culture and the attitude towards training, certainly with those employers and with some employees as well.
Successful employers see investing in the skills of their workforce as one of the most powerful things that they can do to drive their businesses forward. They know that it makes sense for the bottom line. They understand that those businesses that do not invest in training are 2.5 times more likely to fail in a recession. We are seeking to create a culture in which every employer takes that view and in which individuals see improving their skills as one of the most powerful things that they can do to help them to realise their career aspirations. It is not our view that we in any way need to bully, because there are so many employers doing the right thing; it is the ones that are not embarking on any training at all whom we need to influence. We are giving employees a right to a serious conversation with their employer about their skills development. That will help to encourage and support adults and young people to develop their skills and rise as far as their talent will take them.
Time to train goes with the grain of what the best employers are already doing. They are having serious conversations with their employees. It may be in an annual appraisal or in a separate discussion on training. This will help others to follow that example and support their employees to develop the skills that their business needs to prosper in the 21st century.
I want now to address some of the points that have been made. I agree with the noble Baroness, Lady Sharp, about the rights and responsibility approach. We hope that we are giving more rights to employees. This is a fairly cautious, but nevertheless important, step in that direction. Yes, it will require people to exercise those rights responsibly. We are trying to ensure that there is real flexibility. I endorse the point made by my noble friend Lady Wall in relation to union learning reps, who, as I think is universally acknowledged, play a terrific part in encouraging employees to develop their skills and in encouraging employers to focus on the importance of training.
I, too, was somewhat puzzled at the focus given by the noble Viscount, Lord Eccles, to apprenticeships. Apprentices are not the group that we have to worry about, as their training will be laid down. We do not believe that we have made this structurally unenforceable. I do not expect apprentices to have to go through that kind of debate. Neither do we believe that there is a mass of regulations that make this impossible to work. Indeed, we consulted on that matter and we are modelling this on flexible working in order to use a system with which employers and employees are familiar. Our current intention is to have only two or three sets of regulations.
Amendment 79 would prevent those employees whose employers have in place systems for considering training needs from being able to make a request for time to train. It would, as the noble Baroness, Lady Sharp, said, get rid of the flexibility that will exist. I appreciate the aims of this amendment—the need to recognise within the new statutory scheme what good employers are already doing to assess their employees’ skills and training needs and to reduce the burden on business. I assure the noble Lord, Lord De Mauley, that we do not want to increase the burdens on business. We are at one with him on that. We believe that those employers who are doing the sorts of things that he drew to our attention will not be faced with additional burdens.
However, we do not feel that the proposal put forward by the amendment is the right way to go about it. The amendment risks, by introducing an element of qualification, complicating the eligibility provisions and creating a landscape that is perhaps confusing. For example, it is not at all clear from this amendment what exactly “acceptable arrangements” are or how they would be judged. An employee would not know whether they could make a request unless they knew whether or not their employer’s systems were of the required standard. That could put off employees from making requests, including potentially a great many who are in greatest need of training.
Our preference, therefore, is to leave the right open to all employees who satisfy the basic eligibility criteria. They will be able to judge whether or not they need to use the right to gain access to training. As I said, it is our strong expectation that, where an employer has good systems in place, they will be unlikely to receive many, if any, requests under these provisions. They will already have had a serious discussion on training with their employees.
In Committee in another place, an alternative proposal was put forward to provide employers with an additional reason to refuse requests where they have already invested time and effort in considering their staff’s training needs and acted on meeting those needs where necessary. We said at the time that we could introduce such a reason via regulations using the power at new Section 63F(7)(j) if it was supported through consultation with stakeholders. However, our initial discussions have revealed mixed views and it is not clear whether it is actually needed.
None the less, in the light of the views expressed today, principally by the noble Lord, Lord De Mauley, I am happy to commit to the Committee that, after the new provisions have been in force for a year, we will carry out a review, in consultation with stakeholders, to examine whether there is sufficient evidence to support the need for such an additional reason of refusal to be provided. I emphasise that it is not our wish to create any unnecessary or additional burden. On this basis, I would be grateful if the noble Lord would consider withdrawing the amendment.
I thank the Minister for his remarks, which seemed in fact to include a rather better case for my amendment than I made myself. He seemed to say that two-thirds of employers provide very good and proper provision. The amendment would limit the effect of the clause to those employers who do not have acceptable arrangements in place.
I thank my noble friend Lord Eccles for his contribution and I am grateful to the noble Baroness, Lady Sharp, for expressing her sympathy with this amendment. My next amendment, Amendment 79A, will tackle some of the responsibilities of the employee—a matter that she raised. Like my noble friend, I worry about bureaucracy being piled on already compliant employers. I will read the words of my noble friend and of the noble Baronesses, Lady Sharp and Lady Wall, as well as of the Minister, and consider his helpful offer, to see whether I feel the need to return on Report with a better form of wording. In the mean time, I beg leave to withdraw the amendment.
Amendment 79 withdrawn.
79A: Clause 39, page 17, line 37, leave out “may make” and insert “wishing to make a request in relation to study or training must complete”
Our Amendment 79A is designed simply to seek assurances that the burden for filling out the form to make a request for time to train must fall with the employee, not the employer. The Bill states:
“The application must be made for the purpose of enabling the employee to undertake study or training (or both) within subsection (4)”.
This subsection, therefore, does not make it completely clear that the administrative burden of filling out the form must be considered to have fallen on the employee.
Surely if as an employee you are given this great right, the least that can be expected of you is to take responsibility for completing the application. We simply want to hear from the Minister that this would be the case. I beg to move.
Amendment 79A seeks to make it clear in the Bill that a qualifying employee wishing to make a request in relation to study or training under new Section 63D must complete an application. We do not think that it is necessary to make this change. I hope that the noble Lord, Lord De Mauley, will understand why when I make it clear that we have built in the safeguards and precautions that he rightly sought.
New Section 63D(1) establishes the right of qualifying employees to make an application, and subsection (3) requires that the application is made for the purpose of enabling the employee to undertake study or training. We define a key element of the policy, that requests have to be for training that will improve the employee’s effectiveness and improve business performance, at new Section 63D(4). New Section 63E then sets out in more detail what an employee must do to make an application—which lies at the heart of the noble Lord’s concern—including what information must be included in the application at new Section 63E(4).
If the principal concern behind the amendment is around how exactly an employee would make an application, I am happy to confirm that regulations made under the power at new Section 63E(5)(a) will make it clear that employees must make applications in writing. We have sent copies of the draft regulations to opposition spokespersons, Cross-Bench liaison Peers and noble Lords who have spoken in debates prior to today. I shall also place a copy of the regulations in the House Library.
We agree that it is important for employers that an application is made in a clear way, so that the consideration process is as simple as possible. I shall make sure that these concerns also are addressed in the guidance. I hope on this basis that the noble Lord will agree to withdraw the amendment.
I am grateful to the Minister, who is correct in his understanding of the effect of the amendment and for his confirmation that that is what is intended, but I simply do not understand why it cannot be placed at the beginning of the new section, where it will be most effective. For that reason, I should like to test the opinion of the Committee.
80: Clause 39, page 17, line 39, leave out from beginning to end of line 2 on page 18
I shall be brief. I would still like to make an argument for the loosening up of Part 6. On the question of who is doing enough training and who is not, there is an element of chicken and egg. It is easy to say that it is those employers who are not doing enough training who go under in this period of very rapid change, but it could of course be because they are going to go under and do not have a market position that is going to last for much longer that they find themselves in the difficult position of not being able to do enough training.
I should also like to come back to the regulations under Part 6. I am not sure how many there will be, but it is possible that there will be 12—that is the number of times that regulations are mentioned. Either there should be more in the Bill, so that there is less need for regulations, or some of the powers should be reconsidered and dropped. We already have a very rapid increase in the amount of law and much of it is achieved by the weight of secondary legislation. The Government should have another look and see if they really need all these regulations. If they decide they do not, I, for one, will be very pleased. I beg to move.
I give some support to the noble Viscount’s view that the number of references to regulations in this small section of the Bill is quite excessive. It gives the impression that you cannot do anything without reading a lengthy screed of regulations. I read it through with a young person who is working with me as an intern and we were both rather appalled by the degree to which the really very simple notion that an employee has the right to ask his employer if he might have time off for training—he has the right to ask, he does not necessarily have the right to take it—will become very complicated if he actually wants to do it. He will clearly have to have a special 63D form which he will have to fill in in the right way, and then there are all the complications about appeals, if he wants to appeal.
The other day in Committee, we had a very good debate about the report produced by the committee chaired by the noble Lord, Lord Filkin, on the burden of regulations on schools. This is not about schools, but, as was pointed out then, a lot of attention is given to regulatory reform in the private sector, but not enough in the public sector. This is largely a question of regulations on the private sector, but nevertheless, I have quite a lot of sympathy with the noble Viscount, because the number of regulations proposed seems excessive.
We support the right of employees to ask for time to train, but I share my noble friend’s concerns about the bureaucratic burden in this section. I was therefore delighted to hear the words of the noble Baroness, Lady Sharp, who made a similar comment. It is to be hoped that most requests would have a clear benefit for both the employer and the employee. There will, however, doubtless be occasions when this cannot be the case, so I look forward to the Minister’s response as to what should happen in these situations.
Amendment 81 would have the effect of allowing employees to request training other than that which would improve their effectiveness at work and the performance of their employer’s business. We kept this fairly tight, because we did not want to make too much of a burden. Amendments 80 and 82 would remove many of the requirements with which an application must comply in order to qualify under the new Section 63D, including the requirement for a Section 63D application to state that it is being made under that section. While we understand the desire of the noble Lord, Lord De Mauley, to reduce bureaucracy—we are with the noble Viscount, Lord Eccles, on that one—this would have the effect of allowing many general requests concerning training which would no longer be limited to improving their effectiveness at work and the performance of the employer’s business. It would allow these much more general requests to be captured and it would also risk employers being unclear whether the request had to be dealt with in accordance with the statutory procedure.
On Amendments 80 and 81, we want it to be very clear to employees that they can make requests under these provisions only for study or training which will improve their effectiveness or business performance. The close linking of this right with business-relevant skills was set out in our consultation paper and was strongly supported in the responses we received. We do not agree that it is right to remove this link to business-relevant skills and improving the performance of the company, as the amendment would do. I accept that requests could still be refused if they were considered not to increase the employee’s effectiveness at work or improve the performance of the employer’s business, as Section 63F(7)(a) enables refusal on this basis and would remain unaltered. However, the amendments would mean that employers would have the burden of considering a potentially significant number of requests under this process, which would not be likely to benefit their business.
I turn to the concerns expressed by the noble Viscount, Lord Eccles, which the noble Baroness, Lady Sharp, endorsed, about the burden of regulations. I make it clear that we do not need a separate set of regulations for each regulation-making power. It is common for one set of regulations—that is, statutory instruments—to be made using several different powers. That is why we think that only two or three sets for Clause 39 will be needed.
Our primary objective is to persuade or encourage those employers who currently do not engage with any training. They are our primary target. We made it clear in the consultation process that we were talking about business-relevant skills, which would improve the employee’s effectiveness or the performance of the employer’s business. We want it to be clear to employers which requests have to be dealt with under the statutory procedure and which do not. We wish to maintain the position that a Section 63D application must state that it is one. It is important to recognise that these provisions are not intended to, and do not, replace existing systems for considering training needs. When these are available, employees can, and, we strongly suspect, will, continue to use them. When good systems are not available, employees will, through this legislation, have a route to request and discuss their training needs with their employer. A request for training that will improve performance or benefit the performance of the company, if it were refused, would have to be justified.
I trust that, in the light of those comments, the noble Viscount will withdraw his amendment.
I thank the Minister for his reply and thank my noble friend and the noble Baroness, Lady Sharp, for joining in the debate. I should probably have done more to explain what my amendment would do. If it were passed, it would probably lead to a need to rewrite Part 6A, because I doubt that the wording of my amendment would stand up on its own.
The Minister’s last argument seemed to be exactly what we have been saying—that, to the maximum extent possible, employers who already have good systems with which their employees are content, which are positive and productive for both, should in some way be left loose enough not to be subjected to the full rigour of Part 6A. In that connection, I have looked at new Section 63D(8), which comes right in the middle of the clause and says:
“Nothing in this Part prevents an employee and an employer from making any other arrangements in relation to study or training”.
Is it right to interpret that to mean that it is entirely a matter for the employee to decide whether he or she starts the whole process? That is how Part 6A reads. Therefore, it might be helpful if we had the Minister’s assurance that employers and employees are entirely free to agree whatever they want to agree about additional study and training, without reference to this part.
I am grateful to the Minister for that assurance. It might be helpful if that provision was at the beginning of Part 6A, rather than where it is placed at present.
I accept that regulations can be consolidated, but each individual statutory instrument gets longer. I still feel strongly that there is too much power in the hands of the Secretary of State to change the rules of the game. New Section 63E(4)(c) gets down to the detail of saying,
“contain information of any other description specified by the Secretary of State in regulations”.
The thinking behind the powers of the Secretary of State to make regulations has been very loose on this occasion and needs to be tightened up. I may well feel that that is sufficient reason to come back to the subject on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment 80 withdrawn.
Amendments 81 and 82 not moved.
83: Clause 39, page 19, line 41, at end insert “which shall include at least a right to a first decision on the application and thereafter a right to appeal against that decision”
I shall speak also to Amendments 84 to 88. All these six amendments are probing amendments, dealing with different aspects of this issue of time off for study. Amendment 83 is about what happens if a request for time off for study is turned down and whether there is a right of appeal. New Section 63I allows the employee the right to complain to an employment tribunal if he thinks that the employer has not acted in accordance with regulations, but the Bill contains no provision to guarantee a right of appeal. The nearest thing that we get is in new Section 63I(3)(a), which implies that a decision may be referred to an appeal, but the language is obscure. The purpose of the amendment is to ask the Minister to tell us, in relatively plain English, precisely when an employee has the right to appeal an employer’s decision.
Amendments 84 and 85 seek to clarify new Section 63F(5) and (6). Subsection (5) says:
“The employer may refuse a section 63D application only if the employer thinks that one or more of the permissible grounds for refusal applies in relation to the application”.
It is what the employer thinks that is important here; subsections (5) and (6) refer to what the employer thinks. Amendments 84 and 85 seek to insert the word “reasonably” in relation to what the employer thinks.
We put the amendments forward in Committee in the other place, but we were not satisfied with the Minister’s arguments. First, the Minister argued that since the grounds on which employers may refuse a request are already very extensive, asking whether the employer has reasonable grounds to think that he or she meets the permissible grounds for refusal adds an extra dimension of uncertainty. Secondly, the Minister argued that these provisions are modelled on the provisions relating to requests for flexible working hours, which contain similar provisos and grounds for refusal but have no requirement for the employer to have reasonable grounds for thinking one way or another. The flexible working time rules have worked well. If an employer turns down a request he or she has to explain to the employee why they have done so, and, by doing so, inevitably has to set out the grounds for refusal. If those are based on incorrect facts, the employee has the right to challenge them. Nevertheless, that still leaves us with the fact that the right to request time off for training, like the request for flexible working time, remains a limited right. It is a right to request training but not to receive it.
We worry about those employers who do not value training. We know that they need to be nudged to do better and that they will be all too ready to raise problems in relation to meeting consumer demand or reorganising staff duties. As the grounds for refusal are already so wide we need the test of reasonableness. That is why we urge the Government to consider whether it should not be in the Bill.
Amendment 86 again raises the issue of what is reasonable. Here we are looking at the burden of additional costs the employer would have to meet if the employee were allowed time off for training. We propose that the employer should be asked to do a cost-benefit analysis before turning down a request on cost grounds and to show that the burden of additional costs would be greater than the value the firm would derive from the training the employee wants to undertake. Again this was debated in the other place. The Minister argued that it would inhibit the use of the additional costs argument unhelpfully because employers would use it only when they were able to show that additional costs were greater than any value gained from study, and that if that were the case that they could also call in aid new Section 63F(7)(a), that the proposed course of study would not improve the business’s performance, or new Section 63F(7)(g), that it would have a,
“detrimental impact on performance”.
What the Minister seems to have neglected in that reply is that it is precisely because we think the employer should be doing this implicit cost-benefit analysis that we want the term “reasonable” included. We want employers to think seriously about training and the value it gives to them. It is all too easy to claim that it will create an additional costs burden. The amendment forces them to think a little about the other side of the equation.
Amendment 87 relates to new Section 63F(7)(c) about the effect of meeting consumer demand and seeks to insert the word “significant” at the beginning of the provision so that there would need to be a significant detrimental effect on the firm’s ability to meet consumer demand. Again we are into the issues of reasonableness. If the employee is, say, a teacher, and as a result of training would be better able in the long run to do the job, how do you balance the short-term detriment in terms of the cost—for example, the fact that the class has to have an extra supply teacher—against the longer term gain in terms of having a better teacher.
Finally, Amendment 88 seeks to probe precisely what is meant by new Section 63F(7)(h) and the term “insufficiency of work”. In Committee in the other place, the Minister said that the Government did not want there to be any suggestion that an employer would have to provide alternative work for the employee at relevant times such as where the employee suggested a change in their current working arrangements to accommodate training. But nobody has suggested that. What we want to know is what constitutes an “insufficiency of work”. Will the Minister clarify how that can be used as a ground for refusal? I beg to move.
As the Bill stands, the Government are attempting to introduce legislation that would give employees a right to request time to train. The Explanatory Notes are clear that the employer must then consider this application and it must be accepted unless one of the reasons for refusal allowed by the legislation applies. These reasons are then laid out in new Section 64F(7) on page 20 of this draft of the Bill.
We are generally in favour of the principles behind the Government’s intentions in this part of the legislation. We agree that people should be allowed and, indeed, actively encouraged to take advantage of opportunities to gain further training and skills from within their employment.
However, there are situations where, perhaps despite the best intentions of employers, these opportunities may not be forthcoming. In some situations a less enlightened employer might prefer to let a talented and hard-working employee continue in an existing role, rather than allow the individual the room to feed ambition and train to a higher level. Such an employer might be reluctant, for example, to let a good waitress or waiter train to be a restaurant manager because of the risk that the replacement waiting staff may not be quite as efficient or effective as the waitress who is looking to equip herself for promotion. Of course, no one can condone this attitude. Nevertheless, we should not overexaggerate this risk. The consultation response, published by the department last year showed that only 57 per cent of employers in England felt that time to train would help skills development in their organisation and that only 28 per cent said that the introduction of the new right would cause them to alter their behaviour at all. The document published by the department stated:
“These relatively low figures are largely explained by organisations’ existing positive attitude and commitment to training rather than because of any particular reservations about the time to train proposals”.
We are of the opinion that employees should have the right to a serious conversation with their employer about their skills development, as the consultation document stated, and, as I have said, we support the right to train. However, we would be cautious about extending our full support to all these amendments as it is also important to ensure that the administrative burden on employers should be kept to a minimum.
The Institute of Directors—I declare an interest as a member—is increasingly concerned about the regulatory approach the Government are taking to ensure that the UK becomes a world leader in skills. It comments that these proposals add to the pipeline of impending regulations that will add to the administrative burden on employers and that at a time of recession this is spectacularly unhelpful. I would perhaps not go quite that far. We think that the right to request time to train is an important part of increasing skills and of allowing every employee to reach his or her potential. We do however want to ensure that at the same time employers are not disadvantaged by these proposals, especially given the current economic situation.
While it is right that employees should be able to request the time to train, it does not seem right that the permissible grounds for refusal should be so narrowed that it becomes very difficult for an employer to refuse at all.
Amendments 83 to 85 seem very sensible. If an employee has made a request for time to train, it is right that the employer should at least have to make a decision in response. There may also be situations where a right to appeal is appropriate. Perhaps the Minister will inform us as to whether any research has been carried out into the administrative impact of inserting a right to appeal against the decision. Moreover, the injunction on the employer to act reasonably as regards the grounds for refusing an application is difficult to argue with.
However, Amendments 86 to 88 redefine the permissible grounds for refusal by considerably narrowing the ability of employers to find a way to refuse the application, even if they are struggling to meet the demands. I fear that these last amendments assume that all employers will be searching for a way to get out of offering training. I do not accept that that will be the case. Proper training is essential in any business. A business that does not reskill and retrain its staff will not be successful. I very much look forward to the Minister’s response.
I have considerable sympathy with these amendments but, like the noble Lord, Lord De Mauley, I think some are better than others. It takes me back very much not just to “train to gain”, which was clearly a sensible idea, but also to the right the European Union directive gave women with family responsibilities to request flexible working that, as we all know, has been extended more and more and seems to be quite beneficial for employers.
Certainly, the right to be “reasonable” on the basis that you make a decision seems absolutely essential. Maybe the Minister will say that it is not necessary, but “reasonableness” in all these things, where there is a pretty wide degree of discretion, is, surely, something that we should all be in favour of. I am not necessarily convinced by all these amendments. I take into account what the Institute of Directors has to say, and it has a point. Nevertheless, we should be quite sympathetic to these amendments.
I, too, have some sympathy with a number of the amendments raised by the noble Baroness, Lady Sharp. However, I have an issue with Amendments 87 and 88. Most organisations have a very clear understanding of whether their performance is being detrimentally affected. Having “significant” in the amendment raises the dilemma of what this means and how it would be measured. It is usually how the order book is placed and all the rest of it. In my years as a trade union official and working with a sector skills council, I have never experienced that there has been a necessary adjective that needs to be there.
There is something a bit perverse about changing “insufficiency of work” to,
“the inability to provide sufficient work”,
as though the employer was conniving in some way not to have this work. Most businesses, whether small or large, operate in a transparent way, where you know whether there is business coming in or not. I personally have a great deal of difficulty with both of these amendments in particular.
I understand the desire of noble Lords on all sides to get the balance right between employer and employee. That is what we are trying to do. I will see whether I can reassure noble Lords on the balance.
Amendment 83 would place on the face of the Bill a requirement for the regulations to be made under new Section 63F(4) to require a right to a first decision on a request for training and a right to appeal against that decision. I reassure the noble Lord that we intend to use the power at new Section 63F(4) to define a process in regulations based on the one already in place for flexible working that would cover first decisions and appeals.
Again, I have sent indicative regulations to the noble Lords who have spoken in the debates so far. These regulations would require the employer to hold a meeting to discuss an application within 28 days of receiving it and to provide a decision in writing within 14 days of that meeting. The regulations will also include a right for an employee whose application has been refused to appeal to his or her employer—I stress that—in the first instance. These details are better dealt with in regulations where they can be adjusted more readily in the light of practice and experience. This model, in which stakeholders were consulted, again, follows the one used for the flexible working requests.
Amendments 84 and 85 would introduce a concept of reasonableness to the basis on which an employer may refuse an application. As currently drafted, the Bill enables an employer, relying on his or her own judgement and knowledge of his or her business, simply to form a view about whether one of the grounds applies. If these amendments were accepted, an employer could no longer do that. Let us be clear: instead, they would have to consider whether they were acting “reasonably” in forming that view—in other words, to put themselves in the position of an objective outsider and decide the application from that perspective.
Including the term “reasonably thinks” introduces a level of uncertainty about the employer’s decision, and creates a more complex and burdensome test for the employer that we think is unnecessary and that we are genuinely trying to avoid.
I agree with the comment that the noble Baroness, Lady Sharp, made in her contribution, when she talked about this being a “limited right”. It is. In the vast number of circumstance, as the noble Lord, Lord De Mauley, drew to our attention, many employers will not have to worry about this right because they are already training their employees. There are also still a significant number who do not do so. They are the ones who we are trying to address. The example of the teacher that the noble Baroness, Lady Sharp, brought up is the one I would be least worried about in these circumstances. As a school governor, I cannot believe that a request for time to train would be unreasonably refused. I will come to the question about insufficiency and detriment later.
Introducing “reasonably” will create uncertainty and will make it more burdensome for employers, rather than looking simply at the grounds that we have defined. In practice, when considering requests, employers would have to consider which of the permissible grounds for refusal are relevant, and why. They would then need to explain this decision to their employee when they notify them of their decision. If the employer is acting unreasonably, it will be difficult to give the necessary explanation in the decision notice, and it would be open to the employee to challenge the decision on the basis that it is based on incorrect facts. That keeps it as simple as we possibly can make it.
Amendment 86 would narrow the cost ground of refusal so that it applied only where the costs relating to the training outweigh the value of the proposed training and are an unreasonable burden. In our view, cost considerations may be a legitimate factor in an employer’s decision to refuse an application in a wider variety of cases than that proposed by the amendment, where, for example, employers may simply be unable to meet the costs of covering an employee’s absence, however great the potential benefit to the business.
Amendment 87 would mean that an employer could refuse an application only where agreeing it would have a “significant detrimental effect” on the employer’s ability to meet customer demand rather than simply a “detrimental effect” on this ability. While I understand that this amendment is intended to clarify the test, we do not want to try and quantify the level of detriment that would need to apply in order for a request to be refused. It may be that an employee’s absence at that time would put an unreasonable strain on the performance of the business. It may be just a question of timing and something that can be resolved in the future. However, the employer should not have to try to quantify that in the way that is suggested in this amendment by the introduction of the word “significant”.
Provided that there is some detriment, if it is a level of detriment that the employer does not wish to, or cannot, bear, then it is right that they should be able to decline a request on this basis, just as they can under the flexible working arrangements. I stress that again. We tried to model that procedure so that we are not introducing a fresh procedure. There may be genuine instances where a particular request will have a detrimental impact that employers feel make it impossible to accede to a request, and I have instanced a possible example of that.
While we believe that these decisions are best left to employers, there are safeguards in the system—I stress that to the noble Baroness, Lady Sharp—for the employee. As I said, it is a question of balance. The employer will have to explain why the detrimental impact ground applies, and, ultimately, this view could be tested at an employment tribunal. We do not want that to take place; but it could. If an employer was adopting a situation where it thought that it could refuse all requests for time to train and not engage in a proper appeals procedure, some of these may eventually be tested at an employment tribunal. We hope they will not go as far as that, but it will depend on the circumstances.
Amendment 88 would have the effect of redefining one of the permissible grounds for refusal set out in new Section 63F(7). Rather than specifying “insufficiency of work”, it would refer to inability to provide work during the periods that the employee proposes to work. We do not want employers to be obliged to find something for the employee to do at times when the employee proposes to work in order to accommodate training. Instead we want the employer to consider in the light of the current business situation how much work is available during the periods proposed. That is the correct position. No doubt we will find that employers are prepared to be flexible in many cases.
As I said, this new right is modelled closely on the flexible working arrangements which employers are familiar with and which we know work well. That is important. We are not introducing a new procedure here; we are introducing something of which both employers and employees already have experience. This close alignment between the two rights has been welcomed by stakeholders and was supported in the consultation responses as something that would be helpful to employers. We therefore wish to maintain this, and we do not want to create unnecessary differences between the two rights that have the potential to cause confusion.
On the reasonableness test, it was asked whether employers who do not offer training will not simply refuse applications. We think that it may well trigger a discussion about training and that employers may well see the advantages of training. We think that the balance is correctly set where the employee can appeal on grounds of procedure or incorrect facts; we think that is the right way to approach it. In these circumstances it is best for both the employer and the employee to keep it simple and modelled on existing procedures. Therefore, in the light of the explanation and assurances given, I would be grateful if the noble Baroness would consider withdrawing the amendment.
I am grateful to the Minister for his explanations. These are probing amendments seeking clarification and the wording of certainly some of them is not necessarily perfect. The idea was to try to get a clearer picture. On the first amendment, I am grateful to the Minister for making it quite clear that there is a right of appeal and that it will be spelt out in the indicative regulations that he will circulate to us.
I now understand better the Minister's objection to including “reasonably” in relation to what the employer thinks. The question of what the employer thinks is somewhat subjective, and it is being left as a somewhat subjective decision. One accepts that. As the Minister said, the provision is modelled on the flexible working time directive, which has worked well. On narrowing down the cost grounds for refusal, I very much hope that the employer will do a back-of-the-envelope cost-benefit analysis to see whether it is worth doing.
The answer with which I feel least satisfied was that to Amendment 87 and the issue of “significant”. If we say that we do not want to quantify the element of detriment it will leave the issue extraordinarily uncertain. The answer, as the Minister says, is that it will have to be tested at a tribunal. However, the term “significant” would have to be tested at a tribunal in exactly the same way.
I again thank the Minister for his explanation and I beg leave to withdraw the amendment.
Amendment 83 withdrawn.
Amendments 84 to 88 not moved.
89: Clause 39, page 21, line 3, at end insert—
“( ) fails to attend more than two consecutive periods of study or training”
As will be clear from the debate on the previous group of amendments, we support the time-to-train proposals. It is fundamentally important to ensure that those who wish to build on their skills, achieve their ambitions or improve their standing should be allowed to make an application to their employer for time to do it. Nevertheless, we also want to make it very clear that the interests of employers must be taken into account. The IOD, in its response to the Government’s impact assessment of these provisions, stated that,
“no evidence was presented to support the implication that employers are not open to training requests, deny employees the opportunity to discuss training needs or do not treat requests seriously”.
Does the Minister not accept that many employers already do their utmost to ensure that employees are constantly developing their skills training? Does he not support the voluntary measures that many businesses already use in order to make sure that this training can occur? Does he not accept that many businesses do this purely because of good business sense because further training means better staff, which in turn means a more efficient business?
The right to training is very important. Nevertheless, it is vital to find a way of ensuring not only that employees retain their right to training but that employers are not overburdened. It is this thought that is behind these amendments.
Amendment 89 would mean that if an employer has agreed to a request for training, or a part of it, then the employee must inform his employer if he fails to attend more than two consecutive periods of study or training. It seems to me that this is an unobjectionable duty on the employee. As we all know, with rights come responsibility. If the employee has enjoyed the right but also the privilege to request time to train, then it should be incumbent on him also to inform his employer if he is not, for whatever reason, able to reap the benefits of this education and training.
Moreover, we would go further. The Bill as it stands allows the Secretary of State to make regulations regarding the way that the employee will inform the employer of any changes in the training he will carry out. We would like to see a provision in the Bill which states that if an employee fails to start, attend or complete study that has been agreed with the employer, it should constitute grounds for removing the time off.
Does the Minister not accept that while there is clearly an argument for allowing employees to ask for time off, they should not be allowed to abuse this right? Does he not agree that we must also protect employers and businesses from the risks associated with the fact that some people may find themselves unable to attend training, or indeed may have abused the system to the disadvantage of the employer? We want to protect the employer from losing out.
There is an argument, of course, that if the employer is awarded the right to withdraw training that has not been completed to the terms of the agreement, there should be a commensurate right for the employee to appeal against this result. This may result in greater bureaucracy. Nevertheless, I am not sure that this is an entirely satisfactory response. We must not draw away from finding a solution which would protect employers simply because of the complexities involved. It is important that these issues are resolved. I look forward to the Minister’s response, and I beg to move.
Perhaps I may suggest that Amendment 89 probably relates to new subsection (2), at the bottom of page 20, which talks about failing,
“to complete the agreed study or training”.
Amendment 89 seeks to describe what that means whereas Amendment 90 refers to paragraph (c). I think that the Bill is strong enough. If a trainee—it does not matter whether he or she is in an apprenticeship—fails to attend a course, the college will automatically advise the employer that they have not attended. They do this regularly, on a weekly basis. If I am supposed to go every week but do not turn up, my employer will get a phone call saying, “Do you realise that Margaret Wall hasn’t turned up?”. So I think that that is taken care of.
On the other amendment, in reality new Section 63H(2)(c) certainly says that if an individual,
“undertakes, or proposes to undertake, study or training that differs from the agreed study”,
the agreement would be broken. The employee would lose the opportunity to have that training leave continued. They would not be doing what the agreement asked them to.
I found both those amendments perfectly reasonable. However, having heard what the noble Baroness, Lady Wall, has just said, maybe they are covered sufficiently, although we would need a little more emphasis on how the employer will get to know the situation. We must be assured that all colleges behave as described by the noble Baroness, Lady Wall.
We certainly sympathise with the desire of Members opposite to keep burdens on business to a minimum and to get the balance right between employers and employees. I hope that the noble Lord, Lord De Mauley, believes me on that score. I accept his point that many employers do their best to provide good quality training. We also accept that this is a question of rights and responsibilities, and not just about the employer’s responsibility or employee’s rights, but also about the employee’s responsibilities in this matter. There is no difference between us on this.
Amendment 89 would place a requirement on employees to inform their employer if they fail to attend three or more consecutive periods of study or training. As my noble friend Lady Wall said—it is so good to have her wise counsel on these areas—the provisions already cater for this. New Section 63H quite rightly requires employees to inform their employer if they fail to start or fail to complete the agreed study or training, and also if they do, or propose to do, study or training which is different to that which they agreed with their employer. We have covered the three circumstances: they fail to start; they fail to complete; or they embark on something that was not agreed with the employer. So if they do not attend their course as arranged, that would be a change that would be covered.
My noble friend Lady Wall made the point that colleges and training providers have a responsibility that they exercise in saying to employers, “Well, I know that you think that your employee is attending this training course, but I have to advise you that he or she is more often honouring that in the omission rather than the commission”. That is already current business practice.
Amendment 90 proposes that the employer should be permitted to withdraw support on the grounds that the employee had failed to start, attend or complete the agreed study or training. However, as the noble Lord, Lord De Mauley, recognised, providing such statutory provision for employers risks adding an additional level of bureaucracy and further burdens on employers, as we would need to consider giving a similar level of statutory protection to the employee to be able to appeal such decisions.
We do not want to do that, but do want to emphasise the noble Lord’s point about the responsibilities of an employee. In our view, it would be better if, at the time of agreeing a request, the employee and employer also agreed any terms under which support may be withdrawn. This recognises the need for a certain level of flexibility and sensible discussion by both parties that will be necessary for these provisions to work.
In many cases, withdrawal of support will be less of an issue, particularly where it has been agreed that the employee will attend a course of only a short duration. In other cases, it may be appropriate for any breach on the part of the employee to be dealt with through the employer’s disciplinary procedures.
However, I agree that these are important matters and, in the light of today’s debate, I will certainly commit to providing guidance that explains employees’ and employers’ responsibilities under these provisions. I would be grateful if the noble Lord would consider withdrawing the amendment in the light of the explanation and assurances that I have given.
I am grateful to the noble Baroness, Lady Wall, for her comments, which I will consider carefully, and to the noble Baroness, Lady Howe, for her contribution. Before I withdraw the amendment, can the Minister confirm that all colleges are required to report non-attendance to employers? That was suggested by the noble Baroness, Lady Wall, and the noble Baroness, Lady Howe, asked about it.
Amendment 89 withdrawn.
Amendment 90 not moved.
Clause 39 agreed.
Schedule 1 : Employee study and training: minor and consequential amendments
91: Schedule 1, page 161, line 34, at end insert—
“ In section 236(3) (orders and regulations subject to affirmative Parliamentary procedure), after “47C,” insert “63D, 63F(7),”.”
This government amendment takes account of the recommendations of the Delegated Powers and Regulatory Reform Committee, looking at the regulation-making powers in Clause 39. The committee’s recommendation is that they should be subject to the affirmative, rather than the negative, procedure. It is appropriate that we should take these recommendations on board. I know that the party opposite has also tabled an amendment that is similar in effect, and I hope that the noble Lord will agree that the government amendment will take on board the concerns that I expect the party opposite to raise.
I am grateful to the Minister. I think I am right, as she seemed to suggest, that we are both aiming to achieve the same thing. I do not know whether she can help on whether there is any difference in the effect of these amendments, other than the Government’s being perhaps a little more elegant.
Amendment 91 agreed.
Schedule 1, as amended, agreed.
House resumed. Committee to begin again not before 8.29 pm.
Common Fisheries Policy Report
Question for Short Debate
My Lords, at this stage I am tempted to somewhat curtail the dinner hour debate and say that this is a pretty good report, that the Commission has by and large followed it and that I hope that the Government will support the Commission and our report, and to sit down. However, that might be something of an anticlimax, if ever there can be an anticlimax during the dinner break.
Let us go through some of the history. Our report was published in July 2008 and was basically a mid-term review of the reforms introduced in 2002, which, I am afraid, were a complete and utter failure. In April this year, the Commission published its Green Paper on reform of the common fisheries policy, which followed an absolutely devastating report from the Court of Auditors. Perhaps I may quote three elements of that report. The court said, first:
“Catch data are neither complete nor reliable, due mainly to weaknesses in the Member States”.
Secondly, it said:
“The inspection systems do not provide assurance that infringements are effectively prevented and detected”.
Thirdly, and perhaps most importantly, it said:
“Overcapacity detracts from the profitability of the industry and incites non-compliance”.
That, in a way, is the nub of the problem.
I know that there are Members of your Lordships’ House who somewhat decry the activities of your Lordships’ European Union Select Committee and say that it has little or no influence. However, in this area I think we have demonstrated that we have significant influence in that our report predates the Commission’s Green Paper and that Green Paper follows very closely the line of argument that we advanced in our report.
I want to begin with two propositions, and the use of the definite and indefinite article is important here. First, “a” common fisheries policy is part of our treaty obligations as a member of the EU, and we cannot maintain that membership without acceptance of such a policy. I am sure that the noble Lord opposite will endorse that position. Even non-membership of the EU would, under international law, require us to put in place something at least closely similar to the common fisheries policy. The second proposition is that “the” common fisheries policy as we know it is broken, busted and an unqualified failure. It has totally failed to deliver the objectives of a sustainable fisheries policy. It is top-down, it rests on regulation upon regulation, and it is a system that alienates the fishermen, the scientists and the processors. It is bound to fail.
In line with what we discovered through evidence, there are a number of reasons why we maintain that the dismal reputation of the common fisheries policy, as it is now, is totally justified. Let us look at the outputs. Despite the extensive nature of the regulatory regime for fisheries in EU waters, around 88 per cent of stocks in Community waters are overfished compared with the global average of 25 per cent. At the same time, many segments of the EU fishing fleets achieve poor profitability and, as a result, are vulnerable to increases in operating costs.
Experience since reform of the common fisheries policy in 2002 has been characterised by the following: overcapacity in the fishing fleets of the member states, with a balance not being achieved between the number of fish in the sea and the fishing effort put in; poor compliance; uneven enforcement; a legislative process that continues to be stiflingly prescriptive; and ongoing depletion of fish stocks. That is a very severe indictment of the common fisheries policy as it stands today. Why is that? At the kernel we have to recognise that some member states—I emphasise “some”—have been reluctant to bring the size of their fishing fleets into line with available fishing opportunities. We identified this reluctance as the root cause of the poor performance on biological and economic indicators. That mismatch between, on the one hand, the size and effort of the fishing fleets of the member states and, on the other, the actual safe take from the seas is the root cause of the problem. The response has been an overcentralised legislative process that has been doubly flawed: alienating stakeholders and stretching the Commission’s resources to the limit.
We were pleased to see that analysis of the failure of the 2002 reforms and the cause of that failure largely echoed in the recent Green Paper from the European Commission. Therefore, there is a degree of commonality between our analysis and that of the Commission. In large part, the steps that we recommended in our report for improving and reforming the common fisheries policy are now being advocated by the Commission itself, and we hope that the Government will be able to come into line behind that in very large measure. I think that that shows the influence of your Lordships’ House.
I should like to summarise our recommendations but I also want to make it clear that in our report we explicitly stated that the prospect of withdrawing from the common fisheries policy was not a credible policy option with the restrictions of the EC treaty and European law. We should simply not waste our energies in arguing over options that, frankly, cannot be seriously contemplated. Instead, we should work for a better policy framework and put in place a new and more appropriate common fisheries policy that secures sustainable fisheries for the future.
Perhaps I may go into detail on a particular point. It is rightly asked how we can improve matters. There are a number of issues here. One is that we received overwhelming evidence from our witnesses that the compulsory registration of buyers and sellers of first-sale fish had almost eliminated the demand for black fish—a problem that has bedevilled the fishing industry for many years. We therefore urge all member states to ensure that they have transposed the relevant EU legislation and that they are enforcing it rigorously. It is beyond belief that, faced with the challenge of sustainable fisheries, we do not have that degree of enforceability in relation to registered buyers and sellers of first sales. That would bring about a considerable improvement.
If you get the balance right between the exploitation of fish numbers and the catching ability of the fleets, you can at last establish a common identity among fishermen that they have a real stake in the future of their fisheries and you can develop a culture of compliance. At the end of the day, if the stakeholders—the primary stakeholders are the fishermen—do not sign up to that culture of compliance, you are left with a process of evasion and avoidance, which has been the problem with the common fisheries policy as it has developed.
In that context, I give genuine credit to the Scottish conservation credits scheme, which is a means of providing carrots rather than sanctions, and a means by which fishermen are rewarded by recognising real-time closures and adopting conservation measures, such as more selective fishing gear. In return they receive the same number of days at sea as they received in 2007, 2008 and 2009, thereby avoiding cuts. If there is that sort of genuine interaction between the various elements at the centre and the periphery of the industry—I do not use those terms disparagingly—there is a chance of establishing sustainable fishing.
I have two final points. We have a problem in terms of enforcement and compliance in member states. I wish that we could enhance the role of the Community Fisheries Control Agency. It is important that it is the inspector of the inspectors, making sure that the member states do their job in enforcement. There is sufficient evidence showing—I shall use a somewhat diplomatic term—a degree of difference in the rigour with which enforcement is carried out across member states, which must be put right quickly.
I know that I have spoken longer than I should, and I shall come to my conclusion. Our review left us in no doubt that the main cause of the 2002 reforms’ failure has been member states’ reluctance to cut national fishing fleets to match the fishing opportunities available. Some have and some have not. I live in the north-east of Scotland and am aware of what has happened to the Scottish fishing fleet. On a European level, subsidies can assist that process but too often they have been used to offset rising costs. We need to move towards a much greater degree of decentralised fisheries management. We must use the experience of the regional advisory committees and involve the stakeholders. The big issues of the strategic levels of depletion of stocks should be set centrally at Brussels, and the implementation and management should be a regional question with regional enforcement. Let the fishermen have greater control of their own futures. That is how to head towards a sustainable fisheries policy.
My Lords, I, too, served on Sub-Committee D during this investigation. I do not know whether any of your Lordships have seen the film “The End of the Line”, based on the book by Charles Clover, but, whatever one might think of each and every claim made therein, there is no denying the underlying message that we have too many fishing boats in the world, which with ever improving technology are gradually destroying our planet’s supply of fish in the most irresponsible manner. There is simply too much capacity, as the noble Lord, Lord Sewel, has just said. Indeed, the film claims that a mere 25 per cent of the current world fleet could catch the sustainable quantity of fish that we need.
Unfortunately, it appears to be hard for fishermen to consider the long-term future of making it possible for their children to have a career in the fishing industry. This so-called tragedy of the common fisheries policy is well described in paragraph 6 of our report, which states:
“Prudent harvesting by one fisherman, with a view to protecting the stock, will most likely only yield larger catches for other, less restrained, fishermen. Hence the incentive is to grab one’s share as quickly as possible while the resource is still available”.
That is the piscatorial equivalent of “Shop now while stocks last”—and it is quite possible that they will not. As a result of this phenomenon, more than 80 per cent of the stocks evaluated by ICES are overexploited. As a result, fishermen now use two to four times the fuel that they did 30 years ago per tonne of fish caught. Over 90 per cent of cod is caught before the fish have the chance to breed once, and so it goes on.
While one might sympathise with the fishermen who are trying to protect their immediate livelihood, I have less sympathy with politicians who protect their short-term electoral interests by siding with their fishermen, even though they must know that they are behaving irresponsibly. We had a good example of this last year when fuel costs went up. That was an ideal opportunity to up the rewards for decommissioning vessels, but did this happen? Not on your Nelly. Under pressure from politicians in member states, and perhaps because of everyone being fazed by blockading fishermen, the Commission actually had to give €600 million to help fisheries to adapt to rising fuel prices.
Our report covers a whole range of recommendations to improve the situation, not least of which is the giving of more responsibility and resources to the regional advisory councils, which I very much support. In this short intervention, however, I just want to deal with the question of overcapacity, which to me is the key issue and perhaps the most controversial.
The Swedish representative told us that the Swedes had a 30 per cent overcapacity in their pelagic fleet and a 50 per cent overcapacity in the rest. This situation is not unique to Sweden, but the Swedes are perhaps special in that they actually admit it. Having said that, I must give credit to UK fishermen, particularly Scottish fishermen, who have done much to reduce their capacity. The Scots succeeded in decommissioning about 65 per cent of their white fish fleet in the early years of this century. As a result, as we were told and saw with our own eyes in Peterhead, there is a new degree of optimism and confidence in the remaining fleet. It is a pity that more member states seem unable to endure the pain in order to gain.
Commissioner Borg told us that only 20 to 25 per cent of member state aid currently goes towards decommissioning, which must be a good example of sticking one’s head in the sand and ignoring the very real needs of the next generation. I am tempted to comment that maybe people are looking for the fast vanishing sand eels. As well as a ban on all subsidies, apart from for decommissioning, I believe that other actions could also help to reduce capacity.
The first is to have a degree of individual transferability of quota on a more permanent basis than just the in-year leasing that currently exists. The Swedes say that their aim is to turn over the resource to the fishermen and allow them to decide whether they want to try to stay in the market or to sell it for a reasonable price. That way, the market controls the capacity. It would also mean that a tighter quota would not be all pain for fishermen, because a tighter quota might actually raise the value of the remaining quota. Furthermore, the fishermen themselves would become their own policemen because they would not want their colleagues to take for free what they themselves had paid for.
It is worth saying that, in the interests of relative stability, I do not believe that permanent transfers of quota should be allowed between member states. However, within a member state, a region or a producing organisation, if you prefer, I see no reason why they should not be permitted. It is of course essential in such a system that member states should not issue any new fishing licences where no quota exists and that they should be active in the marketplace, buying in quota where necessary, to take it out of circulation. It might be possible for the Commission, when it wishes to reduce quota, just to buy some of it in and thus not put all the cost of reduced catch on to the fishermen.
The final essential piece of the jigsaw is to work towards the total banning of discards. I realise that this is controversial, but discards at a rate as high as 50 per cent in some species in some waters are a PR and scientific disgrace for the fishing industry. I was quite taken by the Norwegian enforcement of a total discard ban. It requires greater enforcement costs, but then more rigorous policing is needed anyway for the current policy. At sea, it is possible to see for some time afterwards whether a boat has been discarding fish. Equally in Norway it is an imprisonable offence not to submit an accurate landing note. While the Government there are happy to pay for the landing costs of over-quota fish, which is a small percentage of the real value, they then deduct the quantity of excess fish from the overall national quota in that species. So again catches of excess quota become pretty unpopular among other fishermen.
To summarise, if the tragedy of the Commons prevents the fishermen from taking a cautious long-term view, it should not prevent politicians from focusing on how to feed their nation in 20 or 30 years’ time—I speak in this House frequently on the problem of agricultural produce in terms of what the situation will be like in 20 or 30 years’ time—as opposed to worrying about their electoral popularity in two or three years’ time. There should be a total ban on any aid to the fishing industry apart from for decommissioning. A system of individual transferable quotas on a permanent basis, within member states, should be introduced as soon as possible. It should be noted that this has worked effectively in New Zealand. Finally, we need to move as soon as possible to a total ban on discards to make the fishermen think hard about how they can avoid this profligate and irresponsible waste.
While our report on the common fisheries policy was comprehensive and thorough—as our chairman has reported, it was thoroughly respected by the Commission—and nothing that I have mentioned tonight is not discussed therein, I have a feeling in retrospect that we were not quite bold enough in setting out a new and better way forward. In the end, of course, it will be the consumers and the voters who influence change. I hope that, as a result of recent publicity, they are now becoming sufficiently aware to do just that.
My Lords, I welcome the opportunity to contribute to this important, if belated, debate. It is a sad fact that, when I reread our report, it became clear that its recommendations are still relevant today. In other words, progress as ever with reform of the common fisheries policy remains painfully slow. I, too, thank our chairman, my noble friend Lord Sewel, who guided us towards our conclusions with an enviable balance of intelligence, common sense and wit.
I would like to concentrate my comments this evening on the issue at the heart of our report: how can the EU move away from its legacy of decades of overfishing and move to a sustainable fishing regime? Overall, the picture across the EU remains dire, with short-term economic considerations consistently taking priority over stock recovery. As we have heard, the Commission itself has warned that 88 per cent of stocks are overfished as a result of total allowable catches being set too far above scientific advice on sustainable levels.
The fact is that the EU fishing fleet is still too big, so there is huge overcapacity. Despite encouragements to decommission, the fishing fleet capacity is diminishing by only 2 to 3 per cent a year. Meanwhile, the Commission estimates that technological improvements have increased catching power by similar rates. However, these figures hide wide variations in the approach of member states. As part of our inquiry, we visited Peterhead, which is one of the biggest fishing ports in the UK. It was instructive on a number of counts.
First, we learnt that the UK has successfully cut back its fleet by 11 per cent. This had made the remaining fleet more profitable and, as a result, the Scottish fishermen were, as we have heard, making enough money to begin renewing their fleet and were seeing a positive future for their industry. Secondly, the Scottish fishermen to whom we spoke were persuasive in their commitment to sustainability. They were already taking voluntary steps to control overfishing through closing sea areas, particularly spawning and nursery areas. They were clearly committed to taking a long-term approach to the availability of stock. Thirdly, they were taking a proactive approach to working with stakeholders and building up credible regional fishing strategies through their involvement with regional advisory councils.
Unfortunately—I do not wish to sound too partisan—many of the representatives from other member states whom we interviewed were less keen to address the problem of overfishing. For some, the preservation of their fishing fleet has taken on a symbolic national importance. This is despite the fact that fishing represents less than 1 per cent of the gross national product of EU member states and less than 1 per cent of employment.
One of the totemic features of the failed fisheries policy—it is the one that causes consumers the most disquiet—is the number of discards taking place across the EU, including the UK. Our report suggests that between 10 and 60 per cent of fish and marine organisms are thrown back in the sea, usually dead. Commissioner Borg confirmed that discards of flat fish can reach up to 60 or 70 per cent.
While there are many reasons for discarding fish, including the catch being unmarketable or not included in the trawler’s quota, the Commission acknowledged that large amounts of discarded dead fish were the undersized juvenile fish, which should have been left undisturbed to breed the next generation of fish. Instead, the overexploitation of the stocks means that there are few large fish left in the sea and the fish stocks are dominated by the small fish that are banned from being landed but are nevertheless caught and therefore dumped before they have time to breed. Therefore, sustainability becomes increasingly unachievable.
Our report recommends a number of measures to address this problem, but ultimately I concur with my noble friend that a discard ban has to be the way forward. We heard how this had operated successfully in Norway. As Dr Horwood, the CEFAS chief scientific adviser, argued, such a ban would be extremely helpful, as it would scare people into deciding that they really must do something about the issue.
Although the EU has, as yet, failed to address this problem effectively or to deliver the much needed radical overhaul of the common fisheries policy, other commercial and consumer changes are taking place that could yet force Governments and the EU to face up to their responsibilities. We took some interesting evidence from Mr Cliff Morrison, chair of the Food and Drink Federation’s seafood group. He described how consumers were increasingly changing their eating habits to support sustainable fishing. He also described how investors, fish processors and retailers were intervening directly in the market to ensure that any purchases came from sustainable sources. They understood that, apart from the ethical issues, there was a commercial interest in having longer-term sustainability. Consumer power could therefore play a role in changing markets and changing policy.
However, as with all these things, it turns out that nothing is that simple. The sustainability of the EU stock is only one part of a complex global picture. Mr Morrison described a fascinating picture of fish and fish products crossing continents. In essence, the UK exports what it catches and imports what we eat. Ninety per cent of the mackerel and herring that we catch goes eastwards towards Japan. Much of the Scottish white fish and shellfish goes to the Mediterranean, particularly Spain. Those holidaymakers tucking into langoustine in a pretty coastal resort might be surprised to discover that it has been driven there on a lorry from Scotland.
Meanwhile, in the UK, the British shoppers tend to buy their fish in chilled supermarket pre-packs. In order for this to happen, for example, Icelandic cod is caught, frozen on the vessels, shipped on container boats to China to be filleted and then returned to the UK to be processed or packed. That may be sustainable, but it has added up a good few food miles. Worse, the UK’s penchant for tuna means that the tuna loins are flown in from the Indian Ocean, adding even more to our carbon footprint.
Food labelling has some way to go before it can enable consumers to make intelligent decisions about the fish that they eat, although clearly the Marine Stewardship Council is playing an important role in this regard. It may ultimately fall to the markets, the environmental lobby and consumers to deliver the pressure necessary to achieve a sustainable fishing stock, as so far the EU and its member states have not shown the appetite for radical reform in this sector. In fact, one of the more depressing aspects of our inquiry was that many of the senior people whom we interviewed understood the scale of the problem but lacked the political will to act.
In conclusion, I commend our report. I hope that the Minister will feel able to endorse our recommendations and give a commitment that the UK will challenge the collective inaction of the EU and fight for a truly sustainable fishing policy before it is too late.
My Lords, like other members of the committee, the noble Baroness, Lady Jones, has become an expert on this subject, and we thank her for her insights into the literal insanity of the worldwide transport movement of fish that she so graphically described. In that context, there is a London configuration here. I am thinking of last week's initiative by the Fisheries Minister in another place and sections of the London press to promote knowledge of the “true price of fish”—that is the new phrase—in shops, including supermarkets as well as smaller shops, and restaurants and the future of certain stocks which are overfished. Without doubt the general public, who are anxious to eat more fish in the future rather than too much meat, are cottoning on to the fate of rapidly threatened stocks. The Minister quite rightly called on supermarkets and restaurants to stop offering vulnerable species until the overfishing had stopped and stocks had recovered. He said that there is a government commitment that by 2012 we bring forward proposals on an ecologically coherent network of marine conservation zones and that it is our duty to replenish our stocks.
This has been a good but short debate on an immensely complex subject based on a densely packed report from the committee. We thank the noble Lord, Lord Sewel, and the other committee members for what they are suggesting. There is a bound to be a meeting of minds on this matter because of the quality of the report and because it is pragmatic common sense for people to come together on these collective solutions.
The EU has been struggling for quite a while to try and get rational solutions for a viable long-term future, so I welcome most of what is said in the report. I shall not repeat some of the detailed matters, but I shall refer to some of the broad themes as time allows. The substantial, erudite and sometimes passionate body of evidence was impressive indeed.
Years ago in Hollywood, Cecil B DeMille was credited with defining the ideal film as one that starts with an earthquake and builds up to a real climax. Unfortunately, that cannot be done with this subject as it just goes on and on. The trouble with the CFP is that you cannot single out a particular moment. It is hugely complicated and long drawn out, even for the experts. Furthermore, it is politically supercharged in a way that is perilous for politicians, as we know, in this country and elsewhere.
In the years up to 1997, successive Governments avoided the ecological aspects in favour of nationalistic schmoozing of the sector, but that eventually had to be replaced by a more realistic analysis for which the EU Commission should take some credit. It has got better at this business in recent times.
There are not good guys and bad guys in the common fisheries policy. The entire industry has overfished for years because livelihood was understandably the priority. Fishermen were regarded as heroic figures in most country’s newspapers and overlarge catches were meant to bring lower prices for customers. Now, at last, we can come to a more sensible position, partly thanks to the high-quality suggestions in this outstanding report and the Government’s response. I hope that the Minister will have time today to refer to page 4 of the Government’s response to the report. The Government did not say what their attitude is towards the committee’s recommendation that the WTO should be involved in outlawing subsidies or harmonising a system of subsidies that are acceptable to everybody under international trade rules. I assume they agree, but I would like that confirmed, if possible.
The threat to species and the depletion of certain stocks need dramatic action on a collective basis. This is even more the case as the 2002 reforms were not up to the much more fundamental task now on the composite agenda of the European Union. Persistent overcapacity of the main fleets, poor records of compliance and excessive centralisation have all highlighted the growing malaise. Despite tabloid frenzy, no one in his right mind, even in this country, is suggesting repatriation on the lines of the fisher folk—our wonderful fisher folk as we always say, but other people’s fisher folk are not like ours. All these foolish themes have now been superseded by the need for collective action on a serious basis. With a single market in fish, in which all member states’ interests are taken into account, including those of the states furthest from the sea, drastic losses of fish stocks are the urgent priority, and I welcome the Government's commitment to getting common sense by the end of the current target year. The sub-committee rightly insists on an end to the spiral of negligence. Here, state aid should also be eschewed, especially on fuel costs, and should focus on decommissioning incentives.
On these Benches, we welcome the almost universal enthusiasm for the broadly based regional advisory mechanism, which started in 2002 and is gradually reaching a much more impressive position in co-ordinating work, which gets away from the Stalinist overcentralisation of previous policy formation and gives a good spread of chances and fair play to the various fleets in the new zones. The crucial element in this new system will of course be the successful interplay of the stakeholders, partly, of course, with long-term sustainability in mind. This started following the 2002 reforms, but much more experience and development of this system will be needed.
Quite rightly, sub-committee D is blunt about the need for a new approach partly to rescue fishing stocks from the overfishing disaster. A range of policy instruments are spelled out, including the quota approach, science-based technical conservation action decisions, effort controls, continuing with the central TAC configuration, but on a lower basis, as the noble Baroness and other noble Lords said, and, if necessary, a ban on certain species, as the Canadians had to do many years ago. We must all hope that the micromanagement mistakes of the past will yield to a new era of regional differentialisation running smoothly by 2012, which would also be an education for the Council of Fisheries Ministers and the Commission itself.
My Lords, I join the noble Lord, Lord Dykes, in thanking the noble Lord, Lord Sewel, and his committee for their industry in producing such a thorough and, as we have learnt to expect from the noble Lord, well thought-out report. Indeed, the European committees set an authoritative base for debates in this House, and it is a pleasure to see their chairman, the noble Lord, Lord Roper, in his place. It is regrettable that it has taken so long for the report to be presented for debate. It is now more or less a year since it was published, and it does nothing to address the urgency of the subject matter that we have not been able to debate it earlier.
My Lords, I understand the reason for the delay. However, delay seems to be built in to the process and a sense of urgency is important in trying to move this subject on. I was going to say that on the plus side we have had a comprehensive response from the Government that indicates that they are broadly in support of the report, its analysis and its recommendations. The affirmation by the noble Lord, Lord Sewel, that the committee’s report has been listened to in Brussels is good news. Would that their views on CAP health check were similarly powerful, but that is another story. I expect the Government are not alone in depending on Commissioner Borg. When he announced his review in September last year, he commented:
“There is no alternative to the common fisheries policy when it comes to managing the mobile international resource that our fishing industry depends on. But, in its current form, the CFP does not encourage responsible behaviour by either fishermen or politicians”.
The problems and issues with the CFP identified by the Commission, clearly in tune with the committee’s sentiment, include overcapacity in the EU fleet, which has been mentioned already by noble Lords. The fleet is capable of catching between two and three times the maximum sustainable yield. I will return to this later.
Fishermen must be made responsible and accountable for the sustainable use of a public resource. The goal of ecological sustainability must be placed before economic and social sustainability, because it is the precondition that makes economic and social sustainability possible. There has to be a clear hierarchy in the decision-making process between principles and implementation, in order to simplify regulation at EU level and encourage regional management solutions wherever possible. The CFP will have to be aligned with the marine strategy framework directive that has recently come into force, which obliges member states to ensure, by 2020, the good environmental status of the seas under their jurisdiction. Having recently been involved with the Marine and Coastal Access Bill, I can vouch for the significance to the United Kingdom of that legislation.
Europe needs a joined-up approach to fisheries management that will include the onshore and market dimensions of the industry, as well as the capture sector and aquaculture, in line with the EU’s new integrated maritime policy and its focus on sustainable growth in coastal regions. The role of the below-10-metre fleet in sustainable fishing communities is vital. The Commission has since launched a consultation phase that will provide the basis for future reform of the CFP, and it is expected that these reforms will be outlined by 2012 at the latest. I hope that the Minister will tell us that the committee’s report has the support of the Government and is being used in this consultative phase.
One recurring theme of the committee’s report is the complaint that the CFP is overcentralised and unwieldy. Will the Government assure us that their future efforts in influencing reform will focus on improvement in this important area? The report spoke favourably of the regional advisory councils, and the Government set great store by them for their role in improving stakeholder consultation. However, the report pointed out that they could be improved by being given a more flexible and independent role. Have the few that have been set up progressed in this direction, and will the Government ensure that British fishermen get the best deal in this respect when they come to influence reform?
I said recently that the CFP appears neither to conserve fish stocks nor preserve the livelihood of fishing communities. This is more than a neat turn of phrase. It sums up the full tragedy of a policy that is failing. I hope that the Government will confirm that their policy on forcing reform is underpinned to a significant extent by the need to ensure the survival of our fish stocks for future generations. The report points to “alarming” declines in fish stocks and landings over the past 25 years and issues the stark warning that,
“if these trends were to continue, many Community fish stocks would collapse”.
Given that overcapacity appears to be a key element—the Community’s fleet size was identified as a problem in the 2002 reforms, and has again been identified as a problem by Fisheries Commissioner Joe Borg—what assessment has been made of fleet size changes, and what is the Government’s attitude to the below-10-metre fleet? After all, they have only 3 per cent of the UK quota. This is an important element of Community fishing around our shores.
I close with a few comments on the question of control and enforcement. The noble Lord, Lord Sewel, euphemised this by talking about a “degree of deficiency of rigour”. Nothing angers our fishermen more, when they are tied up, than to see others fishing what they consider to be their native grounds, seemingly heedless not just of the consequences to existing stocks, but of the need to re-establish stocks to a sustainable level. We rightly operate a highly effective and disciplined regime. The quid pro quo must be to ensure that others exercise similar control. If they fail to do so, there should be sanctions. They should be subject to dual policing if the Community Fisheries Control Agency cannot guarantee compliance. In the end, our duty is to Britain’s fishing communities, and to the fish stocks that we ask them to ensure that we conserve.
My Lords, it is a tall order to analyse the problems of the common fisheries policy, produce the Government’s response to the problems, reflect the nature of this excellent report and respond to speeches that have been very precise with reference to the report, but have also raised issues beyond it. I have less than 15 minutes, so the House will forgive me if I produce somewhat more abbreviated comments than otherwise I would have done on a number of issues.
First, I congratulate my noble friend Lord Sewel both on his introduction to the report today and on the enormous amount of work that went into the report, which analyses the situation in such a way that the Government are in a position to endorse a great deal of it. As my noble friend made clear, it was important that we should have this debate against the background of the Commission’s Green Paper, so that we have a context in which to work as we seek to produce changes on these matters in Europe.
I turn to one or two extraneous points. My noble friend Lady Jones indicated that we should take more interest in the carbon footprint of the food stocks that we use, particularly fish. She gave us a very interesting analysis of how fish arrive in the shopping basket. We now have clear food labelling that helps us to identify where food has come from. It gives us the chance of some long-term sustainability of the European Union’s fish stocks through improvements in traceability and a full audit trail of fish products. I want to reassure my noble friend that we have in mind the issue that she raised.
The noble Lord, Lord Dykes, asked me to consider where the World Trade Organisation’s principles might fit into the common fisheries policy. The UK agrees that subsidies which give rise to distortion of commercial activity and place some fleets at a competitive advantage over others should be prohibited. We are, however, prepared to consider targeted decommissioning on any funding to help to attain sustainable fisheries, a point which was also mentioned by the noble Lord, Lord Cameron. He was quite forthright in his condemnation of subsidies and we agree. We do not think that we should subsidise fuel costs, including fuel costs for commercial fishing vessels. Such subsidies can lead to overcapacity, can distort business conditions and can act against the long-term interests of the industry. However, the noble Lord recognised that there might be a case for some support for decommissioning of vessels. I accept the point that he made.
On the more general issues raised by the report and in the speech made by my noble friend Lord Sewel, we endorse the committee’s main statement that the common fisheries policy has failed to deliver sustainable fisheries. My noble friend, I think, referred to it as broken and busted. The Government might not go quite so far in their language, but we accept certainly the trenchant criticism of the CFP, which is why we are concerned to effect changes. Reform of the CFP must be radical and we intend to make progress as far as we are able. This report is timely in these terms, as is the Green Paper. The House will recognise that changes in Europe are such that we have a timetable whereby we can now influence the emergence of the new CFP. Of course, we have a great deal of work to do on that. The main principles behind the debate, my noble friend’s speech in introducing the report and the Government’s position are largely coincidental on what needs to be done.
Certainly, I would want to emphasise that a reformed CFP cannot exist in isolation from other policies. The noble Lord, Lord Taylor, and others who served many long hours on the Marine and Coastal Access Bill are all too well aware that that Bill raises issues which interrelate with the fisheries policy. We need to ensure that our marine environment is analysed, exploited and conserved as a whole, rather than in terms of partial individual polices.
A reformed CFP must be an appropriate and effective policy for managing not only fish stocks but also managing the impacts of fishing activity on marine resources and the marine environment more widely. The UK and other member states need effective measures at their disposal by which to limit the impact of all fishing activity where we have clear conservation objectives, while at the same time ensuring that fishing is able to develop in a much more successful way than in the past. We all know the problems which the common fisheries policy has failed to solve.
It is early days in the debate on CFP reform, but Commissioner Borg has acknowledged the importance of integrating better fisheries policy with others elements, such as marine environment policy. I hope that his successor recognises that importance also. We will certainly be pressing along those lines.
A reformed CFP also needs to be based on economically rational principles. It should enable a more prosperous, economically resilient and efficient fishing industry and promote vibrant fishing communities. Again, that important matter was expressed by the committee. It is distilled from the evidence that it received from fishing communities which emphasised just how important the industry was to the social and economic lives of their areas. We therefore recognise the case for a reformed CFP having some kind of social element, but this must be consistent with the need for the industry overall to become more prosperous and efficient, and must be based on a sound understanding of the full social, economic and environmental aspects.
The noble Lord, Lord Cameron, referred to discards in very emphatic terms, as did my noble friends Lady Jones and Lord Sewel. We clearly need to reduce discards. The report makes clear that action is needed to drive down discard levels incrementally. Changes could be made now to the current system to reduce discards. Ultimately, we need to see a fundamental change in the way in which the CFP influences decisions taken by fishermen on a daily basis. After all, a discarded fish is in the main a dead fish. No one derives any benefit from it—not the fishermen or the consumer and certainly not the fish stocks on which the fishermen and the consumer depend. A reformed CFP must provide the incentives and regulatory framework to enable us to catch less, but land more. Those are the principles we wish to see taken forward in our pressure for reform.
I agree with my noble friend Lord Sewel on his point about the registration of buyers and sellers and how that has improved the position on enforcement. There is no doubt at all that our implementation of registration has made a difference to the level of unreported landings, and the UK takes every opportunity to urge the European Commission to ensure that every effort is made to implement that regulation and all enforcement issues equally across the EU. As the report indicates, however, and as noble Lords who have contributed to the debate have emphasised, the issue of enforcement is of very great significance. For that, we need agreement on the principles of what needs to be enforced, and it is a drive towards that which is the Government’s goal in building on this report.
Of course, we agree with the report that the current CFP is overcentralised and that greater emphasis should be placed on the regional advisory councils. We can see progress from these councils in terms of a more intelligent strategy for fishermen and the acquisition of their consent regarding the objectives laid out at a more local level. We certainly need to end the overcentralised CFP which now exists and develop the regional advisory councils, which will help toward achieving the objectives indicated in the report. We also cannot escape one of the themes of the report: effective control and enforcement. One of the contributing factors to poor compliance is overcapacity. After all, that is what puts more fishing vessels at sea than have the right to take the catches. The European Commission’s Green Paper on CFP reform suggests that overcapacity may be tackled by a combination of rights-based management and targeted decommissioning. We agree with both those strategies.
We therefore have a report that has been extremely well worked through and well thought out, based on evidence taken from a wide group of well-informed sources—a report which, this evening, has had the benefit of very careful interpretation, not only from my noble friend who is chairman of the committee, but from all those who contributed to the debate. There was very little in the speech of the noble Lord, Lord Taylor, with which I did not concur in relation to the Government’s strategy on this issue. There are very significant British interests at stake in respect of the common fisheries policy. That is why it is so important to win the support of the European Union, which is larger than the body that set up the original CFP.
It is a major task ahead—a battle for which the Government are girding their loins. We have encouragement from Commissioner Borg in his analysis of the position, we have the Green Paper from the European Commission, and we have this report to help guide us. On that basis, I have no doubt we will make progress in seeing a radical reform to the common fisheries policy, which all who spoke in the debate agree needs very radical reform.
Apprenticeships, Skills, Children and Learning Bill
Committee (3rd Day) (Continued)
Clause 40 [Education and training for persons over compulsory school age: general duty]:
91A: Clause 40, page 23, line 8, leave out “secure” and insert “satisfy themselves”
In moving Amendment 91A I shall speak to the other amendments in the group. These amendments are intended to give us a chance to look at Clause 40 as a whole and to discuss how the relationship between a local education authority and the colleges now being brought back under its wing is to be conducted. The Government express the core of this in Clause 40(1) which states:
“A local education authority in England must secure that enough suitable education and training is provided to meet the reasonable needs of persons in their area”.
I take that as pretty strong control and indeed that seems to be the way it is being interpreted by local education authorities, which even now are tramping around colleges saying, “We are not going to allow you to do that because we want you to do this”, and generally putting a rather dirigiste interpretation on how the relationship will run. Indeed, that is the flavour I get from it as well. If a local education authority has a duty to secure that a particular kind of education is available, one that it decides on because it has to settle that the education is suitable, presumably it will use these powers over its colleges to make sure that they provide that education and do not provide other things.
Amendment 91A substitutes for the word “secure” the words “satisfy themselves” to indicate a different kind of relationship where it is the responsibility of the local education authority to make sure that education of a suitable kind is in place, but makes it clear that the authority itself is not responsible for providing that education. An authority will not have to take steps to ensure that the education is provided because, after all, it does not provide the education but merely directs one of the bodies under its control to do so.
That theme is pursued in most of the other amendments in the group, and certainly in Amendments 91B and 91C. Amendment 91D seeks to leave out lines 23 and 24. That is an amplification which really asks why a local education authority should be concerned about,
“the locations and times at which the location or training is provided”.
Again, that moves into the timetables of the colleges subject to the local education authority’s edict. I do not see why those details should be of concern to the authority. Amendment 91E provides that if the authority is going to take on all this control, it ought to be subject to the opinions of the people on whose behalf it says it is acting. Local education authorities appear to be doing this out of their own invention and direction rather than paying any attention to the people they should regard as their customers and, indeed, their masters in this matter.
Amendment 93A follows the general line I have laid out, while Amendments 100A to 100C underline what I said earlier in that they seek to change the relationship of the authority from one of master to provider. In other words, the relationship would change from one of controlling what colleges provide to looking at what the customers—the individuals who require the education or training—actually want.
That is almost the end of the group. Amendment 102B looks at the duty of LEAs to co-operate with each other. It seeks to reinforce the duty requiring local authorities to co-operate, particularly when there are a lot of authorities involved. A large further education college may well be serving 20 or so local education authorities altogether—some of the very big ones rather more than that. I want to increase the duty on local authorities to co-operate and make it clear what sort of co-operation is expected by saying that they have to co-operate not only in the interests of persons resident in their area but in the interests of persons resident in other areas. Colleges that they are responsible for, although in their area, may well be offering education to a very large number of people from outside their area. The whole direction the college takes, and the management of that college, should be in the interests of all the people it serves and not just the people in whose area the college happens to be. It does not seem to me that the local education authority’s duty to those people outside its own area is clear enough. I beg to move.
I am interested in these amendments that the noble Lord, Lord Lucas, has put down—somewhat belatedly, if I might say so. It would have been good if he had alerted us to them a little earlier. I take on board the points he is making.
The noble Lord said that in his experience local education authorities are beginning to lay down the law. That is not my experience. Many local education authorities are only just beginning to wake up to the responsibilities they are going to have under this Bill. A lot of negotiations are taking place among authorities regarding who will be working where. We have run down the capabilities of many local education authorities and this is causing real difficulty. There was a time, 10 or 20 years ago, when local education authorities had very large numbers of advisers and people running them. Authorities that used to be providers of education have become very much commissioners of education. They have very slim-line central secretariats these days; they have been slimmed down to small strategic authorities. Authorities are having now to think about acquiring capabilities that they have lost.
I am interested that the noble Lord feels that they are already adopting a very heavy-handed approach. There are, I know, among the colleges fears of going back to the days when local education authorities ran them. That has been echoed by the noble Lord, Lord Baker. However, the colleges are quite clearly established now as corporations in their own right. Most of them have strong corporations and capable chairs and capable principals. I am interested that he feels that already we are seeing signs of local authorities wanting to extend their empires. We probably also come from, so to speak, a slightly different standpoint. On these Benches our vision is of local education authorities having more of these responsibilities and having a good deal of discretion to run the show and do things and do their own thing rather than being told by the YPLA or the SFA what they ought to be doing.
Our great fear is that these two new authorities, particularly the YPLA, far from being light-touch authorities, are actually going to be strong second-guessing authorities. From reading some of the briefings we have received, it seems that local education authorities are going to have to go cap in hand to the YPLA and show it their plans and get their plans approved. Then they are going to have to go to their sub-regional groupings and regional groupings and so forth. A lot of bureaucracy is still involved.
I am interested in what the noble Lord, Lord Lucas, said, although I do not fully understand where he is coming from and we do not fully sympathise from these Benches with the line that he is taking.
This is a group of very useful amendments and I look forward to the Minister’s response to them.
Does he understand the concerns regarding the devolution of the powers and duty of education of those within the 16-to-19 age group to local authorities? Does he accept that concern is felt that some local authorities will struggle to cope sufficiently to ensure that all receive the high standards of education to which they are entitled?
The Minister will doubtless attempt to reassure us that the student is given the right to travel to a different local authority for education and that the funding follows the student. I would welcome such assurances, but the key problem, highlighted by my noble friend’s amendments, is not so much that we dispute the principle of education and training being provided by a functional and co-operating group of local authorities where the funding will follow the student wherever he wishes to go as the question how the Goverment intend to give effect to this proposal.
Can he tell us precisely how he envisages ensuring that local authorities co-operate in such a way that the best education is available to all and that the communication lines between transport, funding and other local services combine to ensure that people are encouraged to go to the area or education establishment which best suits their needs? It would be very useful to hear from the Minister how he envisages this working in practice.
I apologise in advance for what will probably be quite a lengthy contribution, because I want to place on record a range of key principles that have been addressed by the noble Lord, Lord Lucas, and, to some extent, by other noble Lords. Although I echo the point of the noble Baroness, Lady Sharp, about the belated nature of the amendments, we welcome them because they give us an opportunity to air some important issues.
Before I look in depth at the intention of the amendments, I reiterate why we are making these changes. They are driven by our desire to see a single, integrated service for children and young people from nought to 19—somebody from our group said “from cradle to college”, which I thought was quite nice—to ensure that all young people get the best possible start in life and the best preparation to succeed and achieve as they get older. We are making sure that every young person will be entitled to a new curriculum and qualifications. We are making sure that even the most vulnerable of our young people have an offer of a suitable place in education and training, including provision for young offenders and effective progression into learning for ex-offenders, and that young people with learning difficulties or disabilities will have consistency of support from nought to 25.
The historic step to raise the participation age to 17 by 2013 and to 18 by 2015 demonstrated how far this country’s sights have been raised. Through the Bill, we are making sure we have a system in place that achieves this aspiration and can continue to build on the highest-ever levels of participation that were seen for 16 and 17 year-olds this year.
All these changes put the young learner at the heart of a system which must make sure that the learning offer across an area and throughout a region is well planned, of high quality and responsive to meeting the needs of all our young people, irrespective of their age, ability or location. By transferring the duty to secure such a system to local authorities, we will provide the framework and impetus for these changes. Young people will benefit from having a single body which will be responsible for securing sufficient provision alongside information, advice and guidance services, and youth services. These amendments seek reassurance, first, on the ability of local authorities to take on these new responsibilities, and secondly, that they will always commission provision in the best interests of the learner.
I would like to address the concern of the noble Lord, Lord Lucas, about what he described as the dirigiste approach to FE colleges. This is not what we expect, nor, I must concur with the noble Baroness, Lady Sharp, what we have experienced, but if the noble Lord provides examples, we will speak to the LGA and the REACH director to ensure that local authorities are clear that we expect them to show strategic leadership, enabling and building strong, collaborative partnerships with colleges.
Let me look first at the ability and capacity of local authorities to carry out these new duties. Local authorities are uniquely well placed to take on the crucial leadership to continue and increase improvements in participation and achievement. They will have access to detailed intelligence about the needs and aspirations of their communities, through their responsibility for commissioning pre-16 education and through their ownership of Connexions. This intelligence will enable them to commission the 16 to 19 provision which their learners want and need. Local authorities will work together to plan and commission provision, including for our most vulnerable young people, in the full recognition, as noble Lords have already said, that many young people travel outside the local authority area in which they live to their local college or to their employer-based training place.
Immediate capacity will be provided by the transfer of around 950 LSC staff to all 152 local authorities to ensure that they have staff with the appropriate skills. These will be spread proportionately, depending on the size of the local authority. They will be supported by the Young People’s Learning Agency which will use its resources to provide efficient and economic services to local authorities. I realise we will have to go a long way to reassure the noble Baroness, Lady Sharp, that this will be a light touch, rather than the firm smack of dictatorship. We share her view that the partnership between the YPLA and the local authorities should be supportive and collaborative.
Services will include the provision of data analysis to support planning and commissioning, which means, crucially, that the college and school need provide information only once, to be used many times. The YPLA will also have powers to commission provision directly, which we expect to be used where it is sensible to do so, for example, where specialist provision should be commissioned nationally. There are some examples of where there are particular national requirements. I think there is one dealing with veterinary education. I may not have got that right, but there are examples of where we need national commissioning, such as where a local authority is struggling to take on its new role.
Local authorities also have their own pre-existing expertise on which they will build. They have already shown that they can rise to the challenge of improving services for young people through developing their commissioning expertise and we have the success stories to show just how effective giving power to locally accountable councils can be. For example, Bournemouth, by reviewing its services for children in care, developing a planned commissioning approach and redeploying resources to more preventive services, has achieved a reduction in its number of looked-after children from 204 in 2003 to 150 in 2007 and a marked improvement in outcomes for children in care. The authority now scores in the top 25 per cent on indicators for stability of placements and educational outcomes. Surely that is a very welcome improvement and an example of the benefits of the greater involvement of local authorities.
Our performance management structures for local authorities will ensure that we continue to see such improvements in commissioning. From April 2009, local authorities are being assessed and reported on through the new comprehensive area assessment—CAA—undertaken by six inspectorates including Ofsted. There will be an annual CAA report for each local authority area, in November each year. The report will include a rating by Ofsted of the local authority’s performance on children’s services. This will be a key driver for improvement at a local level, helping to develop high-quality services for children, young people and their families.
At a local level, government offices will work with local authorities to improve their performance through identifying and sharing best practice, using knowledge and data to improve performance, negotiating and supporting the new statutory local area agreements and reviewing how local and national priorities, set out in the national indicator set, are being delivered. Nor are these changes imposed on unwilling local authorities. Local authorities have been involved in shaping the system, and are now all enthusiastic about the opportunities that this gives them to improve outcomes for young people in their area.
As Anne Futcher, head of integrated services at Luton borough council, says:
“The transfer of both commissioning and funding provides a very real opportunity for continuity of support for learners with special needs, and it’s one we need to grasp. It will be the first time we have been able to plan for the needs of learners in the round, which can only be good for young people”.
We are building on this existing expertise and enthusiasm as local authorities prepare for their new duties, and have invested in relevant support through both the React—Raising Expectations Action—programme, which has been developed with the Association of Directors of Children’s Services and the Local Government Association. Launched in September 2008, it provides a package of support for local authorities, including a specific strand focused on pre-19 commissioning.
I turn to the vital matter of how the system will ensure that local authorities will always commission in the best interests of the learner, which is after all a shared objective of all of us. I sympathise with the noble Lord’s concerns, and agree that we must make sure that a young person can access the most suitable learning for them—a point that the noble Lord, Lord De Mauley, focused on—no matter whether it lies within or outside a local authority boundary. We all know that young people will travel to learn, often across local authority boundaries, because it makes sense in their circumstances. We are making sure that young people will continue to access that same choice of learning.
The Bill provides that local authorities must secure enough suitable education and training opportunities to meet the reasonable needs of young people and that they cannot constrain the choices of the learner. This will be achieved because the funding will follow the learner; the provider chosen by the young person will get the funding for that young person.
I turn to the importance of the sub-regional group with regard to co-operation between authorities to enable some of this to take place. The sub-regional group will agree a lead commissioner for each institution, which will normally be the local authority in which the institution is based. The local authority will plan and commission provision from those providers in its own area. This commissioning will include provision for young people who travel into the local authority area to study. Each local authority will have an interest in other local authority plans to ensure that all its resident learners are being catered for. To ensure that this happens, local authorities will be required to co-operate with each other when carrying out their new functions. We will expect this duty to be fulfilled largely through coming together in sub-regional groups, which we know broadly reflect travel-to-learn patterns. Forty-three sub-regional groups have now come together and data show that around 90 per cent of learners within each grouping are likely to travel to local authorities within their sub-regional group to learn. I think that takes a lot of account of travel between local authority boundaries.
The key role of sub-regional groups is for the local authorities to work together to build a picture of demand, including the flow of young people across the individual and sub-regional borders, and to make sure that the individual local authority commissioning plans are coherent with each other. I give an example in which the noble Lord, Lord Lucas, might have a particular interest. Greenhead sixth-form college is an excellent college, which in 2007-08 took 16 per cent of learners from outside its home local authority of Kirklees. Kirklees local authority will be expected to reflect this proportion of learners in its commissioning plan, as this is where the young people are choosing to study. If the figure changed substantially in future commissioning plans, the sub-regional group will challenge this decision, as will the college. In that respect, this is similar to the ability of colleges to challenge commissioning plans by the LSC.
We know that sub-regional structures enable local authorities to work together to improve the outcomes for young people. For example, Devon, Cornwall and Torbay, by developing a sub-regional approach to the commissioning of residential placements for children in care, experienced a 450 per cent increase in placement choice as well as improvements in the quality of service received from providers. The sub-regional groupings will also serve to provide peer support and challenge. All local authorities within a sub-regional group will have an interest in ensuring commissioning is working in other local authorities in that group, and this will manifest itself in stronger collaboration.
As I have touched upon, it is even more likely that learners who have learning difficulties or disabilities that require specialist support may need to attend provision that is outside their area. There are additional safeguards in place to ensure these needs are met, and we will go on to consider these in more detail in further amendments, but I wanted to cover them briefly as I know this group of learners is of particular concern to the noble Lord.
I cannot argue with the maths. We would say that on that basis we are picking up a huge amount. There may well be other cases. We would say that we are picking up most of the requirements in that 90 per cent. I will come back to the noble Lord on that 10 per cent.
The learning difficulty assessment, which is undertaken by the resident local authority as part of a wider person-centred planning process, should identify the support and the provision, including the provider and the programme. The local authority will need to have regard to the outcome of the assessment when securing provision. Therefore, if the assessment identifies, for example, a specialist provider that is outside the local authority’s area, this information will be fed into national and regional planning processes so that a place can be commissioned as appropriate.
I want to make sure that I have picked up on all the points raised. The noble Lord, Lord Lucas, expressed a concern about why a local authority should be concerned about the timing and location of provision and whether that was about college timetables. To support participation by all young people, we must ensure that education is accessible. We recognise that people need and want to learn through different methods at different locations—for example, part-time working to satisfy raising participation age requirements around a job to support the worker and their families. Our colleges are used to providing flexible timetables. This is absolutely not a licence for local authorities to dictate college timetables. They will remain a matter for colleges.
On the independence of colleges, colleges will own the land and the buildings. They will remain incorporated bodies, employing their own staff and setting their own vision and direction. In sort, colleges will remain autonomous. It is about getting the right touch and collaboration and co-operation.
As to what happens to the other 10 per cent, they will be commissioned through the YPLA as a support to local authorities. The explicit assurance is—the noble Lord is right to ask—that nobody will lose out. We do have to ensure that.
I apologise once again for the length of the contribution. However, it was necessary, given the importance and complexity of some of these issues. I hope that I have reassured the noble Lord, Lord Lucas, that the system is designed to ensure that young learners are able to access the most suitable provision for them, and not the other way around. This will not lead to parochial commissioning practices within local authorities and will ensure that the best 16-to-19 providers, of whatever form, flourish and expand.
I cannot say I find myself much reassured by that. We seem to be replacing a system that has relied on the expressed wishes of the individual learners as reflected in their applications to colleges and the colleges’ response to that with one that supposes that half a dozen people transferred from an agency in Coventry can get a grip on exactly what everybody in the local education authority’s area requires by way of 4,000 different qualifications. Moreover, they would need to take into account their,
“ages, abilities, aptitudes … learning difficulties … the locations and times at which the education … is provided”.
I do not begin to understand how local education authorities are going to be capable of planning on that scale and in relation to that complexity. Can the noble Lord start by telling me what is meant by “commissioning”? If the local authority decides that it needs another 20 places for people to study hairdressing, say, how will it go about securing that? Will it issue an instruction to one of its local colleges to provide them? If it does, what happens if all those places are taken up by someone from a neighbouring local authority? How does commissioning and securing work in practice? Can the noble Lord give us an example?
I thought I had endeavoured to cover that. I am happy, however, to return to the issue again. Local authorities are uniquely well placed to take on the crucial leadership to continue and increase the improvements in participation and achievement. They will have access to detailed intelligence about the needs and aspirations of their communities through their responsibility for commissioning pre-16 education and through their ownership of Connexions. That intelligence will enable them to commission the 16-to-19 provision their learners want and need. They have also agreed that they want to work together in sub-regional groupings. They have seen the advantage of that. They already know that they cannot possibly provide every facility in each local authority. A degree of co-operation is required already. Working in sub-regional groupings, which have been agreed to, and supported by, local authorities, ought to enable them to ensure that, when they are commissioning, they are commissioning to meet the needs not just within their local authorities but across the whole of the sub-regional grouping.
The noble Lord dismissed the transfer of LSC staff but we see it as being important; they are people with the appropriate skills. There may be circumstances in which local authorities may need additional help in the commissioning process. Again, the YPLA will have resources to provide efficient and economic services to local authorities. This will include the provision of data analysis to support planning and commissioning, which crucially means that the college and school need provide information only once to be used many times. I can see the importance of getting clarity on the commissioning process, so perhaps there is some value in writing to the noble Lord to give him further details. However, we believe that because of the way in which it has been structured, with the sub-regional groupings and the support of the YPLA, it will be a collaborative process that ensures that commissioning does what it needs to do—to meet the needs of learners.
I am not sure that I am much wiser at the end of that. I agree with the noble Lord that local authorities are in a position of great knowledge and potential leadership, and I hope there is nothing in my amendments that goes against that. What I do not see is how they are in a position to direct.
The noble Lord talks about commissioning in relation to school places and then in relation to colleges. To the extent that a local authority commissions school places, it merely makes sure that places are available without specifying in any way what should be taught. You just commission a school, which acquires a board of governors and a headmaster and then goes off and decides what A-levels and GCSEs it will offer and whether it will have a diploma or vocational qualifications. They are decided entirely by the school. But as I understand it—I am sure that the noble Lord will correct me if I am wrong—commissioning in the sense employed in Clause 40 means specifying what particular courses should be taught and available, because otherwise the word “suitable” becomes quite difficult to parse.
If what is required, as I say, is additional courses in hairdressing, how can the local authority secure it without really getting its fingers inside the operation of a college? What actually is meant by “secure”? If I have to secure the places that are available, it means that I have to ensure that they are not available to anyone else. I need them for people in my local authority area. If I am going to commission 20 new places to study hairdressing at, say, New College in Huddersfield, I am not going to have people in Manchester coming in and taking those places, because that would mean that I had not secured them. To secure them must mean not only directing the college to provide them but also directing it not to admit people from other local authorities.
I must admit that I am now a trifle puzzled by the noble Lord. On the one hand he wants ultimate flexibility, but on the other he is now saying that he does not really want that in his commissioning process. With sub-regional groupings, that is exactly what we need to address. Of course there will have to be a bottom-up process. It will not be the councils not taking any notice of colleges’ current requirements. In arriving at the 14-to-19 partnership strategic plan negotiated by providers and local authorities, they will have to take notice. That is how they will build up a picture of the requirements. If you are serious in saying that you want young people to have the ability to cross boundaries, you have to be able to meet that requirement. The only way in which you can do it is not in the silo of one local authority but by co-operating in these sub-regional groupings that the local authorities themselves have willingly entered into. They believe that they are necessary and will meet 90 per cent of the requirements.
I have some sympathy with the noble Lord, as he has enabled me to explain in detail the precise nature of the commissioning process and to satisfy not only him but the Committee generally that it will be a demand-led process which will reflect the demands of learners and have flexibility. I have offered to write and further explain that process, because I think that that would be helpful.
I am emphatically not saying that. I do not want to be misrepresented. I am not saying that that is how it will operate. In fact, I have taken great pains to say the complete opposite—that they will be working in partnership to try to assess the nature of demand, not dictating exactly, in the way that the noble Lord has unfortunately misrepresented. Rather than our continuing this rather circular argument, I hope that the noble Lord takes my offer to write and explain further at face value, as a genuine attempt to help.
Yes, I will. There are one or two other points that I want to come on to. If what I said is not true, how is a local education authority to live up to the wording of lines 8 and 9 on page 23, to,
“secure that enough suitable education and training is provided”?
That is the point of my amendment. The noble Lord really has not addressed my amendment at all in its detail. For example, if I am required to “secure” that the noble Lord has an 8 ounce steak for lunch tomorrow, I have to go out and buy it.