House of Lords
Monday, 7 December 2009.
Prayers—read by the Lord Bishop of Salisbury.
UN: UK Peacekeeping Contribution
My Lords, I refer to the Statement made by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs in another place on 25 March 2009. To control spending, the Treasury has capped the call on the contingency reserve for peacekeeping at £374 million.
We estimated that peacekeeping assessed costs could rise to £456 million in 2009-10 and so reluctantly cut back on discretionary conflict activity. From 2010-11, the Treasury will consider a modest request for end-of-year flexibility.
My Lords, I thank the Minister for that not terribly encouraging reply, although I know she has done her best, and I regret that a Treasury Minister has not been prepared to come to the House to answer for a matter that is fair and square within the responsibility of the Treasury—because the contingency reserve is not a matter for the Foreign Office. Can she confirm that there will be no question of Britain using its veto on the Security Council to block on purely financial grounds an operation that enjoyed the support of the council? Will she also confirm that the budgets of these peacekeeping operations are set by the UN General Assembly, which does so by majority, and therefore Britain has no control over that? Is it not high time that the Government got out of the trap into which they have fallen and which is squeezing Britain's contribution to conflict prevention and resolution?
I thank the noble Lord who, we are all aware, has enormous expertise and experience in these matters. I can confirm that the UK would not block a UN mission in the Security Council on financial grounds alone. On the noble Lord’s second point, he will be aware that budgets are proposed by the UN Secretary-General and agreed by the General Assembly of the United Nations. In 2009, the Secretary-General asked for $1.5 billion more funding than in 2008. As the noble Lord knows, it is very difficult to influence the General Assembly of the United Nations. We are but one voice in 192 and that makes the task very difficult. A decision on full access to the reserve for peacekeeping costs would have to be taken in the context of wider government financing. I thank the noble Lord for his interest and commitment in these matters.
Will the Minister confirm that the earmarked sum of £456 million is still adequate to meet expenditure in the current financial year? What does she expect to do if the pound falls further in the financial year 2010-11 in terms of sterling’s stability? Will she also reflect on her predecessor's admission that combining assessed contributions and discretionary spending is a bad idea and attempt to revoke it in the next spending round?
On the noble Baroness's first point, peacekeeping costs are unpredictable, which makes it very difficult to estimate the amount that we need in advance. Without the rules governing our ability to buy in currency in advance, we have done what we can to insulate our budgets from exchange rate fluctuations. Our strategy of forward purchase of our foreign exchange requirements has provided a considerable degree of cost certainty. I am not aware of my predecessor, my noble friend Lord Malloch-Brown, having said what the noble Baroness asserts. I will look it up, but I am convinced that he never made that point as forcefully as the noble Baroness suggests.
Does the Minister recall that we dealt with this subject in considerable detail on 6 July and that her predecessor, the noble Lord, Lord Malloch-Brown, who is, alas, no longer among us—who knows who will go next—was very positive in his response to the noble Lord, Lord Hannay, in saying that there was something wrong with the way in which discretionary expenditure always gets squeezed? We all appreciate that there is no more money, but given that more and more of our international involvements will be multilateral rather than bilateral, is it not time to look at this whole arrangement in rather better detail? It might even be more efficient from the Treasury’s point of view as well than the present rather haphazard outcome.
The current process has been in place for a number of years. I confirm that my noble friend Lord Malloch-Brown is alive, well and kicking. Peacekeeping and discretionary conflict activity are paid for from joint budgets with the Ministry of Defence, the Department for International Development and the FCO. It is important to understand that tripartite responsibility. The Treasury cap on accessing the peacekeeping reserve means that we have finite conflict resources. The budget is under huge pressure because of exchange rates and, more significantly, the big rise in UN and EU peacekeeping around the world, notably in Africa. I know that many Members of this House will be aware that the spending of the EU and the UN on concerns in Africa has increased substantially and that that affects the amount of funding that we have for discretionary activity. The UK pays a significant share of that bill, which means that we have limits on contributing to discretionary conflict interventions from our fixed pot.
My Lords, as peace and security are fundamental preconditions for economic development, does the Minister agree that it would be entirely appropriate for a greater sum to be made available from the budget of the Department for International Development to supplement the scarce funds now available to the Foreign and Commonwealth Office?
I am sure the noble Lord is aware that the assessment that is made when the Department for International Development agrees its funding has to be in line with the OECD conditions. I think he will agree that those strict limits and criteria are very important in terms of what we call “DAC-ability”; that is, whether they conform to our overseas development priorities.
“Daft” is a word that I would hesitate to use about the UN, or about the British Government, of course. There are increasing pressures on the UN budget because of the increasing need to respond to urgent and emergency situations, particularly in Africa. Therefore, extra funding is required. However, fluctuations in exchange rates have led to significant pressures on the FCO’s budget, not just as regards conflict activity. We have tried to mitigate the worst effects of the depreciation of the pound, but it is very difficult for us to predict each year, on a year-on-year basis, what will be needed in terms of conflict prevention and for dealing with conflicts, particularly in the continent of Africa.
Employment: Public Sector
To ask Her Majesty’s Government what is their response to the report by the Office for National Statistics that the number in public employment in the second quarter of 2009 (including employees of the partly nationalised banks) had increased to 6.04 million, representing 10 per cent of the United Kingdom’s population.
The main factor influencing the recent public sector employment growth reported by the ONS has been the temporary reclassification of certain banking employees to the public sector. Growth other than this has largely been a result of the Government’s decision to invest in front-line services, including vital recruitment activity at Jobcentre Plus to maintain provision of targeted support to help people to find work and move out of unemployment.
I thank the noble Lord for his illuminating Answer, but does he acknowledge that the level of public employment has risen steadily since 1997? Even if we take note of the points that he made and accept that there will perhaps be many more employees in the National Health Service, education and policing, is it not also true that there is an increase in the number of those working in make-work projects that are of absolutely no commercial benefit to Great Britain Ltd?
The noble Baroness will no doubt be aware that the total number of people working in the public sector is roughly in line with the figure in 1990, when the noble Baroness, Lady Thatcher, was Prime Minister. The total increase in public sector employment since 1997 includes 116,000 more teaching assistants, 41,000 more teachers, 66,000 more nurses and 14,000 more police officers. These are important supports for our community and are consistent with our advocacy and support of good public service.
My Lords, it is in fact not the case that the share of public sector employment has risen continuously since 1997. That merely shows that it is dangerous for people who do not understand statistics to get involved with them. Is my noble friend aware that in recent years the peak of the share of public sector employment occurred in 1992? I have forgotten, but can he remind us who was in power in 1992?
My Lords, I think that I have already reminded the House that there was a Conservative Administration on this side of the House at that time. My noble friend is absolutely right. The total percentage of the workforce in public sector employment declined from the mid-part of this decade until the latter part. It has increased only as we moved into a recession. It is perfectly correct and proper that, as private sector consumption and investment decline, public sector expenditure should increase, particularly on front-line services, to help to draw the economy back towards optimal equilibrium.
Given the state of the public finances and the near inevitability that in future years total expenditure on public sector employment will fall, can the Government give an assurance that any cuts will be via reining back public sector pay increases and bonuses rather than staff numbers, particularly in front-line staff?
Can my noble friend confirm that among public employees today are senior personnel in the Royal Bank of Scotland who apparently have threatened to leave the country if they cannot be allowed to have very significant bonuses? Can he, with his experience, tell us what on earth we could possibly do if people of such unique talent were to leave the country? I should add that, while I am not certain what we would do, I am prepared to find out.
My noble friend drifts a little away from the subject of the Question, but I shall respond, as it is a matter that I find particularly interesting. The total number of public sector employees currently includes 240,000 from those banks that are temporarily owned on the part of the taxpayer. They will of course return to the private sector as and when these banks are in full private ownership. I shall not be drawn further on the legitimacy of bonus claims, nor will I verify that these people have threatened to leave the country. The board of directors of RBS has apparently threatened to resign if it does not get the bonuses that it wants, but that is rather a silly line for it to adopt and actually a very unpatriotic one. I think that the nation finds that activity shameful.
My Lords, I think that we ought to get back to the Question proper. Public sector efficiency, as shown by the Office for National Statistics, has gone backwards every year since 1997, so the Minister’s assertion that this is just about front-line services is clearly inaccurate. We have had many Statements on efficiency—there will be another today—but when will the Government knuckle down and deliver efficient public services?
I am sure that we can count on significant improvements in efficiency if the party opposite finds itself in government, because it will slash the number of people in teaching, slash the number of people in the National Health Service and slash the number of people in defence and security, thereby increasing and improving efficiency on the crude measure used by the ONS. We are more focused on the combination of quantity and quality.
Will the Minister repeat the figure for new teaching assistants, which I think was about 146,000? Is he happy with the outcomes? He talks of efficiency, yet every day we see in the newspapers that we are failing our children on reading, writing and arithmetic and that we are failing those leaving sixth-form colleges, who are not getting sufficient grades. Does the Minster think that that is efficient? Perhaps we should not have employed any of those teaching assistants.
I am shocked by that final observation. My experience is that classroom assistants significantly improve the productivity and efficiency of schoolteachers. We believe that augmenting highly skilled teachers with others working alongside them on work that requires less training and preparation is a worthy way of meeting needs in the classroom.
My Lords, provisional data published in October show that there were a record 234,000 apprenticeship starts in the 2008-09 academic year, compared with 184,400 in 2006-07—and a miserable 65,000 in 1996-97, before this Government took over. That represents the highest number of apprenticeship starts and achievements ever in an academic year. When final data are returned by providers, we expect apprenticeship start figures for 2008-09 to rise by approximately 2 per cent to 3 per cent.
My Lords, I thank the Minister for his Answer. But is it not the case that, in the last quarter of 2008-09, the number of people starting an apprenticeship plummeted by 20,000, or 36 per cent, on the same quarter in the previous year? The Government boast of moves to promote apprenticeships, including new apprenticeship training agencies and group training associations, but those will provide only 14,000 places over three years. Is that not a drop in the ocean compared with a fall of 20,000 in no more than three months?
My Lords, I am informed that the figures that I have given you for 2008-09 are correct, and they show an increase of approximately 2 per cent to 3 per cent. We believe that our record on apprenticeships is second to none and that we rescued a system that was dying on its feet. We are spending more on this than we have ever spent before. We are also determined to recruit more within the public sector; we have, as the noble Lord knows, set ourselves an ambitious target of something like 21,000. We are making significant progress. I am not in a position yet to announce the figures, but we are driving hard and have ministerial champions in each department. I am confident that they will make a significant contribution.
My Lords, although the House will welcome the number of apprenticeships recently announced by the Minister in traditional areas such as manufacturing, what steps, if any, are being taken to create apprenticeship opportunities in rural areas and communities?
To reassure my noble friend, we have a number of schemes to try to drive up the number of apprenticeships. I instance group training associations. We have invested another £10 million to encourage the creation of those organisations, where small and medium-sized employers can shelter under that umbrella and encourage the creation of more apprenticeship opportunities. Generally, the drive for apprenticeships around the country is being led by the National Apprenticeship Service, which came live last April, but it is the cumulative result of a number of government initiatives to drive up apprenticeships that will ensure that we create more of them in rural areas.
My Lords, with the enactment of the apprenticeships Bill, there is concern that there will be a requirement for prescribed standards—in particular, for off-workplace training. Does the Minister agree that we need to listen to employers and businesses to meet their concerns and to ensure that the apprenticeship schemes meet their particular requirements, which can be special in many cases?
I agree with the noble Lord that we should. We have created what we believe to be a demand-led system. We have created the sector skills councils which, as I am sure the noble Lord knows, are employer-led. We Ofsted-inspect the learning scheme. We believe that we have taken every precaution. If he has specific examples where he feels that the system is failing, I would welcome the opportunity to examine them, because we want to ensure that our training schemes deliver value for money.
I will have to write to the noble Lord to give him the precise number but, in the area of his concern—which we are addressing, because we share it—we have identified the new skills strategy. It sets out a new ambition for a modern class of technicians to secure our economic future and to drive growth. We will create up to 35,000 extra advanced apprenticeship opportunities for 19 to 30 year-olds over the next two years, and many of those will be in the engineering area, so we are addressing that.
My Lords, is my noble friend aware that in the 1950s, I served a five-year apprenticeship, which delayed by three years my National Service, which I then served in the Air Force? Secondly, does he believe that the Government should have been encouraging apprenticeships 10 years ago, not two years ago?
I thank my noble friend for that information. I believe that we have been encouraging apprenticeships for more than 10 years now. As I pointed out in my opening remarks, the scheme we inherited was dying on its feet: there were only 65,000 apprentices and only just over a quarter were completing their apprenticeship. If we wind the clock forward 10 years, we now have more than a quarter of a million apprentices, and more than two-thirds are completing their apprenticeship. That sounds like a Government who are focused, concentrating and, more importantly, delivering on apprenticeships.
Why are the Government cutting back on the number of adult apprenticeships when, in a demand-led system, there is excess demand for adult apprenticeships, whereas it is quite difficult to find employers willing to take those aged under 19?
As the noble Baroness knows from our many exchanges on the apprenticeships Bill—what a pleasure to meet her again—last year was a record year for adult apprenticeships. There were about 27,000. We will not reach that figure this year, but we will still see a significant number of adult apprenticeships. We want to ensure that we get extra value for money from colleges and to encourage the most efficient. As she will know, we are very focused on 16 to 18 year-olds, and I know that she shares a similar concern. It is a question of balance. We certainly have not abandoned the old apprenticeships, because they also make a significant contribution in reskilling and retraining.
EU: UK Membership
My Lords, first, I congratulate the noble Lord, Lord Pearson, on his election as leader of UKIP. I thought that his reported offer to liquidate his party in exchange for a deal with the Conservatives showed a rather original approach to party leadership. The Answer to the noble Lord’s Question is no.
My Lords, I am most grateful to the Minister for her comments. I have to tell your Lordships that the democratic process and the subsequent media attention have come as quite a shock to the system at my age, but I am, of course, enjoying it very much.
I fear that the Minister’s Answer serves to confirm the gulf between the political class and the British people. How do the Government respond to the large and growing majority of voters who polls show very much want a referendum? Are they surprised at that demand now that the Lisbon treaty has removed the last vestiges of our national sovereignty and EU membership is costing us some £45 million per day in cash and hugely more when we add up the costs of overregulation, expensive food and so on? How can this country possibly afford this in our present circumstances?
My Lords, far be it from me to cause further shocks to the noble Lord’s system. Repetition of his hostility to our country’s membership of the European Union does not add strength or wisdom to his arguments. The truth is that the United Kingdom derives great export, employment and investment advantages from our membership of the single market. Does the noble Lord wish to turn that clock back? Does he want to affect the jobs and the security situation that we enjoy because of our membership the European Union? Our country’s environmental security, currently under discussion in Copenhagen, and our geopolitical interests are also best served by full and committed participation in the European Union. These and other realities mean that a referendum on continued membership is unjustified, unnecessary and, frankly, irrelevant to the interests and needs of the people of this country.
My Lords, would my noble friend agree that the noble Lord, Lord Pearson of Rannoch, has shown today a standard of leadership that screams out to all other political parties that they do not have a great deal to worry about?
On a more serious note, would she give us her reflections on the voice of UKIP in the European Parliament when it was questioning the noble Baroness, Lady Ashton, in her new role as European High Commissioner for Foreign Affairs? Does she think that it is of any benefit to this country to talk down a British politician who is fighting not only for a British, but also for a European, interest in Brussels in the high role that she has been given?
My Lords, I thank my noble friend for raising those points. I am well aware of the comments made by the former leader of UKIP. I thought that they were so vile that they probably damaged him far more than our noble friend or anyone else. This House has every reason to know of the profound capabilities of the noble Baroness, Lady Ashton, and will have every confidence in her ability to apply those qualities in her new role as High Representative.
My Lords, we are all concerned that the noble Baroness, Lady Ashton of Upholland, who we all admired very much and who was an excellent Leader of the House, should have been caught up in this maelstrom of arguments following the Lisbon treaty being put into force. It is very worrying. I make clear that we are not interested in the ideas of the noble Lord, Lord Pearson, in our referendum. I think that was the policy of the Liberal Democrats recently. Perhaps they would explain. We are concerned that we should not be outwitted, as we appear to have been, in dealings with the appointment of the new Commission. Surely what we need in London is a smarter Government in dealing with the French and the European Union, rather than the Government we have now.
I do not think anyone can take away from the Government the fact that we have had a very good result in terms of the decisions that were taken after the Lisbon treaty came into force. The High Representative, the noble Baroness, Lady Ashton, will have an extremely important task in streamlining the abilities of the European Union to deal with the increasingly complex foreign policy issues. The UK Government remain committed to our relationship with the European Union and that has to be in the interests of the British people.
My Lords, it is an eccentric state of affairs as the Minister has indicated. Has she noticed that the noble Lord, Lord Pearson, probably qualifies for the Guinness Book of Records as being the only leader of a British political party to have caused a mass resignation crisis three days after taking over? Would she none the less also reflect that as so many senior Conservatives dislike Europe intensely perhaps the logical solution would be for a merger between UKIP and the Tories, but before the general election?
I thank the noble Lord, and I cannot help noting that the cast-iron guarantee given by Mr Cameron seems to have somewhat evaporated and been lamely replaced by the pledge that democracy through Parliament will be replaced by democracy by plebiscite on European issues. That certainly cannot be in the interests of the British people. He quite rightly points out that there seem to be many issues on which there is considerable agreement between the UK Independence Party and the Conservative Party.
Arrangement of Business
My Lords, with the leave of the House, my noble friend Lord Davies of Oldham will repeat the Statement entitled “Putting the Frontline First: Smarter Government” immediately after the debate. [Laughter.] Shall I repeat that? The Statement entitled “Putting the Frontline First: Smarter Government” will be repeated immediately after the debate in the name of Lord Sutherland of Houndwood.
Proceeds of Crime Act 2002 (References to Financial Investigators) (Amendment) Order 2009
Motion to Resolve
That this House notes with concern criticisms by the Chairman of the Police Federation of the powers contained in the Proceeds of Crime Act 2002 (References to Financial Investigators) (Amendment) Order 2009 (SI 2009/2707) laid before the House on 8 October and calls upon Her Majesty’s Government to revoke the order. 31st Report, Session 2008–09, from the Merits Committee.
My Lords, the Proceeds of Crime Act 2002 is 300-odd pages long. At its Second Reading, its complexity and disorder were commented on adversely by the noble and learned Lord, Lord Lloyd of Berwick. This complexity has made it more difficult to understand even than the constitution of the Holy Roman Empire in the early part of the 17th century; I know that as I have borrowed a history of the 30 Years’ War from your Lordships’ Library. My only regret in having made that comparison is that the late Earl Russell is no longer with us.
Section 68 states who may be financial investigators. They are defined as a police officer above superintendent and a customs officer above a certain grade—so far, so good. The third type was to be designated by the Secretary of State in statutory instrument. No one commented on this at Second Reading and the enabling clauses were passed undebated at both Committee and Report stages.
The powers of the financial investigators are wide and sweeping. I have no objection to that, even though the Joint Committee on Human Rights at that time thought that the seizure of criminal goods in the way in which the Act allows amounted to double punishment. However, the Government did not agree with that and passed the Act as it stands. The powers are admitted by the judiciary to be draconian and therefore should be used only to combat those serious criminals who organise drug smuggling or people smuggling. That was the stated objective at the time. It was not intended to include, as does the new list, those who dodge fares, those who fiddle pensions, those who are behind with their council tax or similar minor offenders.
It will be no good for the noble Lord, Lord Brett, to come to the Dispatch Box and read out a prepared piece of anodyne guff telling us that the powers will be used with discretion. They will not. The agencies are on to a slice of the money seized. The only time I have heard of such a thing before was when Bertie Wooster commented that Sir Roderick Glossop had had a slice of the fines that he imposed in the magistrates’ court.
Too many cases of official heavy-handedness have already occurred in the near past and there has been no confidence in the siren calls of official restraint. In a case where a chemist made a false prescription claim involving £464, under the existing Act £212,000 was seized from him. Luckily, that was quashed on appeal. We have seen anti-terrorist powers used to question tourists photographing St Paul’s. I believe that even the noble Lord, Lord West, was stopped under Section 44 of the Terrorism Act. We have seen local authorities using RIPA powers against people for putting rubbish into the wrong bins. We have seen these powers used against people for trying to send their children to the school that they want but which the local authority does not, against people for illegal fishing for eels in Poole harbour and against a punt operator in Cambridge for landing at the wrong place. Last, in this far from comprehensive list, one Stephen Clarke, who was standing near a manhole cover fiddling with his mobile telephone, was arrested. The police banged him up for two days, accusing him of taking photographs with a view to committing a terrorist offence. Happily, the magistrates acquitted him of any wrongdoing.
This general abuse of powers has increased and is increasing, but it has to be reduced, preferably to vanishing point. This statutory instrument repeals an earlier one passed last spring. That one added only Uncle Tom Cobbleigh and most to the number of financial investigators; this one rectifies the deficiency and the list now makes sure that Uncle Tom Cobbleigh and all have the powers.
This abuse of executive power was drawn to my attention by the Times. No one had noticed it until then. The Merits of Statutory Instruments Committee also had its attention drawn to it by the Times. Therefore, we owe that newspaper a debt of gratitude for doing something that none of us parliamentarians noticed, which we should have done. The Merits Committee then complained, saying:
“More importantly however, it gives some agencies (Counter Fraud and Security Management Service; Department of Health; Department of Regional Development in Northern Ireland; Gangmasters Licensing Authority; Home Office; Intellectual Property Office; local authorities; Serious Fraud Office; and Transport for London) powers they did not have previously”.
It points out with icy restraint that the lack of broad consultation on this instrument meant that the committee and, therefore, the House were,
“unsighted on the views of key stakeholders”.
The Home Office, in answering the lack of consultation complaint, said that as the powers had not been controversial it saw no need to consult those who had those powers under Section 68. Section 68 gives the Secretary of State the power to grant financial investigator powers to anyone he thinks fit. He should think long and hard before he doles them out. The Merits Committee also complained that the Government failed in the spirit of their own guidance.
The Law Society has written to the Home Office Minister, Mr Campbell, saying that it was of great concern to it to learn that these powers would no longer be restricted to serious organised criminal activity but instead would be able to be used against fare evaders, parking defaulters and bookmakers operating rigged betting rings. The Law Society said that it was even more concerned to learn of this change through the media and only after the statutory instrument had been passed by Parliament.
Paul McKeever, chairman of the Police Federation, is quoted as saying:
“The Proceeds of Crime Act is a very powerful tool in the hands of police and police-related agencies and it shouldn’t be treated lightly”.
He went on to opine that the public should be very concerned at the,
“behind-the-scenes creeping of powers”.
He could not be more right. There is a very serious principle involved here. The power of the state to seize people’s goods or to lock them up should be granted only after a full debate in Parliament with Ministers of the Crown making a concrete case for it, not by sneaky hole-in-the-wall statutory instruments. This is what the Government have done and, I hasten to add, not for the first time. It is a disgrace. I wish only that I had been able to ask the House to pass a fatal Motion and not one only of an admonitory nature. I beg to move.
My Lords, we are most grateful to the noble Earl for bringing this matter before the House. My Liberal Democrat colleagues in the Commons prayed against this order, but there are different procedures there and the matter was therefore not debated. We should also thank the media, as the noble Earl said, specifically the Times. We may not always regard the media as our friends, but they are part of the scrutiny process.
There is one thing to be said for the order. It sets out in full—including the added organisations—a schedule of the organisations and their relevant purposes whose staff may be accredited as financial investigators. This is the sixth version of the list. The schedule seems to have gone from three pages in its original version in 2002 to the current 18 pages. I have not had time to count the individual organisations.
I have a number of questions for the Minister. I hope that he has received my e-mail asking these—he indicates that he has. Why is this order needed, a mere six months after the last order? Have any agencies requesting these powers ever been refused in their request? What is the relevant training, if that is the term used, required for accreditation? I am aware that it is training by the National Policing Improvement Agency, but I am concerned, as the House should be, to know its content, length and so on. What monitoring and reporting mechanisms are there, both to monitor the detail and to provide us all with the big picture?
The Explanatory Memorandum published with the order is very useful. It tells us that various bodies will be,
“less reliant on more traditional law enforcement agencies, notably the police”.
It is significant that it was the chairman of the Police Federation who raised this issue. I suspect that he shares my view. Should not organisations such as Transport for London and local authorities be reliant on the traditional law enforcement agencies, notably the police, for things like the recovery of cash in summary proceedings? Before anybody accuses me of betraying my background, I have checked this out with the Local Government Association; I simply disagree with it about the extent of the powers. I am well aware that offenders can often be charged for a range of offences once they are picked up for an individual offence, but that does not seem to me to warrant what this order proposes. Search and seizure warrants in confiscation, money-laundering, civil recovery and detained cash investigations are serious matters on which to give so many organisations what are effectively law enforcement powers.
One of the agencies that now within the new remit is the Department for Regional Development in Northern Ireland. I mentioned this to my noble friend Lord Alderdice, who observed that currently this department is under the ministerial leadership of Conor Murphy of Sinn Fein. We seem to be unable to devolve policing and justice to the Northern Ireland Assembly, but we are granting these powers.
I do not suggest that crime is not serious. I accept that in some cases of serious crime powers of search and seizure can be effective. But who exercises the powers is, in our view, of fundamental importance. I do not want to be overly dramatic, but I could not help thinking that the extension of investigatory powers is a characteristic of totalitarian states of which in the past we have been rightly critical. It also occurs to me that such powers seem to have appealed to the worst in some individuals over the years, attracting the wrong people into particular services. Therefore, another question for the Minister is whether accreditation has ever been refused.
The noble Earl referred to the incremental extension of the powers. Along with bonuses and incentives, which he mentioned, that makes us uneasy. Of course agencies and organisations will want powers—this is why the local authorities want them—to carry out their jobs as effectively as possible. Consulting them and only them misses the point, as does the NPIA’s verdict that they are suitable to be given the new investigatory powers. More accurately, expecting the NPIA to give the assessment is not right. What should concern us is the big picture—bigger than the sum of the parts of the order. Why did the Government not consult widely on the development of the order, in accordance with their own guidance?
I am sure that I could have found the answer to my final question somewhere. I was intrigued by paragraph 11 of the Explanatory Memorandum. We know that the powers are intended to deal with the Mr Bigs, but paragraph 11 tells us:
“The legislation does not apply to small business”.
Perhaps the Minister can help me to translate that. We support the Motion.
My Lords, I also thank my noble friend Lord Onslow for raising the matter. As members of the Joint Committee on Human Rights know, he is a strong advocate of the rights of individuals and the liberty of the subject. This order is the most recent in a line of orders under the Act which have progressively added to the different bodies that can apply to have financial investigators appointed for the purpose under the Act. As he and the noble Baroness, Lady Hamwee, outlined, such investigators have considerable powers designed to recover the proceeds of crime.
I have no doubt that, on Second Reading on 25 March 2002, everybody in this House had in mind—as the Government had in mind—the recovery of large sums of money from major criminals. I am delighted that the noble Lord, Lord Rooker, is in his place. In his second paragraph in Hansard on that day, he said:
“The huge profits made from crime are often flaunted and give force to the old saying, ‘Crime pays’. This causes deep offence to hard-working and law-abiding members of the community and it makes harmful role models for our young people. Above all, the proceeds of crime provide the working capital for future criminal enterprise. Recovering the money must therefore be an inherent part of our crime reduction strategy”.
He went on to say:
“Another problem is that many major criminal figures have become untouchable by prosecution and confiscation. They organise or finance the criminal activity of others and then profit from the results”.—[Official Report, 25/3/02; cols. 12-13.]
That atmosphere prevailed and was shared by other speakers in that debate. The House was talking about major crime, major sums of money and major criminals.
The 2003 order which designated the first financial investigators referred to a number of different bodies, which have been added to over the years. Those bodies moved progressively away from the kind of crime that was in everybody’s mind when the matter was discussed. The order made earlier this year was in similar form to that which we are discussing this afternoon, but it did not include local authorities, among others. One reason for the amended order appears to be to remedy that omission. It is interesting that the original order came in in May and this one was brought in in October. In May, we talked about adding financial investigators who were members of staff of the Serious Fraud Office, the Gambling Commission, Royal Mail and the Office of Fair Trading. By October, we wanted to add others, and it is extraordinary that this could happen in such a short space of time. As my noble friend has indicated, there is a danger that the legislation is used for purposes for which it was never intended.
In saying that, I make no allegations of bad faith on the part of the Government, but Parliament—and we must all include ourselves—would be remiss if it did not stop this process at a much earlier stage. I do not even blame the individual organisations that have decided that, since the powers exist and you can get them by applying for them, they want their bit of the action. The blame rests with us, particularly those of us in a different part of this building who could have stopped the statutory instrument in its tracks, but which we cannot do. The Merits of Statutory Instruments Committee, as we have already heard, did not raise it in the first instance, but did do so at a later stage. I have no doubt that when powers are taken, they will be used, so the legislation must be drawn to ensure that that is not possible. As my noble friend Lord Onslow indicated, we have not been good at this. Anti-terrorism legislation has been used to stop people reading out the names of the dead at the Cenotaph and to freeze the assets of Iceland, thus alienating a friendly state and fellow member of NATO.
The House considered a code of practice following the Serious Crime Act 2007 which merged the Assets Recovery Agency with the Serious Organised Crime Agency, the body which authorises the appointment of these individuals. But it is my belief that the kind of powers that we have heard listed should be exercised by the smallest number of law enforcement agents possible and not handed out to anybody who thinks it would be convenient to have them. If other bodies want these powers, should they not call on the normal law enforcement agencies to exercise them? If they cannot do it, serious questions need to be asked about their organisation and funding. The extension over the years has been formidable, so that the number of bodies included in the order even managed to increase between May and October.
I want to ask the Minister this: under what circumstances and what kind of case is envisaged that would lead local authorities, the Post Office and Transport for London to want powers that were introduced to curtail,
“major criminal figures who have become untouchable by prosecution and confiscation”.
You need quite a lot of car parking tickets to come under that description. If my noble friend chooses to divide the House, I will support him, although it is in the nature of non-fatal amendments that it can only be a gesture. However, it may be a gesture worth making in this instance to demonstrate, at least at this stage, that we have noticed what has been going on, and to give notice to Governments of any persuasion that Parliament has noticed and that the future extension by statutory instrument of such extraordinary and considerable powers to organisations for whom they were not envisaged by anyone at the time that the initial power was provided in the Bill, will not be tolerated and should not occur again.
My Lords, I want to make a very short speech to say that this is really a technical problem. I speak as a member of the Joint Committee on Statutory Instruments, which meets every Wednesday to consider abuse of process and certain other reasons why we should report back to the department. I speak not for the committee but only from my personal experience. I would ask respectfully that we should not divide the House today. This issue should be returned for further consideration as to whether, in essence, it is an abuse of process. Frankly, I think that it is, but what I think is wholly irrelevant. This has to be considered properly and in due course.
There is little more to be said, other than that this should not be dealt with as if it is a singular, one-off occasion. Every Wednesday, we get at least one and sometimes four statutory amendments that are objected to for abuse of process, or for some other reason. The problem is that the departments have no written guide on how they should deal with them. Our advisers are highly intelligent and greatly informed—they were all from the Chancery Division in the old days—but frankly, these matters are difficult for us to understand. We are therefore in the position of having them to help us, but they should be helping the departments with written instructions on how they should deal with these matters. I am sorry to take your Lordships’ time.
My Lords, I have done the addition that the noble Baroness, Lady Hamwee, had not had time to do, and in addition to the police there are 22 other organisations. They include immigration, but also the Rural Payments Agency and so on. I am a member of the Merits of Statutory Instruments Committee, and I regret that we did not pick this up on the last occasion that a statutory instrument of a similar kind, but with fewer organisations, came through our hands early on this year. Nor indeed, I regret, did we pick it up on this occasion until, like others, we read the Times—and then we had another look at it.
One point which concerns me is that the government department did not go in for the standard consultation, which is the practice. One thing we look at in the Merits Committee is who is consulted and what they say about it. The reason that it did not consult was that there had been no earlier objections, and although there has been a significant increase in the number of organisations with these very wide powers, the government department did not think it necessary to consult this time because there had not been an objection earlier. From the letter from the Permanent Secretary, I hope that it will in future at least go in for the consultation process.
If these additional organisations were unable to have these extensive powers, it would be the duty of the police. Perhaps I might read paragraph 10.2 of the Explanatory Memorandum, with the heading “Impact”:
“The impact on the public sector is neutral. Most of the agencies listed already have accredited financial investigators. The bodies added will have previously had to rely upon the police to perform their investigations and so the actual manpower time will not increase. Investigation bodies will also receive a share of money recovered as additional funding to incentivise”—
a terrible verb—
“further work in recovering the proceeds of crime”.
I read that as an encouragement to go out and use these powers. I share the view of the noble Earl, Lord Onslow, and have real concerns about the considerable extension of these powers. It is valuable that he has brought it to the attention of the House; it certainly needs, at least, to be looked at.
My Lords, I am very grateful, as the House should be, to the noble Earl, Lord Onslow, for bringing this matter to our attention. To be very brief, over and over and over again I have heard speeches from Back-Benchers warning about Henry VIII clauses, and here we have the outcome. It is called mission creep.
My Lords, I feel compelled to contribute to this short debate. I support the Motion wholeheartedly, given that I was the shadow Minister steering the Bill through Parliament back in 2002. I remember that we debated at length the whole issue—the noble Lord, Lord Bowness, has referred to this today—of just how far these laws could be extended, and we were assured time and again that we were focusing on major crime and major criminals. It is deeply depressing that today we are discussing what amounts to our part in, frankly, a weak Parliament. The lack of proper scrutiny of the orders following the 2002 Act is lamentable, and we must all share the blame for that.
There have been no sufficient checks. That seems so strange; I remember in 1998, when I first came into this House, the Government introducing this word, “proportionate”. Everything had to be proportionate, but these powers are not. Everything also had to be “evidence-based”, but where is the evidence? And everything was based on “consultation”. We have just heard from noble Lords that there has not been proper consultation. I say again: there has been a lack of proper scrutiny, which has become so habitual and such a depressing issue when it comes to being a Member of your Lordships’ House.
The current policy under the memorandum is,
“to limit access to these intrusive powers to appropriate public (rather than private) bodies involved in financial investigation addressing public harm”.
Can we expect something a few months down the line to take this just one step further? These powers should be used only in extremis, and yet they will be applied with regard to common offences. That has to be a dangerous development. In a sense, this is all about more and more erosion of our normal freedoms. It is creating a real change in the culture of this country, which is deeply depressing.
We have had a number of examples today from noble Lords; I shall add one more. I keep hearing about photographers who are not allowed, or who feel unable, to stop in the street to take pictures because somehow they could be committing a crime. We are all beginning to feel that we are in a guilty state, which is appalling.
What will the checks be on the potential abuse of powers? Yes, there will be information on databases that will go astray—what will happen if it falls into the wrong hands? The Minister looks bemused by that, but it keeps happening; he has to accept that.
What about overzealous officials? The proceeds of crime will be shared by the CPS, police officers and courts, so of course there is an incentive here—it is sort of commission-based. On one level that is about the need for more efficiencies, as we were hearing about earlier, but we must take great care.
I ask the Minister and the Government: please be careful what you wish for. Freedom is such an easy thing to lose, and you rarely get those freedoms back without a revolution.
My Lords, I, too, contributed to the Proceeds of Crime Bill when it went through this House. I have also had some practical experience of the Act in operation. As previous speakers have said, it was designed to deal with large-scale crime and terrorism. The architecture of the Act is that an investigator seizes an individual’s assets, and it is then for that individual to prove that those assets are not the proceeds of crime. Was it seriously to be the case that the investigators employed by these various agencies—local authorities and so on—should have the power to seize assets and throw the burden of proving that they were legitimately obtained upon the person concerned? That is what the Act was all about. It had nothing to do with the trivialities that the order seems to have brought forth.
My Lords, it is now some 40 years since I was entitled to put the word “learned” before my name, so it is with some hesitation that I rise to my feet on this important issue raised by my noble friend Lord Onslow. The scale of the extension of powers, the random lack of definition of the extension of powers and the bland way in which they have been commended and accepted thus far startled me as soon as I became aware of them. The list of people to whom they are being extended runs to some 18 pages.
My reaction comes with one qualification: I have to declare an interest as a vice-president of the Trading Standards Institute and as president of the Consumers’ Association. The latter appears not to have been consulted about this and would expect to have been. For the Trading Standards Institute, the power to recover money as a surety for handling misappropriated goods has been useful. One should not therefore reject the concept altogether, although I understand why it raises serious anxiety among many of those who have spoken thus far.
There should be a fresh rethink about the order and its massive extension of powers. It does damage to a much more modest and cautiously exercised approach. What on earth might the late Graham Page have said in the face of this legislation? In my early days in the other place, his vigilance was sustained and effective. This House today has demonstrated comparable vigilance. It is a matter of great concern that these proposals have extended as far as they have without much more careful consideration. There may be some merit in some aspects of the order if properly exercised with due restraint, but for it to go through unchallenged would be shameful.
My Lords, I had not intended to speak in this debate; in fact, I have been very reluctant during the past year to comment on departments where I have quite recently served. However, the date on which I left the Home Office, 29 May 2002—it is the date when ODPM was formed, so I remember it well—is long enough ago. I am not familiar with the order, but I am astonished to learn that it is within the gift of departments to decide whether they consult. My experience from the four departments in which I have served since I have been in your Lordships' House is that there is strict guidance from the Cabinet Office about the rules that departments have to follow when consulting on changes. You have to get permission if you want to cut what would normally be the 13-week consultation period. If circumstances arise whereby you want to do it in six or eight weeks, you virtually have to get an override. So I am a bit surprised that it is possible for a department to say, “Well, no one’s bothered in the past. Therefore we can carry on and we don’t have to consult”. I really am surprised by that.
If I had come to this House for the Second Reading debate on 25 March 2002 and given a flavour of what would subsequently arise, I would have been given pretty short shrift because of the range of these powers. It is quite clear that there has been a massive extension.
It is just not on for government departments to be able to decide whether to consult on these issues. Rules on consultation are set down for the whole Government. To that extent, this looks like a failure in the conduct of public administration by the relevant department.
I fully accept that the means of fighting crime have to change. We will never be ahead of the criminals but, as the techniques change, we have to be as little behind them as possible. That is why the proceeds of crime legislation was passed in the first place.
My final point reiterates what the noble Baroness said about scrutiny. A couple of weeks ago, after the gracious Speech, I made that very point—that the reason why this place exists is the quality of the scrutiny it provides. I also mentioned half a dozen issues which I think we ought to examine in order to tighten up what we do. Because of the force of circumstances and time, the other place cannot provide that scrutiny. It looks at the great policy issues of the day but not at the detail; that is our responsibility. That is something that we should pick up and take forward.
My Lords, I have heard enough this afternoon to feel convinced that a further careful look at this by the Government is called for. I liked the notion of the noble Lord, Lord Campbell of Alloway, who suggested that we might not vote on the issue today and that the Government could take it away and look at it in some detail. Picking up on a point that was obviously troubling the noble Lord, Lord Rooker, the government departments have been following consultation rules which are apparently binding on them. That is something that ought to be looked at. I have a feeling that if we take a vote today, there may be a scene with which we are somewhat familiar. Various noble Lords will emerge from wherever they have retired to, not having had the benefit of hearing the debate, and vote in a way that might be predicted in advance. That would not be helpful. I think it is something that ought to be looked at here.
I should say that I knew only one thing about this. I happened to be sitting innocently in the Library the other day, working on a totally different project, when the noble Earl, Lord Onslow, came up to me and asked for some help in looking up some of these statutory instruments. I tried to help in the way that any lawyer would. I did not then form a view but I have formed one this afternoon. There is something here that really does need looking at.
My Lords, I congratulate my noble friend Lord Onslow on tabling this Motion. As he rightly said in his introduction, this order is not an innocuous piece of secondary legislation but one which raises issues of considerable importance about the powers of the state and the way that the Government choose to legislate. I can tell the noble Countess, Lady Mar, that the words “mission creep” occurred to me early on in my research for this debate.
The Minister must understand the concern that these powers are following the way in which other organised crime and anti-terrorism powers are being overused and abused. This stems from the fact that the Regulation of Investigatory Powers Act was originally used by only nine organisations. Now this has been extended to over 800; my noble friend Lord Onslow cited some of them. This order derives, of course, from the Proceeds of Crime Act 2002, which I accept immediately had considerable merit. It was presented at the time as the means by which the police and HMRC would be able to confiscate the ill-gotten gains of serious—note the word serious, as my noble friend Lord Onslow and others have—criminals.
There are few among us who would disagree that seizing a yacht or fleet of luxury cars from someone with no apparent income, other than, say, selling stolen artwork or smuggling drugs, is not an unsuitable response by the state. However, as has been mentioned over and over again this afternoon, the powers which are being awarded by this order are out of all proportion to the crimes which will be relevant. It is difficult in the extreme to consider, for example, housing benefit fraud in this context, especially as we know how often fraud and error are confused in social security benefits. The noble Lord, Lord Thomas of Gresford, is right: this is overprovision in the extreme.
As my noble friend Lord Bowness pointed out, the list of bodies which will henceforth be able to seize assets, freeze assets and seek the forfeiture of cash is quite surprising. Local councils in England and Wales will have this power. Royal Mail, Transport for London and the Department of Health, among others, will be given the appropriate power. At the commencement of the Act, that was a matter reserved for police and officers of HMRC. Under this order, these other “financial investigators” can step in and seize property if they—which presumably means their employees above a certain rank, details of which are stated religiously in the order—have been trained and accredited by the National Policing Improvement Agency. The noble Baroness, Lady Hamwee, commented on that. Does the Minister really think that that is a suitable arrangement?
The Minister may well argue that because training is to be conducted by the NPIA, there is nothing to worry about. That this training should take place goes without saying, but should it be provided in the first place to employees of councils, the Royal Mail and other organisations? This order marks a considerable accrual of powers to the state by spreading around powers that one would have thought should be the exclusive preserve of the police and HMRC.
Like my noble friend Lady Buscombe, I noted that, alarmingly, paragraph 7 of the Explanatory Memorandum to the order states:
“Current policy is to limit access to these intrusive powers to appropriate public (rather than private) bodies”.
Will the Minister confirm that it will never become policy to include private bodies in the list?
It is rather instructive to consider the comments of Paul McKeever, chairman of the Police Federation of England and Wales, in the Times. Those comments have already been well referred to. Moreover, an expert in asset recovery law has said that it is dangerous to place these powers in,
“the hands of someone less experienced and less skilled, particularly when combined with the incentive of their department collecting a share of the confiscated money”.
Given that only two years ago the Public Accounts Committee of another place criticised the lack of supervision of financial investigators by the National Policing Improvement Agency, which is to carry out this unspecified training, is this not an extremely valid concern? I am grateful to the noble Baroness, Lady Hamwee, for that point.
It is not enough for the Minister to respond that these powers will be used correctly and wisely. We know from past experience of this Government that unexpected consequences tend to turn up in their legislation. As we have heard, we have seen counterterrorism powers and surveillance laws used for purposes that could not possibly have been intended when the relevant provisions were drafted. For that reason, any extension of the powers of the state must be properly debated in Parliament. My noble friend Lord Onslow has, thankfully, given your Lordships' House that opportunity, and the Government would be well advised to take on board the concerns of noble Lords. The concerns include those mentioned in the report of your Lordships’ Merits of Statutory Instruments Committee, which should give the Government pause.
Concerns about the order have come to light elsewhere, but the Home Office does not seem to be particularly bothered. No consultation took place beyond asking the bodies that are to get the new powers what they thought. It is no surprise that they responded “Yes, please”. To paraphrase Mandy Rice-Davies, they would say that, wouldn't they?
The House will find it quite extraordinary that the police and HMRC were not consulted. Have they been consulted now? The committee also notes that by failing to consult more widely the Government have gone against the spirit of their own guidance on consultation, and I am grateful to the noble Lord, Lord Rooker, for pointing that out. That is far from satisfactory. No wonder we are about to have a Statement on smarter government.
This House prides itself on being a revising Chamber. However, revision is not appropriate for an order of this kind. That is why a better description of what we do is to advise—as my noble and learned friend Lord Howe has done—the Government of the day. The Minister has had such advice this afternoon. Unless we hear a convincing explanation, I am minded to recommend that noble Lords vote to support my noble friend’s advisory Motion, despite the hesitation of my noble friends Lord Campbell of Alloway and Lord Neill, for the simple reason that we know that under this Government there is no going back, and added pressure will be important.
My Lords, I think that it was the noble Lord, Lord Bowness, who paid tribute to the noble Earl for being a doughty defender of individual rights. I echo that; he is, indeed. Among his many attractive traits is that of never knowingly understating his case. I will therefore not comment on the Holy Roman Empire, the Thirty Years’ War or even Bertie Wooster. I hope that I will not give noble Lords anodyne guff. I will try to meet the genuine fears in people’s minds based on what they have seen in the past, and therefore fear might happen on this occasion. The noble Earl quoted part of an article in the Times of 28 October in which Paul McKeever, the chairman of the Police Federation, was quoted as saying:
“There is a behind the scenes creep of powers occurring here and I think the public will be very surprised. They would want such very intrusive powers to be kept in the hands of warranted officers and other law enforcement bodies which are vetted to a very high standard rather than given to local councils”.
This seems to be part of the fear that there is a diminution in the authority of the individuals carrying out such activities. Some people were slightly surprised that this issue had not been raised previously. However, it is perfectly understandable that the article in the Times drew your Lordships’ attention to the issue. I will try to allay the concerns that your Lordships have expressed.
The order deals with accredited financial investigators. These are financial investigators who are trained and accredited and subsequently closely monitored by the National Policing Improvement Agency under the Proceeds of Crime Act 2002. The Government believe strongly that seizing criminals’ assets is a key measure that improves public confidence in policing and the criminal justice system. There is strong public support for taking away criminals’ ill-gotten gains as well as evidence to indicate that criminals fear the seizure of their assets more than a term of imprisonment. Evidence from ACPO and the National Policing Improvement Agency also shows that using the skills of trained financial investigators contributes significantly not only to asset recovery but to combating a wide range of criminality.
As has been said, accredited financial investigators are not a new proposal. They have been in existence since 2003, following the Proceeds of Crime Act 2002, and have been using their financial investigation skills successfully since that time. There have been accredited financial investigators in local authorities since 2005. The latest order under the Proceeds of Crime Act simply extends some of the powers available to these investigators in line with powers already held by the police. These investigators, both within the police service and in other areas of law enforcement and the wider public sector, have therefore played an integral role in the recovery of the proceeds of crime since 2003.
The Government made amendments to the 2002 Act in Sections 78 to 81 of, and Schedule 2 to, the Serious Crime Act 2007, extending the range of powers of accredited financial investigators. The new powers that can be exercised by suitably accredited financial investigators therefore have full parliamentary approval. Noble Lords asked why there was less than adequate consultation. There were a number of reasons why this occurred. In hindsight, and given noble Lords’ contributions, it would have been wiser to have had wider consultation, but AFIs have been in existence since 2003 and the investigative powers of local authorities have been in existence since 2005. The extension of powers was provided for in the Serious Crime Act 2007. The statutory instrument issued earlier this year, SI2009/975, and the previous one, had attracted no parliamentary, media or other comment despite the fact that the Home Office Minister, Alan Campbell, wrote to Members of the Commons in December 2008, enclosing a copy of the earlier order, as those Members had expressed interest in the issue in earlier, unconnected debates.
What consultation did take place? In preparing the instrument during the summer months, Home Office officials worked in full consultation with the NPIA, the body with statutory responsibility to train and accredit financial investigators. The NPIA was satisfied that the new bodies listed in the order were suitable to be given new investigative powers and asked the Home Office to lay the new order. ACPO has said that the NPIA’s Proceeds of Crime Centre is held in the highest regard across the world and maintains very high standards of professionalism. The individual agencies have requested access to the powers and were also closely involved in settling the details of the order.
My noble friend Lord Rooker referred to Cabinet Office rules in respect of consultation. I am told that these do not apply to negative SIs as such, although I have to say that the plea from the noble Baroness, Lady Buscombe, that we should take note of that in future and that there should be consultation, represented wise words that I will take on board.
A number of other important points were made by noble Lords. However, I should like to deal with those at the termination of my contribution.
Accredited financial investigators’ powers can be exercised only by categories of persons approved by order of the Secretary of State, such as the one which we are discussing today. It is the Government’s policy to accord these powers to public bodies. In answer to the question of the noble Lord, Lord Skelmersdale, on whether the Government have any intention to extend these powers to private bodies, Ministers sought these powers only for public bodies. As the noble Lord well knows, no Government can bring perpetuity into a debate, but there is no intention in the Government’s mind to extend these powers to other bodies.
If the powers were to be extended, they would be the subject of another statutory instrument and would, therefore, be brought to your Lordships’ attention, if not through noble Lords’ perspicacity, then via the Times. Perhaps I may continue.
Concern has been expressed over local authorities having these powers. But, for example, trading standards officers who are members of local authority staff already investigate intellectual property crime. This is not small beer. This is a lucrative business for criminals, which includes pirated DVDs, clothing, electrical equipment and so on. The most recent Intellectual Property Crime Report suggests that the criminal gain for intellectual property crime was around £1.3 billion in 2006. These powers are, therefore, an important addition to local authorities in their fight against crime.
Further, we are encouraging the use of these powers against all levels of crime. One of noble Lords’ concerns was regarding the fare dodger or the person who does not pay council tax. These are areas where, initially, the civil law is involved. The issue here is criminality, so there has to be a proposal to involve the criminal law. Currently, there are 1,282 AFIs: 621 are employed by police forces or are non-warranted police officers; 354 comprise Serious Organised Crime Agency staff; 107 are in local authorities; and some 200 are in other public bodies. We are adding four new bodies to the list of 22 which the noble Baroness kindly quoted—the Gambling Commission, VOSA, Transport for London, and the Intellectual Property Office. We expect that to increase the number of AFIs by six people.
The Minister has justified the powers for local authorities to deal with intellectual property, and has now said that the Government are adding the intellectual property agency, or whatever, as a body. I wonder why both bodies need those powers. While he is giving examples, could he perhaps cite cases of “major criminal activity” involving “major criminal figures” untouchable by prosecution confiscation that justify the powers of Transport for London and the Royal Mail? We would be grateful to know the sorts of crimes the investigators of these agencies would pursue.
I noted the point made in questions and will answer it in due course, if I may. I think that £1.3 billion in 2006 represents a considerable amount of criminal gain. As I was saying, we have added four new bodies and will add only another six AFIs. We do not anticipate that there will be a great expansion in the number of AFIs beyond that. There may be changes in that local authorities or other agencies may increase or decrease their AFI staff, depending on the areas of their involvement and what they are dealing with. I should add that we required the Intellectual Property Office to be included because it has a supervisory role to handle international and complex cases and needs investigative powers to perform the function. The order provides it with powers so to do. It will investigate cases that have passed the relevant local authority for prosecution, so there is an overlap. The IPO deals with the bigger cases that often go beyond local authority or even national boundaries. I hope that that helps the noble Lord.
As I was saying, there are some 1,282 AFIs, the vast majority of which—almost 80 per cent—are within the staff of the police and Serious Organised Crime Agency. Many of the posts in other bodies are held by former police officers. It is the Government’s view and that of those involved that any withdrawal from accrediting investigators would be a serious step back in the outstanding progress we are making to drive up the amount recovered in the past six years. In 2001-02, £25 million was recovered and £148 million in 2008. It is also important to note that there is proper judicial oversight.
I do not have a complete list in my brief but I will happily seek the same and write to the noble Countess.
Judicial oversight exists. First, confiscation powers remain in the hands of judges, not the police or other financial investigators. A confiscation order can be made only by a Crown Court judge following a conviction for a criminal offence. The decision to restrain or freeze a defendant’s assets pending the possible making of a confiscation order can be made only by a Crown Court judge. An application for a search and seizure warrant has to be made to and approved by a Crown Court judge. When suspect cash is seized it can be further detained and forfeited only on the order of a magistrates’ court.
Essentially, many of the fears expressed by noble Lords should be allayed by two factors: that AFIs will be very well trained, which I shall come to in a little while, and that they will be very well vetted by the National Policing Improvement Agency. It is wrong to suggest that these new tools are being treated lightly. Investigators will have to be vetted to a very high standard.
The noble Lord, Lord Thomas of Gresford, referred to confiscation of funds. I understand that there was a fear that the officer who seized cash would then leave the person with the burden of proof that it was not criminal in origin. That is not the case. When an officer seizes cash, the burden is on the seizing body to prove criminality. A confiscation or investigation order will be issued on application to a judge. It is not the decision of the investigator. There are also the safeguards that I mentioned of NPIA monitoring and the code of practice. Therefore, we do not think that it changes the status at all.
With respect to the noble Lord, my point is that if Transport for London, through its investigator, goes after a person who owes it money and seizes the assets or asks the judge to confiscate the assets, the person whose assets are being seized has to prove, under the Proceeds of Crime Act, that he has come by those assets without crime—not necessarily the crime concerned, but any criminal activity. That is the architecture of the Act. Presumably, that means that the investigator for TfL pursuing a congestion charge fine, or something of that sort, will be able to apply for all the assets of an individual to be confiscated unless he can prove to the judge that he has come by them legitimately. Surely that is a wholly disproportionate extension of the powers.
It is with the greatest trepidation that I would cross swords with the noble Lord, whose extensive knowledge and experience of the law would expose my absolute lack of it, you might say. However, as I understand it, it is not the case that the burden of proof lies with the person on whom a freeze on their cash is sought. It is still for the prosecution to give good grounds to the court as to why that is. I will defer and seek further advice if the noble Lord is still insistent that that is the case, but that is not what my brief tells me.
In the face of which formidable argument and witnesses, I suggest that the best thing is that I take the question away to seek further advice on it.
If I may continue, I think that I have dealt with the issue of consultation, but a number of other important questions were raised. I shall seek to deal with some of them now.
On Transport for London, I do not believe that we are talking about congestion charges. First, congestion charges are not themselves a criminal offence, and criminality is the issue here; secondly, there may be major fraud issues between internal and external colluders, or certainly with external contracts, with an organisation such as Transport for London. You could even have something similar in the Rural Payments Agency. Those are areas of investigation for major issues of criminality; they are not intended for the person putting their bag in the wrong dustbin. I think that the noble Earl was seeking that reassurance.
The noble Baroness, Lady Hamwee, asked several questions, but one was about Northern Ireland. She said that we have not delegated policing to Northern Ireland, so how could this be delegated? The order is already in force in Northern Ireland; it came into force on 2 November. I am told that there is a separate list for Northern Ireland because it has separate agencies, which were consulted in Northern Ireland at the time of the order—although that may not help people here.
A number of other major points were made by the noble Baroness, Lady Hamwee. She asked why we are getting this order six months after the last one, to paraphrase. The first order this year followed three years of not having SIs. We do not want to overburden the House with numerous pieces of legislation to scrutinise, but that is not the case here. We stated the benefits of the powers to which accredited financial agencies should have access, in particular, the Serious Fraud Office and local authorities. Trading standards officers, in particular, had expressed their interest in the powers as part of their broader focus on proceeds of crime. They have both heavily invested in the expectation of the powers and wished to see them put before your Lordships' House at the earliest opportunity. Also, we have—as some may criticise the Government for having a tendency to do—changed the name of departments of state with some regularity. The Department for Business, Enterprise Regulatory Reform has been partially succeeded by the Department for Business, Innovation and Skills. Such changes are also reflected in the order.
Have any agencies been refused a request to be added to the list? The answer is no. The explanation is that the public bodies are sounded out by the NPIA and the Home Office if they declare an interest in having the powers. They are then sent a series of questions which they need to answer to justify their requirement for the powers. This tends to act as a steer for those who then pursue their inclusion or seek not to do so.
The noble Baroness asked who does the accreditation and what it consists of. It is an intensive course that has five levels of training depending on which powers an investigator wants access to. The courses begin with six weeks’ pre-course study to obtain the necessary knowledge. Passing an exam places an investigator on a five-day skills course. He then works in the workplace for 12 months and has to submit a portfolio of his work that is assessed by an operational/vocational qualified assessor. Accredited financial investigators are then intensively monitoring by the NPIA, which also delivers a continuous personal development programme. They are assessed by an independent assessor and trained as A1 assessors. In addition, the NPIA dips a sample of 10 per cent of those AFIs who have submitted their PDP each year. These dip samples take place in the workplace and involve an examination of the case papers that contain the supporting evidence for the online PDP submission, which then results in accreditation. Once AFIs have been verified, they move into continuous professional development, and a 5 per cent dip of those individuals takes place in the workplace each year. There is fairly intrusive continuous monitoring of individuals and the quality of their performance. If they fail, they can be removed. That has happened in two cases so far.
The noble Baroness’s final question was about Clause 11(1) of the Explanatory Memorandum, which does not apply to small businesses. She asked why it is there. I thought that was an interesting question. The powers to investigate the proceeds of crime and to execute warrants in the search for cash are obviously focused on the criminal. If a sole business is involved in criminality, it is possible that this will lead to an additional burden, but we make no apology for adding to that burden in cases where there is criminal activity. Many of the powers are not new and have been in operation for the past six years. We have received no complaints about any burden on or intrusion in small businesses.
A question was asked about this being misused by zealous local authorities or other public bodies, and I think this is noble Lords’ real fear. Criticisms about counterterrorism legislation being used by local authorities in unintended ways led to a circular from the Home Secretary making clear that that was not the case. If we were to find that that situation applied here, we would take similar action. However, we believe that with the involvement of the Home Office and the NPIA, there is ongoing monitoring which should mean that that should not be the case.
Finally, the Association of Chief Police Officers is very enthusiastic that this is brought into existence because it believes that it will relieve the police, who do not have the skills to deal with things such as fake drugs, some trading standards offences or some waste management offences. They can now be dealt with by people who have narrower expertise than police officers, which relieves the police of that burden.
My Lords, that being the case, and given the answer my noble friend gave me about the negative resolution, which I fully accept in terms of consultation, if I had put the possible use and extension of these powers to the House in 2002, it would not have bought the negative procedure and would have demanded the affirmative procedure. I do not expect an answer to this question now, but will the Home Office look at whether, if the situation we have today was envisaged in 2002, it would have put the affirmative procedure in the Bill? If that is the case, this ought to be looked at again.
Hindsight is powerful, but it is not powerful enough to go back seven years. How we deal with crime, and the crime that we have to deal with, is fast moving and continues to be a fast-moving series of events. The answer would have been no at the time. Clearly, today there is an issue. It is before your Lordships’ House. It has by the noble Earl’s determination been something that your Lordships have debated. I hope that we have allayed the fears that it will not be misused as people fear it could be—for people who were not paying the congestion charge and the like. It is important that we have these powers on the statute book, because they are requested by the very people who are currently dealing with these forms of crime. I hope that I have allayed your Lordships’ fears sufficiently for the noble Earl to consider withdrawing his Motion.
The noble Lord ended by saying he “hoped”. Hope springs eternal. It is worth summing up, as I understand it, what this debate has been about. It has not been about whether there should be powers to seize goods from the ungodly who have ungodlily taken them from the public. It has not been about getting the big drug barons to cough up their ill gotten gains. It has not been about big people cheating on intellectual property. It has not been about any of those things. It has been about whether the powers of the state are being unnecessarily increased.
The noble Lord, right at the end, said that the Home Office sent a circular round when it heard that the anti-terrorist powers were being misused. He hoped that was satisfactory. It was not satisfactory. People are still rocketed for taking photographs of St Paul’s Cathedral. When the man to whom this attempt was made complained to the police assistant—or whatever she was called—she said that none of the other people who she had told not to take photographs of St Paul’s Cathedral had complained. This insidious entry of powers by the Government to reduce the liberty of the subject is why we are here. We are here to protect those liberties—they are precious beyond anything. My noble friend Lady Buscombe picked up late again, when some of us were perhaps a bit dozy, on the Civil Contingencies Act. That was a happy little Act, which at one stage allowed a junior Minister to repeal habeas corpus while Parliament was in recess.
This is a habit that this Government have got into, and it is an appallingly bad habit. I thank immensely the noble Lord, Lord Neill, for helping guide me through the constitution of the Holy Roman Empire, because that was what he was doing only in its more complicated form. I say to him and to the noble Lord, Lord Campbell, both of whom I respect, that the reason I want to divide the House is because the Government perhaps might pay a little bit more attention if we divide the House than if we do not. The problem has not been allayed. My fears have not been allayed. Therefore, I wish to test the opinion of the House.
Pandemic Influenza: S&T Committee Report
Motion to Take Note
My Lords, I shall speak about the report of the Science and Technology Select Committee on pandemic flu and the Government’s response to it. I propose to take the House through the main points, knowing that my colleagues will be eager to participate on specific issues. I thank the Government for a careful and, I have to say, at points a helpfully detailed response. That done, I of course immediately say “however”, but I shall leave that for a moment or two because I also want to thank colleagues on the committee, including the co-optees—the noble Baronesses, Lady Finlay of Llandaff and Lady Whitaker, and the noble Lord, Lord Jenkin of Roding. With our excellent special adviser, Dr Sandra Mounier-Jack, and superb help from the Committee Office, they produced an important document that has provoked an important response from the Government.
The report was an update by the committee on a report of October 2005. The follow-up report was published on 28 July this year. We thought it necessary because the reaction to our 2005 report left us with a number of concerns about the adequacy of government preparedness for the possibility of a pandemic outbreak. We had expected it to be a short and fairly quick report; we had planned to do it in autumn 2008 and had a useful session with government and departmental spokesmen in November 2008. However, that evidence session did not convince us that all the questions that we thought ought to be publicly aired had been, so we decided to extend our report and prepare for two further sessions in spring 2009. The first was in February, when we had an excellent team of specialists from the appropriate areas of science and medicine to work with and advise us. For the second, on 17 March 2009—I stress the date, as it is important—we had departmental representatives and a ministerial presence.
One day later, on 18 March 2009, the virus H1N1 was identified in Mexico. That virus became known as possible “swine flu” because it could transmit from pigs to human beings and, as it turned out, from human beings to human beings. Therefore, the stage was set for some important and worrying consideration to be given to it. By 27 April, there was confirmation of cases in the USA, Canada and Spain, with suspected cases in several other countries including the UK. Within five or six weeks, we had moved from taking evidence on 17 March that was, in a sense, theoretical—for a table-based report—to a pandemic flu situation.
By 11 June, the World Health Organisation confirmed that we were at phase 6 alert in the pandemic period measurements, which was the first such alert for more than 40 years. Of course, that affected the nature of the Select Committee’s work and the way in which it would go about its business. Quite properly, it also affected the nature of the government response to the Select Committee inquiries at that stage. So there were complications for the Government and complications for us. They were responding to a series of questions, some of which were originally asked in 2005, and the importance of the answers was becoming more evident day by day throughout the summer. It might be thought that the Select Committee showed some prescience in choosing this topic, but I have to say that we do not claim any special knowledge. Rather, the committee sees the continuing importance of these questions, so they must be kept alive. If they are not, that would be complacent and we would not be able to respond to a potential pandemic.
A pandemic is different from an epidemic in so far as a pandemic includes the possibility of risk to individuals worldwide. The virus that particularly concerns us at the moment is H1N1, which has the capacity to transfer from pigs to human beings and thence from some humans to others. One has learnt, not being an expert in these matters, that viruses are tricky customers. Evidence in Wales shows that this virus has already developed a resistance to Tamiflu, which is the first line of defence available to us. There are also major concerns about the evidence that the virus has already manifested itself in communities where avian flu virus is still present, perhaps because all the chickens were not killed. The possibility of mutation or a mixing of the different viruses is high and potentially very dangerous. We have to watch this because it is occurring in certain parts of the world, so the issue may not leave us in our current comparatively quiet state.
That is the context. The committee’s response to the government reply is positive in terms of the way in which the current epidemic has been handled by the department and the Government. A number of good things have been done and, as we will hear later, international comparisons bear out the view that we have an alert and responsive Government and department. There is always a “but”, however, which leads me on to two or three specific points.
First the “but”, which is not carping in tone, but realistic. The virus and its effects in this country have, for most people so far, been comparatively mild in terms of the symptoms. Sadly, that is not true for everyone and there have been deaths, usually associated with other medical conditions. Nevertheless, it is a dangerous virus, as are they all. But so far, the symptoms of the virus have been mild. That has been a positive help to the Government and the department in their response; I shall come back to that in a few moments. However, there is a considerable possibility that a second and more virulent wave of the virus may come through, in which case the symptoms will be much more pressing and potentially more dangerous than they have been across the piece. Moreover, as I have suggested, there may be mutations which inevitably we are unaware of at this point and which produce a much more dangerous virus. We have dealt with the wave so far, for which congratulations are due to all concerned, but there is the possibility of further dangerous developments.
I now want to make one general and three specific points in the remaining time that I have available to speak. The general point is to ask whether, although we have been fortunate in that the virus has been comparatively mild and government systems have been able to respond, there are lessons to be learnt. Are there issues that we can pick up on and take forward into the future from the experience of the last five or six months? I am sure that there will be none of this in the Minister’s speech, but the danger is that folks in the department might become a little complacent. They might ask, “Well, so far, so good—what were all those irritating questions about that we were getting a year ago? There has been a pandemic, we are dealing with it effectively and the number of cases is falling in this country, so what’s the fuss about? We coped; why go on about it?”. One sometimes had the impression that members of the department implied, “It’ll be all right on the night”, but was it? When we were pressing for system-wide review and testing, there was just a hint of that coming through.
If that were the reply—that they had coped, that it was all right on the night, so what was the fuss about?—it would be wrong on two serious counts. The first, as I have suggested, is that it would be complacent. Fears of complacency are what stimulated the Select Committee to go back and produce an update after its 2005 report. There are risks of becoming complacent. More significantly, such a reply would ignore the most important contextual key point: this virus, I stress, has so far been only moderately virulent in its attacks and in the symptoms that it has produced. The systems that we have to deal with the symptoms have of course been tested under real enemy fire, so to speak. The department would be right to say, “Well, we have had pandemic here and we have coped”, but the testing has not been comprehensive because there have been hot spots across the country where the virus has been claiming significantly more victims than it has elsewhere. A continuing concern for the committee is that the system testing has not been end to end, as we called it; it has not looked right down the chain to see that every stage is fit for purpose and will link up well and appropriately.
There has been system testing in the presence of a pandemic, but that has been of a comparatively mild one, whose impact has been patchy throughout the country. So far, the testing of systems has also been by and large desk-based. I am sure that the very strong recommendation from the committee would be that there are lessons to be learnt. We have been given a living laboratory; let us ensure that there is a proper report looking back to see what happened and how well or how ill it happened, as the case may be.
On my specific points, first, the evidence that we have on scientific infrastructure is that it has been good and has worked well. The World Health Organisation has labs in place throughout the world. It is functioning and has been able to bring reports on how the virus is spreading—some this very week. The UK lab system has, from the evidence that we have, been alert and ready to respond. UK scientists are currently trying to get ahead of the game. They are in jurisdictions where avian flu still exists and swine flu may be present and they are looking for the earliest dangerous signs of mutation—again, all credit to them. A pandemic brings out—this one has brought it out as well as any—how we are dependent on other jurisdictions. This is an international risk that we run and it might be worth asking the World Health Organisation to think about the lessons learnt in terms of international preparedness and co-operation.
The second specific issue that I want to take up is the provision of acute facilities. We were concerned about this from the earliest evidence taking, when we had some important evidence from those who work in the provision of acute beds in hospitals. Again, I am pleased that the Government plan—this emerged after our report was published—to double the readiness of intensive care beds. That is a better response than we had from them in oral evidence in July this year. However, they have moved from there and their response is important. It is a significant improvement on July and on a meeting that I had on behalf of the committee in May with the then Secretary of State and his advisers. The reaction from the advisers showed that they had not been thinking carefully or systematically about this matter at that stage; there was, I have to say, evidence of complacency. However, the Government have moved enough to be commended.
Equally, a recent Cambridge study casts doubt on whether even that preparedness will in fact deal with the situation. It says that some regions could come under particular pressure—patchiness again, but a different form of it. For example, the south-east coast region, which has only one relevant intensive care unit in Brighton, could see five times as many patients as it has beds for. That is a serious question being raised by a serious research team and there ought to be answers, even if they are not available today. We ask the Government to look at their improved policy and, in the light of what this study is giving to us, at whether further strengthening of the provision of intensive care beds would be sensible.
My final point is about communications. There have been good developments; we pressed this quite hard early on. There is good progress on the Department of Health website. The Government have sponsored the preparation of a leaflet on the most-asked questions to be distributed to key workers, which is good, as is the way in which private sector or professional groups have been involved—for example, the BMA’s General Practitioners Committee and the Royal College of General Practitioners. I commend the latter body particularly because it was kind and gave me an honorary fellowship, so I have access to its website and its weekly bulletins, which have been first-class, and GPs have benefited from them immensely.
However, there are dangers with multiple sources. Having a lot of sources is good, but to which source does the worried individual go? Should that be looked at? I commend that to the Government. Are all the sources singing from the same hymn sheet? The answer is so far, so good.
The phone line has coped. The demands on it have not been as great as was predicted because of the nature of the pandemic, but there are still questions in the committee’s mind about whether separating the number from NHS Direct was helpful. I gather that this was not done in Scotland. I understand the Government’s reasons for wanting to do it here, but the number that a patient confronting the situation thinks of first will be NHS Direct, not a separate phone line whose number may be printed on a scrap of paper that came through the letterbox.
If the communications have gone really well, the impact will be great. However, a recent survey of 2,000 people suggested that almost half of them doubted whether they would be happy to accept a vaccination. There is a communication issue still to be faced there. Fewer than 10 per cent of the children coming into hospital had had antivirals and, of the whole population going into hospital, fewer than 15 per cent had done so, which suggests that there is a gap. Of the 10 million vaccination doses that went out, we have evidence so far of 1 million being used. The numbers may have improved, but why the gap between 1 million vaccinations and 10 million doses?
In conclusion, we have made some good moves and I commend the department for that, but there are lessons to be learnt. I commend all those on the front line who have been doing such marvellous work, but I also commend to the Government continuing vigilance. I beg to move.
My Lords, I must first thank our chairman, our clerks and our advisers for all the work that they put into the preparation of our report. I shall make one general comment before I concentrate my remarks on a specific topic.
In the face of criticism that preparedness and testing had been too long delayed, it is hardly an adequate response to say that the H1N1 epidemic has effectively proved an end-to-end test of preparedness. If the epidemic had been more serious at this stage than it has proved to be, the Government would not have found that response acceptable, particularly by those who have suffered most from a worsening of the epidemic.
When the Minister, Gillian Merron, gave evidence to the committee in July, I suggested that there was a need for much clearer advice to be given to pregnant women about the steps that they should take to protect themselves and their unborn children from the effects of the pandemic. Based on the experience of one of my daughters, it seemed to me that even good hospitals and GP practices were not doing enough to remove the understandable fears of women or making clear exactly what they should or should not be doing. It was relevant in that context that the Royal College of General Practitioners reported:
“Concerned family doctors have also been in contact seeking the latest recommendations on the protection of pregnant healthcare workers that might come into contact with possible swine flu patients. It appears guidance on this issue is not very clear”.
In response, the Minister referred to the detailed information available on the Department of Health’s website and that of the Royal College of Obstetricians and Gynaecologists. I suggested that there was a need for clear leaflets on the subject to be available. Anticipating that the committee might pursue the point and urge clear guidance for this and other particularly vulnerable groups—the noble Lord our chairman has just referred to the importance of guidance—the Government announced positive action just before our report appeared. I shall have more to say about antivirals and vaccinations in a moment. Perhaps the strongest advice given to my two pregnant daughters has been to isolate themselves as much as possible before the birth, and to isolate their babies in the months after and to avoid crowds. That is clearly sensible advice, although not every mother will be able to do that.
We learnt in evidence from the Department of Health—I refer to page 37 of our report—that neither oseltamivir, which is Tamiflu, nor zanamivir, also known as Relenza, is licensed for use in pregnant or lactating women, but that Tamiflu is licensed for use in children over one year old and that solutions of very-low-dose oseltamivir were being prepared by hospital pharmacy units for use with children under one. Zanamivir is not licensed for children under five years old and is not available in a suitable paediatric presentation. Rather confusingly—it is the very same paragraph—we were told that zanamivir was the preferred drug for pregnant and lactating women. We were later told in a supplementary paper—I refer to page 66 of our report—that, in general, Tamiflu may have additional benefits over zanamivir by being more systematically available against a wider spread of infection in the body and, again, that it can be given to younger children over one. However, zanamivir, more commonly known as Relenza, has fewer side effects. Trials have supported the effectiveness of both in alleviating and reducing the duration of symptoms. On the advice of the Scientific Pandemic Influenza Advisory Committee, Tamiflu has been selected as the main antiviral, except in the specific instances where it is unsuitable, which include pregnant and lactating women who are treated with Relenza. The Minister, Gillian Merron, confirmed this in response to a question from me in her evidence on 2 July, adding,
“because we of course know from SAGE that pregnant women, amongst others, are some of the most at risk should they contract swine flu”.
I asked about possible allergic reactions and was told by Professor Sir Gordon Duff that the indications were that Tamiflu is as safe as any drug ever is, but that up to 10 per cent of people report nausea. He did not say anything about the side effects of Relenza, and I do not think I ever got an answer about allergic reactions to flu injections. I referred to the case reported of a child at a Dulwich school, who had a very mild attack of swine flu and a very violent reaction to Tamiflu. The Daily Telegraph reported on Saturday that European regulators had said that children receiving their second dose of the swine flu jab may develop a high fever. We have also heard reports of the development of some resistance by the virus to Tamiflu and the transmission of a Tamiflu-resistant strain in south Wales. Again, this was referred to by the noble Lord, Lord Sutherland.
Perhaps more serious questions arise about the effect of vaccines on pregnant and lactating women and young children. The committee had completed its work by the time that swine flu vaccines were made available and approved as safe. Because of the brevity of the testing period and the relative lack of experience worldwide of the effects of having the vaccine, it is hardly surprising that there is quite widespread anxiety, particularly among pregnant women and the parents of young children, who feel that as the effects of swine flu seem to be relatively mild in the great majority of cases, they would rather not risk any as yet undisclosed hazards arising from the vaccination. They tend to point to past disasters with new products that were initially said to be safe but were later the cause of tragedies.
It is a fundamental fact of nature that pregnant mothers should worry about their unborn children, and that mothers should be concerned about the safety of their children. During recent months, with two pregnant daughters, one of whom has just had her baby, I have been a particularly interested and concerned observer of their experience. Most doctors and midwives, if asked for advice, follow government guidance and recommend vaccination. However, if you then ask, “What would you advise if it was your wife or daughter who was pregnant?”, or, in the case of a female doctor, “Would you have it if you were pregnant?”, the responses are very different and equivocal. Quite often the answer is, “No, I would not”. It is only the pregnant woman or mother who can take the decision. If the effects of swine flu remain relatively mild in most cases, it is hardly surprising that many women decide that they would prefer to accept that risk, rather than the unknown hazards of a form of vaccination that they feel has not yet been adequately tested. If we move into a phase when the virus takes a more malignant form, opinions may change.
After I had drafted that section of my speech, I read in the Daily Telegraph on Saturday a report that said:
“Midwives are being sent letters about the safety of the swine flu vaccine after it emerged that some pregnant women were being refused the jab … A letter being circulated to midwives says: ‘All pregnant women in the UK have been prioritised for the H1N1 vaccine as an “at risk” group.
‘However, there has been evidence that some nurses and midwives are either refusing to immunise pregnant women or strongly advising women against this option. While some resistance to new vaccines is understandable, we are writing to reassure nurses and midwives of the safety of the H1N1 vaccines, and the increased risk of complications in pregnant women who contract the virus, compared with the rest of the population’.”.
The Royal College of General Practitioners said:
“The college had received dozens of emails from GPs who had been confronted by women who said their midwife had given them conflicting advice”.
Clearly, this is a vivid and real current issue.
In addition to giving the best advice that they can, it is important that the Government should collect the fullest possible statistical and other evidence as the pandemic continues about the number of pregnant women who are vaccinated and the number who are not and their subsequent medical histories, so that future advice can be given with greater and greater confidence. As far as possible, the evidence must be accumulated on a worldwide basis and, as there are different types of vaccine, should differentiate between the types used.
I understand—again, the noble Lord, Lord Sutherland, referred to this—that since the start of the vaccination campaign only about 1 million people have reportedly been vaccinated out of 10 million vaccines distributed to GP practices. There may be a good many reasons for that, but it would be particularly interesting to know how many pregnant women had had vaccinations and what information is available about the proportion of pregnant women who have chosen to have vaccinations and the proportion who have not. I would also like to know how many children it is intended should be vaccinated, together with current information about the way in which children have responded to antiviral treatment. Another question that I hear raised is about the possibility that the virus from a flu vaccination or antiviral can be passed on by a breast-feeding mother to her child. Again, it would be helpful if clear advice could be given on that issue.
My final question for the Minister is about the provision of paediatric intensive care beds. What specific preparations have been made in light of the fact that those in this age group who are affected are very often affected most severely and are sometimes desperately ill?
It will be clear that I have no medical qualifications and I understand that medical experts have to deal with complex questions in a changing and developing situation. I commend the efforts being made to clarify the issues and to give good advice based on sound evidence, but it would be helpful if the Minister in responding could provide further information and reassurance and continue to look at the advice being made public to this particularly vulnerable and sensitive group.
My Lords, I begin by thanking my noble friend Lord Sutherland, who so ably chaired this committee. I also thank the secretariat, the special adviser and all the speakers in the seminar that we put together, the summary of which should be published as a separate document because it provides an exceptionally insightful and helpful background.
I shall now make what many noble Lords, possibly with some justification, will find an excessively academic contribution to this debate. Infectious diseases—viral, bacterial and others—have been with homo sapiens, and have killed lots of people, since we first invented agriculture, began to interact with domesticated and other animals and, most importantly, began to gather in large aggregates in villages and cities. We are still doing that.
In 1967, in one of the most foolish things ever written, the US Surgeon General, as the epigraph for his annual report, said:
“The time has come to close the book on infectious diseases”.
Nothing could be further from the truth. HIV-1 and HIV-2, which came from chimpanzees and macaques, and SARS, where we got lucky, underline that for us. The combination of still-growing populations, poverty and climate change is a real problem.
On the other hand, we have weapons to combat such diseases these days. They are all relatively recent, beginning with vaccination, which is a few centuries old and which we hit upon phenomenologically; we still do not fully understand it, which is why we cannot yet produce a vaccine for malaria or HIV. Fifty years ago, we added to that armamentarium antibiotics, which kill bacteria in the body. Much more recently, we added antivirals, which are very different in what they do; they suppress viral replication within cells, but they do not attack a virus in the body. I will return to that point, because it is fairly important, in a moment.
So much for what we can do with the interaction between infectious disease in an individual and the treatment of that individual. Even more recent—surprisingly, it is only about 30 years old—is our increasingly sophisticated understanding, which has developed rapidly over the past 30 years, of the engagement between infectious disease and whole populations of individuals. Here I declare an interest, and, indeed, an egotism, because I think it fair to say that the canonical text on that subject is still the one written by Roy Anderson and myself. It illuminates such things as why we could control SARS and stop it spreading, and why we cannot do that with influenza.
Against that background I return briefly to the topic itself. I was going to mention four things, but I shall mention four and a half, the half prompted by the very interesting presentation of the noble Lord, Lord Crickhowell. The first is complimentary to the Department of Health. I wish to emphasise this at the outset in view of the constructive criticisms—as I would like to think of them—that will follow. I happened to be living at Princeton in the United States in the 1970s when it had an experience with swine flu that was little short of calamitous. It was mismanaged, first, by muddled information being distributed, which made people excessively agitated, and then by distributing a vaccine which had various problems. The Secretary of State for Health, a lawyer called Joseph Califano—the situation was not his fault—afterwards wrote a brilliant, short book on lessons learnt, of which the primary one was, in his words—it has resonance right across the spectrum—“I always thought science told me the answers. What I have learnt is it is a very effective tool for asking the right questions, but the answers are often not easy”.
That brings me to my other comments. We revisited the inquiry into pandemic flu not least because the first inquiry showed a marked confusion in the Department of Health as regards antivirals and antibiotics. Until just before the advent of H1N1, the policy was that antivirals, such as Tamiflu, would be given to people who had come into the surgery and been diagnosed with flu. The idea behind that is sensible if you are confused about antivirals and antibiotics because any agent will, if sufficiently used, provoke an evolutionary resistance; it is just a matter of time. The best defence against that is using the thing only when you really need to. That is true for antibacterials—antibiotics. Antivirals are effective if they suppress replication initially and give the natural immune system a bit of a jump start, but are best taken in the first 24 or 48 hours after infection. By the time you are really symptomatic and going to the doctor, the correct policy is to give them to your children or other contacts. In short, if you are dealing with something serious, the correct use of antivirals is targeted local prophylaxis; that is, giving them to other members of the family and other members of the schoolroom.
It took several years for this lesson to be absorbed in the Department of Health. Pleasingly, that followed immediately the advent of the first case of H1N1 swine flu in this country. Happily, the noble Lord, Lord Darzi, was able to reply by saying that the department had implemented this policy. It did not, of course, halt the spread of the virus, but were it more serious, doing that would buy you time. Even now, the policy should be followed as regards the more vulnerable contacts of people diagnosed with H1N1 swine flu, even though for most people the virus seems to be no more troublesome than the usual unpleasant seasonal flu. We should still use targeted local prophylaxis for people at special risk.
Secondly, on a separate subject, in 1993 the John Major Government implemented one of the manifesto commitments of the Labour Party, which lost the election, by creating an Office of Science and Technology and brought in the Chief Scientist as a Permanent Secretary. Shortly after, guidelines on science advice and policy-making were issued. There are echoes here of the Nutt affair, and of others. One of the central tenets of these guidelines is that you should admit uncertainty. There is an uncomfortable dissonance between the desire to give people certain messages and the fact that often the best we can do is offer approximations. On occasion, the Chief Medical Officer has not fully comprehended the need to admit uncertainties. Statements such as, “There will be 70,000 deaths from swine flu”, apart from being silly, reveal a lack of comprehension of how that number could be expressed as a best guess with huge variants. It is important that such a statement should not be repeated in any way other than by underlining that it is a best guess with huge variants.
That brings me to my third-and-a-half point. I have been vaccinated against swine flu. If I had a pregnant daughter, I would unhesitatingly recommend that she be vaccinated. If I had a small child, I would wish it to be vaccinated. It is true that sometimes there are miniscule risks from vaccinations, typically of the order of, at best, one in 100,000. The risks are very hard to document, but you cannot rule them out. It does not help to tell a sceptical public that there is absolutely no risk, as distinct from no evidence of a risk. However, you can be sure that there is a much greater risk even from ordinary seasonal flu. Going back to MMR, the chance of serious damage to a child who catches measles is about one in 1,000. That is two orders of magnitude worse than any conjectured risk from the vaccine. That is what the Department of Health should have said in that case, instead of evoking resonance with BSE by saying, “There is no risk at all”.
My final message is that the Department of Health does a superb job these days in putting together expert committees to advise it. The people that it chooses and the advice that is given are good. The ineluctable process aspects of much of what follows from that mean that too often there is not as strong a connection between the implementation of good advice and the excellence of that advice. That is where the Department of Health is doing well, but could do better.
My Lords, after that speech one is tempted to say, “Answer that”. It was invaluable to our inquiry that we had real experts on the committee, such as the noble Lord, Lord May, and the noble Lord, Lord Patel, whom we shall hear later.
It is no secret that I was one of those who urged that the Select Committee should revisit its report of October 2005. The noble Lord, Lord May, has rehearsed at least one reason—there were others—why it was thought that we should return to it, although there was at that stage no more than anxiety that we might face a serious pandemic flu outbreak. Therefore, I was immensely grateful to the noble Lord, Lord Sutherland of Houndwood, when he, as chairman of the Select Committee, agreed. I was also grateful to be co-opted to serve on the committee. Of course, I echo his thanks and that of others. I was particularly impressed by the session that we had with five of the leading experts in the country on this subject.
One may have had to push to have a fresh look at this, but in the circumstances I am in no doubt whatever that it was worth while and that the follow-up report has a lot of important matters in it. As our chairman said, it has evoked important responses from the Government. The truth is that we—the committee and the Government—were overtaken in the middle of our work by the arrival of the H1N1 virus in the UK just six weeks after it had first been identified in Mexico.
I have several general points to make and I shall then return to a specific one. First, it has been rightly said that H1N1 is a very much less severe strain than H5N1, which was the strain that had been originally feared following some cases reported in the Far East. Of course, as has been said, for some H1N1 was fatal, and a few—very few, compared with the total who contracted it—were very ill. For the most part, those diagnosed with H1N1 had probably a milder illness than a normal attack of winter flu might have been. I cannot claim a direct connection, as my noble friend Lord Crickhowell did when he referred to a friend of his daughter, but my daughter-in-law had two nephews who were sent home from school along with all the others. That resulted in the then Secretary of State for Health going to the Cabinet and saying, “Prime Minister, we have closed Eton at last”. Eton was closed for two weeks because there was a fear of disease spreading among the boys. This time, we have got off lightly compared with what a full, serious pandemic might have produced, as in 1918.
Secondly, I think that H1N1 arrived before the Government had completed their preparations and in particular before they had conducted what has been referred to as an end-to-end test of the whole procedure—that especially applied to the distribution of antivirals. I shall come back to that in a few moments.
Thirdly, the outbreak has provided a valuable real-time test bed for the extensive and, let me say at once, welcome prior preparations that the Government had made. I refer in particular to the decision to order and store large quantities of antivirals—enough to treat several millions of people. The committee was right to applaud the Government’s foresight.
We have now reached the second phase, or so one is given to understand—the figures are not always clear. There is no doubt that the H1N1 virus now seems to be tailing off, certainly in this country and in certain others.
However, the latest figures, which I saw this morning, suggest that there is still wide variation. Therefore, I reinforce the point made by the noble Lord, Lord Sutherland, in opening the debate: it is hugely important that there are full reviews of all the experiences of the past nine months, so that the lessons can be learnt. It has been in that respect a valuable test bed. Systems have been tried and operated. We need to know what the lessons are.
We may not have seen the last of H1N1. There may be a further phase, as predicted by some of the experts. If we had those lessons—if we had the results of those reviews—we would be better prepared for that and for the arrival of what may eventually emerge, as a result of mutation or whatever, as a more serious strain, or as a more serious virus in future.
There are many issues, but I shall refer to only one. I was going to talk about communication, but I have nothing to add to what the noble Lord, Lord Sutherland, said on that. Like him, I have found the regular bulletins issued by the Royal College of General Practitioners an extremely valuable update. I am not on the subscribing list for all the others, but I believe that there have been a lot. I echo his question: is there sufficient co-ordination between all the various sources of advice so that they are consistent? My noble friend Lord Crickhowell said that there seems to have been a good deal of doubt about the proper treatment for pregnant women and very young children. If there has been conflicting advice, it must be for the department to co-ordinate that and sort it out.
The main point to which I want to return—this will not surprise my colleagues—is the distribution of antivirals. I shall refer to them by their short names, Tamiflu and Relenza. Yes, we had millions of doses originally. It was also originally proposed right back in 2005 that we have a national flu line. We were told during our evidence that that was to be manned by up to 7,500 people to diagnose, triage and authorise over the phone the issue of millions of antivirals from some hundreds of nominated collection points. Given that that programme had been outlined to us three or four years earlier, we were surprised and, to some extent, dismayed that it had not gone much beyond the planning stage when we began our study. We were told about a major exercise that had been carried out, called Winter Willow, but it was made perfectly clear that that did not include the question of the distribution of antivirals—that was not part of the exercise.
However, in the event, as I said, we and the Government were overtaken when H1N1 arrived, but the Government managed to set up what the Department of Health originally called an interim programme for the National Pandemic Flu Service, with the expectation that, by the autumn, there would be an enhanced programme. I must state at once that the way in which the professionals in the National Health Service and beyond coped with having to take on board at very short notice an interim service has been nothing short of wholly admirable. No praise is too high for the people who had to operate a system for which, as it happened, they were largely unprepared. I said several times to witnesses to our inquiry that I had yet to find anyone in the National Health Service who could tell me what they were going to do in the event of the national flu line being activated, with all the rest of it. Clearly, there were people who were able to respond quickly and effectively. The National Pandemic Flu Service was tried out on the ground. It was the first time that it had operated; there had been no test.
I have a number of questions. As H1N1 is continuing, although at a diminishing level, can the Minister tell us how antivirals are now being distributed? Is it all being done through GPs or is the flu line still operating? What about the collection points?
My second point was prompted by the noble Baroness, Lady Finlay of Llandaff, who has sent her sincere apologies for not taking part in this debate. She is just taking off from Heathrow for an engagement to which she was committed. She asked me to raise the point that there is a need to ascertain how many patients were misdiagnosed with H1N1 because it was done over the telephone. How many times were patients wrongly prescribed Tamiflu as a consequence? The noble Baroness points out that diagnosis is not done over the telephone in Wales; it is done by professionals who see the patients. It would be helpful to have numerical data to indicate the accuracy of telephone diagnosis. The noble Baroness believes that Wales has operated an effective system at lower cost. Are there lessons that ought to be taken on board for England by the Department of Health? I understand, but I may be wrong, that we are the only country adopting the national telephone flu line. It is important that we know how it has worked. If telephones are still being used, is there a system to monitor what is going on?
Last month, the Chief Medical Officer stated that only 20 out of 219 children and 55 out of 381 other H1N1 patients admitted to hospital had had an antiviral—I think that the noble Lord, Lord Sutherland, mentioned these figures. That is 10 per cent of children and 15 per of adults. Why is that? Were people wrongly diagnosed as not having it when it turned out that they did? If they were properly diagnosed, did they understand the instructions? If they understood them, did they fail to follow them up by collecting and taking the antiviral? This emphasises that there must be an early evaluation of the future of flu line services. The Government changed tack twice during the early part of this year as they were overtaken by the epidemic and it is hugely to the credit of the staff that they made the services work.
I hope that this is not the last word. When, four years ago, we debated the Science and Technology Select Committee’s previous report on flu, I asked the then chairman, the noble Lord, Lord Broers, whether the Select Committee would return to this matter. To paraphrase him, his answer was yes. In the event, we did, but I think that this follow-up report must not be the last word that this House has on this vital matter. Compared to some of the other threats that the human race faces, it may be that pandemic flu is not the most serious, but it could be. I do not think that we should leave it here.
My Lords, I am very pleased to be able to take part in this debate. I was not part of the current inquiry, but I have read the report fully. I took part in the previous inquiry and have read the Government’s response. I had a few points to make, but, having listened to the previous speakers, I have now cast aside my notes.
I strongly reinforce what my noble friend Lord May of Oxford said. During the previous inquiry, we agreed about how antivirals should be used. Like him, I do not care whether everybody who got antivirals was proven to have the H1N1 infection so long as the spread of the disease was contained. The effective strategy for using antivirals is to give them to all the contacts of people suspected of being infected with H1N1. Equally, if I were a practicing obstetrician, I would recommend to every lady who attended my clinic that she be vaccinated with the H1N1 vaccine that is currently available. I shall return to these two points. The noble Lord, Lord Sutherland, raised issues about communications failure, and I shall return to that in a slightly different context.
Overall, despite our early anxiety, the UK’s response has been effective. We should, as all the other speakers said, congratulate the department on that. This is due partly to the fact that the pandemic has been mild. However, we should not be complacent. We have had 178 deaths, and there are 747 patients in hospital today, 161 of whom are in critical condition. The number of deaths is increasing despite the fact that the disease incidence is decreasing. Last week there were 37 cases per 100,000 of the population. The incidence could also increase as we might be about to enter another wave of infections. Historically, the peak infection rate for influenza occurs from week 52 to week 6, and that time has not yet come. Unfortunately, this period also covers the holidays when services might not be fully geared up to meet the demand. In the week to 26 November 2009, there were 21 deaths in England, which is the highest weekly total so far. Is the disease pattern about to change? We do not know. There are higher incidences among the under-fives and pregnant women; 7 per cent of hospital admissions have been in those categories. We should not get complacent and give the public the impression that all of this is overblown and we do not need to remain vigilant about this disease and the pandemic.
We need to remain vigilant because we do not know what the second wave might bring. It might reach epidemic levels of 300 cases per 100,000 of the population. If that happens, it will be the real test of whether the system can cope. We do not know how much Tamiflu we have stockpiled or how it will be delivered. We hope the Minister will tell us that we have an adequate number of Tamiflu doses to cover the whole population, and that if resistance to Tamiflu, which is currently low, increases, we have enough Relenza—the trade name for zanamivir—to cope. It is important that we have enough vaccine stockpiled. I understand that hitherto only 1 million doses have been used, that 9 million doses are currently available to general practitioners and that a further 4 million doses are in stockpile. We will need much more than that. While some of the contingency programmes have been effective, they have been falling behind. We are responding to events as they happen rather than being ahead of them. If the pandemic really takes off we will need to be ahead of it. In Sweden 50 per cent of the population is already inoculated while we are nowhere near that—only 1 million doses have been used so far. Do we have a big enough stockpile of vaccines coming onboard to cope with the second wave if it occurs?
I hear that general practitioners have been asked to immunise all the target groups by Christmas. How are they going to do that when only 1 million have been immunised so far? Are all the front-line workers immunised? I understand that around 275,000 of them have taken advantage of the vaccine. We need to get the message across more loudly and clearly to priority groups that the vaccine is currently available to them. The noble Lord, Lord May of Oxford, has had the vaccination. If someone was to offer it to me right now I would take it. That is the message we need to get across to people—to the pregnant ladies and the children under five. There is some suggestion that 30 per cent of the children under five have had swine flu already. We do not know that but we do need to immunise them, otherwise we will need more paediatric intensive care units. If we get the vaccination programme running properly we will not have this problem.
Of course there are questions to be asked—about what data collection we are undertaking, and what epidemiological research we have put in place—so that we can answer questions such as that asked by the noble Lord, Lord Crickhowell, regarding the complication rate. The noble Lord, Lord May of Oxford, noted that in the 1970s the American vaccine programme was chaotic, as was the vaccine. The data we have today which suggest that the vaccine might be harmful come from that time. Even then, the incidence of serious disease such as Guillain-Barré syndrome was one in 100,000 people vaccinated. We have now vaccinated a significant number of people, so we should collect data, including among special groups, about the side effects of this vaccination programme.
Despite the widespread use of Tamiflu, the incidence of resistance is actually quite small. Yet there are scare stories that we must not dish this out as it will create resistance. As the noble Lord, Lord May of Oxford, clearly explained, antivirals act differently to antibiotics. They do not produce the same degree of resistance. There are questions to be asked. It is a pity that some countries in Europe are not using Pandemrix, a vaccine produced by a British company, because it contains adjuvants such as squalene. There are suggestions that squalene is harmful but there are no reports of it. In the UK this is not the view. Of course there are questions to be asked; of course we need the answers, but we need properly collected data so we can learn from this, but we do need to remain vigilant.
My Lords, scientists have been warning for several years that a global outbreak of influenza was due. Following the development of the H5N1 strain of avian flu, the H1N1 strain from Mexico arrived and developed much more quickly than anticipated. The US Centers for Disease Control and Prevention found that the H1N1 strain was so unlike existing flu viruses that most people had no immunity and there were no relevant existing vaccines. As we descend the speakers list the points to make become less and less. However, I should like to thank the noble Lord, Lord Sutherland, for his authoritative chairmanship of the committee and Sandra Mounier-Jack, the expert, and Christine Salmon Percival for their help.
Although there were some serious delays in the development and testing of NHS plans, the overall preparedness for an influenza pandemic and the government response to the committee’s concerns have been good. The Department of Health pandemic influenza team aimed to provide support for the development of pandemic preparedness which included guidance to GPs and primary care organisations. Operational guidance for GP practices was developed in conjunction with the Royal College of General Practitioners and the British Medical Association. It focused on continuity planning, dealing with symptomatic and asymptomatic patients and access to antivirals. The use of the Flu Line Professional, which was meant to allow GPs and other healthcare workers to validate users, update the system and process patients who had been correctly diagnosed, was, like the Pandemic Flu Line, announced but delayed in its implementation.
Although plans took much longer than expected, the national swine flu hotline and online symptom checker that enabled people to obtain antiviral drugs without seeing a doctor was launched at the end of July. Swine flu was remotely diagnosed and patients with symptoms answered a diagnostic questionnaire online and received a numeric code that could be exchanged for Tamiflu and collected by friends or relatives. Medical leaders and charities were concerned that this remote diagnosis might lead to other serious infections or conditions, such as meningitis, being missed or the “worried well” applying for medication which was not needed. My noble friend Lord Jenkin has already made that point.
After a period when everyone who could possibly have come into contact with a swine flu patient was given antiviral treatment, the mild symptoms of most cases and the effect of the antivirals caused a change of plans in August when scientists announced that children who catch swine flu should not necessarily be given antiviral drugs as the risks probably outweighed the benefits. They urged the Government to reconsider their pandemic strategy after an analysis of four studies published in the BMJ showed that the benefits for children were slight. Many health workers were concerned that Tamiflu was being handed out too easily and that little notice was being taken of possible side effects—some, including diarrhoea, vomiting and hallucinations, being quite serious.
One in 20 children given Tamiflu suffered vomiting as a side effect, which can lead to dehydration and the need for hospital treatment. A study published by Eurosurveillance listed common side effects: nausea, stomach pain or cramps and problems sleeping. Almost one in five had a “neuropsychiatric side effect”, such as inability to think clearly, nightmares and “behaving strangely”. There was also a danger of hypersensitive reactions to the drug, which have included anaphalaxis, erythema multiforme and Stevens-Johnson syndrome.
The researchers found that antivirals preventively reduced flu transmission by 8 per cent, meaning that 13 children would have to be treated to prevent one additional case of flu. It is not clear to me who has the professional responsibility for the prescription of antiviral drugs and for follow-up treatment if any unforeseen problems were to arise. Does the Minister know whether any deaths from swine flu have in fact been caused by administration of antiviral drugs?
Peter Holden, the BMA’s expert on swine flu, also suggested that Tamiflu was being overused. He agreed that the National Pandemic Flu Service had been a great success and had taken the pressure off GPs. He said that for patients who are not in the high-risk groups, the virus typically causes mild symptoms and does not require a course of Tamiflu. Higher-risk patients, such as expectant mothers and asthma patients and those with respiratory problems, should see their GP, who would use their clinical judgment. In view of the decrease in numbers of anticipated cases, I hope that the Minister can update the House on how antiviral drugs are currently being distributed.
Recent studies by Professor Wendy Barclay warned that the virus had become more virulent and, in high doses, could penetrate deeper into the lungs. This might be an explanation for why different people react differently. For the first time we are experiencing a global infection in an era when we have knowledge of the sequence of our own genome. There may be genetic factors that determine how a person copes with a virus infection that are only just becoming evident. We can also study the virus’s own genome, knowing from our experience with other flu strains that very small changes in the virus sequence can have important effects on its virulence.
We know from previous pandemics that there are usually two or more waves of disease, but we do not understand why. Whether the virus in the first wave was a milder form that mutated into something more deadly or whether other factors, such as changes in climatic conditions, enhanced the spread and infectivity of the virus is not clear. If a second wave arrives, vaccination will be our major public health defence.
Vaccination for vulnerable groups became available at the end of October, and front-line health workers have been encouraged to take the vaccine because they are at an increased risk of exposure to the virus and an increased risk of transmitting the virus to vulnerable patients. The committee recommended that steps should be taken to identify front-line healthcare workers who should be encouraged to be vaccinated.
A pandemic could place severe pressure on critical care capacity. I should be grateful if the Minister could provide more information on how critical care facilities, including staffing, could be increased in the event of a winter or spring pandemic. Should these staff be encouraged to be vaccinated, and what is the value of an advance course of antiviral drugs? During an oral evidence session I suggested to the Minister that medical and dental registration bodies should maintain a list of retired practitioners who have the experience to help with antiviral and vaccination policies should extra staff be necessary. I wonder whether the Minister agrees.
As the noble Lord, Lord Sutherland, mentioned, health workers reported 10 days ago identifying a strain of swine flu that was resistant to Tamiflu. Five people at the University Hospital of Wales, all of whom have serious underlying health conditions, have developed resistance to the antiviral drug. There have been several dozen reports around the world of people developing resistance to Tamiflu, but there has been only one recorded case of person-to-person transmission of a Tamiflu-resistant strain. The World Health Organisation has reported 57 incidents of Tamiflu resistance.
Dissemination of information could be a problem. The committee was concerned about the number of organisations that issue recommendations and the discrepancies between them. Will the Minister comment on the committee’s recommendation of a national reference point for use by GPs from which they can request advice on the treatment of high-risk groups? The noble Lords, Lord Sutherland and Lord Patel, and my noble friend Lord Crickhowell have asked the Minister to explain why only 1 million people have been vaccinated using the 10 million doses of vaccine distributed to GP practices. What plans are there to explain the benefits of vaccination for both adults and children? Are the Government content with the current campaign to support those benefits?
My Lords, I congratulate the noble Lord, Lord Sutherland, and all members of the committee, on producing this report and on being so diligent in taking pre-emptive action during the potential pandemic. As we have heard, the report came out just as the flu really hit us in this country. I, too, commend the seminar, as did the noble Lord, Lord May, within the report. It is very interesting reading and very informative. I also thank the members of the committee for the 10-minute seminars that I have received today. They, too, have been informed and interesting.
I commend the report and the Government’s response, which has been timely and measured. They have taken this seriously and have done very well. As the noble Lord, Lord Jenkin, pointed out, the vaccine and antiviral store was quickly built up. He also mentioned the NHS workers. We should all pay tribute to the people in the NHS who have taken this very calmly. I no longer work in the NHS, but I am still in touch with a lot of colleagues who are, and they are calm and organised, a point to which I will return.
I do not think that anyone has mentioned the 1918 flu epidemic which killed 50 million people. That was far more than the number of people who died in the First World War. Flu has to be taken seriously. One of the slightly frightening things about the current flu epidemic was that it was said to be attacking the same age group of people as the 1918 flu epidemic. So it rang lots of bells. My family also do not have to be told how serious flu can be. Only nine years ago, a 32 year-old woman in my extended family died of myocarditis two days after contracting flu. My lot are all a bit flu-sensitive and take it very seriously.
Consequently, when two of the grandchildren in one branch of my family developed very high temperatures two weeks ago, all the bells started ringing and they rang mum and dad to find out what to do. Since we were not within visiting distance, we decided to test the system. This is a bit more coal-face experience for noble Lords. In the report, some delays in the setting up of the National Pandemic Flu Service were pointed out. But it now operates well and was used by my family. My family went onto its website and it answered all the questions. The other night, in preparation for this speech, I went onto that same website. I realised that I was doing something wrong, but I wanted to see how it worked. The questions got so detailed and complicated that I gave up and rang my family to find out what they had done.
They answered all the detailed and comprehensive questions. Eventually, they were told that it sounded like the children had swine flu. They were given a magic number, like an airline booking number, to give to their flu buddy, the next-door neighbour, who was sent to a centre to get Tamiflu—just like that. I was a little concerned about that and a number of noble Lords, especially the noble Lord, Lord Colwyn, have expressed anxieties about this. No swabs were requested. Despite the seminar saying that a very good system of diagnosis had been set up with laboratory confirmation, I would like the Minister to tell me why this has been stopped. I appreciate that numbers are difficult to cope with, but there needs to be confirmation of diagnosis. We do not seem to be getting that. So no diagnosis was made and they were sent to get Tamiflu.
The children became very sick. The little one started vomiting and was quite ill. The older child could not swallow the Tamiflu capsules, which made her a bit sick as well. There was the usual family chaos. They were told that no suspension was available. Indeed, last week I was in Chicago and there were notices up at all the pharmacies saying that no suspension was available for children. This clearly is a problem that the Minister might like to address. I do not expect him to be responsible for the USA, but I should like to be assured that there is enough suspension here.
Finally, when my family rang their GP to get advice about the children who were really quite poorly he was furious. He said that it was too late to give the children Tamiflu anyway. He did not agree that Tamiflu was the right thing to take. He said that it should be given, as the noble Lords, Lord Patel and Lord May, eloquently said, as a preventive, if not in the first 24 hours. He said that he had had lots of experience of children becoming ill on Tamiflu. I should like the Minister to address that problem and tell us what the Royal College of General Practitioners says about Tamiflu. I appreciate all the points made by the noble Lords, Lord Patel and Lord May, about the usefulness of antivirals, but it is the way in which they are being distributed which may be the problem.
I should also like to reinforce what the noble Baroness, Lady Finlay, has asked the noble Lord, Lord Jenkin, to say. If no further laboratory diagnosis is taking place, how do we know that it is H1N1? How do we know what we are dealing with? Is it being treated in the right way, or has it mutated—if viruses do mutate? I cannot remember: it was a long time ago. There is a real hole in our information. We are assuming, from telephone calls and website questionnaires, that the disease we are dealing with is the H1N1 virus, but we do not know. I would like to know.
I will make a few more short points. Will the Minister tell us what progress has been made on vaccination? I agree with all that has been said about pregnant women and the value of vaccination; indeed, one of my daughters-in-law, who is pregnant, dashed to get her vaccination straightaway. However, she cannot get it for her child who is under five. Our GP has kept up and was fully prepared. He did all his vaccinations for the elderly early this year because he knew there was going to be a big rush for the flu vaccine once it came through. He has already vaccinated all the pregnant women and vulnerable people, but he has run out of vaccine, and as he is still waiting for more he cannot do the under-fives. This is quite a serious problem which needs looking at. The noble Lord, Lord Sutherland, and others dealt with intensive care capacity. We need reassurance that if a second wave of the flu comes, there will be enough intensive care beds to treat patients.
My final point is that I was, as usual, quite amazed to see some American television last week. Most of it really is quite awful. However, I was very impressed to see every 10 or 15 minutes the messages about flu that my children had received from the website here; about what to do if you think someone in your family has flu and the various points and symptoms to check out. This was on television at regular intervals. I do not watch much television in this country, but I hope the Minister will tell us that the Department of Health will start using television much more for health messages. It is such a useful medium. Many people, particularly the elderly, cannot be bothered to go on to computers or websites; we should be using prime-time television much more.
My Lords, the House will be grateful to the noble Lord, Lord Sutherland, for having given us the opportunity to return to the subject of the H1N1 pandemic. I congratulate the noble Lord and his committee on producing such a useful short report. The fact that events have moved on since its publication is neither here nor there: it contains both evidence given and conclusions drawn which are of lasting value for future policy-making and which therefore merit the closest attention.
At the beginning of their remarks, the committee make a point of commending the Government on the steps it has taken to prepare for the current pandemic. We can all echo the spirit of that commendation, because while big questions remain about the pace at which the National Pandemic Flu Service was commissioned—and my noble friend Lord Jenkin is right that we should not gloss over this—there is no doubt that the Department of Health has done well in delivering a good state of national preparedness for dealing with a flu pandemic, and with this pandemic specifically. I am sure that the early stockpiling of antivirals and the prompt commissioning of the H1N1 vaccine from manufacturers represent at least part of the reason why the WHO has been so complimentary about this country’s state of readiness in comparison with that of others. As an aside, I think it has been helpful that we have had a broad degree of political consensus on what needed to be done, borne largely on the back of clear and expert scientific advice.
Nevertheless, some of the decisions taken by Ministers have not been straightforward. The original emergency plan, based around an H5N1 pandemic, presupposed that there would be no attempt at any sort of containment strategy, yet when H1N1 first broke, the immediate policy was to try to contain it. This was not a case of Ministers acting like King Canute, but rather a deliberate and sensible effort to delay the worst of the outbreak in the lead-up to a specific vaccine becoming available. Even with hindsight it is impossible to say whether this policy actually worked. The likelihood is that it succeeded in delaying the spread of the virus during the school summer term, though by July of this year very significant numbers of cases were being reported. Those numbers dropped rapidly during the school holidays, but then again rose sharply during September. The latest data indicate that the numbers are levelling out, and perhaps even diminishing a bit, but the burden on the NHS remains significant. It would be helpful to hear what the Government’s predictions now are of the worst-case scenario as regards the national infection rate. Is it still, as they were saying earlier this year, 50 per cent of the population?
There is one basic problem with H1N1, referred to so well by the noble Lord, Lord May, which is that the science surrounding it is still unclear. From a political standpoint, that is unfortunate. The public are in the habit of demanding absolute certainty in the advice they get from Government, but here absolute certainty is impossible. We can say that the virus appears to be less lethal than the virus which gave rise to the last major pandemic in the late 1960s, but that it has none the less proved lethal in a number of instances. We can say with confidence that some people are more at risk from the virus than others, yet we must also say that some healthy people, who do not currently appear to be at risk, will die from it. Nor can we quantify the number of cases. The statistics that we have are based not on swabs, but on the number of consultations which GPs have recorded, a methodology which is wide open to inaccuracy and distortion. No doubt some sort of a picture will be emerging from the experience gained by the National Pandemic Flu Service. It would be interesting to hear what the Minister has to say on that score, bearing in mind the warning note sounded by the noble Baroness, Lady Finlay, via my noble friend Lord Jenkin.
The scientific uncertainty over H1N1 was brought home to me by one particular press release from the department in August, which announced 14 new research projects into swine flu. These included a project to establish how long someone with the virus is contagious and what a “safe distance” is from a swine flu patient—in all circumstances, fairly basic facts. It would be helpful to hear whether the department has had sight of any findings from this research.
We do of course have the benefit of data collected in other countries. In the United States, the Center for Disease Control has recommended that children and young people should be vaccinated as a priority group, because a large number of cases have been seen in children who are in close contact with each other in school and daycare settings, and in healthy young adults who live or work in similar close proximity. The hospitalisation rates among nought to four year-olds and five to 24 year-olds are the highest, and the incidence and severity of swine flu is significantly greater in these age groups than in the rest of the healthy population. I therefore need to ask whether the Government are considering rolling out the vaccination programme to all children and young people under the age of 24, as opposed to just those in the seasonal flu at-risk groups.
Last week the noble Lord, Lord Patel, was made a Knight of the Thistle, for which I am afraid that modesty is not part and parcel of the requirement, as my noble and learned friend will understand particularly clearly. On listening to the debate and on reading the report, I have to say that the scientific community in Scotland is particularly pleased that such a brilliant report should have been received by your Lordships' House in these circumstances.
My Lords, my noble and learned friend has brought the House’s attention to a happy award. I extend my own congratulations to the noble Lord, Lord Patel, on his honour.
It is also clear that the elderly who catch swine flu do badly, and many doctors consider it regrettable that not all the elderly are to be offered the vaccine. I fully appreciate that supplies of the vaccine are limited and that its distribution must be prioritised. However, it would be helpful to have the Minister's comments on that point.
One issue which the committee considered was the need for clear advice to be available to high-risk groups about the virus and what to do. The recommendation that emerged—my noble friend Lord Colwyn mentioned it—was that it would benefit GPs to have one central source of up-to-date advice which could be accessed as necessary. What has been done about that? The idea has particular relevance in the context of antivirals. As we have heard, anecdotally there is a reluctance on the part of many GPs to prescribe Tamiflu, because its side effects can be nasty compared to the symptoms of the virus itself. There is also a fear that those who take Tamiflu now may develop a resistance to it, which could prove counterproductive were the virus to mutate. I follow my noble friend Lord Jenkin in asking what is now the official medical advice as regards taking Tamiflu.
The committee also looked at the vexed question of critical care capacity. I wonder whether the Minister could update the House as to how well the NHS's critical care services are standing up to the test of swine flu alongside the beginnings of seasonal winter flu. It was encouraging to read the evidence presented to the committee that, should circumstances so demand, critical care capacity could be doubled. How precisely that could be done is still unclear, at least to me, and I hope that the Minister will take the opportunity to explain. Looking at interim measures, I should be interested to know what arrangements have been made for NHS trusts to help each other when the system comes under pressure.
Looking back at the events of the year, I think that many would say that there were lessons to be learnt from the way in which PCTs communicated—or in some cases failed to communicate properly—with GPs; undoubtedly some GPs felt unreasonably excluded from the planning process. The approach adopted seemed very much one of command and control, which in an emergency may be all very well, so long as the plan actually works and makes sense. By some accounts the messages promulgated were not always as consistent and clear as they should have been, and I frankly do not understand why members of the medical profession were not given more of an opportunity to contribute to the logistical planning process than they were. There was time to do that. It seems that the departmental failings on which the committee has put its finger, as well as a lot of the unanswered questions, all fall under the broad heading of communication. As we look ahead to what may lie in wait for us around the corner, as we must, it would be good to hear from the Minister that, when the threat from this virus is behind us, there will be a small list of issues in the department headed “Lessons to be learnt” which can be addressed and resolved before the next such crisis occurs.
My Lords, having lived in crisis situations, I know that one of the points at which you are running out of options is when you count your problems rather than weigh them. Today, I feel that I have been barely able to count the number of questions, never mind understand or possibly respond to them. Therefore, I make a blanket commitment—I apologise to officials for it—that we will write to noble Lords. There must have been 100 questions and we shall try to cover them. I shall make an overview speech and then touch on the major issues raised.
I thank the noble Lord, Lord Sutherland, for tabling the Motion, and thank all members of his committee for their insightful report. It is a welcome recognition of the strength and quality of the UK’s pandemic plans. The UK remains one of the leading global players in planning and preparing. WHO declared a global influenza pandemic on 11 June, which means that we have an entirely new virus. At the beginning, we have little information, and you cannot wait to see how it develops before deciding how to respond. That is why we invested so much time and effort in planning and preparing. But plans need to be adapted as information becomes available.
Throughout the pandemic we have drawn on national and international expertise to track how swine flu has developed. We have constantly adapted our approach and continue to do so. As many noble Lords have noted, to date the pandemic has been milder than it might have been. Most illnesses continue to be mild. However, some people are much more seriously affected. Our best estimates for England suggest that around 790,000 people have been ill with swine flu. Tragically, as of 2 December, there had been 178 confirmed deaths. I express my sincere condolences, and those of the Government, to the families and friends of those who have lost their lives.
We have been able to understand past pandemics only retrospectively. This is the first time we have been able to deal actively with a flu pandemic in real time. We are now in the second wave of the pandemic and case numbers are decreasing. That gives a great opportunity to roll out the vaccination programme and limit further the impact of the virus this winter and in future years. First, we have offered the vaccine to the most vulnerable clinical risk groups. We have also made it available to all front-line health and social care workers so that they can protect themselves and those whom they care for. Enough vaccine has been delivered into the UK to cover all those groups. So far, around 1.9 million doses have been administered in England.
We have taken the advice of the independent Joint Committee on Vaccination and Immunisation. The vaccine will next be offered to children over six months and under five years of age. Children under five who get swine flu are more likely to need hospital care than other age groups and are more likely to need critical care. Parents and carers of those children will be contacted when the NHS is ready to start that second phase of vaccinations, which I understand will be very soon. Vaccine will also be offered to main carers of older people and of people with disabilities. That phased rollout of vaccinations allows us to focus on those most at risk and to use vaccine stocks as they become available. We also have to recognise that there are limited capabilities for delivering the vaccine, which is why the phased and prioritised approach is so important. We will continue to review the best evidence to support any decision on wider vaccination.
Another key element of our response to the pandemic in England has been the National Pandemic Flu Service, which went live on 23 July, as soon as there was a significant upsurge in cases across the country. It allows people to have their symptoms assessed automatically by a dedicated website or phone. People who have flu-like symptoms can then ask a “flu friend” to collect the drugs for them. Antivirals help to reduce symptoms and the risk of complications. The service has given patients swift access to antivirals. It has discouraged people from spreading flu and has allowed GPs and other healthcare workers to focus on other sick patients; that is an important part of the service. A recent study of swine flu patients in hospital showed that they had a better chance of recovery if they received antiviral treatment within two days of having symptoms. That supports our precautionary approach and the use of the service to ensure prompt access to treatment.
As I said, the UK is one of the best prepared countries in the world. The NHS has planned and prepared extensively for pandemic flu and continues to do so. Our pride in that achievement, and the way it has been echoed around the House, does not mean that we are complacent. This has been a serious event and learning experience. The NHS is potentially facing a very tough winter, but it is in a strong position to cope.
The 10 English strategic health authorities have each led an exercise to test and improve their preparedness for a second wave of swine flu this winter. The results of these exercises have been published and copies placed in the Library. NHS boards have also published statements of their readiness to respond to swine flu. These show that there are robust leadership and governance arrangements in place to deal with the pandemic. One key service that can come under severe pressure in a pandemic is critical care. The NHS has demonstrated how it could, if necessary, double its ventilated critical care capacity during the peak weeks of the pandemic. Fortunately, although demand for critical care has increased during the pandemic, the NHS has coped well without having to surge capacity. However, it is absolutely right that we are prepared for the possibility of doing so.
As highlighted in the committee’s report, we know that during a pandemic some healthcare workers will be concerned about risks. The Government have taken precautions to protect these essential workers. We have developed detailed guidance and we have stockpiled face masks and respirators. We are now encouraging front-line health and social care workers to be vaccinated. To keep the public informed, there has been a mass public health campaign with print, TV and radio adverts. The adverts remind people about good respiratory and hand hygiene. The “Catch It, Bin It, Kill It” message has been pushed hard.
A tremendous amount of work has been done since the outbreak of swine flu both at the front line and behind the scenes on trying to limit the effects of the virus. On behalf of the Government and the whole House, I would like to thank everyone involved in helping to respond to the pandemic. But we must not underestimate the continued threat that swine flu still poses, so we continue to monitor the situation closely, reviewing our plans and maintaining a precautionary, flexible and proportionate approach.
I move now to some of the particular points made by noble Lords. The noble Lord, Lord Sutherland, set out the interesting story of the committee’s involvement in this debate. One of his points was that the questions raised must be kept alive. He commended the Government for being alert and responsive but quite properly warned that complacency can be a problem and that lessons must be learnt. We will not be complacent.
There has been much discussion both in the report and during today’s debate about the concept of end-to-end testing. I have probed this at some length and I am assured that the experience of the pandemic, together with the exercises carried out over the summer by all the strategic health areas to assure ourselves that the various plans that we have put in place will work, has effectively been more powerful than the end-to-end testing originally contemplated in the evidence to the committee. While the exercise has been desk-based in one sense, I would say, as someone who has been involved in emergency plans, that it can be powerful. However, as the noble Lord commented, we have had a living experiment and we are committed to learn from it. We will also pick up on his point about the importance of involving other jurisdictions.
On the issue of the lack of beds in the south of the country, those areas that are less affected by the flu at any one time would help areas that are more affected. This is a mutual aid exercise and follows an approach frequently taken by the NHS. All regions have well developed systems of critical networks in place to make sure that adult patients have access to critical facilities.
The noble Lord, Lord Crickhowell, concentrated particularly on concerns related to pregnant women and workers. I think that the advice is clear: pregnant women should be vaccinated. However, I will ensure that we touch on this point in our response to all Peers who have taken part in the debate. On the issue of the limited reach of the vaccination programme, it is vital to realise the importance of prioritisation. Public communication material for surgeries, including a leaflet, was launched and this has raised awareness and understanding of the swine flu immunisation programme. Also, vaccine records have been created. We are collecting data from GPs and all other sources so that we have a ready database for the learning programme.
I was asked whether the vaccines are safe for pregnant women. The simple answer to that is yes. While it was explained to us that the phrase “absolutely safe” is unrealistic, the vaccines achieve the levels of safety reached by other vaccines. Both vaccines have been licensed for use in pregnant women. Licensed vaccines, including influenza vaccines, are subject to a very high standard of safety and they would not be licensed if they were considered unsafe.
The speech of the noble Lord, Lord May, was in a sense a useful teaching exercise for noble Lords. The only area that I would dispute is that at some point we said that there would be 70,000 deaths. Someone else mentioned the “dilemma of communication”, which is an important point. On the one hand we want transparency—I believe in it strongly—while on the other hand we do not want to frighten the horses. The problem with transparency is that people can be frightened. What we have been publishing throughout the process is the worst-case scenario, because that is what we ask our organisations to respond to. I have not been able to cross-check the figures, but I believe that at one point fairly early on it was said that there might be as many as 70,000 deaths. Today’s view is that there will be, at the most, a further 1,000 deaths. Once again, that is a worst-case scenario. Indeed, all the other figures for planning purposes are related to the worst-case scenario option.
The noble Lord, Lord May, discussed the use of antivirals as a prophylaxis. That is absolutely valid and we agree with him. In many ways, it is why we have set up a system that is automatic in nature. Some people have said, “Going to a web page or making a telephone call does not constitute a proper diagnosis”. This is all about judgment, and the Government are responsible for those judgments. The question here is one of proportionality: what is the risk of very serious complications perhaps leading to death through use of the antivirals? The judgment is that it is low compared with the advantages of easy access through the rapid rollout system that we have created. We take the view that the method of distribution continues to reflect the right balance of judgment. The role of government is to be responsible for that kind of decision.
I turn to the issues raised around lessons learnt. We have learnt a lot about swine flu and we have tested our plans. We will conduct a full review of the national framework next year and will revise and update the content in the light of emerging information about the pandemic. I cannot give the detail of how we will conduct the review because lessons being learnt in a live situation are a continuing process—you learn the lessons and put them into your system. However, we will also go through a formal lessons-learnt process to ensure that we learn all that we possibly can from the experience.
The noble Lord, Lord Jenkin, asked whether the service was misdiagnosing people. As I have said, the system has been developed with specialist help. The causes of illness are not always clear, but we believe that the proportionate effect that was delivered was right. Wales, Scotland and Northern Ireland have not used the same system; that is quite correct. They generally have a more dispersed population and have chosen to use GPs to distribute the antivirals. That is not considered the best option for most people in England. However, we have always recommended that people in high-risk groups, including pregnant women and children under one, should consult their GPs.
The noble Lord, Lord Patel, particularly stressed that we should remain vigilant. I may be new to this subject, but I have been probing officials over the last couple of days and I am convinced that we are very seized of the importance of vigilance and of not being complacent. The targeted group approach will mean, for instance, that children under five should all be vaccinated by the end of this month. We are not changing the access to antivirals, which continue to be accessible now through the flu line and the website, as they were before. Our current stockpiles of antivirals are good; there is a stockpile sufficient to treat 50 per cent of the population, should they become ill.
I was about to say that the vaccine is available to GPs; it is available to virtually all GPs. Data about the uptake are just starting to come in, but it is early and I cannot deliver any more precise answers about uptake today. The full or enhanced national pandemic flu line is only modestly different from the interim one that was delivered. It allows for a better relationship with NHS professionals. When it is used, it will be more flexible in its approach.
On the points raised by the noble Lord, Lord Colwyn, we have concentrated on making sure that GPs get a consistent and correct answer to questions, whatever the source of the advice. We have worked closely through the Royal College of General Practitioners and the BMA General Practitioners Committee and we have provided advice on policy and context issues to GPs. We resisted the idea of a specialist channel, because these are well developed and trusted ways of communicating with GPs; we thought it more important to enhance them and to make sure that single, consistent messages were coming through those regular channels than to create some other channel where you might end up with two messages. So far there have been 178 confirmed deaths in England. None of those was from an antiviral. As with any drug there is always a potential risk, but most reactions are short-lived.
I think that the comments from the noble Baroness, Lady Tonge, have largely been taken up. We are relying on a clinical diagnosis, not a laboratory confirmation. However, we have well established seasonal influenza surveillance systems to monitor the spread and activity of swine flu and we are getting a strong enough picture from those. We are very clear about the importance of data. We are still finalising the logistics of how the vaccine will be delivered to children over six months and under five years, but we expect that general practitioners will want to continue to be a key component in that delivery. We are currently working with the BMA and national health organisations to agree exactly how.
Finally, the noble Earl, Lord Howe, asked a list of questions, as ever. I will take praise from him as from everybody else on behalf of the Government in his general comment echoing how we have done relatively well. I am looking at this as having been quite a good job from the Government. To pick up on his particular points, the containment worked; the numbers are levelling out. He asked about numbers and where we are now with the guidance. I think that the last guidance was on 22 October. In that revision of the planning for a worst-case clinical attack rate, we revised the numbers down to 12 per cent—up to 7.5 million people. The reasonable worst case is that a further 35,000 people may need to be admitted to hospital, with up to 5,300 requiring critical care. A further 1,000 people might die, but once again that is the worst case. At the moment, all our plans show that our critical resources can cope with that situation.
Yes, there were 14 research projects; I feel that we are damned if we do and damned if we don’t. The questions may have seemed straightforward—how long, when, and so on and so forth—but it seems to me entirely proper to have started those 14 research projects. I understand that four of them have interim reports, but since they were launched only in August we do not expect results until—
My Lords, the noble Lord should not misunderstand me. I was commending the Government for having commissioned the research and merely commenting in the context of my general point about scientific uncertainty that that went to prove how much we still had to learn about the virus. In no way was I criticising the department.
It is always a delight to agree even more with the noble Earl.
On the groups, the six-month to five-year group is in hand and the other group of young people is under consideration, but at this time we have certainly not decided to go ahead with that. We are not going ahead with the 65-plus group at the moment. They are in the same general position. I emphasise that we are strongly encouraging anybody who is 65 or older and who is in an at-risk group to be vaccinated. That is available now. Anybody listening to the debate who is 65 or older and in any of the at-risk groups should be off to their GP, seeking a vaccination.
I have made the point about the central source and I think that most of the points raised by the noble Earl have been covered. I thank noble Lords for this excellent and wide-ranging debate and I apologise to my team for the length of the letter that will have to be written.
Yes, hear, hear. I also thank the two opposition Front-Bench spokespersons, the noble Baroness, Lady Tonge, and the noble Earl, Lord Howe. I particularly appreciate how there is, on the Front Benches opposite, a non-party-political approach to the issues as reports come from this committee. That is true of the Government, too. There is no point-scoring; we are concerned with real issues. There is evidence available—it may not be perfect, as the noble Earl, Lord Howe, pointed out—but that is the basis on which we go ahead.
I add just one more commercial. This further justifies to me the need to retain in this House the level of expertise that we have in the membership here. That being said, Members will appreciate very much the quality of advice that we have, both from within this House, on the committee, and from the experts who have come to attend our seminars and to talk to us. It was also evident to me that there is almost an increase in interrogation skills that my colleagues develop as the discussion goes on. I am tempted to say that there is a sort of terrier-like doggedness in how they pursue things, but one occasionally has to add to the word “terrier” the other words “pit bull”, as one or two witnesses might well testify.
I thank the Minister for his response—for the overview, the detail and especially the promise. I appreciate that many of the questions that we have asked could hardly be answered from the Bench now and, equally, that the many requests that we have made for additional updating of figures could not possibly be satisfied in the course of the debate. We very much look forward to the Minister’s and the Government’s response on this.
One of the most important questions in the debate was asked by my colleague and noble friend Lord Jenkin, who asked whether the Select Committee would return to the matter. The answer is not to that question; the answer concerns when we will return to the matter. The practice of the Select Committee, over the last two or three years, has occasioned no fewer than eight follow-up reports, because we do not let a matter rest until we are reassured that it has been, to carry on the metaphor, worried to death both in report and in this Chamber. Perhaps I might conclude by telling the Minister, on behalf of the committee, that when the follow-up comes the first question will be, “What did we learn this time?”, and the second will be, “What additional data did we collect that will help us in the future?”.
My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend the Chief Secretary to the Treasury in the other place earlier today.
“With your permission, Mr Speaker, I would like to make a Statement on Putting the Frontline First: Smarter Government, a command paper that I have presented to Parliament today.
This Government are very proud of Britain’s public services and Britain’s public servants: our doctors and nurses who treat 1 million people every 36 hours; our police teams who brought down crime by one-third; the teachers and support staff in our schools who have helped record numbers of young people do well in their exams; our jobcentre staff who have helped 2 million move off unemployment since last November; and, of course, our Armed Forces, serving with such distinction in Afghanistan and around the world.
We always knew that with the right backing, Britain’s public servants could transform the quality and the standards of public service in this country, and over the past decade they have—not by some happy accident but by the work of careful design and determined investment. NHS investment doubled, education investment is up by 60 per cent and investment in public order and safety is up by 50 per cent. We did this while overdelivering by 20 per cent our Gershon review savings of £26.5 billion in the three years to 2008.
Thanks to that effort, we have now reached the point where the investment gap that we inherited in 1997 has been fixed. We have not only reached but exceeded international averages for spending on education and health. We are now at a turning point where, in the decade ahead, we can capitalise on the great strengths that we have created and set out a new way of driving standards in public services up while we drive the deficit down.
I am therefore laying in the House today a command paper entitled Putting the Frontline First: Smarter Government that shows how the Government will set about that task. It draws together over 12 months’ work from literally thousands of people from across public life, the private sector, charities and voluntary groups, leaders of public services and those on the front line.
In particular, I want to thank Sir Michael Bichard and public servants from 63 councils, 34 primary care trusts and 13 police authorities who have contributed to our trials of Total Place, and the many local areas undertaking similar work; Sir Tim Berners-Lee and Professor Nigel Shadbolt; Martha Lane Fox and her Digital Inclusion Taskforce; our efficiency advisers Gerry Grimstone, the noble Lord, Lord Carter of Coles, Martin Read and Martin Jay; and leaders from across the third sector who have advanced the relationship between the Government and civic society.
Today’s command paper summarises what we have learned from that work. Our starting point is a relentless focus on standards. We are ambitious for Britain’s future and we know that we can do well in the years to come, but we know, too, that Britain’s families will more readily succeed and do well in life if they are supported by first-class public services. So we will make first-class standards in public services not a privilege for the few but the right of all by setting out new entitlements to high-quality public services in health, education, policing and, in time, social care, backed where appropriate by the force of law.
To help citizens to hold local services to account, we will revolutionise the free availability of comparative information on police efficiency, hospital costs and local authority spending. We will make sure that services, where they can, will fit in with the demands of busy modern life by putting many more services online faster. We will redouble our efforts to get more people online. Today I can announce £30 million more to get 1 million more people online by 2012.
We will free public data created using taxpayers’ money, including Ordnance Survey mapping and boundary data, and we will make it easier for civic society to contribute to public life by pressing ahead with a new social investment wholesale bank and testing social impact bonds.
Our second principle will be to free up the front line to innovate and collaborate by cutting back on ring-fenced budgets and national targets. I am therefore setting out today 10 steps drawn up by myself and the Secretary of State for Communities and Local Government to provide our local councils with a range of trading, joint venture and regulatory flexibility. We will cut the cost of local inspection. We will identify burdens on local areas where the cost outweighs the benefit, and remove these in time for the 2011-12 financial year. In preparation for the next spending review, we plan to radically reduce the number of targets.
If we set in place strong rights to high standards and free up the front line to innovate in a more flexible way, then I believe that we can cut back on the overhead costs at the centre. We are already on track to deliver £30 billion of savings between 2008 and 2011. Today, though, I am setting out steps to save £12 billion, and in the Pre-Budget Report we will set out further tough choices towards halving the deficit.
First, we will reduce the costs of the senior Civil Service. I am announcing today that we will reduce senior Civil Service costs by 20 per cent by 2012-13, and that we will seek to move 10 per cent of civil servants’ posts currently in London and the south-east to other parts of the country in the medium term.
Secondly, I can tell the House today that Bill Cockburn, chair of the Senior Salaries Review Body, will review senior pay across the whole of the public sector, reporting to the Government in time for next year’s Budget. In the mean time, I will personally review all proposals of salary offers of over £150,000 set by the Government.
Thirdly, we are publishing today plans drawn up by every Secretary of State to increase administrative efficiency for which they are accountable in back-office operations, including human resources, IT, collaborative procurement and asset management. I am also today publishing benchmarking information for all central government departments and government agencies showing exactly where we will focus to deliver these gains. I am also today setting a goal of saving £1.3 billion by putting services online, halving the consultancy bill and reducing marketing spend by one-quarter.
Fourthly, I am announcing today the first results of a comprehensive review of arm’s-length bodies, to report by Budget 2010. I am announcing today that we will save £500 million a year from changes introduced by the review. I am able to tell the House today that as an interim step, subject to the necessary consultation and legislation, we will abolish or rationalise 123 arm’s-length bodies.
Finally, I believe that, as part of this new future, the Government must either sell or transfer to better owners the things that they no longer need to own. I am therefore publishing today an asset portfolio listing the state-owned assets that the Government could commercialise over the medium term. This includes options for the future sale of the Tote, the student loan book, the Dartford crossing and the High Speed 1 rail link, and for potential alternative forms of ownership for British Waterways agreed by myself and the Secretary of State for Defra. Our policy will also include a new approach for testing where publicly owned assets should be transferred for use by the third sector.
This Government believe that this country is both richer and fairer for the strength of our public services. We will never compromise on high standards, but we will never compromise either in our search for value for money. Today’s command paper sets a new path for the future that draws on the strengths created over a decade’s work, and I commend it to the House”.
My Lords, that concludes the Statement.
My Lords, I thank the Minister for repeating the Statement made in another place. Noble Lords might think it strange that this Statement is made just two days ahead of the Pre-Budget Report. As usual, the press has been full of stories about what might or might not be in the PBR, but today the Prime Minister chose to steal the Chancellor’s limelight by announcing the efficiency component of the PBR and then sending the Chief Secretary along to the other place to explain it. This has all the hallmarks of dysfunctional government, and does not surprise us.
I turn to the content of the Statement and the document, Putting the Frontline First, which basically sets out the Government’s efficiency stall in a pretty wrapper of citizen-centred jargon. We should recall the Government’s record on efficiency. The Office for National Statistics has confirmed that in the 10 years after 1997 public service productivity fell by 3.5 per cent. Private sector businesses improved productivity by 30 per cent in the same period. Put simply, the Government have mismanaged our public services to a shocking degree.
Back in 2001, the Prime Minister told the Institute of Directors that,
“the efficiency we seek in the private sector we demand in the public sector…Government at every level–national, regional and local–must raise its game”.
The only area in which the public sector has raised its game is announcing efficiency savings which are not delivered.
In 2004, the Government announced £20 billion of efficiency savings following Sir Peter Gershon’s review. The NAO’s first look at those savings in 2006 showed that they were “provisional”, which is code for “they don't exist”. The Government then claimed that they had realised £13 billion of the savings. However, the NAO said in 2007 that only £3 billion had been achieved. The rest was to varying degrees a figment of the Government’s imagination.
Since then, the Government have repeatedly boasted, as they did again today, that they have achieved £26 billion of savings. The Minister also said that the Government are on track to achieve £30 billion of savings between 2008 and 2011. The document refers to £35 billion. Can the Minister explain how £5 billion was lost between the document and the Statement? However, all these assertions are unaudited and, given past form, why on earth should we believe a word of them?
Today, we have heard the final chapter of the Prime Minister’s long-running fairytale about efficiency savings. We are promised that another £12 billion a year will be realised. But there is precious little detail. The only figure found in the Prime Minister’s introduction to Putting the Frontline First is a saving of £100 million from streamlining the senior Civil Service. The Statement referred to a couple more figures, and various other figures are scattered throughout the document, but there is no summary of the savings and little information about when they will be realised. There is no mention of costs incurred in achieving those savings.
My first question to the Minister is whether the Government will place in the Library a schedule which sets out the various savings mentioned in the report, analysed by the year in which they will arise and reconciled to the overall £12 billion. Will the Minister also undertake that the schedule will include the costs of delivering the savings?
Secondly, I ask the Minister to say what contingency lies behind the figures. The Government will be aware that people, whether in the public or private sector, tend to be optimistic about the amount of savings and their timing. For what contingency have the Government allowed in announcing savings of £12 billion?
Thirdly, I have one detailed question for the Minister. Yesterday, the Chancellor said on air that the NHS IT project would be put on hold. He said:
“I think that we don’t need to go ahead with it just now”.
Three cheers for that; we have been saying for some time that it is a wasteful project. But today there is confusion, with a Department of Health official reported as saying that the Chancellor “misspoke”. What, if anything, is included within the totals dealt with in this Statement relating to the NHS IT project?
In many ways, we are immensely flattered by the document. It plays catch-up with many of the things that my honourable friends Mr George Osborne and Mr Philip Hammond have announced during the past few months. For example, we announced a complete re-think on quangos, cutting the cost of Whitehall by 20 per cent, and handing power to front-line professionals. In some other areas, the document does not go as far as us. We have gone further on signing off high levels of public sector pay and on cutting the consultants and communications budgets.
Quite a lot of the document merely reannounces existing policies. We have heard before about community asset transfers, about patient-focused approaches in health, about e-auctions and about reducing ring-fencing in local authority finance. We have heard about the Tell Us Once programme three times already.
There is also a lot missing from this document. One huge cost overhangs our future; namely, the cost of public sector pensions, but there is not a word about it. There is nothing in the document to give any confidence about delivery of savings; for example, about the role of incentives in delivering savings. We are yet to be convinced that the tentative moves towards cost transparency go anything like far enough.
When the Prime Minister was the shadow Chancellor of the Exchequer in 1995, he told the Labour Party conference:
“We abhor waste and imprudence in public spending not because it is electorally convenient to do so or the markets don't like it—but because the victims of waste are not those with money but those who find it difficult to make ends meet and for whom the best form of kindness is efficiency”.
What a pity that the Government have spent the past 12 years dishonouring that fine sentiment.
The only reason for today’s Statement is electoral convenience. The Government calculate that they can convince the electorate that the years of failure on efficiency can be wiped out by a skimpy document. The only kindness that is now appropriate is to put this Government out of their misery and let a new Government, committed to real public sector reform and efficiency, take control of our economy.
My Lords, I, too, thank the Minister for doing his duty, repeating the Statement from another place. The Statement sounds as if it is coming from a new Government taking over a brave new world, not from the same tired old team who have been running the shop so inefficiently during the past 12 years. If so much of what is proposed is so obvious and so easy, why have they not done it already? What have they been doing?
The National Audit Office, in its second review of progress on Gershon targets, pointed out that 23 per cent of the claimed savings could not be proved. So they were funny money. The Statement refers to halving consultancy fees. How on earth has the Treasury alone managed to run up a consultants’ bill of more than £120 million just for dealing with the banks during the past couple of years? Is there not anyone left in the Treasury who knows how markets work and can do that job themselves? What are they paid for?
I should declare my interest as a pension fund manager investing in property. I have had a quick look through the asset portfolio programme and must say that there are some wonderful statements in it. I particularly enjoyed that relating to the long delayed sale of the Tote. The Government announce that it is,
“a public corporation which does not have pure public policy objectives”.
Well, as it is the country’s fifth biggest bookie, you could say that again. We have the ultimate in unjoined-up government when they say that they want to sell off Ordnance Survey while making a considerable part of its product free. That seems unlikely to work.
I have some more detailed questions. The new social investment wholesale bank is meant to be funded from dormant banks and building societies, but so are community youth clubs and financial capacity training. How much money do the Government think will be generated? How confident are they of being able to fund all those different projects?
We then turn to reducing Civil Service costs. What will be the breakdown of this? How much of it will be done by reducing pay or stopping bonuses, and how much by cutting posts? Indeed, why should any senior civil servant get a bonus at all this year, while Britain is in deep recession and private sector pay is frozen or falling? We also welcome the increasing interest of the Conservatives in public sector pension costs. It is a great shame that they did not support our amendment to set up a public sector pensions commission to have a rigorous look at public sector pension costs when it was moved during the Pensions Bill, but we welcome their support. When will the Government get a grip on public sector pension costs, which typically add between a quarter and a third to the pay bill for providing front-line public services?
There is now a policy that all salaries in the public sector—or is it the public sector?—of over £150,000, set by government, will be reviewed in detail. The Statement says “set by government”, but what exactly does that mean? I wonder whether we could not go considerably further than that and say, “Why should any civil servant or local authority chief—people who are not, frankly, in the commercially sensitive or competitive front line—earn more than £200,000, which is more than the Prime Minister?”. How in principle can we justify that? There is also this totally arbitrary figure of £500 million to be saved by cutting arm’s length bodies. Where has that figure come from? Where on earth does 123 come from? The target for reducing advisory bodies is a quarter. Why is it a quarter? Why not a fifth, a third or even a half?
As the noble Baroness has said, the asset sales are just a re-announcement. We called them a car boot sale last time. Two months on, the goods look even more shop soiled—like the Government, who review, re-announce and rebrand ad nauseam, but cannot take decisions to save their lives.
I think that I am grateful to both noble Lords for their comments. Given the success that we have already had with the Gershon project, I find the last statement of the noble Lord, Lord Oakeshott, rather extraordinary. He said that the Government are incapable of effecting savings, but we have a proven record of where we have done so. I hope the noble Lord will at least recognise the strength of that statement, as far as the Government are concerned. I am aware that, like the noble Baroness, he places great emphasis on the comments and conclusions of the National Audit Office. It noted that projects across the programme are making significant improvements to the efficiency of public services. Our £26.5 billion SR04 savings, which were quoted in the Statement, meet the most robust data category of the National Audit Office. It really will not do for noble Lords opposite to suggest that the Government have a poor record on value for money.
I understand entirely their criticisms of the projections for the future because they are not in the business of giving the Government credit for their productive approach to this issue. However, they surely cannot gainsay past achievements. Indeed, the Government have a strong record on value for money. We overdelivered on the Gershon target by 20 per cent; this was in the Statement. We achieved £26.5 billion of savings over three years. I am not going to have lectures about how the Government deal with issues of value for money from the Opposition, who have forgotten how to govern, or from the Liberal Democrats, who probably never even knew—or certainly not in a century that we can readily recall.
The noble Baroness suggested that this was a dysfunctional Government because the programme was introduced by the Prime Minister, who happens to be responsible for the totality of the Government. As the House will have recognised, the Statement ranges right across the totality of government—the whole area of public service. Of course, the Chancellor has a significant role to play. How could it be otherwise when it is the Chief Secretary to the Treasury who is making the Statement because of his discrete area of responsibility? The relationship between these savings, the overall position in the running of the economy and projections for the next few years relate directly to the fact that this Statement is made on Monday and the Chancellor will be making his Statement on the Pre-Budget Report on Wednesday. Far from it being dysfunctional, I cannot think of a better locking together of two propositions, put before the other place in the space of three days and considered, in due course, in this House. They show the totality of how we see our route to map the economy to deal with what we all recognise, as a result of the credit crunch and the recession, is an immensely challenging position for the Government, in circumstances where resources are bound to be scarce.
The noble Baroness asked whether the schedule of savings should be placed in the Library. She knows, of course, that we will be concerned to identify the costs of the programme. I hope the House will forgive me if I go through a little list. We will place the clear figures that we intend to save across a whole range of significant headings. They can be checked against those headings, such as “Increasing energy efficiency”—with a saving of £300 million—and “Reducing consultancy and marketing spend by 50 per cent”. That is in the Statement. That is easily checked. We are saying that we intend to save £650 million over this period under that heading. We intend to do so and it can easily be checked. We said that we will rationalise arm’s length bodies. We intend to save £500 million there. We are identifying the number of those arm’s length bodies that we intend to address. We will have a list in due course. I give way.
I am grateful to the Minister for giving way. He is very good at reading out what is in the Statement. He has given totals for various items. I asked for that to be brought together comprehensively, split out over the years and reconciled to the £12 billion. I hope he will commit to putting that in the Library.
My Lords, I need to be absolutely assured of just what the noble Baroness is asking for. I am indicating that of course the Government recognise that they need to be open about the areas in which they intend to make savings, the figures attached to them and the process by which they will move towards those objectives. The noble Baroness will be the first to appreciate that it is extremely difficult to set out those figures year on year. It is a projection over three years. If the noble Baroness thinks that running a Government means that in 2009 you produce some statistics and everything in the economy then follows exactly that pattern, and at the rate at which the Government predict in every respect, she is not concerned with the real economy. The Government are bound to say that what they are attempting to reach are the figures over three years—the period of the intended savings. They must also identify the areas in which they will do so and be clear about which figures attach to which objectives. That is clear in the Statement.
When the noble Baroness has had the chance to look at this in greater detail, I am quite sure she will be reassured that the Government have documented this with all the accuracy that they can produce for their objectives at this stage. What they cannot do for the noble Baroness—and no Government could ever commit themselves to this—is produce detailed statistics, year on year, from 2009 to 2013. How on earth could anyone expect that a Government would be able to do that in those terms? But they do identify what the overall objectives should be over that period of time.
The noble Baroness asked specifically about the National Health Service IT position. The IT case illustrates the exact nature of the problem of the approach that the noble Baroness has attached to this Statement today. Parts of the programme are already in place. Choose and Book, which allows patients to choose a hospital appointment that is most convenient for them, is already part of the IT strategy in the National Health Service. Other parts that the IT project was meant to implement are somewhat behind schedule at the present time, but that reflects the enormous challenge of the programme which, after all, is dealing with resources for the largest employer in Europe. It is not surprising that parts of a programme as large as that are piecemeal in their impact. The national programme for IT is about delivering benefits for patients and is bound to take time to get right. The noble Baroness would be the first to support the proposition that it is more important that we get it right than that we should stick to a timetable that might include weaknesses in the strategy. Of course, the Government are careful not to do that.
The noble Lord, Lord Oakeshott, raised the issue of the asset portfolio and quoted the Tote. I did not mind his little jibe about the Tote, but he will know that it has been in public ownership since its origins. Therefore, to say that somehow the Government ought to be ashamed of the position in which the Tote finds itself is not so. What has been difficult, as I am sure the noble Lord will accept—as will the noble Baroness, because she has been in discussions about the Tote—is getting the right buyer for the Tote. Getting the right price in circumstances where we can also safeguard the interests of British horseracing has proved a challenge. We attempted that, as the House knows, several years ago and we did not get the right offer and the right buyer. Are the Government to be charged that they were injudicious because they withdrew the offer from the market? That cannot be so. We cannot sell the taxpayer short by selling off assets without getting an appropriate price for them. What we can do is identify the areas in which a market exists for the purchase and we are indicating within that what we expect to get for those assets.
I hear the criticism of the Government from the noble Baroness and the noble Lord. I am all too well aware of the fact that in any projections of this kind—and these are significant projections—the Government are always open to the charge that they cannot substantiate every figure involved because they have not yet achieved those figures. Of course they have not, but we have a track record to be proud of with regard to efficiency and we intend to continue that programme.
My Lords, the Statement refers to halving the consultancy bill and the Minister has just emphasised that point. Noble Lords are aware of the extravagant misuse of management consultants in the National Health Service. Is the Minister aware that those management consultants, who know little or nothing about the National Health Service, earn approximately, from the public purse, £200 million per year? They learn on the job and pontificate to individuals who have a wealth of knowledge and experience. As I said, they charge the earth for that. How much of that phenomenal waste of public money will be saved?
The noble Lord will recognise that the issue of consultancy and management advice costs is an important part of the Statement. I have some sympathy with his point. We need to look at value for money in relation to these consultancy positions in the National Health Service. We all know the enormous complexities and challenges of the National Health Service. It is not just that it is such a huge organisation: it is dealing with issues that affect the public in the most significant terms—namely, their health and even matters of life and death. Issues of right decision-taking are more manifest in the health service than in almost any other part of the public service, so of course we have to get it right. We have learnt the lessons. We have had benefits from consultants with regard to the health service and some programmes have been affected by their contributions. But the noble Lord is right: when reduced resources are available, we need to address the issue of consultancy fees. That is why it is included as a major point in the programme of economies.
My Lords, I am tempted in welcoming the Statement by the Minister to inquire what he thinks it says about the Statement that the Benches behind him are entirely deserted. I do not think that there will be any questions from there. Is that a show of confidence or a true reflection of what his colleagues believe to be in the Statement? A Back-Bencher has rushed in at a signal from the Whips.
My question concerns the welcome news that jobs will be moved out of Whitehall and into the regions. In the past, the north-east of England has benefited significantly from such moves, but there is a concern there about the proportion of senior Civil Service grades that are moved out when these discussions take place. In the north-east, where we have a substantial proportion of the workforce in the public sector, we have only 0.1 per cent of senior Civil Service grades compared with an average of 0.9 per cent for England. Therefore, what plans do the Government have to send more Sir Humphreys from Surrey to Sunderland as a way of shaking up government and ensuring a wider reflection of the nation as a whole in Whitehall and our national debate?
My Lords, the noble Lord recognises that the limited support behind me merely bestows confidence in the Government’s message being delivered from this Dispatch Box. However, I have considerable sympathy with the noble Lord when he identifies this issue of civil servant movement elsewhere in the country. I must be negative about what he said about Sir Humphrey. After all, Sir Humphrey was a Permanent Secretary. In fact, he ended up as Cabinet Secretary. The Cabinet Secretary and Permanent Secretaries are no more likely to be located in Newcastle than in Manchester because they are expected to give regular advice to Ministers. They need to be in close association with them and on tap. But on the broader issues that the noble Lord raises, if a critical mass of civil servants move to a particular area, effective management should move with them. I have sympathy with that proposition and I think it is incorporated in the Statement that we are making today.
My Lords, I welcome what I hope is the beginning of the end of the current situation where one half of the Civil Service spends their time monitoring and inspecting the other half, who spend their time responding to those inspections and very little leaks out to the benefit of the taxpayer.
However, I really wanted to ask about the electronic or internet side of this. I notice that the Government are trying to get a million more people online. Are those new connections? Are they in urban areas or in rural areas, where they are really wanted? If it is only £30 a connection, is this just waffle, encouragement and PR? The Government are committing to spend £1.3 billion in putting services online. How does this square with the ideas in the Digital Economy Bill of throttling back people’s internet connections and possibly cutting them off, because then they cannot access these e-government services? If they are throttled back to below a useable speed of 1.5 megabytes per second, you will not be able to receive podcasts, and some government websites will “time out” on you, so you cannot submit your forms. That seems to be an example of the right hand not knowing what the left hand is doing.
I am delighted that the Government are going to free public data from the Ordnance Survey mapping and boundary data. At last, perhaps farmers, Defra and the RPA can all work off the same database. I hope this means that the RPA will release its data sets to the farmers for free, so that we can work off the same sets. But, on the other hand, who will pay for that? The Ordnance Survey has to make a profit at the moment, so presumably this will have to be funded from somewhere. However, I welcome it as a proper step forward in the right direction of having some joined-up government.
I am grateful to the noble Earl. The Government have made clear that we are concerned about internet access as regards a large number of our citizens. We are devoting resources to ensuring that an extra million people have the opportunity to access it. He is right; that is at the basic level of two megabytes per second. Nevertheless, it is a government commitment and we have indicated that we intend to deliver it over the next few years.
I say to the noble Earl that we do not intend to withdraw facilities from anyone. He may participate in discussions on the Bill, which proposes sanctions for misuse. Withdrawal is not quite the ultimate sanction but it is a very heavy one indeed. We envisage that the majority of offences will occur involuntarily and unwittingly. We intend that well before such an offence occurs, individuals will be warned about downloading in a way which breaches copyright. Withdrawal of the facility is a very significant sanction that is up for debate as we discuss the Bill. I am all too well aware that the proposal has its critics, but it is not meant to be anything other than a distant object.
As regards the noble Earl’s point about farmers, he will have rejoiced over the announcement about the progress that the RPA has made in terms of prompt payments to farmers from 1 December and the very high percentage of farmers who have already received payment. He is absolutely right that it would be hugely advantageous if there were total agreement between farmers and the RPA on the mapping data. Making Ordnance Survey data available for free—that is an important concept—may assist in this respect, but I imagine that a shorter route to achieve this object is through more effective liaison between the RPA and farmers.
I was just talking about making the system more efficient if this was shared; I was not trying to suggest anything else. The document says that the Government are going to make this provision free. However, my wife is delighted, and absolutely amazed, to have received her payment.
My Lords, at the end of the Minister’s first reply, he told us that he had noted the points made to him from the two Front Benches. That was welcome as one could barely expect him to welcome those remarks. It was probably more than his job was worth to do so. Will he also note that to many people in the country the Statement which he kindly read out to us will seem a liturgy of pious hopes and intentions? Will he also note that many people in the country will believe that this Government have sat and watched the mess we are in build up like latter-day Neros? I wish to ask him a specific question that he did not answer from the Front Bench. This Government have been in power for 12 and a half years. Why did they not do these things years ago, as they clearly ought to have done?
My Lords, I hear what the noble Lord says, but I do not accept the criticism implied by the word “pious”, if it is meant to be pejorative. I would sooner have a pious Government than a malign one. It is for the electorate to decide which is preferable.
I emphasise that the Government have beneficial objectives with regard to the Statement. The noble Lord says that this cannot be taken seriously, given the Government’s record. However, it can. He may not appreciate the increase in the number of doctors and nurses as a result of the Government’s expenditure programmes, but the public do. He may not particularly appreciate how many more teachers we have in our schools, but the public do. He may not particularly appreciate how many more police we have, but the public do. The Government seek to effect proper economies with regard to government services against a background of more than a decade of substantially increasing the spend on government services. When his party was last in power, we were well down the league table of Europe and the advanced world with regard to the NHS; now we compete with anybody as regards that expenditure. The present situation requires us to increase our drive towards obtaining value for money, and that is what this Statement represents.
Money-laundering and the Financing of Terrorism: EUC Report
Motion to Take Note
My Lords, I hope that we move to rather less contentious issues. The report on money-laundering and the financing of terrorism, which is the subject of this debate, was prepared following an inquiry earlier this year by the European Union Select Committee’s Sub-Committee F, of which I have the honour to be the chairman. Thirty persons and bodies sent the sub-committee written evidence and between March and May we received oral evidence from 28 witnesses. I should like to say how grateful we are to all the witnesses who gave evidence to us, both written and oral. In expressing appreciation, I must put on record our appreciation of our clerk, Michael Collon, who has been tireless in supporting the work of the committee. I also note the work of Anneliese Baldaccini; she has now left the committee but she gave great service to it over a number of years.
The report was published on 22 July and we received the Government’s very full response on 6 October. I am very glad indeed to have secured a debate for the report only two months later. I hope that the Home Office has emerged from that dreadful period when we had to do business with Liam Fox, who was actually named by the Leader of the House for lack of attention in responding to the European Union Select Committee. In one case we waited for over a year, despite repeated reminders. We are now in much calmer and more helpful waters.
We are debating this issue only two months after we received the Government’s response. The timings of these debates are very important. Perhaps I may mention another report of this committee on which the timing of a debate is even more critical. Three days ago, on Friday 4 December, we published a report recommending that the Government should opt into proposals for two new directives on asylum. That report is the first since the treaty of Lisbon entered into force less than a week ago and we are the first to rely on the undertakings given to the committee during the passage of the European Union (Amendment) Bill by the noble Baroness, Lady Ashton of Upholland, who was then Leader of the House. She said that the Government would find time to debate these reports. She undertook that the Government would not notify a decision to opt into arrangements within eight weeks of the publication of the proposal. In this case, those eight weeks expire on the day that this House rises for the Christmas Recess. I speak with the authority of the whole sub-committee and hope that the Government will honour that undertaking by making time for a debate before the Recess. I hope that the noble Lord can give us that undertaking because, if the Government fail to do so and leave the debate until after the Recess, that would be a very bad precedent to the new arrangements under the treaty of Lisbon.
I return to the issue of money-laundering and this report. Money-laundering and the fight against it are a global activity. In the course of our inquiry, we therefore looked not only at the activities of the European Union but at those of other international bodies. Some of those, such as the Council of Europe, are well known, but the main international organisation fighting money-laundering is the Paris-based Financial Action Task Force—FATF. One of our recommendations was that the Government should report systematically to Parliament on the activities of FATF. I am glad to say that the Government accepted this recommendation and undertook that after each plenary session of FATF they would submit the chairman’s summary to Parliament. That is most welcome.
On 21 October, the Exchequer Secretary to the Treasury wrote to me enclosing the chairman’s summary of the October meeting, telling me that she had placed a copy in the Library of the House. While I am most grateful for this, placing a document in the Library is not the best way of making the activities of FATF more widely known. Our recommendation was for a Written Statement. I suggest that the Minister might make a Written Statement to this House on future meetings, explaining that the full summary had been placed in the Library, with the Government’s reaction to the most important developments. A model to follow, relating, as it happens, to money-laundering, would be the Written Statement on 26 November by the Parliamentary Under-Secretary of State at the Home Office on the third annual report on the suspicious activity reporting regime, which is closely involved with money-laundering.
The reporting of suspicious activities by the private sector to law enforcement bodies is the keystone of the fight against terrorism. It follows recommendations made by FATF, but those are only recommendations. They acquire the force of law throughout the EU by being incorporated in the third money-laundering directive. Effect is given to the directive in the United Kingdom by the Money Laundering Regulations 2007. It is under these regulations that banks, other financial institutions, lawyers, accountants, auditors, insurers, estate agents and many others are required to report to the Serious Organised Crime Agency any transaction or activity that seems to involve funds that are the proceeds of criminal activity. Knowledge to do that is unnecessary. The bankers explained to us that this is a suspicion-based regime—if you smell a rat, you must report it. In 2007-08 the banks alone smelt and reported 145,000 rats, of which 838 related specifically to terrorist financing.
We did not question the utility of this; it is central to the fight against money-laundering. But given the immense burden of the regime on the private sector, we questioned whether the regime should apply where the underlying criminal offence is minor or even trivial. Some of our witnesses, especially the Law Society, agreed with us. We recommended that the Proceeds of Crime Act 2002 should be amended to exclude minor offences. The Government, in a response that I commend for its careful consideration of our recommendations and, to be fair, its full response to them, explained at length why an all-crimes approach should be retained. They pointed out that there may be little correlation between the sums laundered and the seriousness of an offence, that an activity may be suspicious irrespective of value and that something that the reporting institution may regard as trivial may look very different to SOCA when considered with other intelligence.
I am disappointed that the Government cannot accept our recommendation. But, if not, it is all the more important that they should act on our other recommendations: to consult more fully with the private sector and to give greater feedback on the utility of all their work and its outcome. The Government accepted this and listed some of the many ways in which they currently provide feedback. This seems to concentrate mainly on the top reporters and on first-time reporters. More could be done with those, such as small and medium-sized firms of solicitors, for whom the reporting regime is a real burden to which they object strongly. They need to be persuaded that their contributions are of real value.
Suspicious activity reports, or SARs, are entered by SOCA on to ELMER—I am sorry for all the acronyms—which is, in effect, a database of suspects. Given the number of reports, it is a very large database. As one might expect, access to it is available to police forces and others responsible for prosecuting serious crime. One might not have expected the information also to be available to trading standards authorities or, as the noble Lord, Lord West of Spithead, explained in a Written Answer to my noble friend Lord Marlesford, who is in his place, to Nottinghamshire County Council, which wanted to use the database to investigate housing benefit fraud. This seemed to us to be an unwarranted use of information collected for a different purpose. We pointed out to the Government that the FATF recommendations do not require this information to be made use of other than in connection with serious crimes; nor does the money-laundering directive, which gives these recommendations the force of law, require that. “True”, say the Government, but they do not prohibit it, either. Since the Government maintain the all-crimes approach for SARs, it seems that they will continue to allow the data to be used even in connection with offences that could not by any stretch of the imagination be called serious.
We read a great deal these days about the iniquities of the DNA of persons who have never been charged with a criminal offence being retained on the DNA database, but I wonder how many people know that the details of their banking transactions may be retained on a database not because they are connected with a crime that has been committed but because a bank employee—perhaps a lowly employee on the salary scale—has a hunch that a transaction may be related to a suspicious activity. No steps are taken to confirm whether the suspicion is well founded, details of the transaction are retained for at least 10 years and anyone who wants to peruse the transactions relating to him on the database is unlikely to succeed, since SOCA is exempt from the Freedom of Information Act. As I said, these entries can be accessed by a wide range of bodies for purposes wholly unconnected with serious crime.
The committee does not believe that this situation can continue. We recommended that the Information Commissioner should review and report on the operation and use of the ELMER database. The Government tell us that SOCA has invited the Information Commissioner to discuss this. The deputy Information Commissioner wrote to me on 5 October to say that he had made an initial approach to SOCA to discuss how he might carry out that review. That was two months ago—time for the bankers to have reported a further 2,500 suspicious transactions. Has that meeting taken place? Has the review begun? What progress has been made? Where is all this leading?
I mentioned earlier the Council of Europe, which includes all 27 member states of the European Union and many others as well. It is the forum within which two international instruments have been negotiated, both of which would be very useful if only they were fully in force. The first is a protocol to the Convention on Mutual Assistance in Criminal Matters, which the UK signed in 2001 but had yet to ratify at the date of our report. In their response, the Government told us that the UK should be in a position to ratify it towards the end of 2009. The end of 2009 is fast approaching, so I hope that the Minister will have good news for us on that front. It is absurd to sign something in 2001 and not to have ratified it after all this time.
The second international instrument is the Warsaw convention. This is the first comprehensive international treaty covering both the prevention and control of money-laundering and the financing of terrorism. It addresses the fact that quick access to financial information is the key to successful anti-money-laundering systems. If in force it would extend to Council of Europe states provisions that otherwise will be available only within the EU. Yet the Government have yet to sign or to ratify it. They explain that it is their policy not to sign a convention without a reasonably firm intention of ratifying it—ignoring the fact that, as I said a moment ago, they signed the 2001 protocol which eight years later they still have not ratified. The problem with ratification of the Warsaw convention centres on a single provision. We were told in evidence that the Government intended to sign the convention very soon and to ratify it within 18 months. The Government say that their aim is to sign the convention in the very near future with ratification to follow. Has the Minister any news on that front? Can he tell us how soon is very soon and whether the very near future is still in the future? Is the 18 months that we were told in March would be the period to ratification now nine months?
Our inquiry dealt with other fascinating issues, to which other members of the committee will no doubt wish to refer. Not the least of them was whether ransom money paid to pirates found its way into the hands of terrorists, which the committee thought more than likely. It does not take much imagination to guess that that might be so. Clearly, almost all laundered money goes to those involved in illegal activities, but the Government should do more to find out whether money paid in ransoms to pirates—I am thinking particularly of Somalia—finds its way to terrorist organisations that we know have established cells in Somalia.
Although I have made some criticisms of the Government, our overall impression at the conclusion of the inquiry was that they are in the forefront of the fight against money-laundering and the financing of terrorism and in many respects are leading the way in showing what can and should be done to follow the cash and catch the criminal. For this we should all be grateful. I commend this report to the House. I beg to move.
My Lords, I am grateful to the noble Lord, Lord Jopling, for securing this debate. I pay tribute to him, as the committee’s chairman, for his commitment and expertise in making sure that the many strands of the inquiry came together in comprehensive proposals. I also echo his thanks to the committee clerk, Michael Collon, and the other staff who offered invaluable advice and help and who served the members of the committee so effectively. The committee was also greatly helped by the specialist adviser, Professor Bill Gilmore, with his knowledge of international law, the law of the seas and research into money-laundering, as well as by the many people who gave evidence.
It is important that the Government should find time in the business of the House for noble Lords to hear, read and debate the reports which come from the committees, and to do so in timely fashion, as the noble Lord mentioned. In this, as in other EU inquiries, the committee has had access to a very wide range of people and organisations with unrivalled expertise to offer. The resulting report brings forward analysis and proposals to benefit this country and other member countries of the European Union. The proposals are no less topical than when the report was published in July.
Although I shall restrict my remarks to some of the aspects of the report that the noble Lord touched on, I shall also reinforce some of our major concerns in the inquiry. The international standard-setting body is the Financial Action Task Force—FATF—set up in 1989 to combat the growing threat of money-laundering. There were varying assessments of its effectiveness, but it appears to operate as effectively as is consistent with a body which has to deal with matters by reaching a consensus among 34 nations and which now has a more recent counterpart in MONEYVAL. Among member countries, the committee found different interpretations and implementation of decisions, but the ones that we can most influence are the ones for the UK. I shall not repeat the decisions that the noble Lord has mentioned, or the two conventions that this country has failed to ratify, but I shall quote one of the conclusions of the report. It states:
“It is deplorable that negotiations for an agreement on mutual legal assistance, begun nearly eight years ago and concluded over six years ago, should still not have resulted in an agreement which is in force between the EU and the United States”.
I should like to press the Minister for a reply on the extensive delay in implementing that agreement and the Warsaw Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism.
The Government’s reply included the phrase that they are,
“pushing to increase EU cooperation and information sharing to improve seizure of criminals' assets and to combat money laundering”.
We ask: how are they pushing that and what actions are they taking so that implementation is not further delayed?
As we were undertaking the enquiry, there were news stories about piracy and demands for ransom from the seas off Somalia, in particular. Those incidents continue today. We have had the recent example of the couple who have been hijacked and ongoing incidents of tankers being set upon by Somalians. When we were investigating that part of the report, we were struck by the,
“sharp contrast between the naval efforts being deployed ... to deter and eliminate the threat from the rise of piracy off the Horn of Africa and the lack of any concerted action to prohibit the transfer of the proceeds of those criminal acts”.
The sums of money demanded by the kidnappers are extortionate. The millions still under discussion, I understand, for the British couple there, is a case in point. That is even more true when considering that this is one of the poorest parts of the world, where such enormous amounts of money would be a totally disproportionate force for good—or more probably, for bad, and quite possibly diverted towards terrorist or criminal activities.
In pressing for the sources of funding for ransoms and to track payments, we know that things continue to be disrupted in that part of the world. Global trade is suffering significantly. Global trade is itself deserving of international action, because the impact on EU member countries individually, but also on EU trade as a whole, is a highly significant factor in global prosperity and peace. The committee recommended that where payment of a ransom is being assembled in the UK, the authorities should be alerted and consent sought before the money is transferred. We understand that institutions would make a sound judgment about submitting an appropriate report, but perhaps the Minister will comment on how he sees that going forward to ensure that money remains tracked when it is falling into illegal hands.
If the public sector carries responsibility for criminal activities, so too does the private sector. We were struck by the evidence that we received from different private sector bodies, and made aware of the cost of compliance with financial services regulation, which may be wasteful and putting the sector at a serious competitive disadvantage. As the noble Lord mentioned, we heard that the Government have offered a review of the money-laundering regulations to establish effectiveness, proportionality and engagement. We urge those three factors to be present in any activity where the private sector has its part to play. It can fully contribute only if it is not hampered by undue burdens of compliance, which seem to be resulting in no useful outcome.
One of the factors in EU investigations is establishing clarity of communication, whether through use of a common language with common interpretation and understanding, or in making sense of daunting lists of acronyms and abbreviations. This enquiry was no exception, as can be seen from the four pages of Appendix 5—a very useful appendix—which lists 119 entries in its glossary. The EU must continue to ensure that barriers to communication are kept to a minimum.
In summary, global threats such as money-laundering and terrorism can be countered only by international co-operation. The UK's membership of the EU provides us with like-minded partners who share the aim of tackling such crime and the resources to counteract its destabilising effects. We hope that the recommendations in the report will be given due consideration and that further action will be taken on the response that we have already received from the Government.
I look forward to the other contributions to this debate and to the Minister's response.
My Lords, it was interesting and helpful to hear that apology.
I start by saying that this was an interesting committee, and I pay tribute to those who were responsible for the production of the report—the excellent clerk to the committee, Mr Michael Collon, and the specialist adviser, who again advised us extremely helpfully, thoroughly and knowledgeably; but, above all, the chairman, who guided us beautifully through all the difficulties. If I may say so, having sat in the Chamber for the past three-quarters of an hour, he did so in a much gentler, less curmudgeonly and more objective way than perhaps he did when he was participating in the previous business before the House. I can only say that that restored my faith in this Chamber as a calming influence even on Members such as the noble Lord, Lord Jopling.
I found this subject fascinating. It is one of those subjects where one thinks that one knows a lot about it and that it will be easy to grasp but, once you get into it, you realise that you do not know all that much about it and it is certainly not easy to grasp. Three questions arise in connection with money-laundering: first, what is it and is it a serious problem; secondly, is there sufficient machinery to deal with it; and, thirdly, is that machinery working and can it be improved?
The first difficulty for me was in trying to determine what money-laundering actually was. The definition that the committee eventually accepted was that it is the process by which the source and ownership of criminally derived wealth and property is changed to confer on it a perception of legitimacy. In relation to money-laundering offences, the committee concluded that, under current international standards, the three categories of offences were: first, the conversion or transfer of property for the purpose of concealing or disguising its illicit origin; secondly, the concealment or disguise of the true nature, source, location, disposition, movement, or rights with respect to or ownership of criminally derived property; and, thirdly, the acquisition, possession or use of criminally derived property.
It is patently difficult, if not impossible, to establish the full scope of money-laundering in the United Kingdom, although we have a Treasury estimate that serious crime involves every year perhaps £5 billion of assets in a possibly seizable form. On the other side of the balance sheet, one has to note with regret that the value of assets frozen or seized is very small. That inevitably raises, for me at least, the question of the efficiency and competence of the authorities responsible for dealing with those criminal offences and for confiscating the assets which have been criminally acquired. Speaking for myself, I found the evidence of international enforcement disappointingly diffuse.
The Financial Action Task Force—FATF—is a somewhat loosely constructed organisation which can best be described as a partnership between Governments. When it was set up, the European Commission and a number of other states were invited to join it to enlarge its expertise. Membership has since widened and there are now 34 members. Although it is recognised as the international standard-setting body in the field of money-laundering, we had the difficulty that no one from FATF was prepared to give evidence to the committee. This was a matter that the committee regretted, as it meant that we were unable to hear contemporary evidence on the organisation and its current activities. I suppose that FATF progresses as best it can, given its somewhat disconnected structures, but it will be necessary for it to be more forthcoming in future about what it does and how it does it.
Nor was I convinced that the co-operation between FATF and the international organisations which are concerned with this field is sufficient. The UK plays an active part in FATF, and the committee felt strongly that there should be a more systematic way of reporting to Parliament on FATF developments. I was pleased to read in the Government's response that they will submit the chairman's summary to Parliament following each plenary session. One hopes that that will help. In this connection, it seemed to me that the degree of international co-operation in combating money-laundering was somewhat over-complex, and I regret that was I not convinced that the UK was fully engaged with that international effort.
There are various international instruments that deal with this, some of which have already been mentioned. If one looks at the totality of these instruments and where the UK is positioned in relation to them, one has to come to the conclusion that something is lacking. In 2001, the protocol to the Convention on Mutual Assistance in Criminal Matters was signed. It is not yet in force for five members of the EU nearly eight years after the signature. There is still no full cross-border co-operation, even in obtaining details of bank accounts. The Government have an obligation to press other member states to ratify this protocol.
It is also thoroughly disappointing that there is no agreement yet between the EU and the United States. Negotiations have been going on now for many years. The EU and the US concluded an agreement on mutual legal assistance in 2003, which again contained important provisions on access to bank account information and banking data. The negotiations should by now have resulted in an agreement between the EU and the US. Progress has been extremely tardy and I hope that the Government will press for it to improve.
So far as the Council of Europe is concerned, the UK has not yet ratified the second additional protocol to the 1959 European Convention on Mutual Legal Assistance in Criminal Matters. The protocol was signed on behalf of the UK on 8 November 2001, but we have still to ratify it. It is in force for some states but not for the UK. Again, this is something on which the Government must use their best endeavours to produce an early ratification.
Furthermore, there is the delay in signing the Warsaw convention. As we state in our report,
“there is now no reason for any further delay. Still less do we see why a further 18 months should be needed before ratification”.
Since the Warsaw convention is, as the noble Lord, Lord Jopling, pointed out, the first comprehensive international treaty covering both money-laundering and the financing of terrorism, surely it is in our interest that it should be signed as soon as possible. It has now been signed by the EU and could have been signed by the UK.
The main conclusion to be drawn from this plethora of international conventions, instruments and agreements is that international co-operation is rightly regarded as essential in combating money-laundering. In that event, I think that the Government should show some urgency in this matter. The fact is that money-laundering can be dealt with only by intensive and detailed international co-operation. From the evidence we received, I certainly felt that this co-operation needs some fertilising. We have to look to the Government to take a more urgent stance in ensuring this international co-operation soon becomes a reality.
The other matter that I want to mention is SARs. These suspicious activity reports emanate from FATF recommendations 13 to 16 and chapter 3 of the third directive. They impose the duty to report to the appropriate authorities any transaction or activity that seems to involve funds that are the proceeds of criminal activity. The number of SARs now runs into many thousands. The British Bankers' Association gave evidence that it submitted no fewer than 145,000 in 2007-08. The problem with SARs is that there is very little consultation with the private sector and precious little feedback. The burden on the private sector is considerable. Much of the activity reported inevitably achieves little, but some is extremely helpful to the law enforcement authorities. In that event, it seems to me that those making reports deserve to be informed, even in general terms, of the success of their reporting.
There were a number of other controversial issues raised in our report, particularly piracy, which has just been touched on by the noble Baroness, Lady Garden, and hawala, a system for remitting money. I do not propose to deal with them in any detail but merely acknowledge that these two topics cause problems that were investigated at some length by the committee.
This was a useful exercise in analysing some of the many problems related to money-laundering and the financing of terrorism. It pulled together a number of different strands, which were perhaps operating on their own, so to speak, when they needed a degree of co-ordination. I hope that due account of this report will be taken by the Government and that our main recommendations may yet be accepted.
My Lord, I begin by adding my congratulations to my noble friend Lord Jopling on his expert chairmanship, to our clerk, Michael Collom, on his cool professionalism and infinite patience in shepherding his at times unruly flock, and to his support staff who assisted him. I do not forget our witnesses who so well illuminated our discussions and deliberations.
The focus of my remarks will be on chapter 4 of our report on the private regulated sector. I share the view of my noble friend Lord Jopling that the Government’s response to our recommendations has been disappointing, to say the least. Given this, I should declare some interests, which are recorded in the Register. I am chairman of three companies subject to regulation by the Financial Services Authority, and I am a regulated person. I was a member of the Securities and Investments Board, the first City regulatory body, and the Securities and Futures Authority, which was swept up into the Financial Services Authority.
In the light of what I am going to say, I should congratulate SOCA on being better than NCIS. It is not saying a lot, but it is better. When I was chairman of the audit and compliance committee of a building society in the West Midlands—we were a blue-collar society and made 400 or 500 reports a year, none of which was for more than £200 or £300 each—I asked the secretary of the committee to write to NCIS and inquire what use was being made of the reports we were compiling with such care. We got back a letter that was just this side of rude saying we should mind our own business.
It goes without saying that I fully and enthusiastically support the fight against organised crime and terrorism but I have to say the effectiveness and the cost-effectiveness of the present regime is deeply flawed for a number of reasons. The all-encompassing nature of the definitions in the Proceeds of Crime Act 2002, together with the all-crimes approach of the reporting regime, fails to take account of the costs of compliance to the private sector—not just the provision of the suspicious activity reports, but also the base data to companies, to partnerships and to virtually every man, woman and child in this country who falls under this particular provision. There is also the failure to grant third country equivalence.
Perhaps I can give the House some real-life examples of the consequences of each of these. The impact of the Proceeds of Crime Act 2002, the definitions therein and the all-crimes approach, is illustrated by one of my other directorships which is of a brewery. We operate breweries and 2,200 pubs. We sell pubs from time to time. When we sell them we have to complete a huge range of reports on health and safety, licensing, asbestosis, control of fat disposal, waste packaging regulations and a great many other issues. Unless we have completed all those, we have to make a suspicious activity report. This is because we have benefited to the tune of a few hundred pounds, probably, by not having completed the reports—we have inflated the price we have received for the particular public house. It is not just the cost of preparing the report. It is not just the way it is done. It is the diversion of SOCA’s time and effort from looking at and examining really serious cases. This is a pub company and by no stretch of the imagination can it be undertaking any money-laundering, serious crime or terrorism activities as a result of these sales. This is not unique. As my noble friend Lord Jopling said, talk to any solicitor in any part of the country who undertakes corporate transactions and there are simply thousands of these reports being produced every year.
Then there is the cost to individuals of compliance—individuals who may have had long standing relationships with financial institutions, clear life and career histories and unblemished credit records. Members of Your Lordships’ House may have experienced the extraordinary machinations to open a new account for a child, a grandchild or a godchild, even at a bank where the individual has banked for years. The fact that you are then asked to provide a utility bill shows the idiocy of the regulations. When does a child ever have a utility bill? Last January, I was approached by a bank where I have banked for 40 years which told me that unfortunately its money-laundering records were inadequate and that I had to provide a whole series of new records, including a certified passport. This is just a duplication of effort that achieves nothing and which incurs enormous costs both for the individuals who provide the information and the institutions which have to keep it.
Finally, there is the lack of third country equivalence provisions. A private equity company with which I am involved has recently completed an acquisition in France. Money-laundering checks have been carried out by our French solicitors, a well-known Paris firm. However, we had to begin afresh as our English lawyers advised us that we simply could not rely on French checks even though France is a member of FATF and as such is able to call on similar standards to this country. Our French colleagues were truly amazed by this duplication of work and effort.
It is getting worse. The spread of the money-laundering regulations and the lengths to which people now have to go are increasing all the time. Since July this year, the brewery has to carry out money-laundering checks on every new tenant of any of its 1,700 tenanted pubs. This is a new extension, the value and validity of which is very doubtful and which follows again from the all-crimes approach.
Our report makes a number of specific suggestions to improve the situation, which I fear have not found favour with the Government. They prefer to fall back, in their own words, on “prosecutorial discretion”, which is not good enough. No director of a company or partnership can possibly rely on prosecutorial discretion. The damage to reputation from a zealous member of SOCA who decides that prosecutorial discretion should not be waived far outweighs any possibility. As the noble Lord, Lord Richard, pointed out, it is not as though enormous sums of money are being recovered. Our report makes clear that £136 million was reclaimed by SOCA last year, not all of it from SARs. That is less than half of 1 per cent of the estimated cost of serious and organised crime of £20 billion. By contrast, the cost to the private sector is very large. Major City firms will say that the cost to them is well over £1 million per firm.
In the light of all that, it is not surprising that suspicion among many people in the private sector is that, for the most part, it is not the big well-organised firms which are caught. Instead, the net sweeps up the small and incompetent, as well as millions of our innocent fellow citizens. As a minimum, the Government need to offset the deadly effect of the combination of the all-crimes approach with the wide PoCA definition. They need to introduce third country equivalence, to undertake serious cost-benefit analysis, to improve the practical feedback and, as my noble friend Lord Jopling also said, to reassure people about the way in which the data collected on the ELMER database are being used and retained.
To conclude, the present all-crimes regime as regards money-laundering reminds me very much of some ancient tribal ritual. The great god—in this case the Serious Organised Crime Agency—needs to be propitiated. Propitiation is achieved in two ways: first, by filling in large numbers of forms in an entirely mechanical way, covering a vast number of members of the tribe. But that is not all. SOCA requires secondary and deeper propitiation by demanding direct reports. It is clear that the vast majority of these are a complete waste of time. As to the remainder, the god SOCA is reluctant to explain to his tribe what has been achieved by their preparation. Only the god SOCA has the wit and breadth of knowledge to interpret the forms, every one of which—collected at huge trouble and expense, but not SOCA’s expense—the god will tell you, needs to be completed in order to ensure the future prosperity of the tribe.
I have said that I fully support the fight against organised crime and terrorism, but this regime is not contributing to that fight in a cost-effective way.
My Lords, this will by no means be a tour d’horizon or a comprehensive response to the report, which I found more interesting than I had expected. I congratulate the chair and the members of the committee on navigating their way through the subject. The report is a mere 50 pages—I do not mean that pejoratively but comparatively—with a four-page appendix, as mentioned by my noble friend, which was required to list all the acronyms. I have not counted them, but I believe she said that there are 119. Having read the report, I have learnt one addition to my vocabulary; namely, the word “kleptocrat”. No doubt, I shall find an opportunity to use the word “kleptocracy” shortly.
A theme which runs through all Home Office matters is the quantity of legislation. So I was surprised by paragraph 80 regarding the transposition into national law of the framework decision on mutual recognition of confiscation orders, due more than a year ago. There has been plenty of legislative opportunity. After all, immediately after State Opening, the Government published the Crime and Security Bill, which in part amends the Policing and Crime Act, which had received Royal Assent just a few days before Prorogation.
I wish to mention two matters, which echo a number of points that have been made. On the database and the final recommendation as regards compatibility with the jurisprudence of the ECHR, I was glad to see that the Government have responded that they will consider this with the Information Commissioner. Not knowing and not being able to find out whether you are on the database is a matter of concern. The noble Lord, Lord Richard, and others have mentioned the cost of compliance by the private sector, particularly solicitors. I declare an interest in that I am a solicitor, although I am no longer practising.
I looked at the Law Society practice note today on the website and I recoiled slightly. I was not surprised at its evidence about the costs to solicitors, including the hidden costs. I recoiled because of the obvious complexity of it—not caused by the Law Society. I find the term customer or client “due diligence” counterintuitive. After spending many years attempting to foster a relationship with one’s clients, it does not come easily to have to exercise due diligence on them. I checked with solicitor friends before this debate, and I am told that clients are now so used to the regime that they come along armed with their ID, though the comment was made that real criminals would find it very easy to fake the requested ID. I was also told that it is now easier than when the regime started to find user-friendly and pragmatic ways of dealing with the requirements. This may be comparative; it did occur to me that my friends have been somewhat ground down over the years. However, they did mention that they know some firms still require their fee-earners to complete a six-page document before they can even see a client.
The noble Lord, Lord Jopling, has mentioned the Law Society. The chief executive of the society made a good point about feedback to those who have to comply with regulations, both in recognition of their burden and to work towards improvements in the system. The noble Lord, Lord Hodgson, mentioned the irritation that one can encounter. I recently tried to make an investment—not a very big one—in a building society, but because I had no debts they thought I did not exist. I suspect that was irritating to them; it was certainly irritating to me.
In conclusion, there is a temptation in a debate such as this, when reading about the problems, to call for an ever tougher regime. We on these Benches would want to resist that. We would not want to overlook the civil liberties issues which were at the centre of the debate we had earlier.
My Lords, there is a certain synergy between this debate and the debate with which we started today’s business. I hope that I am able to resist the temptation to repeat myself, not least on the potential for mission creep mentioned by my noble friend Lord Jopling, aided and abetted in much greater detail by my noble friend Lord Hodgson.
I start by congratulating my noble friend on chairing the sub-committee which produced this report, and drawing the House’s attention thereto. I must also congratulate him on securing this debate in what, in recent years, has become a remarkably timely manner. I agree with him absolutely that the delays on these reports have been an out and out disgrace, and the usual channels really should have been able to do better.
As the report states at the outset, serious organised crime is big business, with a suspected turnover of £15 billion per year in this country alone. I echo the noble Lord, Lord Richard, in asking: who is to say it is not higher? Whatever the figure, the scope for financing terrorist activities is therefore extremely large and a very worrying prospect. The international context of both money-related organised crime, including money-laundering, and terrorist activities means that it is quite right to examine the international dimension to the response to these threats, as the committee report does throughout chapter 2.
It should be obvious that the Government’s position is—and ought to be—that serious organised crime often has international drivers and emanates from abroad. It is therefore vital that the Government further international co-operation. Your Lordships’ committee flagged up in paragraphs 190 and 191 of the report at least one area where the Government could do a great deal more: they have not signed the Warsaw convention on money-laundering and terrorist financing. That convention would considerably ease the UK’s efforts to enforce civil confiscation orders. I hope that the Minister will be able to give noble Lords a progress update on whether, and if so when, the Government intend to sign the convention. My noble friend Lord Jopling, in particular, requested that information; I add to that request.
Article 47 of the Warsaw convention allows financial investigation units in other member states to request the postponement of suspicious transactions, but for some reason SOCA does not have the power to postpone suspicious transactions based on those requests. It can act only in response to notifications from the regulated sectors in this country. Could the Minister enlighten us as to how the external request procedure operates to bypass that problem? In the Government’s response to the report, we are told that they are still considering their position on Article 47, but that the aim is to sign the convention in the near future. That response was made in October. Could the Minister give some indication of whether, if they sign in the near future, they have thought any more about how Article 47 could be implemented? Are we about to have what I think would be the 14th piece of legislation emanating from the Home Office on crime?
The committee also recommended, at paragraph 189, that the Government hasten the ratification of the Convention on Mutual Assistance in Criminal Matters and related protocols. The 2001 protocol to the convention enhanced existing arrangements for mutual legal assistance between EU member states by allowing for the provision of banking information between countries to help combat crime. It has been in force for the UK since 13 June 2006, but I was alarmed to see that it is not in force in five countries. Would the Minister be good enough to both name and shame them? What are the Government doing to encourage other member states to ratify the convention? Will the Minister please tell us the non-EU countries with which the UK is negotiating bilateral asset-sharing arrangements? Of course, that is a rather different matter from the convention which I have just been talking about.
All parties agree that, in those areas at least, international consensus is crucial. That point was made forcefully by the noble Lord, Lord Richard. What steps are the Government taking to change the UK’s law enforcement culture to focus on the need for international co-operation? For example, what role do Europol and Interpol play? Do Her Majesty’s Government think those organisations fit for purpose? While the international dimension is important, moves can be made here in the UK which can help to ameliorate the problem. I will focus my comments on the suspicious activity reports regime operated by SOCA.
I understand that SOCA has been asked to provide increased levels of case-by-case feedback on suspicious activity reports to the regulated sectors. Some progress has been made in developing the feedback given to those who submit SARs, as they are called, but criticism has been levelled that the guidance provided to the private sector is too general to be of much use. That is problematic, as legislation puts the onus on the private sector to report suspicious transactions. Plainly, large financial institutions and professional advisers are better equipped to respond to the challenge, if only because they have greater resources. However, their smaller counterparts are less able to respond to the demands placed on them. Indeed I have heard complaints that those demands are sometimes unreasonable, for businesses of whatever size. I am not sure what size my noble friend’s brewery is—whether it is an SME.
To some extent, SOCA has sought to engage different sectors with sector-specific seminars for banking, insurance, legal and accountancy. In my view, this is a step in the right direction, but more needs to be done. I hope that the Minister will be able to answer some questions on the operation of SARs. For example, has an assessment been made of the contribution that SARs and the broader anti-laundering regime have made to crime reduction, or is this a subject for the Government’s blatant electoral Statement, “Frontline First: Smarter Government”, which some of us were listening to just before the start of this debate? Can he also tell the House how the SARs regime is affected by powers in the Counter-Terrorism Act 2008 such as due diligence, ongoing monitoring, systematic reporting, and limiting and ceasing businesses? What steps are the Government taking to maintain the use of SARs across the UK’s law enforcement community? SARs data have been data-matched with various other databases, such as the Joint Asset Recovery Database. Have they been matched with any other external databases?
It is plain from the committee’s work that the fight against organised crime and the effort to prevent the proceeds filling the coffers of those who would seek to perpetrate violent outrages is an organisationally complex and technically difficult area. I have asked some questions on the operation of various existing agencies, but I would also like the noble Lord to answer two more general points. First, have the Government assessed whether the economic crisis will result in an increase in money-laundering activity, or how the economic crisis will affect the use of the SARs regime by the private sector?
The second point is referred to in the committee’s report at paragraph 223. The current stance of the Government is to refute any claim that there is a link between piracy and terrorism. I note that the committee may not be of a similar opinion. However, is the Government’s view shared by key partners such as the United States, which is particularly concerned about what is happening in Somalia? Does the Minister believe, like the noble Baroness, Lady Garden of Frognal, that there is any attraction or indeed feasibility in the proposal to make the payment of ransoms to pirates an offence, something that might well be usefully considered?
All these questions have been prompted by the European Union Committee’s report on money-laundering and the financing of terrorism. I am grateful to my noble friend Lord Jopling and his committee for the opportunity to ask them.
My Lords, I begin by congratulating the noble Lord, Lord Jopling, on initiating this debate and on the thorough report that he and his committee colleagues have produced. I start by perhaps disappointing the noble Lord, which will not surprise him, and then perhaps surprise him a little by being more helpful. He made a request in respect of another report from the Select Committee, saying that he hoped that it would be the subject of debate before the Christmas Recess, and asked me to give an opinion. The noble Lord knows better than I that these matters are for the usual channels. I understand that a request has been made and no doubt the usual channels will take it on board. However, it is not for me to venture a comment.
While commending the decision of the Government to provide a summary of the report of the chairman of the Financial Action Task Force, the noble Lord suggested that a Written Statement would be more useful. The Government are happy to provide such a Statement on FATF’s work on a regular basis if the House would find that helpful. I hope that that goes a little way towards making up for the disappointment of my not being able to respond more fully to the noble Lord’s first point.
The ability to acquire, disguise and dissipate funds lies at the heart of most criminality and plays a significant role in facilitating terrorism. This welcome report and the useful and timely debate help to shape our approach to challenges facing us both here in the UK and globally in combating money-laundering and countering the financing of terrorism. The Government provided their response to your Lordships’ report in October, and of course agreed with the majority of the decisions. Perhaps not surprisingly, quite a lot of contributions from noble Lords tonight have been about cases where the Government have not accepted recommendations, or where we are not seen to have delivered, and some criticism has been made in respect of international protocols that are outstanding and which have not yet been responded to.
First, the UK Government have a strong commitment to the prevention and control of money-laundering and the financing of terrorism, and we currently have robust legislation and other measures in place demonstrating that dedication. We are committed to the aims and objectives of the Warsaw convention—a number of noble Lords made the point that it has been outstanding for some time—on the search, seizure and confiscation of the proceeds from crime and on the financing of terrorism. It is our aim to sign and ratify the convention. We are still looking at the method of implementation, but we give a commitment that it will be finalised as soon as possible in 2010. We made that very clear in the first conference of parities to the convention, which took place earlier this year in Strasbourg.
Secondly, other concerns have been raised, particularly in relation to Article 47 of the convention; these were outlined in detail in the Government’s response to the report. We are working to resolve those concerns as a matter of urgency and priority, and hope that it will be done as soon as possible.
The third element of the report highlighted concerns over the delay in concluding an EU-USA negotiation for an agreement on mutual legal assistance. The noble Lords, Lord Jopling and Lord Richard, the noble Baroness, Lady Garden, and others raised that as a matter of concern and sought an update on our position. I can confirm that the instruments of ratification for the EU and USA agreement on mutual legal assistance in criminal matters were exchanged on 28 October. The agreement will now enter into force on 1 February 2010. Similarly, the Government fully support the 2006 framework decision on mutual recognition of confiscation orders, and intend to implement that as soon as practicable.
I recognise that it was quite a sharply worded report on some issues. It is not the worse for being sharply worded, for it was no doubt the committee’s intention that it should be seen by the Government as both an encouragement and something of a stick to make the donkey move a little quicker. Noble Lords can take it that the encouragement that the Government received for their response to your Lordships’ report and, indeed, the bruises that some of the criticism has caused—both tonight and in the original report—are such that the Government are seeking to meet their obligations at the earliest possible moment.
We will write to the Council and the Commission to provide an interim report on the extent to which the UK has taken measures to comply with the framework decision on the application of the principles of mutual recognition to confiscation orders. We are currently content that the UK can largely give effect to the framework decision under existing domestic law. None of our fellow member states has criticised the effectiveness of existing provisions. We are not aware of any cases from member states in relation to confiscation orders that have been refused. Equally, we do not believe that member states have had difficulties in processing matters from the UK for assistance in confiscation matters under the present arrangements. Any matter received under this framework will be handled within its spirit, as far as is practicable. We do not foresee any major obstacle; the changes required to our law are likely to be mostly technical.
Another area where noble Lords raised concerns was on the question of the suspicious activity reports. Here, there is a point of difference. I must highlight to your Lordships that, as was said in our response as a Government, there may be little correlation between the sums laundered and the seriousness of an offence. Also, reports on the laundering of small amounts can help to tackle serious crime. Therefore, the Government remain of the view that we should maintain the all-crimes approach, and have set out their reasons in detail in response to the report. I know that this was countered somewhat strongly by one of your Lordships, but it is the case that the Government still believe that the use of prosecutorial discretion in this area is necessary. We believe that a regime with a de minimis exclusion would present significant risks, including of circumvention by serious criminals. An “all crimes” approach provides a far more flexible and responsive means for setting the boundaries of what is and what is not criminal conduct worthy of prosecution.
The issues were raised of burdens upon the private sector and doubts that the smallness of some of the amounts involved could lead to any great advantage. We have looked at this in some detail, and examples can be reported of how detecting the laundering of small amounts can help tackle serious crime. One is protecting the vulnerable. SARs on low-value transactions are increasingly being used to identify vulnerable and elderly victims of fraud. For example, suspicious activity on an account triggered a SAR, which resulted in an investigation into a member of a criminal family in an area. A man was arrested on suspicion of fraud. He had stolen the identity of an elderly victim and carried out several unauthorised transactions on credit cards amounting to over £5,000.
There is also the question of protecting business from fraud. There are details from the banking sector of an account that was in receipt of third-party cash deposits, all of which amounted to £3,000. The funds were then being quickly debited. On investigation, it was discovered that these out-of-character deposits related to the thefts of funds by the subject from an employer. The information in the SAR was pivotal in identifying the true sums stolen and, later, a conviction.
On the question of restraint, a number of SARs featuring restraint transactions of values under £1,000 have resulted in restraint orders being made on individual amounts that, when multiple SARs are looked at, come to thousands of pounds’ worth of seizable assets. That would not have been identified had we had a de minimis exclusion.
Reports are being made by banks on suspected tax credit fraud for small sums, typically tens or hundreds of pounds. SOCA receives many of these. HMRC can recoup the money and the bank can close the account as a result. Sometimes evidence of organised tax credit fraud is uncovered and investigated.
Some criminals use parts of the regulated sector to send small, fraudulent, frequent amounts, sometimes with several different identities, to consolidation points overseas. These individual amounts have been seen to be as low as £36, but can aggregate into sums of tens of thousands of pounds. SARs make a record of these sums, and the identities associated with them are then readily available to law enforcement and any investigation into criminal activities.
There is also the question of new criminal trends. Criminals develop money-laundering methods to exploit the new technologies and financial products, and to take advantage of those products through the new technology. Often those new methods are trialled on a small-amounts basis, but pave the way for large amounts when confidence in the method has grown. When new products have restrictions placed on them and can be used only to process low volumes, SARs reports on these transactions can assist the UKFIU in identifying emerging trends. We believe that there is far more to be seen than just the initial quantity of reports that are made, and we consider that it is still valuable to keep the “all crimes” basis.
The issue of the SAR database was raised by several noble Lords, and we were asked where we are with the discussions with the Information Commissioner. In early October, SOCA received a letter from Christopher Graham, the Information Commissioner, as part of existing correspondence on SOCA initiatives. In that letter, he referred to the House of Lords committee’s recommendation regarding the retention of data on the ELMER database. The letter states that, with SOCA’s co-operation, the Information Commissioner’s Office is planning to implement this recommendation in the form of a review. That review is likely to cover the legal basis for the establishment and operation of the ELMER database, together with SOCA’s relevant policies and procedures and an on-site inspection of the database. The purpose of the review will be to establish the extent to which SOCA, and possibly other contributory users of the database, are meeting the requirements of the Data Protection Act. The Information Commissioner may then make recommendations about future compliance. SOCA and the Information Commissioner’s Office are currently seeking an agreement on a timetable on which the review can take place, and SOCA will provide the Information Commissioner’s Office with all the relevant documents and assistance required. Again, we see that as a matter to be pursued with a degree of urgency.
Other issues included burdens on the private sector. The Government’s aim is to find a balance between a competitive advantage in our regulated sector and continuing to have an effective regime that combats money-laundering and counters the financing of terrorism. The noble Lord, Lord Hodgson, made this point at some length. I shall commend his contribution to my officials and colleagues, coming as it does from someone with considerable experience of several parts of business where this issue is as of much concern as it is to the Government and SOCA.
The Government will continue to seek to minimise burdens placed on regulated firms where possible. The UK’s preferred risk-based approach, which has included adopting all the simplifying derogations within the EU’s third money-laundering directive, demonstrates our attitude.
The Treasury, with the assistance of colleagues from the Better Regulation Executive, is conducting a review of the Money Laundering Regulations 2007. The review is considering evidence and is grounded in the three guiding principles of the UK’s financial crime strategy: effectiveness, proportionality and engagement. We expect to identify aspects of the regime that work well and areas that might be improved. The report following this review is due in the spring and will be made available to your Lordships.
The noble Lord, Lord Hodgson, and others mentioned the cost/benefit analysis. The Government recognise the importance of applying cost/benefit considerations to the anti-money-laundering and counterterrorist financing regime. Steps have been taken to improve the benefits of the SARs regime in the recently published three-year strategy, outlined in the Suspicious Activity Reports Regime Annual Report 2009. The report gives an assessment of the performance of the suspicious activity reports regime for the reporting year October 2008 to September 2009 and announces a three-year strategy. The main objective for the regime during the next three years is to increase the value and impact of the SARs regime, which will bring added focus and efficiency to the regime, driving up the benefits from the efforts and resources contributed by stakeholders.
Another important issue raised by the noble Lord, Lord Hodgson, and others was feedback to the business community and beyond. Further to the feedback initiatives outlined in the Government’s response in October, the Government have unveiled in the SARs annual report 2009 a number of further ways in which they intend to address the report’s recommendations on feedback. The issue of feedback runs through the strategy’s aims and is an integral part of the published action plan for the first year. SOCA recognises the importance of this issue to reporters and is committed to providing them with information where it helps them meet their legal requirements. I shall take on board the point made by the noble Lord, Lord Hodgson, that not just top reporters but also small and medium-sized companies are affected.
Another important issue raised, again because it was not one on which the report and the Government were necessarily in accord, was piracy. The Government regularly examine all available intelligence for evidence of links between piracy and terrorism. I have to say that, to date, we have found no evidence. I sympathise with the view that one cannot see vast sums of money being passed around in Somalia without believing that some of it could be going to terrorist organisations in one form or another. However, we have found no evidence of any operational or organisational links. There is much open-source speculation—we are all a part of it. The noble Lord, Lord Skelmersdale, asked what we are doing to try to establish whether it is true. It has not been possible for any of our or our partners’ intelligence agencies to corroborate it. Therefore, it is a question not of a country having a view, but of intelligence that we have been able to glean from allies, as well as from our own endeavours, failing to find any organisational or operational link. However, we shall continue to monitor the matter closely because we share the concern that many noble Lords expressed.
I take notice of the question. I had not seen it in those terms. I am sure that we are not making a distinction by ignoring neighbouring states or states in any particular part of the world when we look at any links that there might be between terrorist organisations. We all know, alas, that terrorism is an international business that knows no boundaries. I am pretty confident that the answer is that we are seeking that information wherever it might exist. I take note of the question. If there is any useful information that I can add, I will write to the noble Lord.
On the other question about piracy, the Government do not make or facilitate substantive concessions to hijackers, including the payment of ransoms. However, the payment of ransoms is not illegal per se in the UK. When pirates attempt to spend money received in ransom payments, it is considered the laundering of proceeds of crime. We take, and encourage all Governments to take, firm action to identify and disrupt money-laundering. This was a point made by the noble Baroness, Lady Garden, and others. The latest position is that a group of experts from the UN piracy global contact group and other key regional actors will meet at Interpol headquarters in January to explore possible disruption techniques, which could prevent the laundering of piracy proceeds. This demonstrates the importance that the Government attach to addressing the problems of piracy. This group is the appropriate multilateral forum to advance work on this complex issue.
The Government recognise the committee’s concern that assembling and paying a ransom through a regulated sector without disclosing it may lead to the commission of a money-laundering offence or a terrorist finance offence. The Proceeds of Crime Act and the Terrorism Act provide such a person with a defence if he has a reasonable excuse for not making the required disclosure to law enforcement. As highlighted in the Government’s response, we have carefully considered whether the Government should issue guidance to the regulated sector in relation to suspicious activity reports but have concluded that it would not be appropriate to do so. We are not aware of any demand from the sector for central guidance, other than that which already exists, as produced by the Joint Money Laundering Steering Group.
The noble Lord, Lord Skelmersdale, asked me a series of questions. This is always painful for the recipient because they come about 30 seconds before you have to stand up and respond. The one that stayed in my mind was about the naming and shaming of EU member states. I am not sure that it is beneficial to name and shame, but the truth is that I do not have the names to shame, even if that were a desirable object. If the noble Lord will agree, I will write to him on that. Similarly, there is also the question of other countries with which we are negotiating bilaterally. I will write to the noble Lord about that, too.
Time is not on my side now. There are a number of points that I have not yet responded to. The noble Lord, Lord Hodgson, raised the issue of cost and money-laundering regulations. However, we believe that regulation is not overly prescriptive. Banks have their own requirements on how to satisfy themselves. Therefore, in a sense, there is more than one party in this area that needs to address that. I have a number of other points which I will save noble Lords from having to listen to. I will look at Hansard tomorrow, write appropriately and put a copy in the Library.
I conclude by again congratulating the noble Lord, Lord Jopling, and members of the European Union Committee on a very important report. I also thank those noble Lords who spoke before me for their contributions to the debate. I will write on any points that are outstanding. I express my appreciation of the statement made by the noble Lord, Lord Jopling, at the beginning of this debate recognising that the Government have sought to meet the recommendations of your Lordships’ committee. I hope that, with the additional information tonight, we have made that task slightly easier and that we have moved closer than we were at the start of the debate to your Lordships’ committee appreciating that we are committed and determined to move in the direction that your Lordships are seeking.
My Lords, I thank the Minister for his comprehensive reply. As a committee, we will particularly welcome his undertakings about a written statement on the affairs of FATF. I was pleased to hear that he expressed personal sympathy for the remarks of my noble friend Lord Hodgson and I hope very much that he will act on that and meet my noble friend at a later stage because his sympathy and apparent understanding of those points was most welcome.
I felt a certain amount of disappointment because when we talked about the urgency of some of these matters, the Minister fell back on saying “as soon as possible”. I know that it is difficult to give replies to detailed questions, but I hope that the Minister will try to ensure that “as soon as possible” means “very soon” and “get your skates on”. I hope he will be kind enough to do that.
I was most pleased to hear the kind remarks directed at me and more particularly at members of the committee who all worked extremely hard on this issue. It has been a great pleasure to be chairman of the committee. We were pleased that there seemed to be a good deal of press and media interest in our report when it came out, as a number of noble Lords said.
There are many technical matters involved in the whole issue of money-laundering and the committee would not have been able to produce such a good report as I believe it is had it not been for the technical assistance of Professor Bill Gilmore, who was our technical adviser. He co-operated with our Clerk and his staff in a most successful way.
The lessons that have come out of the debate are our concern about the burden on the private sector and the intrusion through the ELMER database on individuals. There is also a concern about the failure to sign and ratify international agreements. The Minister referred to that and I referred to it myself a second ago. Provided that the Government are prepared to get their skates on, we shall see a much better and more progressive picture to cover all the problems brought about by money-laundering.
House adjourned at 8.58 pm.