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Lords Chamber

Volume 717: debated on Thursday 25 February 2010

House of Lords

Thursday, 25 February 2010.

Prayers—read by the Lord Bishop of Leicester.

NHS: Metric Units

Question

Asked By

To ask Her Majesty’s Government whether all National Health Service bodies comply with the requirement that weighing scales used in the National Health Service display metric units only.

My Lords, NHS use of weighing equipment is regulated by local authority trading standards. LACORS, the Local Authorities Co-ordinators of Regulatory Services, which runs trading standards, conducted a national medical weighing project and published a report in July 2009. We are working closely with LACORS to address the concerns raised in the report. A new comprehensive safety alert will be published in March.

My Lords, I thank the Minister for that helpful reply. Is she aware that the importance of this topic relates to the fact that the dosage of many powerful drugs is now calculated according to the weight in kilograms of the recipient? If, in error, such a calculation used imperial units, there would be a serious risk of under-dosage or, more importantly, major over-dosage. Does she further understand that last year, LACORS, the Local Authorities Co-ordinators of Regulatory Services, carried out a major survey that found that 30 per cent of weighing machines in hospitals were switchable between metric and imperial units and that a staggering 10 per cent were permanently switched to imperial units only?

The noble Lord raises a very important question indeed. The problem is that all noble Lords, if they weigh themselves, think of their weight in stones and pounds and not in kilos but all medical facilities, anaesthetics and clinical decisions are taken internationally on the basis of kilos. It is very important indeed that the weighing that is done in hospitals and all medical facilities is accurate. That is why we will issue a new alert in March—we issued one last year. We are making progress. The noble Lord is absolutely right—this is a very important issue that we must get right.

My Lords—and my lady—I must begin by declaring two interests: as long ago as 1972, I started two years as the Minister for metrication in Edward Heath’s Government, and for many years I have been a patron of the UK Metric Association. Is the Minister aware that on 7 December 2008 her noble colleague, the noble Lord, Lord Drayson, when he was the Minister of science, wrote to the chairman of the UK Metric Association as follows:

“The Government’s longstanding policy … is to move towards full metrication in time … We recognise that a single system of units of measurement as a reference point is vital for fair trade and consumer protection”?

Is she further aware that since I was concerned with this topic decades ago, almost every country in the British Commonwealth—including the Republic of Ireland—has completed that process absolutely fully? Is it not time for all of us, in all parties—I come to the crucial point—now to work together to clear up this long-standing and very British mess?

I absolutely agree with the noble and learned Lord. He is completely right. All our children have been educated using metric calculations throughout and that is quite right. This is a matter that will solve itself over time but it is our job in government to move as fast as we can towards people recognising and feeling comfortable using metric calculations.

My Lords, the Minister has said that it is important and the noble Lord, Lord Walton, has, as ever, pointed out in detail why it is so important for safety and the saving of lives. It is a matter which has been around for some time. It is many months since it was brought forward. Rectifying it is not a matter of huge expense. The professionals are very clear about metrication. Why has it taken such a long time for the Government to respond with what is a very simple instruction to put the matter right, and not an expensive one at that?

We have not taken a long time. We have been working with LACORS for several years to take this matter forward. However, the purchase and installation of weighing machines is done at the local level. The decision to replace and monitor weighing machines is taken by PCTs. What we must do—and what we have been doing—is make sure that they are regularly inspected and the instructions are completely clear. I am happy to provide the noble Lord with the alert that will go out in March. It is completely clear what needs to be done at the local level.

The other issue is that LACORS has been focusing on NHS facilities and hospitals. It is now moving its attention to doctors’ surgeries, health visitors and other places, such as private hospitals, to ensure that their machinery is also as good as it should be and in order.

I am sorry. Does what the Minister just said apply to weighing machines for domestic cooking? All my cookery books give measurements in pounds and ounces and my weighing machine is not metric.

My cookery books give a mixture of pounds and ounces and metric measurements, and my scales give both. That is probably how most people’s are these days. Perhaps the noble Baroness should consider asking someone to buy her some new scales for her next birthday.

My Lords, the National Patient Safety Agency has reported that one of the reasons for poor nutritional care in our hospitals is the,

“lack of equipment, and particularly a lack of availability in weighing scales”.

Today, the Government’s own advisers on malnutrition have written to her colleague, Mr Hope, urging him to,

“discuss with your fellow ministers how the apparent lack of policy on malnutrition might be remedied”.

In those discussions, will the Minister ask that all NHS hospitals have the weighing equipment that they need to help identify patients at risk of malnutrition?

The National Patient Safety Agency has indeed expressed concerns about the impact that weighing scales have in relation to inaccurate readings, or possibly the inability of staff to operate the equipment properly. Training is a very important part of this whole drive to get these things right. I will take away the point the noble Earl has made and make sure that my honourable friend takes it into consideration.

Taxation: Monaco

Question

Asked By

To ask Her Majesty’s Government what assessment they have made of the level of information provided by the Monégasque authorities to the United Kingdom on the tax status of British citizens and companies resident or domiciled in Monaco.

The UK does not have a tax information exchange agreement with Monaco, which until last year was classified by the OECD as an unco-operative tax haven. As a result of the G20 initiative on tax transparency taken at the London summit in March 2009, Monaco is now committed to the international standard of exchange of information. The Government are supporting a European Commission proposal for an exchange of information agreement with Monaco that would enable member states to obtain information for their tax purposes.

I thank the Minister for that helpful reply. Does he think it acceptable that Monaco has a tax treaty with France on a totally different basis than it has with any other country? I understand that French citizens resident in Monaco have to pay a wealth tax as well as income tax. I also understand that Monaco has promised that it will have a similar tax treaty with Germany, but there appears to be no ongoing negotiation with Britain. Should Britain not be committed to making sure that our arrangements with Monaco are similar to those with France and with Germany?

The arrangements with France are of considerable duration and reflect in part a contribution that is made by the residents of Monaco to services which they receive from France, so I do not think it is a good parallel. More importantly, we are working with the European Commission to secure a tax and information exchange agreement, but that is currently blocked in ECOFIN by the Governments of Austria and Luxembourg. If we do not make further progress, we have made it clear that we will press ahead and secure our own bilateral agreement with Monaco to ensure that we have access to information necessary for our own fiscal purposes.

I welcome the noble Lord’s assurance on that. We on these Benches would not want to wait for general agreement. Will he accept our congratulations on the fact that the Treasury and HMRC are co-operating closely with the Germans to get information on tax avoidance in places such as Liechtenstein? Will he also accept my congratulations on saying that Monaco is an “unco-operative tax haven”? Does he agree that that must be the understatement of the century?

On our Benches we exercise great care in our choice of language and avoid any opportunity to score cheap political points. Perish the thought that I would deviate from our policy in that respect. Monaco is an unco-operative tax environment but it clearly wants to come within the fold of greater disclosure, as do a number of other jurisdictions. Undoubtedly these pockets of offshore tax havens were a contributory factor to the world financial crisis, although I am not suggesting that it was in the front line, and there is an element of systemic risk attached to that, so we need to ensure that we have much better flows of information. We are now making good progress with Monaco but there is still a great deal more to be done. It would be tremendous if ECOFIN removed the blockage so that we could get a European Commission agreement. I accept the noble Lord’s congratulations.

My Lords, I am glad to hear that my noble friend always wants to be as clear as possible. Will he look at the Answer that he gave yesterday, which was gobbledegook? As regards Monaco and other offshore places where tax avoidance takes place, as he knows a couple of cases have arisen recently about the number of days one can spend out of the UK before tax is charged here. If the appeal on those cases is lost, will he have it in mind to change the legislation?

I am sorry that my Answer appeared to my noble friend Lord Barnett to be gobbledegook. I am particularly disappointed because I estimate that since I have been a Member of your Lordships’ House about one in three of all the Questions I have had to answer have come from him. So I immediately thank him for continuing to give me plenty of opportunity to improve my performance. Some questions, unfortunately, can be answered only by what might appear to be gobbledegook because they involve complex issues of the sort that the noble Lord, Lord Lawson, was challenging me on yesterday around Glass-Steagall and the Volcker rules. It would not be appropriate to anticipate the outcome of a court case.

My Lords, the Minister said that in this instance the Government were prepared to enter into a bilateral agreement with Monaco should the EU not come up with a global EU arrangement. Does this apply to other parts of government policy?

What I have said is that we are a full and committed member of the European Community and we would always wish to work with our partner countries within Europe; but the European regime and architecture permits bilateral negotiations, and where we judge those to be in the best interests of the country we will of course enter into them.

Does my noble friend agree that if “gobbledegook” is the correct description for his Answer yesterday to the noble Lord, Lord Barnett, a large number of his noble friends on this side of the House would welcome more gobbledegook from him?

I think I can give that a brief answer. I note what my noble friend says and I welcome the question from the noble Lord, Lord Dykes.

Is the Minister seriously confident that the Government are getting to grips with other tax havens? This issue remains a serious problem. What is the situation in Belize, which may involve certain Members of Parliament?

I am not briefed on the situation in Belize; I have never really taken much interest in what goes on there. Perhaps I should do so. The issue of international tax and tax havens is important and undoubtedly there is seepage of money which should be coming to the UK Exchequer. The total amount of interest received from Monaco on its interest withholding tax agreements paid to the UK in 2009 was £1.4 million. I have a sneaking suspicion that we should be seeking a little more than £1.4 million from Monaco. I shall pass by the opportunity to say anything on Belize on this occasion.

Self-defence

Question

Asked By

To ask Her Majesty’s Government whether they plan to change the law on self-defence following recent cases.

My Lords, the Government strongly support the right of members of the public to defend themselves, others and their property with reasonable force. Under the law as it stands, a person is entitled to use reasonable force in self-defence, to protect another person or property, to prevent crime or to assist in the lawful arrest of a criminal. The Government have no plans to change the law on self-defence. The law is already in the right place and is working well.

I thank my noble friend for that clear Answer. Does he agree that citizens who intervene to prevent anti-social behaviour should generally be applauded and not condemned, but that to change the law to allow disproportionate force—as suggested by the Opposition—would clearly cause vigilantism and undermine the rule of law? Does he agree that all that is required is a lighter touch by the police and prosecuting authorities, with perhaps more discretion allowed to judges to do justice in each individual case?

Yes, I agree with my noble friend. Of course we strongly support the right of law-abiding people to defend themselves, their families and property with reasonable force, but it is important that the law is clear and accessible, as people must rely on this law in very difficult and stressful circumstances. We believe that the law is rightly and firmly weighted in favour of the victim. For example, there are very few prosecutions of householders for acts of violence committed against intruders, and obviously they take place only when the violence was extreme and completely disproportionate.

My Lords, I welcome the Minister's Answer that there is no intention to change the law. Does he agree that the law of self-defence is well understood by the courts and by juries, flowing from the resonant words of Lord Morris of Borth-y-Gest, whom many of us have quoted—that in a moment of stress you cannot to a nicety judge the precise amount of force to be used, and that due regard must be given to this by juries?

I absolutely agree with the noble and learned Lord, who speaks with great experience as a former Attorney-General and a leading lawyer. He knows that the practitioners in this field oppose a change in the law. The chairman of the Criminal Bar Association, Mr Paul Mendelle QC, is reported as saying:

“The law on self-defence works well and has done for years. The balance is properly struck between prosecution and defence and it is easily understood by juries”.

I say one thing with certainty: the dog will not be prosecuted. I say something else with almost equal certainty: nor will the householder.

In view of the answer to the previous question, does the position remain the same as when we debated the issue of intruders and burglars years ago, when the late Lord Hailsham said that it was up to you to keep your path in good condition because you would be liable if the burglar tripped and broke his leg? However, he went further and said that if you saw him climbing up to your window on a ladder, you were not obliged to tell him that a rung was faulty. Is the situation the same?

My Lords, we on these Benches entirely agree with the way that the Minister has expressed the position, namely that there is a fair balance in the criminal law as it stands and no need for reform. Has the Minister noticed that so far in this short debate, the Official Opposition have not made clear their position? Does he agree that if the Official Opposition were in government and sought to change the law in the way suggested, they would run up squarely against the European Convention on Human Rights and would find themselves in grave danger of violating the rights of the individual? Finally, as far as concerns civil law, will the Minister tell the House what has happened to the assurance given on 20 October by the noble Lord, Lord Brett, that he would consult the police about the misuse of Section 239 of the Criminal Justice Act, which was raised by the Court of Appeal in the Adorian case?

I am grateful to the noble Lord for giving me advance notice of the second point. The consultation has not yet taken place. I will talk to my noble friend and to the Home Office about that after this Question Time. As far as concerns the first part of the question, the position of the Official Opposition is not clear at all. They would be well advised in our view, and in the view of practitioners in the field, to leave the matter alone. It is not an issue to play politics with.

My Lords, does the Minister agree that there is something unattractive about newspapers and some elected politicians who speak of the jury system as the holy grail of our criminal justice system on one hand, and then complain about jury verdicts when people who plead self-defence have been convicted on the other? Does he agree that the exercise of prosecutorial discretion and the good sense of the jury is a real protection for individuals in these cases?

It certainly is a real protection. Prosecutorial discretion is an important part of that, but the jury system is as well and juries in these cases nearly always get them right.

Banks: Lending

Question

Asked By

To ask Her Majesty’s Government what assessment they have made of the level of bank lending to small and medium-sized enterprises.

My Lords, data supplied to my department by the four main lenders to small and medium-sized enterprises show that demand for finance remains subdued, with the number of applications in the final quarter of 2009 some 25 per cent down on the early 2008 high. However, the value of loans drawn in the final quarter of 2009 was more than 7 per cent up on the previous quarter, and the majority of businesses applying for support continue to access the finance that they require. Loans totalling more than £690 million have been drawn down by nearly 7,000 businesses under the Government’s enterprise finance guarantee, and that is lending that would not otherwise have occurred.

My Lords, I thank the Minister for that Answer but can I press him further? Is he aware of the recent survey by the Institute of Directors which shows that nearly 60 per cent of applications for finance by directors seeking bank finance in 2009 were rejected by the banks and that 20 per cent of the businesses surveyed are to some extent funding their businesses with credit cards? Does he not agree that these figures challenge the central claims made by the UK banks, the latest being made by RBS this week, that, where demand exists for bank finance, the majority of that demand is being met? Does he also not agree that we have been making this point from these Benches for the past 12 months?

My Lords, it is difficult to assemble an absolutely clear and stable picture of exactly what is going on. Surveys undertaken by my own department show that around three-quarters of businesses get finance from the first source they approach. The data indicate that current approval rates for loans and overdrafts are around 66 per cent for businesses with a turnover of up to £1 million and close to 90 per cent for those with a turnover of between £1 million and £25 million. Those figures for this first quarter are up or stable compared with the fourth quarter of 2009. However, I readily accept and acknowledge that the general perception of bank lending among SMEs is, frankly, more negative than these figures indicate. In these circumstances, I strongly urge the banks to be both more communicative and more competitive in their approach to lending to SMEs.

My Lords, how does the Secretary of State respond to the new data from the Institute of Directors, in which I declare an interest as a member, which found that, despite government assurances that businesses found to be ineligible for commercial credit would be offered access to the enterprise finance guarantee, 83 per cent of those found so ineligible were not even offered information on that scheme?

My Lords, I am not aware of the information to which the noble Lord refers, although I shall make sure that it is supplied to me by my department. Obviously, that would create concern in my mind. I can only say that the principal problem that we have in the economy is a lack of demand for lending rather than a lack of supply. As the recovery gathers strength during this year and next, the demand problem might become more of a supply problem, and that is why we have to be very vigilant about the approach, practices and behaviour of the banks in relation to the corporate sector.

My Lords, given the imperative need of small firms for ease of access to finance, will my noble friend satisfy himself that the excellent legislation on late payment, introduced over a number of years by his Government, is properly observed and monitored in both the private and public sectors to ensure that small firms do indeed get ready access and that their cash flow is not compromised?

My noble friend raises a very important point. That is why I have been extremely active right from the beginning of the financial crisis and during the ensuing recession to make sure that at least in the public sector, and in central government in particular, we observe a 10-day limit for the payment of invoices to SMEs. By and large, that is the benchmark that central government has operated, largely successfully, and of course we want to spread that good practice right across the public sector.

Recently, I have received signs that private sector businesses are seeking to extend—not lessen—the time period over which invoices are paid. I say to larger businesses that they have a responsibility to the rest of the corporate sector and a particular responsibility to their supply chain to ensure that their cash flow and viability are properly sustained. I say to them, “They form exactly the supply chain you will need in future years, so do not, through your actions, start to put so much pressure on them that you put them out of business”.

My Lords, a moment ago, the Secretary of State referred to the fact that there is a lack of demand for borrowing. I suggest to him that in fact the problem is the hurdles which people have to overcome, such as very high interests rates, bureaucracy, new charges, audits, facility fees, reviews and management fees. Does he agree that many of those hurdles are new and that they discourage small businesses from borrowing?

My Lords, the noble Lord has put his finger on a very real problem. It is one that I raised earlier this week when, with the Chancellor, I met all the CEOs of all the retail banks. I am only too well aware that businesses continue to raise concerns, not just about the availability of credit but about the pricing of that credit. Increased loan pricing can be attributable to the need for retail banks to repair their balance sheets, given the disrepair they got into in the past; to the increased cost of funding for the banks, which is driven by market conditions; and to new and proposed regulation, such as the FSA’s liquidity requirements. In other words, safer banks, which we all welcome, may not be cheaper lending banks as a result of some of the regulation that has been introduced. In my view, that points out the need for regulators to be conscious of the full consequences of their actions both for the banks and the businesses which rely on them.

Self-employment

Question

Asked By

To ask the Secretary of State for Business, Innovation and Skills what measures Her Majesty’s Government are taking to encourage people who are unemployed to move into self-employment.

My Lords, as part of our response to the economic downturn, we have introduced a support package to help jobseekers to consider self-employment as a route off benefits. Nearly 16,000 people have accessed support through Business Link in England since 6 April 2009. That includes a tax-free credit of £50 a week for up to 16 weeks when the person starts trading. To date, nearly 1,000 people per month have taken advantage of that credit.

My Lords, I thank the Secretary of State for that Answer. Can he tell us why the New Deal self-employment option has dwindled so far below the level that it was at when it was the enterprise allowance scheme and was running at 100,000 a year?

My Lords, in my view, the initiatives taken by the Government have encouraged the self-employment option to be taken up among jobseekers. The Department for Work and Pensions self-employment support package was, as the noble Lord probably knows, originally introduced as part of the six-month offer in April 2009 to provide a significant programme of enhanced support for jobseekers. I think the information I gave in my original Answer supports our contention that that is being extended; it is being rolled out and it is being taken up. The current programme is expected to run until March 2011 and I suspect that it will gather a lot of interest, support and considerably more self-employment, which we welcome.

My Lords, what steps are being taken to offer adult apprenticeships to those men and women who are unemployed, many of whom did not get the chance to do apprenticeships when they were school-leavers? If they are trained and given skills, particularly in the building industry, there is a good possibility of their becoming self-employed.

My Lords, the noble Lord makes an extremely valid point, which is why the Government have invested what are frankly colossal amounts in doubling and more the size of the apprenticeship programme in this country, and why, in my review of the Government’s skills strategy, I announced the creation over the coming two years of 35,000 new advanced technician-class apprenticeships. It is vital that in the provision of further and continuing education, we attract, stimulate the interest of and present options to older people, as well as school-leavers, to engage in apprenticeships and, once they have undertaken apprenticeships—if they so choose, and are suitably qualified—to go on to higher education, as, I am glad to say, many are doing. I fully sympathise with what the noble Lord said.

My Lords, I appreciate the breadth of the noble Lord’s portfolio, but will he say something about his and the Government's view of how they can assist people who are self-employed across the difficult threshold of growing their businesses and beginning to employ staff, perhaps from their own home, with all the associated planning difficulties? As he will appreciate, that is a particular issue in the countryside.

My Lords, I entirely agree with the desirability and need for everyone, including those who live in the countryside, to be able both to create their own businesses—whether from their home or otherwise—and to recruit new employees. I am glad that the Government are giving such support, through the measures and programmes that I described, to enable people to become self-employed. It is also important for the Government to consider additional ways and incentives for SMEs to recruit employees.

My Lords, I must say to the Secretary of State that bureaucracy is a problem with regard to self-employment. Many people who have just entered self-employment have been fined for failing to register as self-employed quickly enough. In 2009, more than 23,000 people were fined for registering late. Many people going into small business do not realise that there are all those requirements. I could give other examples. That is a great difficulty and a barrier to getting into self-employment.

My Lords, it is the Government's firm desire to put away the barriers that stand in the way of such people, to give them proper encouragement and to facilitate the creation of new business and self-employment. That is why, under the jobseeker’s allowance self-employment offer, there are two elements to the help available to people who want to move into self-employment or start a business: first, self-employment advice and support provided through Business Link; and, secondly, financial support provided by the Department for Work and Pensions for those leaving jobseeker’s allowance and becoming self-employed. I would be the first to acknowledge that if, in providing that advice, support and financial assistance, we make it such a ghastly rigmarole for people to navigate their way through the bureaucratic hoops ever to get to it, we are not doing as good a job as we might. We must remain vigilant about that. There is no point in setting up programmes if we then create so many hurdles to climb over to get access to them.

Disabled People: Student Allowance

Question

Asked by

To ask the Secretary of State for Business, Innovation and Skills what changes are going to be made to the administration of student disability allowance.

My Lords, the Government provide generous financial support to disabled students in higher education, but I recognise that the first year of the centralised student finance service has not gone well. Following the recommendation from Professor Hopkin, who was commissioned to review the delivery of student support for 2009-10, the Student Loans Company is reviewing the service that it provides to disabled students, in consultation with relevant organisations and special interest groups.

I thank the noble Lord for that Answer. Does he accept that the proposal from the organisation on 9 February that standard packages, which do not have an initial assessment, should be given to dyslexic students, who form 70 per cent of the student body, is a guarantee for not only giving the wrong type of package but for wasting a considerable amount of money? Is that organisation fit for purpose?

My Lords, I have said that the performance of the organisation is not good enough. That has been confirmed by the independent review. The Government have a good record in giving support to disabled students because we firmly believe that disability should not be a barrier for anyone trying to gain access to higher education. In 1997-98, 10,700 disabled students were offered £13.3 million in support. Provisional figures for the academic year 2008-09 show that more than 45,000 higher education students in England are in receipt of in excess of £100 million in support. That does not mean that the system is operating adequately for all disabled students. I will make sure that those in my department who are responsible for administering this look very carefully at what the noble Lord said and at the ways in which he believes we can remedy the situation and make a poor service better.

My Lords, can the Secretary of State explain why by the end of January, almost four months after the autumn term started, no less than two-thirds of the 19,000 students who had applied for student disability allowance had still not received the money to which they are entitled? Is that what the Secretary of State means by a good record?

My Lords, because these applications rely on specialist needs assessments, we encourage students to apply for student disability allowance well before the start of their course. I am afraid that not all do so, which leads to the problems that some encounter. More than 21,000 applications were received for 2009-10, and 30 per cent of them were received since November, which is well after the start of term. I accept that 9,000 of this year’s applications are still pending information from the student or the specialist and have not been fully processed. It is possible that they relate to students who did not get a university place or who have changed their plans and not told the Student Loans Company. None the less, I entirely accept that the performance has to be improved, and we are undertaking the measures necessary to make sure that that happens.

Employee-owned Organisations

Question

Asked By

To ask the Secretary of State for Business, Innovation and Skills what plans Her Majesty’s Government have to encourage the growth of employee-owned or part-owned organisations in the private and public sectors.

My Lords, the Government take a close interest in employee-owned organisations and the positive role they can play in fostering entrepreneurship and innovation in the private and public sectors. Last December, my colleague Tessa Jowell said that there are important lessons for our public service reform agenda to be learnt from studying companies such as the John Lewis Partnership. She announced the creation of an independent commission on ownership, chaired by Will Hutton, and hosted by the Oxford Centre for Mutual and Employee-owned Business. The commission’s work will help inform developing government policy around such issues as staff engagement, customer service, risk management and links with the wider community.

I am grateful to the noble Lord, Lord Baker. I am also grateful to my noble friend for his fairly extensive reply. Given the evidence from the recent CASS business school research, which shows that employee-owned businesses perform as well as conventionally owned businesses and have outperformed them during the recession, and given that there is well established support already for supporting public limited companies, will the Government give special attention to trying to extend the support to private companies and, equally, notwithstanding what he has just said, spend more time trying to examine how we can develop employee involvement to a far greater extent in the public service than we have done hitherto?

My noble friend makes very valid suggestions and we will try to respond to what he is calling for. I certainly agree that the public sector potentially has much to learn from the way in which employee-owned companies run their businesses. The Government’s public service reform agenda focuses on building stronger relationships between citizens or customers and the professional front line. I am very glad to cite examples in the public sector of 390 members of the Reddish Vale co-operative trust taking ownership of their school and of staff at Leicester City primary care trust taking over general medical and substance misuse services for homeless people. There are other examples and we shall seek to encourage more such practice.

I apologise to the noble Lord, Lord Brooke. Perhaps I may seek to persuade the Secretary of State, after he has answered these three Questions, to stay a little longer in the Chamber to answer the debate later on the savage cuts in universities and FE funding, which will lead to 200,000 youngsters not going to university this year. This is his policy, which he has taken through Cabinet. Many Peers feel—

My Lords, I hear what the noble Lord is saying, but this is a Question to the Secretary of State on the subject on the Order Paper. But I understand.

But many of the companies which will be affected by this will also be affected by the cuts in the education Bill. All that I would ask the Secretary of State to do is to appreciate that many Peers feel that, as the Cabinet Minister responsible for this policy, he should not leave it to a junior Minister but should answer himself at the Dispatch Box to justify and explain the policy.

My Lords, normally, wild horses would not tear me away from the chance to respond to the noble Lord, Lord Baker, on these questions. But I am afraid that essential departmental business keeps me away from your Lordships' House this afternoon. However, I must say that I will not be as far away as my shadow, the noble Lord, Lord Hunt of Wirral, who I gather has gone all the way to New Zealand in order to avoid this opportunity.

No, I am sorry, but it is not. If we can come back to the Question on the Order Paper, it will come as no surprise to the noble Lord to realise that from these Benches we regard, under his control, an organisation that could classically benefit from an increase in employee-ownership—the Royal Mail.

I do not disagree in principle with what the noble Lord has said. We want to encourage the maximum involvement of employees in the Royal Mail in the much-needed and essential modernisation of the company and the technological and other changes that need to take place in order to transform the business and its finances. We will be, as ever, seeking to encourage precisely that.

Energy Bill

First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Joint Committee on Human Rights

Motion to Refer to the Committee for Privileges

Moved By

That the 7th Report from the Joint Committee on Human Rights (HL Paper 56) be referred to the Committee for Privileges.

My Lords, before moving this Motion, perhaps it may be helpful if I say a few words in explanation, as this Motion is, so far as we are aware, the first of its kind.

On 10 February, the Joint Committee on Human Rights published a very short report alleging that Mr Trevor Phillips, the chair of the Equality and Human Rights Commission, had spoken to at least three members of the committee shortly before it was due to publish a report on the commission. The Joint Committee considered that these discussions might constitute a contempt of both Houses and accordingly recommended that the matter be referred to the Privileges Committees of both Houses.

The Motion before the House today simply refers the Joint Committee’s report to the Committee for Privileges. Agreement to the Motion implies nothing as to the validity or otherwise of the allegation itself.

If the Motion is agreed, it will be for the Committee for Privileges to decide how to take this matter forward, and the outcome will be reported to the House in due course. An almost identical Motion, referring the report to the House of Commons Standards and Privileges Committee, was passed in the other place on Tuesday of this week. I am sure that noble Lords will understand that I cannot comment in detail either on the allegation itself or on the process whereby it will be investigated. The allegation is a serious one, and in fairness to Mr Phillips, nothing should be said here today in advance of an investigation which might in any way influence or prejudge the outcome of that investigation.

Nor would it be appropriate for me to comment on the way in which the investigation will be handled. As far as we are aware, there is no precedent for an allegation of contempt by a Joint Committee of both Houses, and there are important issues both of principle and practicality to be addressed. The Committee for Privileges is to meet on Monday 1 March, and the Clerk of the Parliaments will be putting proposals to that meeting. I cannot anticipate the outcome of the Committee’s deliberations. I therefore invite the House to agree the Motion. I beg to move.

Motion agreed.

Digital Economy Bill [HL]

Order of Consideration Motion

Moved By

That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 41, Schedule 1, Clause 42, Schedule 2, Clauses 43 to 46, Schedule 3, Clauses 47 to 49.

Motion agreed.

Equality Bill

Order of Consideration Motion

Moved By

That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 6, Schedule 1, Clauses 7 to 31, Schedules 2 and 3, Clauses 32 to 38, Schedules 4 and 5, Clauses 39 to 52, Schedule 6, Clauses 53 to 80, Schedule 7, Clauses 81 to 83, Schedules 8 and 9, Clauses 84 to 88, Schedule 10, Clause 89, Schedule 11, Clauses 90 to 94, Schedule 12, Clauses 95 to 98, Schedule 13, Clause 99, Schedule 14, Clauses 100 to 106, Schedules 15 and 16, Clauses 107 to 115, Schedule 17, Clauses 116 to 148, Schedule 18, Clause 149, Schedule 19, Clauses 150 to 185, Schedule 20, Clause 186 to 188, Schedule 21, Clauses 189 and 190, Schedule 22, Clauses 191 to 195, Schedule 23, Clauses 196 to 201, Schedule 24, Clauses 202 to 204, Schedule 25, Clauses 205 to 209, Schedules 26 and 27, Clauses 210 to 212, Schedule 28, Clauses 213 to 216.

Motion agreed.

Extradition Act 2003 (Amendment to Designations) Order 2010

Motion to Refer to Grand Committee

Moved By

Motion agreed.

Licensing Act 2003 (Mandatory Licensing Conditions) Order 2010

Motion to Refer to Grand Committee

Moved By

Motion agreed.

Legislation and Public Policy

Debate

Moved By

To call attention to the case for enhancing the means available to the House of Lords to scrutinise legislation and public policy; and to move for Papers.

My Lords, I welcome the opportunity to introduce this debate. The subject is central to the health of our political system. Parliament is witnessing a period of crisis and it is important that we address that as a matter of urgency. There is clearly a crisis of confidence in the political class. That, to some degree, is being addressed. We also need to review how Parliament itself operates.

Parliament is the buckle that links government and people. As such, there are two fundamental relationships—that between Parliament and government and that between Parliament and the people. It is important that we address both and equally important to recognise that the two are not mutually exclusive. Parliament needs to be effective in calling government to account and in ensuring that there is rigorous scrutiny of legislation and public policy. It is crucial that it is seen to be doing so. However, the role of the public should not be passive, merely observing what we do. We need to bolster our relationship with the public by ensuring not only that we are open in our activities but that we seek to engage with the public and draw on those who wish to have some input into our deliberations.

I refer to Parliament. It is important to recognise that the two Chambers are not in an adversarial relationship but, rather, complement one another. In fulfilling our roles, we can learn from one another and enhance efficiency by not duplicating what the other does. This House can and does add value, and I believe it is considerable value. In my view, we fulfil well our core roles of scrutinising legislation and public policy. The House has attributes that distinguish it from the other place and which allow it to fulfil especially well those functions. There is, of course, always room for improvement. It is a case of enhancing what we already do; in effect, building on strength. How, then, can we enhance our capacity to scrutinise legislation and public policy? How can we engage with the public in order to fulfil these functions?

I begin with legislation. When I chaired the Constitution Committee of your Lordships’ House, we published our report, Parliament and the Legislative Process. We looked at the legislative process holistically, addressing pre-legislative scrutiny, legislative scrutiny and post-legislative scrutiny.

Several Bills each Session are now subject to pre-legislative scrutiny, though there is a clear case for the number to be greater. When a Bill is submitted for pre-legislative scrutiny, it is normally sent to the relevant departmental Select Committee in the other place. However, Select Committees have busy schedules and may not always have time to examine a draft Bill. Joint Committees have been used for some Bills—on the whole, very successfully—and we should be open to making greater use of such committees for pre-legislative scrutiny; indeed, we should make it clear that we welcome such a development. We should also explore in conjunction with the other place how Parliament can have a greater say over precisely which Bills are submitted for pre-legislative scrutiny and, indeed, press the Government to accept that pre-legislative scrutiny should be the norm and not the exception.

However, it is the legislative and the post-legislative processes on which I wish to focus. We are able to engage in detailed scrutiny of a Bill, not least because we do not have guillotine or programme Motions. We also consider all amendments that are tabled and can take amendments on Third Reading. We thus have attributes not enjoyed by the other place. However, the other place now has a feature that we lack: Standing Committees in the Commons have been succeeded by Public Bill Committees. In most cases, they are evidence-taking committees. They are thus able to ensure greater links with people outside the House and benefit from their input.

In Parliament and the Legislative Process, the Constitution Committee recommended that every government Bill should at some stage during its passage be subject to examination by an evidence-taking committee. Given that, and in the light of developments in the other place, it should be the norm for a government Bill introduced in your Lordships’ House to be referred to an evidence-taking committee prior to the normal Committee stage. It could be a Special Public Bill Committee or a temporary Select Committee. A Special Public Bill Committee under our rules has to complete its evidence-taking within 28 days, but there is no time limit for subsequent proceedings. It should thus be possible to have time to take account of the evidence, avoiding a problem encountered in the other place.

The value of this change would be that our consideration of a Bill would be informed by engagement with experts and others who have knowledge relevant to its provisions. The evidence would be on the public record and it would be possible to probe it. It would also demonstrate to those outside the House the value of what the House is doing.

I turn to post-legislative scrutiny. Regular post-legislative review, checking to ensure that an Act of Parliament has fulfilled its intended purpose, was until recently not a feature of our parliamentary system. As the Constitution Committee noted in its 2004 report:

“Post-legislative scrutiny appears to be similar to motherhood and apple pie in that everyone appears to be in favour of it. However, unlike motherhood and apple pie, it is not much in evidence”.

The committee recommended that Acts should normally be subject to review within three years of commencement or six years following their enactment. The Government referred the matter to the Law Commission, which recommended that there should be regular reviews by departments, with the reviews submitted to the relevant departmental Select Committees. It also endorsed the recommendation that there should be a Joint Committee on post-legislative scrutiny.

In their response to the Law Commission report, the Government accepted the case for regular reviews. Most Acts, within three to five years of enactment, are to be reviewed. The first such reviews have already been undertaken and published as Command Papers. Other Acts are shortly to be reviewed, including, I understand, the Constitutional Reform Act 2005. I very much welcome this development, but it is two cheers rather than three: the Government have not accepted the case for a Joint Committee.

To my mind, the case for a Joint Committee is compelling. Departmental Select Committees in the other place, as I have mentioned, already carry a heavy workload; they are unlikely to have time to examine in any depth post-legislative reviews except on an exceptional basis. There is a case for a Joint Committee, drawing on the expertise of Members of both Chambers, to act as a longstop to ensure that no significant review is overlooked. Equally important, it can observe and disseminate cases of best practice, ensuring that departments are rigorous and consistent in their reviews. As the Study of Parliament Group noted in its evidence to the Law Commission, the primary purpose of post-legislative review should be to identify good practice, in terms of both process and the substantive content of legislation. A Joint Committee would thus be an important, standard-setting body. It would also help to concentrate the minds of Ministers and officials when considering legislation. The ideal is a Joint Committee, but if the other place is not interested in participating, we should consider setting up a Committee of this House.

Post-legislative review also has the benefit of requiring government to clarify the purpose of a Bill when it is introduced. There needs to be a clear statement of what a Bill is intended to achieve and the criteria by which it can be assessed to have fulfilled its purpose, criteria that will then form the basis of post-legislative review.

There is also a case for such a committee to examine post-implementation reviews of secondary legislation. The case for greater rigour by government in reviewing the impact of secondary legislation has been put forcefully by the Merits of Statutory Instruments Committee. In Grand Committee yesterday, the idea of a Joint Committee on post-legislative scrutiny encompassing post-implementation reviews of statutory instruments received cross-party support. I was gratified that the Minister, the noble Lord, Lord Davies of Abersoch, said that the proposal for a Joint Committee was,

“a very good idea that is worth considering”.—[Official Report, 24/2/10; col. GC 313.]

I turn now to the other part of the Motion, the case for enhancing our capacity to scrutinise public policy. The committee work of this House has been a real success story. The sessional Select Committees have been successful, largely because of the commitment, expertise and thoroughness of their members in producing authoritative and influential reports, valuable in themselves as educative works as well as important means of shaping debate. The committees have already proved highly efficient bodies, producing high-quality reports at relatively little cost. They have also avoided duplicating the work of the other place, complementing departmental Select Committees of the Commons by addressing cross-cutting issues. It has been a case of the House playing to its strength. We can and should build on that strength.

There is a case for looking at our committees holistically. The Liaison Committee operates largely in reactive mode, recommending the appointment of a committee on the basis of a particular proposal put to it. We should examine our committee structure in a more proactive and rounded manner, looking to see whether there are any gaps in cross-cutting subjects that could be fruitfully covered by a Committee of this House.

On my theme of engaging with the public, existing Select Committees should be encouraged to do what many already do—that is, to get out and about to different parts of the United Kingdom in the course of taking evidence and to utilise moderated e-consultation as a way of encouraging evidence, especially from people who may otherwise be reluctant or not able to submit evidence in the normal way. There have been some examples where such online consultation has notably proved its worth. The Information Committee, in its excellent report entitled, Are the Lords Listening?, has drawn attention to the value of such exercises, not least in the context of draft legislation. The Constitution Committee also recommended that the committee should consider commissioning public opinion polls where it believed it useful to have awareness of public opinion on a particular issue. The committee also recommended looking at the communication strategies of other legislatures, including the Scottish Parliament, which devotes proportionately more of its resources to such activity than the Westminster Parliament. We tend to make a virtue of our frugality, but we should not let the need for economy prevent us doing a more effective job, especially not when engaging with the public, or engaged publics, is concerned. The House benefits from such engagement; the public benefit from such engagement.

I have not sought to provide a comprehensive list of what we could to do to strengthen our capacity to scrutinise legislation and public policy. I have no doubt that we will hear other proposals during the course of this debate. I have sought to be illustrative rather than exhaustive. My essential point is that we already do a good job but we should never be complacent. We can build on strength. The House has a good track record of examining and implementing new procedures. We have made some valuable changes in recent years. I believe we should, and can, move forward in order to strengthen our role as part of that essential buckle between government and people in the United Kingdom. I beg to move.

My Lords, I should say at the outset that I agree with every word that the noble Lord has just spoken. I make three preliminary points. First, this is the third or fourth debate in this Session of Parliament relating to how your Lordships' House conducts business. That ought to ring some bells somewhere. Secondly, a minority on the list of speakers are ex-Members of the other place. I am conscious that when I first arrived in 2001 and uttered the odd idea for possible change, I was told, “We don’t want to make this place like the other place”. I certainly do not. The majority of speakers this morning are not ex-Members of the other place, which is the second signal that should ring some bells.

Thirdly, I am really pleased that the three party leaders will wind up the debate. Having had three or four debates on this issue—other issues will come up today—it is time for some action. We do not need any more Motions; we need Motions to make a decision to go forward. There is urgency in this, and it benefits the Government—I see the noble Lord, Lord Strathclyde, laughing, but it does not matter which party is in government—to strengthen Parliament, particularly through some of the modest suggestions mentioned by the noble Lord, Lord Norton, and previously by other noble Lords, which we will hear again today. That is a good thing for government. We should have the possibility of making some changes before the general election.

I agree on pre-legislative scrutiny. I do not think that we are well enough informed. I have introduced enough Bills in this House, and there was one in particular that I much regret piloting through this House. In fact, I blew hot and cold as to whether I was in favour of it or not while it was going through the House, and the Chief Whip and I were at loggerheads in the department on that matter. The House is not well enough informed, and there should be pre-legislative scrutiny. Of course, we do not get any of that with Bills that start in this place. As long as we keep the process up of Bills starting in what is a revising Chamber, we need some extra information. We are a revising Chamber, and I deplore the amount of repetition that takes place in this House, because it is not productive. But when the Commons has done no work on a Bill or part of a Bill, we are actually doing both jobs. Hence, I repeat the point that I made during the Queen’s Speech debate about flagging up clauses that have not been debated in Bills from the other place—with no reasons given; I am not being accusatory here. That would give us a chance to prioritise the work that we do.

I realise that the process in this place is slightly different because of Third Reading but, if we are to keep the current set-up of First Reading, Second Reading and Committee stage, I question whether we need amendments at Third Reading on a Bill that has started in this place. If we are to have that final longstop, which I know parliamentary counsel finds useful, we should see it is a longstop for the Bill, not for the House. The House where the Bill ends up is the place to have a facility for amendments at Third Reading to deal with the things that have been spotted at the last minute. This is a minor thing, but to me it seems a waste of time to have amendments at Third Reading on a Bill that starts in this place, given that after that the Bill goes to the other place, where there is a Committee stage and a Report stage, then there is a big argument between the two Houses on the changes. If only the House where the Bill ended up had the facility to spot these things at Third Reading, that would save a lot of time and repetitious debate.

As others have said in the past, the Committee stage should as a norm be taken off the Floor of the House. It should be done in a Room rather than in the Chamber. As a Minister, I used to prefer having the Committee stage in Committee Rooms 3 and 4 rather than in the Room across the Corridor, but that is what we have. The atmosphere in those Rooms is more conducive to getting the business done. It is an obvious thing in a way. It is not just the atmosphere but the practicalities. The Clerk and the Chair sit alongside each other, which helps—the set-up in the Chamber is a real problem on many occasions. Also, the Ministers and the opposition spokespeople are closer to their advisers. The atmosphere that is generated in a Room rather than the Chamber at Committee stage ought to be the norm. We should more often send Bills off the Floor of the House, or at least think about splitting them.

I want to make a point about post-legislative scrutiny. I remember, although I am prepared to stand corrected on this, the 1972 review of the redundancy payments legislation. I was a student of engineering at the time but got sidetracked into other studies. That was the first time that Parliament had ever reviewed a piece of legislation and asked, “Does it do what it says on the tin?”. The Redundancy Payments Act of 1968, I think, had not worked quite as the Labour Government had expected it to work and major modifications were required. It was said at the time that Parliament ought to do more post-legislative scrutiny. Well, we have done some, but we have a long way to go, bearing in mind that we started at that time.

My final point is about Select Committees. I spent an hour and a half this morning sitting in the public part of the Health Select Committee, which was dealing with meaty issues such as smoking, alcohol and obesity. At other times, the committee deals with hospitals, doctors and nurses. Such committees do not have the time or the capacity to do post-legislative scrutiny or to scrutinise regulators as a norm. Those areas are ideally suited to the work of this House. The main public policy issues of the day are rightly for the departmental committees of the other place, but it is no good our simply saying that we should leave them to do it all, because they will not do it. Therefore, huge areas of public policy are not scrutinised and not debated. Frankly, we should pick this up. It is within our power to do it. It would be of benefit to the House, to the public and, as I said as my first point, to Parliament. Because it benefits Parliament, it benefits whoever are the Government of the day. That is the central point. I will be waiting with bated breath, although I hope that I will still be breathing, for the three leaders’ speeches to commit to taking some of the nuggets from today’s debate and the previous debate and to putting them before the House to decide on before dissolution ahead of the general election.

My Lords, I congratulate my noble friend on securing the debate and on bringing to it his customary deep knowledge and expertise. Speaking as an ex-Member of another place, I have on a number of occasions with other noble Lords drawn attention to the effectiveness of the work of this Chamber. This House sits for more hours of the day and more days of the year and it scrutinises more legislation than any other second Chamber in the world. Because we are a largely appointed House, we bring to our work a unique combination of talent, experience and knowledge, which in my view could certainly not be replicated in any kind of elected House. I just thought that I would get that in.

The Constitution Unit of UCL produced research that shows that in four cases out of 10 the Government have accepted amendments after defeats in the Lords. And, of course, more changes are achieved although you cannot quantify them—when amendments are accepted without a vote, by negotiation and through the work of Lords committees, debates and questions.

I believe that we are an effective House. The question posed by my noble friend is whether, with some procedural—and, perhaps, other—reforms, we could be a more effective, or a much more effective, House. Certainly we could be but, equally certainly, reform is not just a matter for this House—it must be undertaken across Parliament as a whole. My noble friend stressed that the need is urgent, and the report of the Public Administration Committee in another place and last month’s Good Government report from the Better Government Initiative remind us that Parliament’s reputation and, with it, that of the whole democratic process—that is the point—is at a dangerously low ebb. At the same time, there are new challenges for our parliamentary process. I instance global and instant media coverage 24/7. I find difficulties with the increase in cross-cutting issues, such as security and extreme social issues—they mean that our existing government machinery may be unwieldy or even inappropriate for today’s circumstances.

What should be done? My noble friend and the noble Lord, Lord Rooker, have given valuable suggestions. For me—this is really the remit of government—the most important thing is to reduce the volume of legislation. The Good Government report, which I have already cited, points out that the volume of legislation and regulation has more than doubled since the mid-1960s. The Good Government report says that the objective should be to,

“do less through legislation but do it better”.

Parliament’s reputation is not enhanced by the passage through it of ill-thought-out legislation such as the social care Bill, with which we are grappling at present.

As a junior Minister, I worked in the Department of Social Security and at the Treasury. These are both departments in which annual or even more frequent legislation was the norm and in which the word was that, if we got it wrong, we could get it right next year. When I entered the Cabinet, I was amazed to find that many colleagues regarded having a Bill to put through Parliament as a badge of honour rather than as an absolute necessity. Sadly, Governments of all colours find it difficult to resist proving their strength, responsiveness, difference from their predecessors or, dare I say, their virility by producing yet more legislation. We will see whether there is a change after the election and whether a new Government can resist that lure. I hope that they might realise that a pledge to keep new legislation to the bare minimum, and keeping to that pledge, would be wildly popular with the public.

There are changes that could be proposed by Parliament and embraced by government that would improve scrutiny, and thus help enhance the reputation of legislators and restore some trust in the process—a number have been mentioned by my noble friend and the noble Lord, Lord Rooker. I flag up the easy thing that we could do; that is, to flag up straight away those parts of a Bill that reach this House without having had any scrutiny whatever in another place. I believe that that would cause public outrage—and it should—but it would at least enhance the reputation of one part of Parliament, and maybe cause a change of behaviour in the other part, which would also be a very good thing.

Where Bills start in this House, rigorous pre-legislative scrutiny could be the norm. Noble Lords, because of their expertise, are very skilful at questioning Ministers on the practical application of legislation. That practical application is exactly what is needed in relation to pre-legislative scrutiny. There are those who say—I am sure that it will be said in this debate—that some of the proposals put forward by my noble friend would slow the legislative process. How good would that be if it meant that there was less of it?

I also think that it is this House, rather than the other place, which is very well suited to undertaking post-legislative review, as my noble friend pointed out. The noble Lord, Lord Rooker, explained vividly why the Select Committees in another place absolutely do not have the time to undertake that task, although it is supposed to be theirs to do. I believe that it would be an appropriate function for this House. My noble friend is to be congratulated on bringing before the House such a well argued case for reforms which, if adopted appropriately and over time, could certainly help to improve the rather tarnished reputation that, sadly, the democratic process currently has. That process is in need of that help.

My noble friend mentioned a very interesting point about flagging up legislation that the House of Commons has not looked at; the noble Lord, Lord Rooker, made the same point. Surely, the flagging-up should be done by the House of Commons with an explanation of why it has not considered it.

My Lords, that is also a valuable suggestion. I do not care where it is done as long as the public know that a Bill passing through another place has not been looked at.

My Lords, I, too, express my appreciation to the noble Lord, Lord Norton, for securing this debate. It eases the task of those who follow him that he made such practical and concise suggestions. I hope that the Government will act upon them and indicate today how they propose to proceed on those precise points. Perhaps the noble Lord will forgive me if I do not focus on the legislative part of his Motion but rather turn to the scrutiny of policy. It is, in some ways, more difficult to come up with practical recommendations there, but the importance of this House’s oversight of policy is made no less by the complexity of what we have to face.

I was very struck by the reference that the noble Lord, Lord Rooker, made to obesity as something that might be appropriate for this House to focus on. In 2006, as it happens, the House of Commons itself drew attention to the fact that there were 26 different public agencies involved in dealing with the delivery of a national policy for obesity. No single Select Committee, pursuing the issues of one department alone, is going to be able to tackle such an issue. It seems to me that the matrix of accountability is now so complex in this country—an inevitable aspect of modern living and the expectations of government—that it will not do simply to set up bodies individually to take account of the work of each individual non-departmental body. We have many. Probably the only body in Parliament that attempts to deal with the full matrix is the Public Accounts Committee, on which I served for 17 years. That is backed by the National Audit Office, which spends about £80 million a year on scrutiny. One could not hope to replicate that, or even to contemplate replicating it.

However, that does result in what one commentator, Mr Koppell, in his interesting piece on the pathologies of accountability, has called the “multiple accountabilities disorder”. I believe that this House is capable of bringing order where the public may, perhaps, perceive disorder. If we are to do that, we definitely ought to have something in the nature of a mission statement or vision statement that indicates the role of this House in scrutinising, in an overarching way, the policies of government.

The great advantage of this House, as it stands, is that it is less dependent on the Executive. It has some independence of mind and brings to its deliberations and scrutiny the resources of experience and, I dare say, wisdom in some cases, which ought to give it a reputation. When one considers—and in other debates we shall—how the composition of the House needs to be altered to give it greater legitimacy, we must not overlook those qualities, such as objectivity, which it has and that we would wish to build in to any second Chamber. In parenthesis, to achieve at least some of that, I would definitely wish to see, in a reformed Chamber, the removal of all Ministers from the House, but with the understanding that all Ministers are to be called before the House when there is a matter for which they are responsible, be that legislation or a general area of policy.

The trouble at the moment in this country is that in shying away from overregulation and relying, as the Conservative Party did to some extent in the 1980s, on output-based accountability, we do not satisfy the broader sectoral interests in these problems. Setting up new bodies with specific responsibility does not necessarily meet the public perception that governance is not as it should be. We are within 24 hours of the publicity attached to the Stafford hospital report. There too multiple agencies are involved, which have clearly been derelict in their duty. The task of oversight will not necessarily be handled altogether effectively by departmental committee. I hope it will be recognised that this House, with its very broad basis, can do the job not just of fire-fighting but of raising policy issues as a response to the public’s concerns.

The other place has made great strides in the last few years. If the recommendations of the Wright committee are implemented, they will go even further towards enhancing its role, and its role independent of government. However, the Commons employs 15 people in its scrutiny unit. That is an extraordinarily small number to cover all the Select Committees. In itself this would be reason enough to fear that the resources are not adequate. I have not suggested that we should take the route of the Public Accounts Committee, but let no one believe that we can do an effective job without strong support in this place.

My Lords, I join in congratulating the nob1e Lord, Lord Norton, on securing this debate and giving the House another chance to discuss a subject which has become as topical as it is important. Like the noble Lord, Lord Norton, I believe that your Lordships’ House does an excellent job in scrutinising legislation but that it would be a mistake to be complacent. If one looks back there is a continuous process of change and improvement in the proceedings of this House—evolution, not revolution—and I think that most Members of this House would agree that this should continue.

I welcome the statement by the Leader of the House that if, following the election, she is returned to her present post, which she occupies so effectively, she would propose a Leader’s conference to consider further improvements in our procedure. I do not need to ask her to give an assurance to that effect when she replies to the debate, but I ask the Opposition Leader to say whether, if he succeeds to the role, he would propose a similar conference. In the hope that such a development would occur, I have been working with other noble Lords in an entirely informal group to draw up a shopping list of ideas which such a conference might consider. Our motive in doing so is entirely one of respect and support for the House and its present essential characteristics. That work is not finished, nor does it yet need to be. Although I applaud the hope of the noble Lord, Lord Rooker, that something would happen before the general election, I rather doubt that it will.

Let me offer your Lordships a few tasters of the sort of thing I have in mind. I have been a member of the Better Government initiative, to which the noble Baroness, Lady Shephard, referred. That group recently published a report about ways in which government policy and legislation could be improved, including ways in which Parliament can contribute to that. Anyone who has spent a career in the Civil Service, as I have, is aware of how the Executive can become slack if Parliament does not keep it up to the mark. If the Executive does not know that it will have to justify its proposals in the face of rigorous scrutiny by Parliament, its preparation becomes perfunctory, and ill-thought-out proposals are more likely to be produced for political or cosmetic reasons.

I should like to see Parliament pass a resolution in both Houses, setting out the standards of preparation which it expects legislation brought before it to satisfy. Such standards should include a proper explanation—not soundbites—of the reasons for the legislation; what it is intended to achieve; what its costs are; and what consultation has taken place about it. To back up such a resolution, I should like to see a Select Committee on standards of legislation—preferably a Joint Committee of both Houses—which would report to Parliament as the Lords Constitution Committee and the Committee on Statutory Instruments do now; and advise Parliament if, in its opinion, these standards have not been met. I can assure your Lordships that if any Minister supposed that either House would refer back, and refuse to give a Second Reading to, a Bill which had not met the minimum standards, the quality of preparation would improve dramatically. I wholeheartedly agree with the noble Lord, Lord Rooker, that this is not just in the interests of Parliament; this is in the interests of government, and in the electoral interests of government.

I should also like to see some improvements in the use of time to help us maintain our civilised practice of enabling any Member of this House to move amendments without being prevented by formal timetables or guillotines. With this in mind, we might conduct—as the noble Lord, Lord Rooker, has suggested—more Committee stages in Grand Committee, where probing amendments can be discussed before Report stages, which should be held in this Chamber. We might hold more Statements in Grand Committee, rather than in prime time in this Chamber. We might have at least one slot in the week for a one-hour debate on a topical subject, just as we now have provision for topical Questions. We might also allow five-minute trailers for the chairmen of Select Committees to draw attention to the publication of significant reports in your Lordships’ House.

This is just a sample of suggestions which might be considered; there will be others. To those who are inclined to resist any change, I remind them of the words of a former civil servant, Sir Matthew Stevenson, who said,

“you know, we have to accept that life does change. That’s what distinguishes it from death”.

My Lords, I, too, greatly welcome the initiative of the noble Lord, Lord Norton of Louth, and agree with just about everything he said. Therefore, my remarks will be mainly a form of endorsement of his proposals. I also welcome very much the strong statement from the noble Lord, Lord Rooker, that the time has now come to act. However, when we say that we want to act on these proposals, we have to ask ourselves the question which we tend to avoid—although the noble Lord, Lord Butler of Brockwell, did not avoid it—which is, are we giving ourselves the time to do what we can do, what we want to do and what we are asked to do? Time is an important issue and I shall certainly refer to it again. I begin by endorsing strongly the point already made that high-quality scrutiny of legislation and public policy takes time. If we are not prepared to find that time, we must accept that as a revising Chamber we will normally fall short of achieving our potential and fulfilling our mandate.

When Labour came to power in 1997, the Government promised to bring forward more Bills in draft. The numbers went up for a while and the Modernisation Committee in another place stressed in 2002 that publication of Bills in draft should become the norm. In 2004, your Lordships’ Constitution Committee made a strong case for more Bills to be published in draft and subjected to pre-legislative scrutiny. The problem is that the increasing flow of legislative proposals—which worries me as much as I think it worries the noble Baroness, Lady Shephard—has not been matched by an increase in Bills published in draft. In fact, as has already been noted, there has been a decline both in the absolute number and in the proportion of Bills published in draft in each Session. This is highly regrettable. To make matters worse, the few published in draft are often published leaving far too little time for meaningful scrutiny. A minimum of 12 weeks or more should be allowed, which is the principle set out in the Cabinet Office guidelines. As the noble Lord, Lord Norton, told the Wright committee, the Government appear to favour the use of draft Bills in principle but in practice cannot persuade Ministers to utilise the procedure on a more systematic basis.

My enthusiasm for pre-legislative scrutiny is fuelled by three desires: to have better legislation; to save, one hopes, some time during the later stages of Bills; and—very important in my view—to see more public input into our legislative process. Scrutiny cannot be truly effective where the legislative proposals are not considered in evidence-taking committees, but how often do we refer Bills to a Special Public Bill Committee or to a Select Committee here? That happens pretty rarely. I most strongly endorse what our Constitution Committee wrote in its 2004 report. It stated:

“Scrutiny should not take place in a parliamentary vacuum. Parliamentarians need to have access to expert opinion to know if there are potential flaws in a bill. They need to be aware of any views strongly held by citizens”.

It follows therefore to my mind that every Bill should be subject to some detailed scrutiny, with the taking of evidence from informed and interested bodies, including online consultation, which, as the noble Lord, Lord Norton, knows, we do rather well here. Such scrutiny should take place at the pre-legislative stage. Governments must accept that every Bill should be published in draft form unless there are compelling reasons for not doing so, and that much more legislation should be made subject to pre-legislative scrutiny. I am only quoting what the Government themselves have said more than once in the not-so-distant past. But that, of course, means that we have to ensure adequate time for Members to absorb, analyse and discuss the evidence they have read and heard. Look at the experience in the other place following the very welcome introduction of evidence-taking Public Bill Committees, to which the noble Lord, Lord Norton, referred. As he noted in his memorandum to the Wright committee, these committees are generally given too little time to assemble a good range of witnesses and too little time for Members to digest the evidence and apply it to the probing and amending process.

What are we to do about time constraints? The use of Grand Committee these past five years as a virtual parallel Chamber has undoubtedly reduced the pressure, but not enough. I thus fully agree with the noble Lord, Lord Norton, that we need greater use of carryover and a 14-month, instead of a 12-month, cut-off point from First Reading if we are to relieve the pressure and weaken the lack of time argument deployed by Governments in defending the failure to publish more Bills in draft and accept more pre-legislative scrutiny. A more systematic resort to carryover is one obvious way of partly resolving the time problem. I add another, at the risk of drawing the scorn of many, if not all, noble Lords present. We really need to sit for two weeks in September. I know this is not popular but I know of no other Parliament in Europe—I have been to just about all of them—which grants its Members so long a summer break. If we cannot bring ourselves to do that, at least we should consider a later Summer Recess start or an earlier return. I have heard it argued in the other place that by the time the Summer Recess starts, most controversial legislation has moved from the House of Commons to the House of Lords, so why interfere with the recess? But that is precisely the point: the burden passes to us and the pressure builds up. The other place should be understanding of that, but we cannot go on complaining that we have too little time for proper scrutiny unless we grasp that particular nettle.

Finally, no matter how much you change or refine procedures to enhance our scrutiny role, the quality of that scrutiny still depends heavily on the expertise applied to it. I wonder what will happen if and when this Chamber is converted into a wholly or largely elected body. Nothing made my job as chairman of your Lordships’ European Union Select Committee easier than the knowledge that the Select Committee and its seven sub-committees were drawing on a pool of experience and expertise unrivalled in any other legislative body in Europe, and that, of course, applies to the totality of our work here in the House.

Let us ponder deeply—the noble Baroness, Lady Shephard, and others present have obviously done so—on the consequences for scrutiny of abandoning the appointed House model. If we abandon it, the House will need to draw on more expertise and experience outside the House to help it maintain a proper level of scrutiny of legislation and public policy, and that will demand still wider use of evidence-based committees. The supporters of an elected Chamber must accept the resource implications of that and the need for more time to do the work properly. Rigorous, high-quality scrutiny is a constitutional imperative. I would rather we did not imperil the precious capability we now have, which is the envy of Parliaments around the world.

My Lords, I agree wholeheartedly with the final point of the noble Lord, Lord Grenfell. I also join in congratulating the noble Lord, Lord Norton of Louth, on initiating this debate. As has been pointed out, there have been a number of debates on this subject, most notably in the Queen’s Speech debate on 23 November.

A number of the usual suspects are again gathered. Given that the speeches were so good on that previous occasion, there might almost be a temptation simply to read out the same speeches, but in the event I think that the debate has moved on. We have increasingly refined our views and increasingly a consensus has emerged that this matter is coming to the point where action must be taken. I very much welcome the fact that the leaders of each of the parties are to speak in the debate today. This gives us hope that action will be taken.

I remain of the view that the most important change which can be made and implemented without legislation, and immediately, concerns the stopping forthwith of the automatic programming of legislation in another place. I could not be more delighted if the Leader of the House were to stand up and say that that were so. I would be equally delighted if my noble friend the Leader of the Opposition were to stand up and say that an incoming Conservative Government would certainly drop that practice, although I appreciate how tempting it is for any Government to continue with it. New Governments are particularly tempted to rush through legislation and automatic programming is a good way of doing it, but it has effectively emasculated the role of the House of Commons as regards legislation. Together with scrutiny of the Executive, legislation is its most important role. This has put a huge burden on this House, which it has carried admirably.

Perhaps I may make a suggestion. I do not mind whether the noble Baroness, my noble friend or both take it up. The next manifestos of both parties should say that we will stop the practice of the past 10 years of automatically programming legislation, which has prevented the House of Commons fulfilling its rightful role and has meant the House of Lords dealing with legislation in the way that it has. The manifestos should say that we will revert to the traditional system whereby, if it is necessary to guillotine legislation because there has been a filibuster or something that is desperately urgent, one justifies that by a half-day debate and a vote at the end. We need to return to a more rational system, rather than an automatic one. I commend to my noble friend and the other side that such a manifesto commitment should be made.

I turn secondly to the issue of the Speakership. I was on the committee concerned with the way in which the Speakership should develop following the removal of the Lord Chancellor. Everyone on that committee was determined that we should not have a House of Commons-type Speaker, and the House endorsed that view. I said in the previous debate that there was a growing feeling—which has grown since—that the present arrangement at Question Time does not operate as well as it might. I do not impugn the way in which the Front Bench decides if necessary who should ask a question, but the system does not work as well as it might. Perhaps we could adopt a position whereby the Lord Speaker could simply say from which part of the House the next question should be asked, but not in any way name an individual Member. It should be left to that part of the House to decide who should give way in the traditional way. Perhaps this is something on which we could take action now, ahead of any change at the election when there will be a large number of new Members. Regrettably, we have reached a stage whereby some change of that sort is necessary.

While I am on the subject of Question Time, whether or not Members receiving Answers thank the Minister depends on the content of the Answer. I do not object to that. However, it is a terrible waste of time when, time and again, Ministers thank Members for asking the question. Some Ministers do that in every answer. Perhaps the Chief Whip may issue a directive to Ministers on the Government Front Bench not to thank Members in the way that I have described.

Finally, I am concerned about some of the proposals that have been made—for example, taking Committee stages in Grand Committee in the Moses Room rather than on the Floor of the House. If any change of that kind is introduced it is important that Back-Bench Members on both sides should have an effective power to prevent it if they think that the proceedings should take place on the Floor of the House. I am concerned that although we debate legislation in this Chamber, the number of opportunities to vote and win is very limited. During my 10 years on the Front Bench, one could have hoped for at most only six occasions when one had a chance of winning on particular amendments, because it is very difficult to get a good vote after the dinner hour. When I was on the Front Bench there was Committee stage, Report stage and Third Reading. Since then there has been some erosion as regards obtaining votes at each stage in the way that one would like, given the way in which the debates have developed. Therefore, we should consider very carefully whether the ability of the House to take a decision is in fact limited by the proposals—which are in some ways admirable in themselves—to take business off the Floor of the House or restrict the way in which one can vote at different stages of a Bill. I disagree with what the noble Lord, Lord Rooker, said about votes at Third Reading.

Overall, we are in a position to make reasonable progress. The noble Lord, Lord Butler, made a number of other suggestions. I hope that we will get a suitable response from the Front Benches.

My Lords, I add my appreciation in respect of the noble Lord, Lord Norton of Louth, not only on having achieved this debate but because he has steadily worked away at the issue by writing about it, obtaining debates and discussing these matters with others. What is particularly encouraging about this debate, as the noble Lords, Lord Rooker and Lord Butler of Brockwell, have pointed out, is that it is not isolated, but has come off the foot of a number of debates and formal and informal discussions outside your Lordships’ Chamber. The possibilities of moving forward are therefore more substantial.

We should not imagine that the majority of our population’s first thought when they wake up in the morning is about politics in general, never mind the proceedings of your Lordships’ House. However, a number of groups of people should be thinking about these matters—if not first thing in the morning, then certainly during the working day. They include Members of Parliament, because we are Members of a Parliament of two Chambers, those in the machinery of government, Members of devolved Administrations and the European Parliament, as well as interest groups. All of us in our various ways need to work together to ensure good governance of our country and good legislative procedure.

I have always subscribed to William Ewart Gladstone’s understanding of liberalism, which is,

“trust in the people, only qualified by prudence”.

In institutional terms, I have always seen the other place as representing trust in the people, but your Lordships’ Chamber as representing prudence. One of our difficulties as regards those outside appreciating the valuable work that is done and the development of what could be done is that we tend to work rather unto ourselves. First, in relation to Members of another place, we have a marvellous opportunity—or at least some of us think we do—in the upcoming election as a result of an enormous change involving possibly the greatest turnover of MPs since the election at the end of the Second World War. This will be a chance not only to have some kind of relatively didactic short orientation for new MPs coming into the other place, but the possibility of building up proper working relationships with them and understanding much better what we are doing together. We could do that at the start of the new Parliament and then in liaison. A number of different devices have been suggested—some of which are excellent—whereby we would co-operate in ensuring that there was good legislation at the pre-legislative stage. There are things that we could do together—I shall return to that issue. Where work is done on Bills that start in your Lordships’ House, we should be able to have evidence-taking sessions, and all the Bills that proceed through Parliament, whether in one direction or another, should have a similar opportunity for evidence taking and public involvement.

Secondly, there is the suggestion of liaising and ensuring that if, due to procedural or other reasons, parts of Bills are not considered in the other place, that situation could be flagged up so that Members of your Lordships’ House would be particularly concerned to ensure that they were properly scrutinised. There is also the idea of having a Joint Committee on parliamentary standards which would look at legislation coming forward and indicate whether or not it has properly and fully been considered. By working together in liaison, informally, and in Joint Committees, we are trying as a Parliament of two Chambers to produce good legislation. We should be much more up-front about the way that we work together. If that happened, I have no doubt that it would mean that Members of another place would be more appreciative and understanding of the good work that is done in your Lordships’ House. Perhaps we would continually keep in mind the difficulties for some who work at the other end of the building.

It is not just the Members of another place. The devolved Parliaments and Assemblies in the United Kingdom also play an important role. We could learn from them. When it comes to legislation in Scotland, Executive Bills must be accompanied not just by Explanatory Notes—we have those—but by a policy memorandum that says why legislation is the right way to move forward and what other things have been tried. There are also memorandums on finance and delegated legislation. These ensure that the Scottish Parliament is informed about the legislation, and that the Scottish Executive bring forward material that has been much better thought through. In the Northern Ireland Assembly, the Speaker decides whether any Bill accommodates itself to the European Convention on Human Rights. At Westminster, it is Ministers: but what Minister will stand up and say, “I do not believe that this Bill conforms to the European Convention on Human Rights”? It was not a power that I had to exercise often as Speaker of the Northern Ireland Assembly, but it did happen and it ensured that the Minister looked carefully at whether his Bill did what he was suggesting.

There are ways in which we can learn from each other. If there was a little more liaison, perhaps the devolved institutions might be able to learn from us. I found my experience in your Lordships' House extremely helpful in trying to ensure that those who would otherwise not be entirely respectful of each other behaved in a more appropriate parliamentary fashion. There is much that we can learn from each other, but only if we take the trouble to meet. I refer not just to Members of the Houses. Because we now have a number of Parliaments and Assemblies, there is a much better opportunity for those who serve us as Clerks, or who work for Hansard or in other positions, to have a career structure that takes them through a number of parliamentary Chambers, enabling them not only to develop themselves, but also to help us to understand these things and to learn from each other.

What I have said about devolved institutions applies also to Members of the European Parliament. Much of the legislation that governs our country is made in the European Parliament, not by ourselves, and your Lordships’ House does excellent work in scrutinising what comes forward: but again, more two-way liaison would add a great deal to the work that we are doing. The business of opening up to others can only be of benefit not only to the quality of our work, but also to the degree of appreciation, in the other place and in the community at large, of the good work that your Lordships' House does.

Like others, I am delighted that the noble Lord, Lord Norton, initiated this debate. It is always a pleasure to debate and work with him on these issues. The benefit of speaking down the order is that many things have already been covered, so I will focus on points that have not been.

The noble Lord, Lord Butler, and others covered well the importance of Parliament being able to understand a Government's policy objectives, how they seek to implement them and what role legislation plays in that. This House is better at scrutinising the detail of legislation than looking at the bigger picture of what the policy is for, whether the legislation will achieve that and whether the other elements of delivery are in place to do so. Our Second Reading debates can be somewhat thin, because the Government have not deposited sufficient documents beforehand. That would not be a major change for the Government, but it is overdue. It will mean work for civil servants to get documents in place so that we are better placed to understand.

Secondly, Grand Committees have been a success. I take note of the point of the noble Lord, Lord Higgins, about not wanting to reduce the opportunity for Divisions. Therefore, if we make Grand Committees our default, as I believe we should, there are two other issues that we should bear in mind. First, if the House decides to make Grand Committees its default, it must have the freedom to decide not to do so if it believes that the House does not wish that; or to split elements of a Bill and decide that certain clauses are so crucial that they should be considered in the Chamber, while the rest can be dealt with in Grand Committee. The consequence of Grand Committee being the default, and more often if not always used, is that it reduces the opportunity for Divisions. Therefore, with respect to the noble Lord, Lord Rooker, I think that the House would find it uncomfortable not to be able to have Divisions at Third Reading if Grand Committees were used on this basis. The consequence of using Grand Committees more will be that we will get better scrutiny. There are considerable benefits to the Government of using Grand Committees, because it avoids the logjam of this Chamber.

I will talk briefly about evidence-taking sessions. A number of noble Lords have spoken on this. Fewer than 10 Bills a year start in this Chamber. It is an anomaly that there is no process for taking evidence from the public or interest groups. We look slightly out of kilter. It is relatively simple to change this, but we should be careful not to cause wreckage. If we have a Select Committee to take evidence, it should not be able to recommend that the Bill should not proceed: that is outwith its powers. It should not be able to amend the Bill. Its duty would be merely to report to the House on the evidence that it has received from interested people. The consequence of an evidence-taking session is undoubtedly added time. It would be unlikely to take less than another eight weeks. Therefore we must weigh the cost of that added time. Eight or so Bills would have a slower passage, but there would be a benefit to the Government, because most if not all Bills would be in Grand Committee. Therefore, it is inconceivable that the overall governmental legislative programme would be threatened as a consequence.

I turn next to an issue that we have not talked much about, namely the public's understanding and ability to get involved in what we are doing. This matters to our reputation and to the confidence of the public that Parliament is doing its job and is their servant, rather than considering that it has a God-given right to exist for its own sake. The changes that we can make, as the noble Lord, Lord Butler, wisely advised, should be cautious and incremental rather than revolutionary. Simple things can be done that would move in the direction of making what we do more understandable to the public—and, I dare say, to some of our own Members.

First, a deposition on a website of the documents that the noble Lord, Lord Butler, referred to is a simple technical matter. Each government Bill should have a place on a website where the Government's narrative about the Bill is easily accessible to the public and to any Member of the House. Any report from a legislative scrutiny committee should also be accessible there, so one can instantly see what has been said about the Bill.

Next, there should be an explanation of where the Bill has got to in procedural terms, what the subsequent procedures are and what they mean, so that people are aware of what is going on. That is work for technicians rather than politicians, but it would help the public to be aware of what we are doing. It will also help some Members of this House. Here I put my hand up: sometimes one takes part in Divisions when one is not always aware of exactly what one is voting for. Nobody else would make a confession like that. A simple website would allow one to get the bottom line and make that sin less frequently committed. The only worry is that the Chief Whips would not like it. Their view is that one is better doing what one is told rather than understanding what one is doing—but I tease them on that point.

Finally, I will touch on something that we should be concerned about, namely whether good scrutiny and strong and firm government are our intention. All of us in this place recognise that the Government are entitled to their manifesto and to their legislative programme. Therefore we must look at any changes with an open mind—not just from the point of view of scrutinising purists, but asking ourselves whether a fair balance is being struck between scrutiny and the Government getting their work done. The duty of this place is to make the issues explicit to ourselves, to the Government, to the wider public and, through whatever process, to the other Chamber. If we have done that, we have done our job, and it is not usually our duty to go further. However, making changes of the type on which we are beginning to develop a consensus would make that possible, and would allow the Government to proceed with what I hope will be good legislation—less of it, but at the same time better.

My Lords, by way of introduction, I should like to refer back to every thought and word in the speech of the noble Lord, Lord Grenfell, because my speech is focused on pre-legislative scrutiny, as spoken to by my noble friend Lord Norton of Louth on 28 January and again today.

My speech is concerned with the pre-legislative scrutiny of draft constitutional Bills—that is, the Bills that reflect government policy at the inception of the conversion of policy into law. As an available means of enhancement, perhaps consideration could be given to the retrieval of the constitutional entitlement of the Lord Chancellor, which has been slighted into imposed abeyance, having been exercised since the reign of George I until about three years ago. It has evolved over and over again but the substance has never changed, and the proposal is that it should work in harness with the new regime. This is the first step towards establishing a new regime, and I congratulate my noble friend Lord Norton of Louth. However, having taken this first step, one has to think a little about implementation, and that would be of great help to the committee of the new regime considering this question.

The difficulty—although it is not really a difficulty—is that the entitlement of the Lord Chancellor to tender disinterested, independent advice to the Cabinet and the Secretary of State as to the withdrawal or abandonment of a Bill because it fails to conform with constitutional principle or the rule of law could now be extended to advising the committee to be set up under the new regime. I cannot go into detail as there is no time but that could be arranged. The late Lord Kingsland, on 18 November 2008, said that among other things it was the responsibility of the Lord Chancellor to ensure that the structures and processes were in place to guarantee such conformity.

The entitlement cannot be retrieved in any form until the combined appointment of Lord Chancellor and Secretary of State for Justice has been segregated by decree or, if so ordained, by statute or as ordained by the Supreme Court. It was slighted into imposed abeyance in 2007 by prime ministerial decree without consultation with Parliament or the judiciary, and, by appointment, was set up at the same time as the newly established Ministry of Justice. That was done to cover up the botched attempt to abolish the post of Lord Chancellor in 2005 with the stroke of a pen that ran out of ink.

The substance of the case for segregation, as spoken to by Lord Kingsland on 18 November, can be put quite simply. It is a constitutionally untenable and undesirable amalgamation, because the acknowledged role of the Lord Chancellor and the obligations of the Secretary of State for Justice as a policy-maker are in inevitable conflict and simply do not mix. Without disinterested advice, we have had the fiasco of the Constitutional Renewal Bill, although we do not want to go into that again today. By the combined appointment, we have also had the presentation of the Constitutional Reform and Governance Bill with the support of the Prime Minister, his Secretaries of State and Ministers of State, none of whom of course could possibly give disinterested advice.

I think that my time is up but, if I may, I shall add that if the constitutional entitlement of the Lord Chancellor were restored, the administration, by virtue of retaining the Great Seal, would be undertaken by the Crown Office, together with many other constitutional duties of the Lord Chancellor which exist today. The precedence of the Lord Chancellor, who is holder of the Great Seal on the command of Her Majesty, would remain and, as such, he could be of considerable practical value to the new regime.

My Lords, in common with other noble Lords, I thank the noble Lord, Lord Norton, for making what I thought to be an unarguable case. I very much hope that, in their responses, all three Front Benches will accept that this is a debate about governance and not government, between which there is far more than a semantic difference. To me, the essence of good governance is public trust. The noble Lord, Lord Lucas, is seeking a balloted debate on this subject and I very much hope that he achieves it.

As I see it, our job—and certainly my job as a Back-Bencher—is consistently to seek means by which public trust can be enhanced and justified. Current and, I think, fair criticisms are that there is too much legislation—the noble Baroness, Lady Shephard, made exactly that point earlier—unused or inappropriate legislation, and well meant but outdated legislation. Like the noble Lord, Lord Norton, I am an enthusiast for both pre and post-legislative scrutiny, and I do not think that there is a lot to add to the case so marvellously set out earlier by the noble Lord, Lord Grenfell. However, I am very fortunate: I am probably the only person in this Chamber who has had the privilege of chairing two pre-legislative scrutiny processes, and I do not think that I fully appreciated how valuable they were until I recently went through the agonies of the Digital Economy Bill. If ever a Bill required pre-legislative scrutiny, that was it. Many hours have been spent in this Chamber—I would say many of them wasted hours—going through things which a good and effective pre-legislative process could have dealt with very easily. A lot of bouncing around between the various sides of the House on very small issues could have been avoided because many of the arguments were based on an extraordinary amount of misinformation and even disinformation. I shall return to that in a moment. So it is the absence of pre-legislative scrutiny that has led me fully to understand its value.

The passage of the Digital Economy Bill is a perfect example of what can go wrong. All of us engaged in that Bill have been subjected to a deluge of lobbying, some of it informed and intelligent and some of it pretty daft. However, we have had no ability to sort the wheat from the chaff; no ability properly to interrogate the lobbyists; and no ability seriously to look at which of their arguments stand up and which of them collapses under interrogation. That was an error, because that was the only time when this Bill could have received proper scrutiny, given the present parliamentary timetable. No doubt, whatever leaves this House will be swept down to the other end of the building and I am afraid that we shall end up with a limp and lame Bill on what is in reality a very important subject.

Another point is that we live in an era of ever-more professional politics and politicians. The outside world has to be given a voice and has to come into this building to make its voice heard, be scrutinised and feel that it has had a say. I repeat that not being able to sort out and identify the legitimate and factual lobbying has been a major problem in trying to get this piece of legislation through.

The most important point about pre-legislative scrutiny is that the members of the committee form a hard core of informed cross-party expertise when the Bill comes before the House. You have an informed group of people who have been through the arguments and can cut through an enormous amount of waffle and nonsense. Not having that is a great mistake.

We also have an obligation to look at what is happening elsewhere, good and bad. In the time left to me, I would like to draw the attention of the House to a very good article of 8 February in the New York Times by Paul Krugman, the Nobel prize-winning economist, in which he said:

“We've always known that America's reign as the world's greatest nation would eventually end. But most of us imagined that our downfall, when it came, would be something grand and tragic. What we're getting instead is less a tragedy than a deadly farce. Instead of fraying under the strain of imperial overstretch, we’re paralyzed by procedure … Much of the Senate's business relies on unanimous consent: it's difficult to get anything done unless everyone agrees on procedure. And a tradition has grown up under which senators, in return for not gumming up everything, get the right to block [what] they don't like”.

He continued:

“The truth is that … the way the Senate works is no longer consistent with a functioning government … America is not yet lost. But the Senate is working on it”.

I would be very distressed if at any point anyone was able to say that our parliamentary system and our procedures were effectively making good legislation and good governance impossible.

I shall finish with two short points. On 14 January, we had an excellent debate in this Chamber on climate change post Copenhagen. Thirty speakers made contributions and it was led by the noble Lord, Lord Stone. He and I made a point of ensuring that as many schools as possible knew that the debate was happening. We followed that up afterwards. The ability of this House to shoot itself in the foot is sometimes quite remarkable. When we talked to the young people who had shown an interest in the debate, the same question arose time and time again: “Why on earth were you moving for papers and why, at the end of a really excellent debate, did you withdraw the motion? Did you not believe in what you had said or was what you said an irrelevance?”. I think it is foolish to use these absurd, antiquated phrases which no one other than someone who has been in this Chamber for probably more than a year has any way of understanding, when in fact we are trying to engage the outside world, particularly young people, in what we do. We must address that quickly.

Finally, to paraphrase Nikolaus Pevsner, the British have a genius for spending large sums of money, seeking candle-end savings. The most distressing thing I have watched in the past few months, particularly as a result of the expenses drama which has engulfed both Houses, has been the argument advanced that somehow or other a cheaper democracy might possibly be a better democracy. Everyone in the Chamber knows that to be ridiculous. Somehow or other we have been dragged into a debate which has given credibility to the idea that saving money will result in better governance. I have said before in this House that cut-price democracy is not a bargain that any sane person should contemplate. We have to make that case over and over again and stop pretending that somehow, by saving money here and there, we are offering the public something better when we all know that we shall be offering the public something potentially far worse.

My Lords, like others I congratulate the noble Lord, Lord Norton of Louth, on having initiated this debate on the central issues of our effectiveness as a parliamentary Chamber. Much of our legislation and policy is now made or initiated at a European level. Whether or not one thinks that is good, clearly it is important that there should be effective parliamentary scrutiny of European affairs. Therefore, I would like to concentrate on that in my remarks.

Scrutiny of European Union work has been a major strand of the scrutiny activity of this House for 36 years—since 1974. I acknowledge that those in the past would have made a very important contribution—in particular the noble Lord, Lord Norton of Louth, who not only played a part on the sub-committee but has written rather importantly on the subject; and, of course, my predecessor as chairman of the European Union Committee, the noble Lord, Lord Grenfell.

In all, 85 Members of your Lordships' House are involved in the work of the European Union Committee and its several sub-committees, supported by a very effective staff. In the past Session, we considered 800 European Union documents and accompanying Explanatory Memorandums which were submitted to us, and almost half of those were considered in detail by the committee or one of its seven sub-committees. Many of those cases would lead to correspondence with Ministers for answers to questions on issues which we did not feel had been properly explained. We made 25 reports to the House, nine of which were debated. We have been able to identify a number of occasions when our scrutiny has affected the outcome of a European Union proposal, either in terms of the British Government’s attitude or sometimes, indirectly, by our reports being read by Members of the European Parliament which has led to them being incorporated in resolutions and amendments put forward in the European Parliament.

In addition, I want to touch on the point made earlier by the noble Lord, Lord Butler. The process of scrutiny is worth while, in that the requirement that Ministers should explain their policy on every European Union document to Parliament in an Explanatory Memorandum, and through Parliament to the public, is of constitutional importance and keeps Whitehall on its toes.

In view of the remarks made by the noble Lord, Lord Alderdice, I should say that another important way in which our committee works is to have links with the committees dealing with European matters in the devolved Assemblies and Parliaments. That is of particular importance as we are now considering in much more detail issues of subsidiarity, particularly for matters which have been devolved to those Assemblies. My committee has said that it will notify the devolved Assemblies and Parliaments if, before coming to an opinion, we ever see issues of subsidiarity on which we would like their views.

I was very glad to see that the noble Lord, Lord Norton of Louth, in his 2005 book, Parliament in British Politics, wrote that the committee has,

“established a formidable reputation for its work”.

In his recent book, the New British Constitution, Vernon Bogdanor is equally generous to us as he writes:

“The scrutiny provided in the House of Lords European Union Select Committee … has proved to be perhaps the most effective in the European Union”.

My experience of meeting colleagues from other member states suggests that your Lordships' House, together with our colleagues in the Commons, has the most comprehensive system of scrutiny anywhere in the European Union. The committee's responsibilities and Parliament’s opportunity to intervene have been enhanced by the Lisbon treaty. The second report of the Procedure Committee, which is awaiting consideration in the House, sets out the procedural implications for this House on the basis of a most helpful memorandum from the noble Baroness, Lady Royall, the Leader of the House, on the implementation of the new powers and scrutiny arrangements, with particular reference to subsidiarity and the UK’s right to opt in to measures in the area of freedom, security and justice.

The other recent change arising from the Lisbon treaty is widening the range of issues subject to what is now referred to as the ordinary legislative procedure, whereby the European Parliament co-legislates with the Council of Ministers. That was debated in your Lordships' House on 28 January. Codecision certainly complicates scrutiny, but the important point was made in that debate by the noble Lord, Lord Alderdice, that we need to strengthen our discussion and co-operation with Members of the European Parliament, because they have that important function. The current fiscal climate is certainly not one in which one could argue for increased resources for that additional work but, given the additional work that is coming forward under the Lisbon treaty, it is a difficult time to reduce the means of scrutiny.

In its third report of Session 2005-06, the Liaison Committee sets out the case for a review of the policy Select Committees at the beginning of every Parliament. I look forward to the review, and note that in its decision, which was approved by the House, although in general the Motions for reappointing the existing committees will be delayed until the review has been completed, there is an exception for the European Union Committee. The report states:

“In conducting such a review, the special position of the European Union Committee as a committee of scrutiny of EU draft legislation will be recognised and the committee's appointment will not be delayed”.

I am sure that those who will be appointed to the committee in the next Parliament will maintain the high level of scrutiny of European Union matters that has been provided for the past 36 years.

My Lords, I, too, congratulate the noble Lord, Lord Norton of Louth, on securing this debate. I am so pleased that Lady Luck was with him in the ballot, because it has given us an opportunity to move the subject further forward. Also, like other noble Lords, I am very pleased to see that the leaders of each of the parties are present today, and we have the noble Baroness, Lady D'Souza, from the Cross Benches.

In particular, I am heartened to see the noble Lord, Lord Strathclyde, with us, given that he has a long record of being associated with major changes in procedures and practices in the House. I recall first working with him way back in 2002 and 2003 on the committee on which the noble Lord, Lord Roper, also served, when we were working with the late and lamented noble and learned Lord Williams of Mostyn—Gareth. We had not only an intensive but an entertaining exercise that produced some major changes for the House, which in the main have been well placed.

At that time, I recall that the noble Lord, Lord Strathclyde, was very radical—but not radical enough, I regret, to embrace the then Leader's recommendation that we should have a Leader’s session periodically in the House so that the Leader could account to the House for his or her performance. It is interesting that we now have Secretaries of State with sessions devoted to their areas of activity—we had one this morning—but we still do not have a Leader’s session in this House. I hope that that item will be on the agenda as we move further forward. I hope that the noble Lord, Lord Strathclyde, will reflect on his position and that we can introduce a Leader’s session.

I have had some conversations with the noble Lord, Lord Strathclyde, about the slow progress we have been making in trying to establish a Leader's group. I know that the noble Lord, Lord McNally, will give full support for it; I know that the noble Baroness, Lady D'Souza, is in favour of a Leader's review of our procedures; but I understand my from conversations with the noble Lord, Lord Strathclyde, that there is hesitancy on his part. I await with interest his response to the question of the noble Lord, Lord Butler, to see whether there are any remaining obstacles.

When I talked to the noble Lord, Lord Strathclyde, he felt that the agenda was not sufficiently strong for action to be taken. I hope that, in the light of our debate in the past few months—and, in particular, today, with some extraordinary and outstanding contributions, which are to be followed up by papers to be submitted to the next meeting of the Procedure Committee—all the leaders of parties in the House are now of the view that we can move forward. I hope that the papers will be before the Procedure Committee in the first week in March; I hope that there will be a unanimous view on them; and, like my noble friend Lord Rooker, I hope that we will not have to wait until the new Parliament is formed before we start to see some movement. If we do, I suspect that the Procedure Committee will not look at this until some time in June or even into July. Then, before we know where we are, we are into the Recess, we disappear for two months and the process will not be under way until the autumn of 2010 and, I suspect, we will not have a report completed by the end of the year. We will be into 2011. If we can huff and puff, as some people can in some committees, we might even run this through until the Olympics in 2012.

Having teased the noble Lord, Lord Strathclyde, a bit, I now have some firm questions for my noble friend the Leader of the House, whom I know has been doing her utmost to move this forward. Will she be raising the issue at the forthcoming Procedure Committee? Will she give a firm recommendation that we should establish either a Leader’s group or a Leader’s conference? Although there may be problems in getting the formalities moving before we prorogue, does the committee agree in principle, at the beginning of March, to establish a conference or a Leader's group, of whichever party is in power, to continue that work? Will it open invitations for evidence to be submitted? Will she also extend an invitation to all the officials and staff of the House who, from my experience, have some very good ideas about changes that they would be willing to embrace and which we should consider? They should be included in such an event.

We need to get that process well under way so that we can look forward to changes that will be about effectiveness and efficiency—not, as I hope that people will now be convinced having listened to so many contributions, about or against the interests of the Government, but about the interests of the House and the nature of our relationship with the public, which we are trying to rebuild.

I take up two final points, while leaving those questions for my noble friend, whom I am sure will do the utmost to answer them today so that we have that firm commitment and know that, even if we cannot get all the details finalised, we have a date in the new Parliament by which the review will get under way.

I served, 12 months or so ago, under the noble Viscount, Lord Colville of Culross, who is in his place, for six months on the hybrid committee, the Crossrail Select Committee. People said, “You must be crazy going on that”. It was an extraordinary experience, quite different from anything else that I have done. I have been on pre-legislative scrutiny committees that have taken evidence, but in that instance we took petitions from the public; we worked our way through them all. To pick up on a point previously made in speeches by the Lord Speaker, I would like the noble Lord, Lord Norton, to think about our running an experiment whereby we could combine petitions with a post or pre-legislative draft scrutiny exercise. We found that many members of the public participated. Probably about 20 per cent of them went away having secured what they came to us to petition for, but I would guess that 80 per cent or 85 per cent of them went away satisfied that they had been heard by Parliament in a way that they had probably never believed would happen before they came. In the time that I have been in this Chamber, that is one of the most satisfying experiences that I have had.

I also have views on European Union legislation, but I am conscious of the time and will come back to them later. We do great work on it, but it is important that we maintain standards. The Lisbon changes present us with some big challenges to ensure that we continue to do the work to the same level as we have done it in the past, but I hope we can find ways in which we, perhaps working on a joint basis with the Commons, might do it even better in future.

My Lords, I compliment the noble Lord, Lord Norton, on obtaining this debate, but the greatest tribute paid to him is the quality of the speakers who he has attracted. I fully endorse the campaign waged by the noble Lord, Lord Brooke, and I should give him a belated apology. A few weeks ago, he had a Question, and I promised my full support. As the Question unfolded, I had the choice between giving him statesmanlike support and making a cheap political point. I am afraid noble Lords know the outcome.

I am rather shocked by a number of noble Lords, not least the noble Lord, Lord Butler, posing questions to the Leader of the House and the Leader of the Opposition about what happens after the general election. I commend to all Members of the House the poem that ends:

“But we are the people of England; and we have not spoken yet”.

Neither have the people of Wales, Scotland and Northern Ireland and, until they do, those Benches would be wise not to count any chickens.

We know that in 31 years Labour and the Conservatives have missed opportunities to give impetus to parliamentary reform. It is no use ignoring the elephant in the room, which is reform of this House. I say to the noble Baroness, Lady Shephard, and the noble Lords, Lord Higgins and Lord Grenfell, that that matter will be taken to the hustings where all three parties will make clear their attitudes to reform of this House. In the mean time, I can say very clearly that a vote for the Liberal Democrats in the general election will be a vote for Lords reform and voting reform. I give the noble Lord, Lord Butler, the assurance that he did not ask for: these Benches will press forward with the procedural reforms that he spoke about.

It has already been demonstrated that there are many good ideas about. I praise the initiative of the Lord Speaker in initiating a seminar last October, which spun off three committees that have been looking at various matters. The noble Lords, Lord Brooke and Lord Roper, are right that progress can be made now. We will all be back after the general election—that is one of the things that makes this place so attractive in looking dispassionately at the general election to come—so why can we not establish a Leader’s Group now, either by the usual channels or, as was suggested during a Question by the noble Lord, Lord Campbell-Savours, by election by the whole House? It could sit in public and take external evidence. There is an opportunity to do this. I say to the Leader of the House that she should not let the dead hand of Strathclyde stop her taking action. I like the idea of the dead hand of Strathclyde. It is like a 1930s black-and-white thriller, but make no mistake, it is present, and the House should not allow it to stop us moving ahead.

Neither do I think we should stop looking at the situation of the Lord Speaker. It is time that some noble Lords, particularly on the Conservative Benches, stopped being like Jacobites dreaming of the king across the water and assuming that somehow, at some stage, they can restore the Lord Chancellor to the Woolsack. That time has gone, and whatever happens in this House, they will not find a majority for that course of action. It is time to look at the role of the Lord Speaker in the light of experience. Much as I love the Chairman of Committees as he sits on the Woolsack, we must look at the overlap in the roles of the Lord Speaker, the Chairman of Committees and other key committee chairmen.

Taking up the points made by the noble Lords, Lord Filkin and Lord Puttnam, we have to look at how we can involve the public better. I welcome the BBC’s new website on Parliament, which was launched last September. It should be given wider publicity. It is a gateway into a lot of the activities, often live, of the committees and the Chambers, not only of this Parliament, but of the devolved Assemblies. I am a long-time fan of BBC Parliament. It is still too much of a hidden gem. I would like to see much clearer scheduling, so that people know what to find and where to find it, and more cross-promotion, which would draw people into the Parliament channel. The excellent “The Record”, the television equivalent of “Today in Parliament”, could quite easily be shown on BBC2 after “Newsnight”. That would be a way of messing in to what we have been talking about today to get a better understanding and awareness of what is going on in Parliament because, apart from the sketch writers, the print media have now abandoned the field completely in terms of trying to report accurately what goes on in Parliament, and that is a disgrace.

I, too, am in favour of post-legislative scrutiny. I had the honour of serving on the committee chaired by the noble Lord, Lord Puttnam, on the Communications Bill, and I still count it as one of the best parliamentary experiences that I have had—that was pre-legislative scrutiny. On post-legislative scrutiny, the Gambling Act and the Licensing Act are worth having a look at in the light of experience of how they have impacted on our society.

Like my noble friend Lord Alderdice, I deplore the lack of communication and links between the two Houses. An idea off the top of my head is that as well as the joint meeting of both Houses presided over by Her Majesty at the State Opening, what about a joint meeting of both Houses at the beginning of a Parliament, perhaps held in the Royal Gallery or Westminster Hall, and jointly chaired by the Speaker and the Lord Speaker? It would at least be a symbolic gesture that we are in the same business and are complementary in the work that we do. That is just a passing thought.

I pay tribute to the noble Lords, Lord Butler and Lord Filkin, and the noble Baroness, Lady Murphy, who have been doing this ad hoc work following the Lord Speaker’s seminar. The fact that those ad hoc committees have worked and produced some interesting thoughts that they will publish shortly means that a lot of the groundwork has been done.

I hope that the lesson that we take from this debate is that there are lots of good ideas about, there is certainly enough of an agenda—if that is what the noble Lord, Lord Strathclyde, is worrying about—to get a Joint Committee, however it is formed or elected, to work now. I ask the Leader of the House to send this debate to the Prime Minister in the hope that he will send back a famous directive from a non-bullying Prime Minister: action this day.

My Lords, it is a rare pleasure, which is too often denied to me, to speak after the noble Lord, Lord McNally. I must tell him that whenever I see the Liberal Democrats I am reminded of another great black and white film called “Up the Creek”. I join all others who have congratulated my noble friend Lord Norton of Louth on securing a place in the ballot for this interesting and extremely useful debate. I can assure noble Lords that not only shall I have listened carefully to all who spoke, I will also read the many distinguished contributions with equal care.

Perhaps I may start on a slightly sour note: it is better to get these things out of the way at the beginning. I was struck by the number of Peers who spoke about public involvement in the scrutiny of legislation. Yet when this House was asked, only four of those who spoke today supported the idea that the British people should have a say in agreeing the Lisbon treaty. That is a stain on this Parliament, which will not be removed, particularly because the three parties gave a promise in their manifestoes. The 2005 Labour Party manifesto—the most recent—said:

“We will legislate to place reasonable limits on the time bills spend in the second chamber—no longer than 60 sitting days for most bills”.

I take it that the Government have changed their mind on that objective. I hope that the noble Baroness will be able to tell us when and why they changed their mind, and that it will not reappear ever again in a Labour Party manifesto.

When I read the terms of the Motion, to enhance,

“the means available to the House … to scrutinise legislation and public policy”,

it struck me that this went to the heart of what this House and Parliament have been about since the earliest days. Issues of how to contain the Executive and to hold the King's Ministers to account were exercising Members of this place in the 13th and 14th centuries. Some of their statues are above us as we speak. It is thankfully a lot less bloody these days, but, sadly, it is also a lot less effective. We are all agreed on the need to expose those in power to more effective scrutiny, but as a small-part player in the events of recent years, I have to say that we should not be too downhearted.

This House has had a significant impact in the past 13 years. It has protected the right to trial by jury; limited the most draconian emergency powers to terrorist-related crimes; prevented the imposition of compulsory ID cards; upheld the right of every election candidate to send a free election address; defended controls on night flights to airports; blocked super-casinos; and prevented 90-day detention without trial. That is just part of the record, which is not bad for a House regarded, whether we like it or not, as far less legitimate than the other place.

But our weakness has meant that while we were right on 24-hour drinking, regional assemblies, home improvement packs, the risks of electoral fraud and, I would contend, the use of closed lists in elections, we had to give way on all those occasions. The issue was not one of deficiency of scrutiny—your Lordships filleted all those propositions—it was a deficiency of authority. However we react to the issues raised in this debate, that deficiency cannot be mended by changes in our practices or Standing Orders. Some confuse bad strategic decisions by government with less-good scrutiny. We exist very often to make bad Bills a little better. It should be the job of government to make sure that we get better Bills, which is why I very much commend the work done by the noble Lord, Lord Butler of Brockwell, and his group in the Better Government Initiative.

Parliamentary reform—by which I mean strengthening the authority of Parliament vis-à-vis the Executive—has to involve both places. We are part of a process that will change. The use of guillotines in another place has been monstrous as regards the number of Bills that arrive in this House not having been debated. I totally agree with what noble Lords have said on this and with the proposition that we should find a way of flagging up those areas that have not been debated.

Since 1997, we have seen huge changes in procedure in this place. I have been a willing participant in that. After the reforms that followed the discussions initiated by the late Lord Williams of Mostyn, we agreed on a cross-party basis a range of changes. That was in about 2000-01. The noble Lord, Lord Brooke of Alverthorpe, sat on that group as well. I must say that I had no idea of how growingly irritated he has become, so that in these dying days of the Labour Government, he at last erupts and says that everything that has gone before was quite wrong and that now we must go for change.

The important changes we made included much greater use of Grand Committees. On the whole, these have worked well. However, I note that there is still some disagreement between the views of the noble Lords, Lord Filkin and Lord Rooker, and my noble friend Lord Higgins about whether they should become the default mechanism. I note a lessening of the use of Grand Committees for legislation and a greater use of them for other business. This is ripe for review and could include, perhaps, the suggestion that Grand Committees should have the ability and power to sit in the mornings. Equally, another effect of the Williams reforms was to bring in tighter rules on procedure at Third Reading, which, too, should be revised. I very much welcomed what the noble Lord, Lord Rooker, said about that.

There are advantages and disadvantages in all changes, but I refute the claim that we on this side have been resistant to it. We, for example, proposed and would maintain the Delegated Powers Committee, the Constitution Committee and the Economic Affairs Committee. But, given the limited resources of the House, we may wish to look again at the distribution of resources between the committees of the House, especially if we do more pre- and post-legislative scrutiny. No one could help but notice the enormous share of resources that is taken by the European Affairs Committee family overall. I noted that the noble Lord, Lord Roper, is bidding the other way on that to make sure that there should be enhanced resources.

Will the noble Lord support today the establishment of the Leader’s group to consider these matters?

My Lords, I will come to that in a moment, but this is a time-limited debate and I am not allowed any extra time. I always hold to one principle; namely, that this House should not be the same as another place. I do not accept the argument that we need to become more like the other place, sit on the same days or run our internal arrangements in the same way. I was struck by what the noble Lord, Lord Grenfell, said about September Sittings, which may be a way that we should move.

There will be an election in a few weeks’ time, after which there will be enormous change. There will be a new House of Commons. Some of the Wright committee proposals no doubt will have been taken up. Because we are part of a process, we should react to those changes and those, if any, that are taken up by the Better Government Initiative. Of course, there is a need for the House to respect the right of the Queen’s Government to get their business. We have respected that right these past 13 years. I hope that if the Labour Party finds itself in opposition, it will do the same and, likewise, on the Salisbury doctrine, as was upheld in the report of the noble Lord, Lord Cunningham of Felling. I am sure that the Liberal Democrats will sign up to that, too.

The glory and strength of this House, which I have no desire to see changed, is the right, not given to Members in another place, to table an amendment or a Motion, and to have it heard and replied to by a Minister. Few other legislative bodies have that right—there may be none for all that I know. My noble friend Lord Norton put it very well and he will know the answer to that. But it is an extraordinary freedom that we should maintain.

Many excellent arguments have been put forward in this debate, especially that of using technology better, which we should do. I assure the House that having spent 13 years upholding and defending the rights of the Opposition with, perhaps I may say, a very fair hearing from most Leaders of the House with whom I have dealt, I will not change my tune simply because I may change my seat. That would equally be true for any other Leader of the Conservative Party who became Leader of the House. So long as this House continues in the performance of the constitutional role it staked out for itself after 1911, it need fear nothing from any Conservative Government.

I have said that the next Parliament will be different. Whoever wins, we will see a very large change in the House of Commons and have an influx of new Members into this House. And whoever becomes the next Leader of this House should take this debate very seriously, and in my view should meet very early on in the next Parliament to decide how to take forward in a positive manner some of the suggestions that have been made so that we keep our processes up to date and improve the work of scrutiny and of holding the Government to account. That is in the interests not just of this House but also of the Government and, in the long term, the people of this country.

My Lords, this has been a stimulating debate that was much needed in many ways. I, too, am grateful to the noble Lord, Lord Norton of Louth, for calling attention to the case for enhancing the means available to the House for scrutinising legislation and public policy. As Leader of the House, it is my duty and my privilege to assist the House in such endeavours, and in a moment I will respond in detail to some of the suggestions put forward by the noble Lord, Lord Norton, and of course by other speakers in the debate.

I often wish I was a student again, and in difficult days I can see that Hull University is becoming a more alluring place. The noble Lord was right to say that the issues being discussed are essential elements of a healthy political system that links Parliament’s relationship with the Government to Parliament’s relationship with the people, and I would also agree with my noble friend Lord Puttnam that today we are talking about matters of good governance—not so much good government, but good governance.

Before I turn to the suggestions made in the debate, I should like to take the opportunity to dwell for a moment on the considerable contribution that this House makes at present to the scrutiny of legislation and public policy, and on the ways in which we have been able to enhance that contribution over recent years. All of us here present have witnessed the painstaking work done both in this Chamber and in Grand Committee to examine and improve legislation, and to air issues of public policy, although of course much more needs to be done. Noble Lords might recall, for example, the 11 days that the House spent in Committee on the Marine and Coastal Access Bill during the last Session, after pre-legislative scrutiny, or the prolonged and authoritative debate over the amendment of the noble Lord, Lord Waddington, to the Coroners and Justice Bill last autumn. Thankfully, not all our scrutiny is quite on that epic scale, but those episodes should remind us of the quality and magnitude of the contribution made by this House to the crafting of legislation and public policy.

Nor should we overlook the work done outside the Chamber and the Moses Room, although of course there is much more potential to be grasped. I am taken by the suggestion of the noble Lord, Lord Strathclyde, that we should use Grand Committee in the mornings. That is a simple change which would be welcomed by many people, but I shall come back to those issues in due course.

I hardly need to highlight to the noble Lord, Lord Norton, as a former chairman of the Constitution Committee, or to my noble friends Lord Filkin and Lord Grenville, and the noble Lord, Lord Roper, just how vital a role is played by our Select Committees in examining draft legislation and public policy, and indeed in equipping the House with the information we need to perform our scrutiny function effectively. Many of our Select Committees have built up formidable reputations for themselves in this respect, and produce authoritative work. My noble friend Lord Grenfell reminded us that if the membership of this House is to be changed, which under my party would happen, we have to give careful consideration to the impact on scrutiny, which benefits greatly from the expertise of this House. The noble Lord, Lord Maclennan, reminded us that the qualities of this House must not be lost in any reformed Chamber.

I make remarks about our Select Committees not in a spirit of complacency, but because I believe that in what has been a difficult year for the House and for Parliament as a whole, it is important that we should not lose sight of our strengths and achievements, and indeed redouble our efforts to raise awareness of them outside. The noble Lord, Lord Strathclyde, rightly reminded us of the power of this House. So although we have dwelt in the debate on the ways in which we might enhance the contribution that this House makes to our system of governance, let no one be in any doubt that our present contribution is considerable and that we can take pride in it. However, I think it was my noble friend Lord Rooker who said that the bells should be ringing. The bells certainly are ringing. Indeed, one might even detect a note of admiration in the Wright committee report, which surprisingly no noble Lord cited in their speeches. Paragraph 104 of that report noted this House’s,

“commitment to fixed intervals between stages of Bills, the absence of time limitations on debates in the Lords on legislation, and the detailed scrutiny of much legislation taking place on the floor of the Lords Chamber rather than in committees as in the Commons”.

Indeed, I read through the committee’s report and felt that it thought we are doing quite a good job in many ways. But that is not to say that we should rest on our laurels, nor have we been in danger of doing so. Many reforms have been suggested during the debate, and I would remind noble Lords that reform is a process, not an event. This House is engaged in such a process. Looking back over only the past year, we have made advances in our ability to scrutinise legislation and public policy in a number of areas. Evolution and not revolution, as the noble Lord, Lord Butler of Brockwell, put it.

Earlier this month, we passed the Terrorist Asset-Freezing (Temporary Provisions) Bill, which was subject to the fast-track procedure. In doing so, for the second time we followed a new set of arrangements based on the recommendations of the Constitution Committee which are intended to ensure that the House has at its disposal the information it needs to give proper consideration to such Bills, and to the case for fast-tracking the legislation. During this week, the first of a series of national policy statements, the policy statement on energy, was considered in Grand Committee. That arrangement is another innovation intended to enhance the House’s ability to scrutinise government policy formulated under the Planning Act. And earlier today we continued our experiment with Question Time for Secretaries of State based in this House, which I think has been a success and provides a new opportunity for Members to air issues of public policy. I could go on, notably to speak of the new powers that the House has with respect to European Union policy and legislation as a result of the Lisbon treaty and the adoption of the European Union (Amendment) Act. These examples should serve to dispel any notion that we have been standing still. In spite of the challenges we have faced on other fronts over the past year, we continue to find new ways of improving our performance as a legislative Chamber. But, of course, that process must continue.

There is a wide spectrum of opinion among your Lordships on reform of the House: on reform of its composition and means of entry, on the proper role and function of the House, and indeed on reform of our practices and procedures. Focusing as we are today on our practices and procedures, I am conscious that there is an equally wide range of views on the way forward. However, I acknowledge what was said by the noble Lord, Lord Higgins. We are moving towards a consensus on many of these issues and I welcome this.

I have said before in response to an Oral Question from my noble friend Lord Campbell-Savours that I believe that a Leaders’ group should be set up to examine some of the issues raised by noble Lords today. Although I believe that it would make sense to do this in a new Parliament in order to ensure that the momentum behind such a project is not sapped by a dissolution, I have heard the calls for action now. The noble Lord, Lord Strathclyde, was being practical in many ways. We have four and a half weeks before—well, I don’t know.

We have four and a half weeks before the Easter Recess, and that is not very long. However, I will say to my noble friend Lord Brooke that I again undertake to raise the issue at the next meeting of the Procedure Committee. I believe that a Leaders’ group could usefully look at how Members are appointed to Select Committees, how we can avoid duplication with the other place when we repeat ministerial Statements and Urgent Questions, and how we might ensure that in scrutinising Bills that have arrived from the Commons, we focus on the provisions that receive the least attention in the other place. These and many other issues raised today, such as Grand Committees, the use of carryover and so forth, should be considered by such a group. Moreover, it could certainly consult widely, including with the staff of the House.

There is also room to examine how we can ensure that our procedures are more transparent and accessible to Back-Benchers on all sides of the House. Although individual Back-Bench Members can exercise great influence in this House, it often requires close familiarity with our practices and ways of doing things, which can put those who have only recently joined the House, or who attend less frequently, at a real disadvantage.

I should also say a word about the role of the Lord Speaker, who provides an excellent service to this House. I have said previously in response to a Question that my personal view is that, at some point after any new post has been created, there should be a review, but such a review should be conducted separately rather than forming part of the remit of a Leader’s group. The noble Lord, Lord Higgins, mentioned the role of the Lord Speaker at Question Time. That should be looked at in the review of the Lord Speaker’s role.

My noble friend Lord Filkin spoke of the better use of technology, through having Bills on the internet, with explanations of where a Bill has got to in its legislative process. That is a fantastic idea, but much of the information is already available on the Parliament website in the form suggested by him. Moreover, the National Archives are redeveloping their online legislation service to replace the two existing websites and bring together the revised, as-enacted versions of legislation for the first time. The service will also integrate supporting documents such as Explanatory Notes and impact assessments. My noble friend was perhaps speaking of other things that should be on such a website. If there should be, we must put them there, because it is mad not to make proper use of all the technology available to us.

The noble Lord, Lord Norton, made a strong case for Joint Committees on pre-legislative and post-legislative scrutiny. I naturally agree with the views expressed by my noble friend Lord Davies of Abersoch in Grand Committee yesterday. We should certainly consider these issues further, but the noble Lord was right that both Houses would have to agree. There are also resource implications. While I accept that frugality should not impede us in doing a better job and do not think that democracy should come on the cheap, we have to think of resources.

The noble Lord, Lord Butler of Brockwell, suggested a Joint Committee to look at the quality of legislation, which is another interesting suggestion. However, we have already discussed today three new Joint Committees; we are having a plethora of new Joint Committees. That may not be a bad thing, but these matters need proper consideration. I have carefully read the document on good government to which the noble Lord contributed. There are some excellent suggestions in it, and I look forward to receiving the report from the group that he chairs. Various noble Lords mentioned carry-over, whose greater use in this House we very much welcome.

The noble Lord, Lord Norton, spoke also of committees in this House. As has been mentioned, the Liaison Committee will undertake a comprehensive review of the House’s Select Committee activity early in the new Parliament. That would be the most appropriate forum in which to consider many of the suggestions made today.

My noble friend Lord Rooker and the noble Lord, Lord Maclennan, quite rightly said that there are many areas of public policy which are not properly scrutinised—obesity, for example, was mentioned—and that there should be a greater role for committees in this House. We should perhaps ask the Liaison Committee to look positively at that.

Many noble Lords understandably spoke of pre-legislative scrutiny, the benefits of which are clear: the delivery of better legislation and its more efficient passage through Parliament. I agree with noble Lords that more pre-legislative scrutiny assists in the development of strong and effective legislation. Wherever appropriate and practicable, it should be the norm. The Government currently have six draft Bills published, and we remain committed to publishing as many draft Bills as possible. While pre-legislative scrutiny is not appropriate for all Bills, alternative forms of consultation should ensure that policies are robust and well considered. My noble friend Lord Puttnam made a very persuasive and practical argument in favour of pre-legislative scrutiny, saying how we as legislators and the legislation suffer if there is a lack of it. The noble Lord, Lord Campbell of Alloway, made a very interesting contribution. There have been notable successes with draft Bills that have been scrutinised by Joint Committees of this House and the other place. I would cite the Bribery Bill, which recently completed its passage through this House, and the draft Human Fertilisation and Embryology Bill, which was of immense assistance to me and my colleagues in government when I took it through the House.

We have no objection to making better use of the Special Public Bill Committee procedure, which we have recently used successfully for the Committee stage of the Third Parties (Rights against Insurers) Bill, which is a Law Commission Bill. It is essentially a very good idea. There are one or two drawbacks; for example, proceedings in Select Committees are less accessible to Members of the House, as only Peers nominated to the committee can participate fully in the proceedings. My noble friend Lord Grenfell spoke powerfully of the need to use Public Bill Committees better to engage with the public, with which I agree. My noble friend Lord Filkin spoke of the time implications of more use of this procedure, which should be taken into consideration.

My noble friend Lord Brooke mentioned petitions and online consultation, which should also be further considered. While I do not say that it is a bad thing, I was interested to read in evidence given to the Wright committee a comment that the public’s desire is for influence rather than for participation. I make no judgment; I just reflect that comment.

On public engagement, the Information Committee has produced an excellent report. We briefly debated it ahead of its publication, and I hope that there will be opportunities for a longer debate. I, too, welcome the Lord Speaker’s work in outreach.

In the debate on the Loyal Address, my noble friend Lord Rooker said that Bills coming to this House should have an accompanying note stating which amendments had been debated. That is a fabulous idea; I want to take it forward; I have mentioned it to the Procedure Committee. However, in looking at the proposal more closely, it has become clear to us that producing this type of document would be far from straightforward. It is not clear how one might impartially determine which provisions of a Bill have received an appropriate level of scrutiny in the other place, and there are some problems of methodology. That is not to say that we should not try to do it—we shall try, but it is not as easy as it might at first look.

Should Committee stages be taken off the Floor of the House? There has been an interesting debate today, and we will look at the idea further. The noble Baroness, Lady Shephard, said that the world is changing and that we must change with it by looking at cross-cutting issues, in relation, for example, to security. I wholeheartedly agree with that. Many would agree that we need less and better legislation, but I have to tell her that badges are still worn with pride, as they would be in any Government. However, I take issue with her views on the Personal Care at Home Bill, because that will have a profound effect on people’s lives.

All regulatory policy is open to scrutiny by the Regulatory Policy Committee, an independent body, through published impact assessment. The noble Lord, Lord Alderdice, was right that the new Parliament will be a great opportunity for both Houses together to improve the ways in which we work. I hope that we will all seize on that. There is much that we can learn from colleagues in other legislatures, but there is also much that we can learn from each other in both Houses of Parliament, which we should do more of.

It was agreed in another place on Monday night that the question of sitting in September should be reconsidered in the next Parliament following a recommendation from the Wright Committee—but, of course, we are not bound by the decisions of the Commons on that.

This has been a healthy and timely debate as we come to the end of this Parliament. Over recent months, we have put in place a number of new arrangements designed to enhance the House’s ability to scrutinise legislation, air issues of public interest and hold the Government to account. Like my noble friend, I believe that strengthening Parliament is good not only for Parliament but for government as well. It is right and proper that we should continue to look for new ways of adjusting and improving our practices and procedures to ensure that they are fit for purpose.

Today we have evidence of many potential new improvements. We must not be paralysed by either procedures or processes; we seek improvements because we understand the importance of good governance. Today’s debate has helped to move us forward. I have said that I hope the process will culminate in the establishment of a Leader’s group to conduct a systematic review of some of the issues raised today and on previous occasions by Members of the House.

I conclude by thanking all noble Lords who have participated in the debate today, which I am sure will be a huge catalyst for the process of change.

Four-and-a-half weeks is a very precise timetable which, on my calculation, takes us to 30 March. Is the noble Baroness content to lead tonight’s six o’clock news?

My Lords, my four-and-a-half weeks of legislative time led me to the Wednesday before Maundy Thursday. I believe the House will wish to break for an Easter Recess irrespective of what happens about the election.

My Lords, this has been a superb debate. The contributions have been notable not only for their number but for their quality. I am grateful to everyone who has taken part, not least the three party Leaders, and I am grateful for the response of the Leader of the House; I know how seriously she takes her responsibility in that capacity. She will be most welcome to enrol at the University of Hull—perhaps following my noble friend Lady Miller of Hendon, who has just graduated from the university with an MA in legislative studies

There has been a clear theme throughout this debate—that we do a very good job but that we can and should build on that, not least to enhance our links with the public. There have been some excellent proposals and, as my noble friend Lord Higgins and the noble Lord, Lord Filkin, said, a consensus appears to be emerging. Like the Leader, I reiterate the words of the noble Lord, Lord Rooker: good government benefits from a strong Parliament; a confident Government should welcome changes designed to strengthen Parliament.

Like the Leader, I trust today’s debate will constitute but one part of a process of ensuring that this House enhances its role as a crucial part of our political system. I look forward to moving ahead on the proposals that have been put forward. We have the political will; we now need to exploit it. I beg leave to withdraw the Motion.

Motion withdrawn.

Higher and Further Education: Funding

Debate

Moved By

To call attention to the consequences of the cuts to higher and further education funding that have been announced; and to move for Papers.

My Lords, this is the last occasion in this Parliament on which we will have an opportunity to call the Government to account for their policies in higher education, universities and FE colleges. We have just had a debate on scrutinising legislation and public policy—how the House of Lords can get better. It is a disgrace that the Secretary of State is not replying to this debate. He is the author of the policy and, if you are going to improve the ability of the House of Lords to scrutinise public policy, you should have the Cabinet Minister replying. It is very rare for this House to have a departmental Cabinet Minister in it. In the House of Commons there would be no question at all: the House would have insisted that the Secretary of State replied. In fact, the Secretary of State said earlier today that he had departmental business. I suspect he is trying to settle disputes between the Chancellor and the Prime Minister and other members of the Government. However, he has a duty to be here because the cuts he has introduced will have a substantial effect on the whole of the university and FE world.

There are 350 further education colleges in which 3 million people are trained every year. The cut in this sector is 16 per cent but, as it is focused on adult education, 147 colleges have said that they will have to cut their courses by 25 per cent. The head of Walsall College, Amrit Basi, said that this September he will probably have to cut by 25 per cent, which means 8,000 fewer adults in training. On Tuesday I went around an FE college in London and was surprised at the number of people in their twenties and thirties who were going through retraining; it was a very large number. I spoke to one young lady in her late twenties, I thought, who was training to be a mason; she was chiselling out a piece of Portland stone. I asked her what she had done previously and she said that she had been on the trading floor of an investment bank. So she was at least learning a craft that would be useful in her life. All around, there were other people like her doing various courses. These are the courses that are going to be cut.

On Teesside, for example, the House knows that the Corus plant has been closed, as have all the ancillary companies, and that this has devastated the area. There is massive unemployment, with people of all ages—twenties, thirties, forties, fifties—out of work. So what is happening to the colleges in that area? Middlesbrough got a big cut; the principal of Redcar said:

“These cuts will have an impact on adults and those who wish to develop their skills for working life”,

and there have been cuts in Stockton and Cleveland. So in the Teesside area you have the extraordinary anomaly of unemployment increasing dramatically and cuts in adult training. Is that joined-up government? No, it is disjointed, disorganised and disastrous government. It is extraordinary that the choice in Teesside is between training or the dole, and for a Labour Government to accept dole as the answer by cutting the training places in Teesside is absolutely disgraceful.

I turn now to universities. The cut this year is £449 million. The Minister will say that that is 5 per cent and the universities can accommodate that. However, it is much more than 5 per cent because it is in addition to the £600 million that has already been announced for the following years. The real cut, in fact, is £1 billion—that is what we are talking about—so beware the honeyed words that you might hear in the Minister’s reply.

This is the biggest cut for 30 years. Over the past 30 years we have had a magnificent record in developing higher and further education; it has been a golden period. However, before the Minister takes all the credit for the Labour Government doing this, let me remind him that the big increase in students took place in the Thatcher/Major years, when the figure doubled, from 500,000 to 1 million. In a speech I made in 1989 at Lancaster University I did not set a target but forecast that this would happen because of the natural ambition of young people wanting to go into higher education to improve their lot in life, to improve their education and to move on. It was going to happen; the circumstances were in place and there was rapid growth. In the Blair/Brown years there was an increase of 500,000 students—50 per cent, not 100 per cent—to about 1.5 million.

As a result, both Governments provided substantial money to this sector. We managed to retain certain world-leading universities, and we still have a clutch of universities and colleges in the top 20 in the world. The universities make an important contribution to the GDP of our country—nearly 2.5 per cent. In research, we box above our weight; we have 1 per cent of the world population and 12 per cent of the scientific citations. We should be immensely proud of this. Universities of such quality are a great asset to our country. America and Britain stand out in the world as having these quality institutions. However, they are always under threat through a lack of money. That is why the Government, quite correctly, introduced fees.

I was speaking yesterday to the noble Lord, Lord Rees, the Astronomer Royal and Master of Trinity College, Cambridge, another great gem in higher education. He said that some years ago we were able to attract some of the greatest scholars, researchers and teachers, but now it is much more difficult. This is because other countries—not America—are trying to catch up and are offering high salaries and attractive terms. All the time money has to be found for the university sector, not cuts. No Government, of any party, will ever provide universities with the sort of money that they need or deserve, so the damage to universities will be quite considerable.

The quality of speakers in this debate, including chancellors, vice-chancellors and heads of colleges, tells its own tale. Every university is going to be hit in one way or another—some very severely indeed. The sector has estimated that some 15,000 jobs are likely to be at risk. I do not think that it is shouting “Fire!” unnecessarily; it is already beginning to happen. King’s College has already announced a redundancy programme of 205 staff; Leeds is expected to make 700 redundant, Sheffield 340 and Hull 300. I was saddened to read in the evidence sent us by the British Medical Association that in the medical faculty at Imperial College, one of the spectacular great colleges of the world, 26 people have already been made redundant and there is a threat that another 50 may go. This, after 12 years of a Labour Government, is really a great sadness and a national disaster. It is reflected through the whole of our estates of our universities.

Teesside University has come together very well and won a prize last year for being one of the most successful universities. It had devised a plan this year for a scheme of £2 million to help poor students with bursaries and scholarships, but the university has had to scrap it. One perverse consequence of this programme of cuts is that the poorer students are the ones who are going to be hit. That is an extraordinary thing for a Labour Government to do. If you restrict universities on the numbers that they can take, they will raise their entrance standards; that is already happening across the board. Some universities are saying that they will require three A-levels of AAB rather than of ABB. Who benefits from that? It will be the beloved sectors that the Government want to promote—private education and grammar schools, along with some of the better comprehensives. So their policy is having the most extraordinary perverse effect on social inclusion. It is extraordinary that the Labour Government, who have made such a thing about social inclusion in higher education, are creating and implementing a policy that will make it less, not more.

As for the numbers of students likely to suffer as a result of this policy, there are various estimates by various vice-chancellors and the head of the Russell Group. Between 200,000 and 300,000 youngsters will not be able to get to university or college this year. That is denying a generation; it is a generation abandoned. I am sure that those who voted for new Labour in 1997 did not think that after 12 years they would abandon a generation of youngsters, who will not go to college this year. The numbers have been cut; the 10,000 that the noble Lord, Lord Mandelson, increased last year have been removed totally and all universities are beginning to say that they will recruit less. This is a tremendous sadness; it is not a policy that can be defended in common sense. What will we do with those 300,000 who cannot get into college? Some of them will go on to the dole queue. Again, it is the Teesside conundrum. It is very regrettable that this policy has actually occurred. Of course, if universities dare to increase their recruitment over the figures set by HEFCE, they will be fined £4,000, which is again an extraordinary policy to follow.

The last cut from which universities will suffer is capital, which will be cut by 15 per cent. I seem to remember hearing a speech by the Prime Minister about 18 months ago in which he said that one way in which to get out of this recession was through public investment in building projects of one sort and another—the Roosevelt pattern, the Keynesian solution. Well, that will not happen in the universities, where 15 per cent will be cut.

I had a letter from the noble Baroness, Lady Andrews, who was recently a member of the Government but is now head of English Heritage. If she was still a member of the Government, she would be making a speech similar to the one that the Minister will make today. She is very concerned, at English Heritage, that the £40 million that was given last year to the universities right across the board to restore their historic buildings is all going to be cancelled. They will not get a penny. This is capital building in a recession! These are a Government of adjectives, when they talk of policies. This is not a constructive policy at all, and the losses are enormous.

Oxford, whose chancellor is here, will lose £5 million, while Cambridge will lose £4.25 million. The vice-chancellor of Durham has 65 listed buildings in his estate, some dating from the 11th century; he will lose £700,000, which he says that he will have to spend on the buildings as they are actually crumbling. So it has to come out of the teaching grant.

The Government are following a crazy policy on all this. They are not giving enough money to increase training for the unemployed and they are cutting the capital costs which was supposed to help in employing the unemployed. I hope that the Minister is taking a little of this on board and will be able to answer some of it.

What should we do? First, I would recommend—and I hope that the next Conservative Government will do it—removing responsibility for universities and further education from the Department for Business, Innovation and Skills. In the old days, it was always called the Department of Trade and Industry, but again adjectives have won. The department run by the noble Lord, Lord Mandelson, should not be responsible for universities and FE; they should be returned to the education department. It is the natural continuum. If the education department had been responsible for universities and FE this year, I can assure the House that the cuts would not have been as severe. Having been responsible for the budget of that big department for more than four years, I know that it is always possible to find a little bit to cushion the blow. It would have been quite possible for the education department to have found some of that £449 million and given it to universities and FE colleges. That is one advantage.

I am glad to see that the Tory Party has said that it will increase the number of places this year by 10,000. David Willetts has made that commitment, and we must hold him to it after the election and ensure that it is somewhere in the manifesto. That will be paid for by an earlier payment of student loans to the student loan scheme—so it is costed.

Furthermore, there must be a fundamental look at the funding of universities. This is a spatchcock set of proposals, desperate because the Government are in a desperate position. Of course, the university world will have to make some cuts in this situation, and I am not saying that they should not have to take some. But these cuts are too savage and far too high, at 10 per cent for universities and 16 per cent for FE colleges. That means that we must put a lot of hope and expectation in the Browne committee, reporting later this year, which is looking at fees and bursaries. That must be the way forward.

We spend 0.9 per cent of our national wealth on universities, while the OECD spends 1.1 per cent, although those countries get worse value than we do because our universities are rather better than most universities in the OECD. We are quite good at getting value for money, but, frankly, we will have to spend more. In this knowledge-based economy into which we are moving, we must ensure that higher and further education are really pillars of growth and great attraction, which will make our economy and people much stronger and happier.

Before we hear from my noble friend Lord Parekh, I observe that we have no spare time whatever in this debate. If every speaker sticks to a limit of five minutes, we will finish exactly on time, but if speakers run over five minutes we will not. When five minutes show on the clock, it means that your time is up.

My Lords, I begin by thanking the noble Lord, Lord Baker of Dorking, for securing this debate and for introducing it with the eloquence and insight that we have come to expect from him.

The Government have announced cuts amounting to about £900 million out of a total budget of £12 billion over three years, which comes to something like 8 or 9 per cent of the universities’ state-funded budget. I realise that we are all passing through difficult times and that universities cannot be exempted from their share of painful cuts. At the same time, the Government need to realise that universities can go only so far and that once their international standing and their commitment to teaching and research are weakened, it will take years to rebuild them. What is therefore needed is a spirit of partnership between the Government on one hand and the universities on the other. I first want to emphasise that the universities need to do a little more than they have done and then I will concentrate on what the Government need to do in response.

Universities have already done much to diversify their sources of income. Their reliance on state funding is far less than it was about 15 years ago. They can go further, however. There could be greater involvement of the alumni, greater collaboration with our EU partners and the universities in EU member countries, and greater collaboration with universities in the United States and developing countries. The universities can also do much to rationalise their academic offerings and the way in which courses are delivered. Again, they have done much over the past 15 to 20 years, but there is still room for improvement. They can play to their strengths and specialise in certain areas rather than duplicate what neighbouring universities do. They can also put on flexible courses and offer work-based learning so that students do not have to travel to the campus. They can work closely with industry and business and share the costs of education with these institutions. In some cases, technology can be more widely used and we can save on academic labour power. Therefore, I think that there is room for improvement on the part of universities and it would be wrong for us academics to deny that universities, too, must accept their share of the burden.

The Government need to bear in mind three important principles. They must realise that, while it is right to encourage universities to find research money elsewhere, that is not possible in many areas, such as the arts, the humanities and some social sciences. There is therefore a danger that the universities might neglect these areas because money is not available and concentrate entirely on sciences and technology. I think that the Government are, wittingly or unwittingly, in danger of giving a technocratic bias to our university education, which would be disastrous. A university is not simply a place for science and technology; it is the custodian of our civilisation and the values that the country stands for and it cannot ignore its role in those areas. If we are not careful, we might end up in a funny kind of way reversing what Margaret Thatcher did. She turned polytechnics into universities and, if we are not careful, we might end up turning all or most of our universities into polytechnics, which would be just as great a mistake.

As the noble Lord, Lord Baker, pointed out, in a knowledge-based and highly competitive world the Government need to make sure that our institutions of higher education are among the best in the world. Our universities have a lot to be proud of. They are the second most popular destination for overseas students. They get the second highest number of Nobel prizes and other forms of international recognition. They contribute £33.4 billion to the economy, which is 2.3 per cent of GDP. However, other countries are beginning to catch up with us and are even overtaking us. France has decided to contribute €11 billion to higher education. Germany has decided to contribute €18 billion to world-class research institutions, alongside university education. President Obama has committed an additional sum of $20 billion for federal education spending. It is important to bear in mind the fact that the French and German money is not just going to science and technology; it is also going to centres of migration studies, cultural studies, studies of long-term economic and political trends and so on.

It is important that the Government should constantly monitor how we are competing with other countries and what they are doing that we are not doing. They should also bear in mind the fact that, beyond a certain point, university education should be a protected sphere in exactly the same way as the health service, schools and the police are. Unless we recognise that, we are in danger of destroying great institutions that we have taken hundreds of years to build.

I congratulate my noble friend on securing this debate on higher education. Like him, I find the absence of the Lord President lamentable. I declare an interest as chancellor of Oxford University.

The Prime Minister regularly refers to the importance of our world-class universities and regularly talks about ensuring that they remain at the top of the class. In a recent speech, he opined that over the next 20 years education is likely to be this country’s biggest export. However, there is a certain disjuncture between his remarks and what is happening on the ground. My noble friend pointed to the £1 billion in cuts that has been identified by Universities UK. The noble Lord, Lord Parekh, referred to what is happening in our competitor countries—in France, Germany and the United States. As we know, the Institute for Fiscal Studies has predicted that there could be another £1.6 billion in cuts if the Government are to secure their target for cutting the fiscal deficit while ring-fencing programmes such as health.

I have on previous occasions welcomed the increase in spending on higher education since 2005-06. The Lord President has been very happy to quote me saying that, so I hope that he will quote what I am going to say today, if he can find the time to read this debate. What we are seeing over the years until 2012-13 is the obliteration of the splurge of spending on higher education since 2005-06. In fact, it is worse than that. If you look at the Universities UK figures, you see that, even at the high point of this spending and even with three years of tuition fees, the unit of resource for every student is in real terms £7,500, which is £1,500 less than it was when my noble friend was the Secretary of State for Education. There is substantially less money behind every student today. I hope that the noble Lord, Lord Browne, and his review provide some of the answers that are required, but it will be difficult to expect him to go the whole way.

Let me describe briefly the situation at Oxford. It costs about £16,000 a year to teach a student there. Public funding plus tuition fees cover only about half of that, and the gap is steadily widening, not least as we have already had a cut of £11 million in our teaching grant and I doubt that that is the end of the road. One area that concerns me particularly is the impact on the humanities, which I referred to in a speech in this House before Christmas. In Oxford, we did very well out of the 2008 research assessment exercise. The research power index ranked Oxford as top nationally in French, German, Asian studies, English, history, classics, theology, philosophy and Middle Eastern and African studies. However, the Government, in order to accommodate an increase in spending on the so-called STEM subjects and to spread what is left over a rather wider area, have made substantial cuts in the QR funding for those top-of-the-league subjects at Oxford. We have seen a cut of over £600,000 for French, which is about 43 per cent, and a cut of over £500,000 for English, which is about 18 per cent, while the historians have taken a cut of well over £1 million, which is over 30 per cent. I warned before Christmas, as I say, about the problems that the humanities face. The Government sometimes give the impression that they do not much care what happens to the humanities because they are not, in their view, useful. I think that that is a particularly bleak view of the role of universities. If we are having those problems at Oxford, I hate to think what problems others are facing.

I just want to repeat one point that I made, again before Christmas. I do not think that, given the small proportion of GDP that we spend on higher education, we can go on giving young people what purports to be the same university experience in exactly the same institutions and at the same time defend a world-class research base. We simply are not spending enough money to do both. We will have to choose and we will have to reorganise the sector. It is not enough to fudge the figures, to deny that there is any pain and to pretend that all is for the best. Put very simply, it is not all for the best.

My Lords, this is the second time in eight years that the House has been indebted to the noble Lord, Lord Baker, for introducing a debate on this topic. The noble Lord, Lord Mandelson, has announced swingeing cuts in the financing of universities and added his name to those who call for a much more vocational, utilitarian and philistine approach to both teaching and research. In this, it is a re-echo of one of the main thrusts of the Dearing report in 1999 and will doubtless be rehearsed again when the noble Lord, Lord Browne of Madingley, completes the latest review of university financing. It is not new. The Edwardian period was characterised by The Quest for National Efficiency. Then, Governments of all hues were alarmed that the UK would lose out to the superior competitiveness of German and Japanese industry. Now we are told that the UK has to compete with the rising economic power of India and China.

The recurring themes of efficiency, modernisation, vocationalism and prosperity have resulted in different policy manifestations over the years. Many of them were in response to the clamour of industrialists. The problem is that to pursue such siren voices is to follow the lurchings of a drunk; industry always wants the opposite of what it is getting. It is like a perpetual five year-old’s birthday party: no present satisfies.

It is not entirely, or even partially, industry’s fault. Policy-makers, whether Ministers or civil servants, have never stood back long enough to produce a coherent system of higher education. It has all been, as the noble Lord, Lord Baker, said, too piecemeal and knee-jerk. As I have said before in your Lordships' House, UK tertiary education ought to be based on something akin to Clark Kerr’s comprehensive plan which revolutionised the situation in California.

Higher education needs to be regionalised. Its academic staff should teach on more than one campus; a peripatetic element would preserve a greater range of disciplines at a cheaper cost. Courses should be offered on a continuous basis so that students can take them over an intense period, à la the University of Buckingham, or over an extended one, à la the Open University. Such innovations would make higher education much more consumer-friendly and cost-effective.

I was a faculty dean at the time of the Thatcher cuts in 1981. Most universities adopted a rather desperate slash-and-burn approach. It will be much worse this time round, with compulsory redundancies being inevitable. I am glad that I am no longer a vice-chancellor.

In 1981, higher education funds were slashed throughout the developed world, with one exception. Lee Kuan Yew increased the budget in Singapore on the grounds that its best natural resource was the grey matter of its young people and that that had to be cultivated. The noble Lord, Lord Mandelson, should ponder that.

There is one final remark that I shall make—one that concerns intergenerational equality. As I wrote in a letter to the Guardian some months ago, it rather sticks in my craw that this generation of legislators is intent on placing a much greater share of the costs of third-level education on to the students. It is a generation that itself benefited from state scholarships and county awards that covered both fees and maintenance costs. The rate of return on a degree accrued significantly to the advantage of the individual. With a swingeing increase in fees, as the noble Lord, Lord Browne, is likely to recommend, the costs will be to the severe detriment of the graduate. There is a strong case for considering the imposition of a retrospective tax on those graduates who enjoyed the earlier regime that lasted for a half century. That would go some way to preserving equity between the generations.

My Lords, I declare an interest: I am chancellor of the University of Dundee, a leader in life sciences research, and I am also a member of the council of the Medical Research Council.

Discussion related to funding arrangements for universities has to be conducted in the context of potential changes in the research assessment exercise, the widening participation agenda and the application of market forces to university education. The current government approach to all this gives one a feeling that higher education is now being used instrumentally as a commodity and a low-grade instrument of the economy and the marketplace, rather than in its own right as something that enriches society through thought, research, education, analysis and contribution to knowledge and understanding.

Government interactions affect teaching, research and university planning and strategy. In teaching, academics are now rewarded or punished for meeting or failing to meet student recruitment targets. Students are seen in market terms, as purchasers of educational services, forcing redundancies of staff or forcing universities to increase the number of overseas students, selling places to the paying public.

In research, Alistair Darling, the Chancellor of the Exchequer, revealed in his Pre-Budget Report in December 2009 that there will be substantial reductions in higher education, science and research budgets between 2011 and 2013. Peter Agre, the 2003 Nobel laureate in chemistry, stated:

“The nations that fund science are investing in the future, but those that cut funding are hoping for the best”.

On 21 February 2010, Ralph Cicerone, president of the US National Academy of Sciences, said that the cuts in university and research budgets will force the most talented British scientists to find jobs in the US, Singapore and other countries that are continuing to invest in science throughout the global recession.

Yesterday, I heard our own 2009 Nobel laureate in chemistry, Professor Venki Ramakrishnan of the MRC laboratory of molecular biology in Cambridge, make a similar plea to parliamentarians. He said that he moved to the United Kingdom from the United States 10 years ago because the climate for basic science research in the UK was ideal at that time. His research already shows potential for developing new antibiotics. Although the research councils do fund blue-skies research, which is the basis of the renewal of knowledge and the development of new knowledge, there is increasingly a push towards more limited applied research.

Thus, government control of finance for universities which is tied to short-term economic returns extends beyond the direct funding that they provide for capitation. At a more macro level, the drive to treat research as an income-generating, cost-covering activity requires more staff to spend more time seeking outside funding, while those working in research units spend their time accounting for their time. Senior researchers spend more time on forward financial planning and answering questions from accountants about recovering 89 per cent of overheads than in doing actual research.

When it comes to planning and strategy, unstable government policy and the instrumental use of universities for political purposes, subject to the vagaries of the Treasury’s thinking, mean that universities themselves cannot think strategically. Government should think hard about the nature and benefit of universities. The research that they conduct, especially basic and speculative research, is the basis of future economic development. Scientific research is a strategic good and the basis of future income generation and inward investment. Tying research to the market and the economy is short-term, reactive panic-thinking that will disallow the development of a solid base and production of future generations of scientists.

Further cuts in funding, while continuing to put pressure on the universities to teach disproportionately high numbers of students—to generate income, to undertake short-term applied research, and to save money on staff and activities—will lead to our best academics leaving for universities that will use their research skills; to our teachers being burnt out and alienated from the market process; and to our students being offered an education that is not what university teachers would wish to offer nor what the students would wish to have.

We have already heard comments about how Obama, Sarkozy and Merkel have announced significant investment in universities since the global economic downturn, recognising the role that universities can play as an economic stimulus in long-term recovery. So my questions to the Minister are these. First, what do the Government understand the special purposes of universities to be? Secondly, in the face of significant investment in universities in other countries, when will the Government maintain the UK’s leadership in teaching and research by committing to long-term planning?

My Lords, I also am grateful to the noble Lord, Lord Baker, for his eloquent and effective introduction to this debate. In the diocese of Leicester we are delighted to work with three high-performing universities: Leicester, Loughborough and De Montfort. I declare an interest as a governor of De Montfort University and as chair of the governors of Westcott House theological college in Cambridge. It is from that direct personal experience that I want to say a word about higher education in general and about theological education in particular.

De Montfort University has performed outstandingly in widening participation in recent years. It has a growing reputation, a track record of strong student demand and excellent research records, yet it now finds itself facing an already announced 3 per cent reduction in recurrent grant, closing prematurely entry to a range of faculties—almost unheard of at this stage in the academic year—and rethinking its approach to widening access. Likewise, Leicester University has an exceptional recent record; it was named university of the year in 2009 by the Times Higher, and applications for undergraduate study have increased by over 75 per cent in four years.

What are those universities and others like them asking from the Government in the present uncertainties? I shall list four or five requests. First, implement the findings of the fees review swiftly and give higher education institutions more flexibility to generate their own income. Secondly, treat universities as trusted sponsors through the implementation of the points-based immigration system; do not tie universities in red tape that will threaten a valuable source of cultural diversity and income on campus. Thirdly, do not cut the sector twice. The cuts already announced are painful, as we know, but what is unannounced—and the fear that higher education may be disproportionately targeted—is probably more of a concern and a barrier to any medium to long-term planning. Finally, find some further limited expansion in the light of growing demand for places.

It is well understood that funds are limited and entry to university should be competitive, but the current economic circumstances are leading to unprecedented demand. Talented young people, as the noble Lord, Lord Baker, pointed out, are better off in higher education than on jobseeker’s allowance. Above all, we should help these institutions to remain internationally competitive. As has already been pointed out, the UK punches above its weight in academic citations—one reason why universities are able to generate billions for the economy through international student recruitment. Other Governments around the world are responding to the challenging economic climate by investing in their universities.

Perhaps I might also say a word about theological education. It is not just a minority interest for the church but a substantial interest for the building of social capital for the nation. As noble Lords will be aware, HEFCE was directed in 2007 to no longer fund students who are studying for an equivalent or lower-level qualification. That posed a significant if unintended risk to the church, as 75 per cent of ordinands in training already have a first degree. HEFCE has since been helpful in giving the church a two-year breather to explore exemptions to the rule offered, mainly through foundation degrees and employer co-funding. What is to happen next in that area?

If HEFCE funding is drastically reduced, we fear that the church will be able to afford far fewer people undertaking university degrees in our theological colleges, especially in Oxford, Cambridge, Durham and Leeds. That could easily have the effect of creating a generation of potential leaders who would not have had the opportunity to study to the highest possible level in a university department alongside people of no faith or of another faith. That is an important formational opportunity, not just for the church but for society as a whole. I hope that the Minister will be able to offer some comfort and reassurance to the church in its serious efforts to serve the needs of the whole nation, especially at a time of severe economic downturn.

My Lords, I, too, thank the noble Lord, Lord Baker of Dorking, for providing us with the opportunity to debate this important topic. I declare an interest as the principal of Jesus College, Oxford. We have heard many times, from politicians across the political spectrum, of the importance of the knowledge-based economy for our future. I find it very hard to reconcile that with the position of cutting funding for universities in England over the years ahead. As the noble Lord, Lord Patten of Barnes, has pointed out, it is not as though the university sector has been well funded in historical terms in recent years. Per capita funding now, before any of the cuts are introduced, is 17 per cent short of that of 20 years ago.

When David Lammy, the Higher Education Minister, said last September that:

“Universities have had it good for more than a decade”,

he had not looked far enough back in the record. Our investment in universities is not only low in the historical context but internationally. As others have pointed out, our competitors in other countries not only mouth the words about the knowledge economy: they put their money where their mouth is. The UK spends 1.3 per cent of GDP on higher education as a whole and the United States 2.9 per cent; the OECD average is 1.5 per cent. Does the Minister agree that our universities are underfunded both in historical and international contexts? As we have heard, the gap with other countries will widen in the years ahead. While we are cutting funding in higher education, others are increasing their expenditure.

The crucial question for the future is how the funding of universities can be put on a firm and sustainable footing. I have two points. First, the elephant in the room in any discussion of university funding is the binary divide. Until 1992, we had a funding system that encouraged diversity of mission among higher education institutions. Polytechnics focused on skills and training, often for local industries, while universities focused on education and research across the sciences, medicine, social sciences and humanities. That system emulated much that we admire in other countries such as the United States, where different higher education institutions fulfil different needs of society and of individuals. Since 1992, we have seen mission drift, with former polytechnics often aping the older universities—driven by the single ladder of reward up which all universities try to climb.

If there are to be cuts in funding, differences in mission should be rewarded by recognising the difference between research-intensive universities and institutions that provide training in skills and technical subjects. The latest RAE, however, led us in precisely the opposite direction, with the proportion of funding going to the Russell group of research-intensive universities declining by about 5 per cent. If we are to retain world-class universities, we need to distribute funding in a way that protects those intensive research institutions rather than spreading scarce resources thinly across the whole sector.

As others have already said, we are the only country outside the United States to have universities in the top 10 in the world. That is what enables us to attract the best students and academics in a highly competitive global market for talent. Other countries such as France, Germany and China are concentrating their resources in their leading universities. Does the Minister agree that our rivals in other countries will be absolutely delighted to see our pre-eminence destroyed by cuts in government funding?

My second point concerns student fees, currently under review by my noble friend Lord Browne of Madingley. The future of student fees and of university funding should, in my view, be linked to three basic principles. First, access to universities should be needs-blind. Secondly, universities need more income if they are to be sustainable and internationally competitive. Thirdly, not all universities should be charging the same fees. You do not buy a Rolls-Royce for the same price as a Ford Escort; students should not expect to pay the same for an education at all institutions.

In conclusion, our universities are one of the few enterprises in which the UK remains an undisputed world player. The then Poet Laureate, John Masefield, said on receiving his honorary degree from Sheffield University in 1946:

“There are few things more enduring than a University. Religions may split into sect or heresy; dynasties may perish or be supplanted, but the … University will continue … and the thinker and the seeker will be bound together in the undying cause of bringing thought into the world”.

Let us not destroy that ideal by ill thought-out cuts in funding in our world-class universities.

My Lords, I first declare an interest in terms of my employment at the Institute of Effective Education at the University of York, and as a member of the council at Goldsmiths College. I also welcome the debate. It is a timely opportunity to discuss a serious issue, which worries not only those working in universities but everyone who has a child who wishes to go to university, or has skills that they need to upgrade. I am not taking away from the dire situation that many institutions in both higher and further education will be in. I do not think the Minister will say that the cuts that will come will make no difference. To cope with that, we will certainly have to be far more radical in our thought than we have been over the last 10, 20 or 30 years.

I could also make a speech about the achievements of this Labour Government in their ideas and investment in further and higher education during their time in office. I know that the Minister will make that speech, so I will not use my far fewer minutes in doing so. However, the Government have a good record, and one to be proud of. That does not take away from the difficulty facing the sector now. There is no doubt that if there were no cuts, or more money could be invested in the sector, they would make good use of that.

Fundamentally, my point is that it is easy to have a debate and say that this round of cuts will damage our further and higher education sectors. Indeed, it might. However, the truth is that those sectors do not have an adequate way of financing themselves, even before this round of cuts. Unless we face up to that fundamental issue, we will just be talking about something that is the end of a long line of challenges that the sectors have faced. The main message of my contribution is that the Government’s agenda for higher education is right and should not change. However, the structure that is needed to deliver that agenda is not yet on the table, is not well worked out and is not one that faces us today. There has been a need radically to review the structure and financing of higher education. Maybe, from what is bad news in this round of cuts, we could get some good things if we put our minds together.

If you look elsewhere in the education system, be it at early years, schools or parts of further education, they have all had fundamentally to change how they do their jobs and how they get their money to meet the demands of the modern economy. I do not believe that universities have been through that process. They have not modernised and asked tough questions in the same way that many other parts of the education system have. I am not saying that change has not been made, but now the financing means that it is still a better deal for those students of traditional subjects on three-year courses straight from schools at research-intensive universities. Those universities that come out of it best are still those that are research-intensive and offer traditional subjects—not those that have excelled at the access agenda.

If we are to have radical thought, we must challenge some of the assumptions that we have veered away from. I very much agree with the previous speaker, who talked about mission drift. Let us have the mission drift that we have seen since the end of the polytechnics put at the top of the agenda. I also question the need for three-year courses. I welcome the announcement by the Secretary of State that we should be looking at two-year degrees. I question why we always assume that degrees follow A-levels and why they must take place at institutions called universities. I am not convinced that all lecturers need to carry out research, nor that all university departments should carry out research. I worry that teaching can be given over to postgraduate students, whereas top-line research would not be treated in that way. I do not know why we still run three 10-week terms and say that it is the format in which higher education should be delivered. I am also not sure why further education is seen as a separate sector, when more than 20 per cent of degree-level work is now offered at such institutions.

What we have going for us is progress over previous years, whereby people now accept that citizens have an entitlement to funding for their education beyond school; that they have a responsibility to contribute to that funding; that it is desirable for employers to play a part, too; that there is a willingness by alumni and entrepreneurs to give money and resources; and that universities have a growing ability to earn income. Somehow, within that combination of players in the field, we have a chance to create a new structure. Let us take this crisis as an opportunity to do that.

I congratulate the noble Lord, Lord Baker, on this extremely timely debate. As a neuroscientist at Oxford University and chancellor of Heriot-Watt University, I declare an interest, and share the concern of many colleagues involved in higher education and research. If, like everyone and everything else, we need to become as cost-effective as possible, let us focus on our product. One suggestion was the ring-fencing of some 25 per cent of funds for the type of scientific research that is closest to market, but science itself does not automatically nor immediately generate a product.

One example of a seemingly exotic and utterly impractical intellectual indulgence could be quantum theory, pioneered by the physicists Heisenberg and Schrödinger in the 1920s. Quantum theory challenges an apparently impregnable assumption that waves and particles are distinct, and suggests instead that they are inseparable. Abstract and baffling as this may sound, this highly academic research gave enormous insights into the basics of matter and energy. In turn, these insights were to have astounding implications for the more down-to-earth branches of science and, ultimately, technology and eventually everyday life. Advanced materials such as lasers and transistors, and thus finally computers, rely on the principles of quantum theory. Likewise in biology, the current emerging feats of the molecular biologist in genetic engineering have their provenance in the ability to manipulate atoms, in turn reliant on an understanding of molecular bonds and the technique of X-ray crystallography, all of which hark back to quantum theory. What kind of lives might we all now be living, I wonder, if Heisenberg and Schrödinger had been made redundant?

This question begs a still more fundamental one. What, after all, is the real product of a university? Is it truly marketable goods and services, or is it thoughtful individuals who can make the most effective possible contribution to an ever changing society? Whatever one’s answer, we should be mindful not just of the products but the by-products of the imminent loss of perhaps some 15,000 highly and expensively trained specialists. What provision is being made for this expertise to be channelled elsewhere, in either the public or the private sectors? What of the 200,000 new students whose aspirations and dreams may now be thwarted for ever through no fault of their own? What do they do now? How many will be absorbed by the job market? Will the cuts in funding be used simply to pay the increase needed in social security provision?

It would at least be helpful—even responsible—for the Government to implement in parallel some constructive ways in which the effects of dwindling income could be offset. For example, more practical help could be offered to universities to supplement income via philanthropy. Given the imminent introduction of a 50 per cent rate of tax for top earners, it is important that it should remain possible to claim gift aid in full on all donations. Why not allow the financial institutions, whose behaviour triggered the current crisis, to hand over those controversial bonuses, untaxed, to the universities their employees attended?

A second option could be to raise, or even remove, the current fee cap so that universities might be free to charge students the true cost of their tuition. Of course, the large government subsidy on the interest costs of student loans currently makes this strategy expensive for the Government. Perhaps the answer is to cap subsidised loans at their present level and to concentrate financial aid on the students who genuinely need it most.

A failure to adopt such policies could well hasten the rise of the private university, rather along the lines of the American Ivy League. The smaller the sum the best universities receive from government, the less they have to lose by rebelling and by setting their own tuition fees. If we were to adopt the Ivy League model, at the very least a socially sensitive fee structure might be a means of maximising the number of able but poorer students. Inevitably, however, such a delicate balancing act could never be without pain, be it in bureaucratic time taken, parental savings spent, or talent wasted.

The whole point is that universities are all about far-reaching activities, be it in innovative research or in teaching someone the intellectual skills that will enable them to adapt throughout their whole lives to a fast-paced and complex society. Imposing criteria of short-term demands must inevitably be in conflict with institutions whose entire leitmotiv is unambiguously long term.

Electioneering phrases such as “tightening one’s belt” and “fair share” may have a certain immediate appeal to some—that the unworldly pointy-heads have finally been given a taste of the real world—but surely that same electorate should be aware of the implications of what that world will be like if long-term needs are trumped by short-term expediency. I am not suggesting that we academics should be insulated—even if it were possible—from the real financial problems we face, but the answer cannot be in targeting higher education in such a drastic and unimaginative cutback. Let us think of longer-term solutions—solutions that could play to the real strengths of universities. After all, it was the closure of the School of Athens in 529 by the Emperor Justinian which played a major role in the shift of Greek learning to the east, while here in the West it arguably ushered in the Dark Ages.

My Lords, I, too, am grateful to the noble Lord, Lord Baker, for bringing this issue to the attention of the House. It is right that the House should draw attention to the distress caused by the Government’s proposed cuts to our excellent university system.

There is real anger in the academic world. Universities recognise the need to reduce spending in the public services. They are, however, dismayed that the cuts proposed go far beyond the public services’ average in this year's Budget, and that they were picked out as the first victims of the Government’s attempt to reduce the deficit which the Government's own policies have created.

Why do the Government not take a much more strategic stance towards deficit reduction? Why do they not cut in areas where, for the past decade: spending has been wasteful and non-productive; initiatives have petered out or produced nothing but more bureaucracy; consultants have been brought in at huge cost to tell government what well trained civil servants could have told them; there has been advertising to promote government policies, engaging celebrities with fat fees; and armies of well paid professional regulators have become present in every aspect of our national life, most of whom know nothing of the world they are regulating? While cutting in these areas, the strategy should preserve or increase spending where there is a bridge to national growth and prosperity.

Universities should be expanding to provide the engines of growth both in highly qualified people and in world-class research which generates innovation and invention. We will need both to weather the economic storms of the next decades.

We have a record number of 18 year-olds in the population. It is a matter for rejoicing that so many of them have stayed in education to the age of 18 and want to continue into higher education, but it is a matter of shame that hundreds of thousands of them will be denied their chance at higher education. How can any civilised country, not to mention a Government who claimed that education was their main priority, let down a generation of young people in such an arbitrary way? Of all the effects of the university cuts, this for me is the most shameful, and I find it hard to believe that many on the Benches opposite—although there are not many there today—do not share this view.

Furthermore, there is little doubt that the cut in funding for teaching constitutes a threat to the standard of student academic experience. The Secretary of State's astonishing observation that universities could reduce the time taken to reach graduate level to two years or even one literally takes my breath away. It shows an astonishing lack of understanding of what is involved in reaching first-degree level. A degree is not just about stuffing students with a range of facts and skills; it is a process of intellectual and practical maturity, a state of confidence and competence which will go through life with the graduate, empowering them not only to work but to continue learning and contributing to the quality of their own and the nation's life—and this takes time.

The Prime Minister told us that cutting too early would damage the economy, and said that he would not impose early cuts. Yet from this year, as we have heard, there is to be a swingeing cut of more than £400 million. That is an average of around £4 million for each university. But then adding to this in the Pre-Budget Report of last December, we were told there was to be another £600 million cut, starting in 2011-12. What is unforgivable is that the Government have not indicated where this huge cut will fall. Even Sir Alan Langlands, the chief executive of the Higher Education Funding Council for England, has not been told. He told a conference earlier this week:

“I spent a whole day trying to find out what it”—

the £600 million—

“means and I still don't know”.

This is no way for a responsible Government to relate to the university system.

British universities do not face these savage cuts with a cash cushion to help them. As others have pointed out, even with the addition of fee income, the unit of funding per student in real money terms remains substantially less than in 1989. The huge expansion of student numbers in the late 1980s and early 1990s was done with greatly increased funding overall, but with decreased funding per student. There was, arguably, some fat in the system when that expansion started, but there is no room for any further reduction without a real diminution of the quality of student experience. On top of that, this Government are proposing a fine of £3,500 per student on any university which recruits above its government-imposed quota.

The concerns of further education in the light of these higher education cuts must not be forgotten. Many establishments provide a valuable contribution to higher education through foundation degrees and other collaborative arrangements. History records that universities tend to find that it is too expensive to continue these external partnerships in hard financial times, so this crucial ladder of opportunity for older, local students may be lost. Other unforeseen consequences will no doubt emerge over the coming years if this Government are still in power. In the mean time, I ask only for a strategic approach, which sadly seems to be lacking in these unwelcome proposals.

My Lords, uncharacteristically, I am going to make a controversial speech, and I hope that this will not be regarded as ingratitude to the noble Lord, Lord Baker, who has given us the opportunity for this debate. I shall say the most controversial thing first. I agree with much of what the noble Lord, Lord Mandelson, has recently been saying. Writing in the Education Guardian, he said that,

“tighter budgets can be a spur to further diversifying the funding of British universities”.

As the noble Lord, Lord Krebs, has said, the sector is diverse. The noble Lord, Lord Mandelson, and the noble Baroness, Lady Morris, are surely right in saying that not all degree courses have to follow the same pattern. Some universities have already shown the way by offering degrees in traditional subjects which can be obtained in two years with, so far as I know, no degradation in quality.

As with the degrees that our universities offer, so it is with their funding. The universities differ hugely in their costs, their endowments, the value of their brands and their needs. Yet at present the fees regime treats them as though all were the same. I have long argued that our present arrangements offer perverse incentives to our universities. British universities can receive only little more than £3,000 a year from British and EU first-degree students, whereas they can receive from non-EU first-degree students and all postgraduate students the multiple of that figure which their tuition costs. If universities responded to these incentives, they would try to admit as few UK first-degree students as possible and replace them with those from outside the EU. It is a wonderful thing that British higher education has such an international appeal, but do we really want to encourage discrimination against our own nationals?

Secondly, it is absurd that universities should have to subsidise UK/EU undergraduates whose families do not need help in meeting the cost of their courses, when those resources could be used for students who need financial help. If it is necessary to save public expenditure—as it undoubtedly is—that is the place to start. To illustrate this absurdity, if someone were to suggest that the fees of private secondary schools—public schools—should be capped at one-sixth of their present level and five-sixths should be met by the taxpayer or from funds which could be used to subsidise poorer students, we would think that they were mad. Yet that is what our present system for higher education does.

What I hope that the review of the student fee regime by noble Lord, Lord Browne of Madingley, will recommend is the deregulation of fees, on condition that all universities will put in place bursary schemes whereby no able student will be prevented from entering higher education by lack of resource. The Government’s teaching grant should be frozen at its present level and the money which would have been used for future increases should be directed to those universities without sufficient endowment to afford such bursaries. I realise that in saying that I may not altogether please my old university—Oxford—but I am recommending not that the teaching grant should be removed, only that it should be frozen at its present level. The Russell group universities have a strong enough brand and endowment to support that; indeed, to a large extent, they are already doing so. This would be a far better way of saving public expenditure than reducing expenditure on research, which so many speakers in this debate have said would destroy the lifeblood of one of our greatest national assets.

My Lords, I congratulate the noble Lord, Lord Baker, on securing this debate and on the galaxy of talent that he has attracted. I always approach education debates in your Lordships' House with some temerity. In the past, I said that they should be divided in two: one half for oiks like me and the other for the vice-chancellors, chancellors and heads of colleges to make their speeches.

I was moved to enter the list today because I have never believed that more means worse. I have supported higher and further education expansion since the Robbins report in the 1960s. Until I see middle-class parents content to see their children leave school at 14 or 16, I will continue to believe in expansion. Secondly, ever since I have been involved in politics, I have heard successive Governments argue that Britain is undertrained and underskilled, and that to prosper we need a high-skill workforce.

I intervene today to make a plea for the further education sector, to which the noble Lord, Lord Baker, referred in his opening remarks. I have close links with two FE colleges: Oaklands College in St Albans, where I now live, and Blackpool and the Fylde College, located where I grew up and where many of my family still live. Both colleges are superbly led by principals with vision and dynamism: Mark Dawe at Oakland and Pauline Waterhouse at Blackpool and the Fylde. Both have established good and imaginative partnerships—to which the noble Baroness, Lady Perry, referred—with their local universities: Oaklands with the University of Hertfordshire, Blackpool and the Fylde with Lancaster. Both have seen their vision and dynamism kicked in the teeth by the mismanagement of the college capital programme by the Learning and Skills Council. My noble friend Lord Shutt told me a similar story about Calderdale College near Halifax.

I have seen with my own eyes the crucial work done by these two colleges. They are but two excellent examples in a sector that, as the noble Lord, Lord Baker, said, educates and trains 3 million people every year, of whom 750,000 are aged 16 to 18. The colleges provide 39 per cent of entrants to higher education. Often, these are the students whom the school system failed to motivate, but who were given a second chance by FE.

The cuts to funding will have serious consequences for the ability of colleges to respond to local demand, to offer high-quality courses and to contribute to the economic recovery. One suggestion made to me was that colleges should be given the ability to transfer funding within 19-plus funding streams, and from 16 to 19 funding pots, which would mitigate some of the effect of the cuts. However, unlike the university funding cuts currently under debate, which are prospective, these changes are happening now and will affect students trying to enrol this year.

Mine are the observations of a concerned outsider. Mark Dawe said:

“The underlying message from this is we are concerned that future Ministers … will focus the next round of cuts, which will inevitably come from the public sector, disproportionately on Colleges of Further Education”.

Pauline Waterhouse says that her college attracts,

“a greater diversity of students, more part-time study, more vocationally based foundation degrees, more work-based study and more study whilst living at home. The reductions in funding … will undermine the ability of colleges to respond to precisely this agenda which currently we are fulfilling, often in a unique way. However, it should be noted that the funding cuts planned for Further Education will hit our local communities even harder than those predicted for Higher Education as the people who will be worst affected are more vulnerable, with far greater social need”.

Those are voices from the front line of the battle to ensure that we emerge from this recession with a workforce that has the skills and training to underpin the high-skill, high-value-added, high-productivity, knowledge-based and innovative economy necessary for Britain to prosper in the 21st century. I look forward to the Minister's reply.

My Lords, like other noble Lords, I thank the noble Lord, Lord Baker of Dorking, for securing this debate and for the powerful speech with which he introduced it. I need to declare an interest both as a working professor in a Russell group university and as an honorary fellow of Pembroke College, Cambridge.

The vice-chancellors of the Russell group universities have already expressed their concern about what appears to be about £1 billion in cuts. Universities UK has also reacted by saying, “Well, if that’s it, then we needn’t turn a drama into a crisis”. However, I am afraid that my own view is more pessimistic; I do not think that that is it. I recall that in early 2008 the chairman of the strategy group for Universities UK, Professor Geoffrey Crossick, said that the golden period of higher education funding was over. That was long before the current international financial crisis hit this country. I think we must assume that economically the situation is going to get worse and that universities are going to have to play their part, as, after all, the poorest sectors of the community will do.

I think that a separate case is to be made for science, and it has been made very eloquently on these Benches. My noble friend Lady Greenfield is right. Schrödinger, along with one other person, was employed by de Valera during the war at the Institute for Advanced Studies in Dublin. Schrödinger was very unpopular in the pubs of Dublin. The other chap was an historian, and it was commented that this chap had proven that there were two St Patricks and Schrödinger had proven that there was no God. That was thought to be the only product of the Institute for Advanced Studies, but in fact we now know that the institute’s work was very fine and very important.

However, I am going to assume that things will get worse. In these circumstances, the crucial thing is mode of address to academics—something that we forget about in our society. I do not include only politicians here; there are also questions relating to practice in our universities. This week I was disturbed to read in the Financial Times that from 2003 to 2008-09, our universities employed three administrators for every one academic. There are reasons why that happened; none the less, I cannot be alone in regarding it as a disturbing figure. Especially when one is talking about the humanities, it is very important that, when we are going to be asking more from our academics, they are spoken to in a way that is not oppressive. Unfortunately, in recent years we have had Philistine remarks from government Ministers about those who work on the study of ancient civilisations. We also have a tendency to argue that elitist admission to our great universities is a function of the mentality of admissions tutors, when in fact it is much more profoundly rooted in the economic and social structures of our society. Anyone who knows anything about the instincts of fairness among academics who work in this field will know that it is not their fault that we still have such a regrettably inegalitarian pattern of admission to our great universities. It is also quite frequently said by politicians of both parties that, although Britain has a good reputation with regard to the drop-out rate, the increase in that drop-out rate must be a reflection of bad teaching. Any teacher will tell you that these days students are not turning up in the way that they used to. That is the fundamental reason for drop-out rates and, again, it relates much more profoundly to economic and social factors in our society.

One other crucial issue for academics is the impact assessment of the REF, which has replaced the RAE. The RAE has been vital in maintaining the international competitiveness of our universities and it must remain in place. However, whereas when it started out it was too idiosyncratic and eccentric, it is now arguably too bureaucratic and formal. Certainly academics, who cannot be expected to produce an easily accessible public impact assessment, should have some way of having their work properly recognised and not be penalised.

In conclusion, my argument is that in the difficult times that are coming, we are going to have to find a way of getting the best from our academics, and that will be determined to some degree by how our society talks to academics as a whole.

My Lords, I, too, congratulate the noble Lord, Lord Baker of Dorking, on securing this debate on what is a very important and urgent topic. When he addressed the All-Party Parliamentary University Group yesterday evening, the Minister opened his remarks by saying that he likes to think UK higher education bears comparison with the world's best. I like to think so too and would suggest that, at present, that claim can be justified. However, I am much less certain that that will be the case in five or 10 years' time. I say that because of the Government's announcement of a reduction in funding for universities for the coming year of just under 5 per cent and for 6 per cent in each of the next three financial years. I accept that these cuts are being made from a strong base, with the years since 1997 having seen a 25 per cent increase in real terms in higher education funding, the research base more than doubled and participation up to 43 per cent.

I also accept that the cuts are part of the Government's response to the effects of the global financial crisis. But one of those effects is that more people than ever are now applying for higher education places, especially those aged 25 and up, as a means of re-training to prepare for the job market once the economy picks up. Applications to UK universities this year have already increased by almost a fifth, meaning that anything up to 200,000 young people, as noble Lords have already said, are likely to be left without a place at universities and colleges. That is a matter of great sadness.

Like the UK, our major economic competitors are suffering the effects of the global economic crisis; so what is their response? Reference has been made to this already. Last December, President Sarkozy announced plans to increase spending by €35 billion to boost the nation's scientific and technological competitiveness, with €11 billion of that earmarked to boost the global competitiveness of French universities. What is telling is that to fund this France will add to its already sizeable national debt by raising €35 billion, some €22 billion through government borrowing plus €13 billion repaid by French banks which borrowed from the state during the financial crisis.

Earlier this month, President Obama, in his State of the Union speech, proposed a 6 per cent increase in post-school education spending for next year, aimed at combating unemployment and developing skills. His message was that, even as the US introduces a three-year freeze on general public spending to tackle the deficit, it must,

“invest in the skills and education of our people”.

Research funding is to receive a 6.4 per cent increase from last year, with universities to be the biggest beneficiaries from the increase.

Meanwhile, last year, the Deutsche Forschungsgemein- schaft, the foundation involving Germany's leading research universities, which is financed by the German states and the federal government, despite the economic climate, voted a further €2.7 billion to continue the excellence initiative, which promotes top-level research aimed at improving the quality of German universities and research institutions in general, thus making Germany a more attractive research location and making its economy more internationally competitive.

My question to the Minister is, why, when economies broadly similar to ours react to the global recession by investing more in ensuring that they are able to maximise their economic recovery, is the UK apparently moving in the opposite direction? I fear that some of the excellent educational and scientific advances achieved as a result of the increased resources to the higher education sector over the past 13 years stand to be lost because of the abrupt about-turn now being proposed.

Of course, this debate also concerns further education. It is often forgotten that colleges are a vital part of the higher education mix as well. In fact, colleges supply 40 per cent of higher education entrants, and higher education students in colleges often do not possess traditional academic qualifications and frequently come from families with no tradition of university study. They have a vital role in educating and training people of all ages—at present some 3 million a year—and in contributing to the country's economic recovery, but the potential of colleges stands to be unfulfilled because of public expenditure cuts which, for them, start this academic year.

The Association of Colleges is concerned that, when the economic restraints hit universities, they may find cutting their links with colleges a relatively straightforward means of saving money. That would be a heavy blow to colleges, which have been experiencing reduced funding in recent years. An Association of Colleges survey revealed that colleges have recently suffered an average 16 per cent cut in their funding for adult learning. It is important to say that, unlike the current debate about university funding cuts which are projected, these changes are happening now and they will hit students trying to enrol this year. The April 2009 Budget pencilled in £400 million of efficiency gains in 2010-11 for further and higher education, with 75 per cent of that falling in the further education sector, despite it being a smaller part of the sector.

One of the bases required for an expanding economy is a well-trained construction industry, yet, perversely, according to the Association of Colleges, cuts to college budgets will affect courses in areas such as bricklaying, joinery, electrical installation and other trades that are vital for equipping the next generation of skilled young people.

HEFCE is not due to announce its detailed funding allocations until next month, but I hope the Government will re-assess the effects of its proposals for funding higher and further education on this country's ability to emerge from the economic crisis in a fit state to ensure not simply that our economy is strong, but that it remains able to compete with other countries which appear to have recognised the importance of investing now in universities, colleges and training.

My Lords, about 20 months ago, I had the privilege of leading the House’s most recent debate on higher education, and I congratulate the noble Lord, Lord Baker, on finding time for this debate. I must agree with him that it is very regrettable that the Secretary of State has decided not to answer the debate. That is no reflection on the Minister who is answering the debate, but it shows a certain contempt for Parliament, and I very much regret it. Many of the issues that we discussed 20 months ago have featured again today, but the focus is sharper because of the economic crisis that we face and the funding cuts that we are debating.

The question that we must ask ourselves is: what lessons can we now learn to strengthen ourselves for the future? The first, in my view, is that our 160 or so universities must focus increasingly on their strengths and not try to do everything. They need to decide whether they are doing research or teaching, whether they are vocational or academic, and focus on their strengths. The standards of excellence of any institution can then be judged by its objectives and mission. There will be closures, there will be adjustments, there will be mergers—that is inevitable.

I now have something rather nicer to say about the Secretary of State, in that I am pleased that he focused on the value of the two-year degree. That is something that I have experienced as a former vice-chancellor of the University of Buckingham. The two-year degree was pioneered by a very distinguished academic, the late Lord Beloff, and it has proved to be a success. It is not for nothing that for the past three years, in the Times Higher Education Supplement, the student satisfaction level has been higher at Buckingham than at any other university. I hope that there will now be more focus on the value of that degree—although, for my part, I took a four-year degree.

Something that has not featured today, to my surprise, is that we must accept that the number of 18 year-old students is likely to climb in the next 10 years or so. That must be counterbalanced by what I think will be an increasing demand for part-time students. We must recognise that they are not well financed at all.

For a moment, I focus on the question of diversity of funding, because that is the best way to strengthen the autonomy of universities and their sources of income. It is up to the Government to create the climate for that. I know that, some years ago, they introduced matching funding, and that is certainly one way of creating a challenge for universities to raise private finance. Indeed, I suggest that, had there been less regulation on student fees, much of the demand in recent months for student places in universities could have been satisfied with extra money for universities—buttressed, of course, by support for the less well-off students.

Within that, research funds must be ruthlessly selective. In the United States, only a very few universities focus on research. In Europe, almost every university seems to focus on research. It is far more effective in terms of international competition if we focus on a few, carefully selected universities. Then we have to consider the types of funding. Imagination will have to be shown in the months and years head, but I want to focus on one type of funding: endowment funding. Nothing can be better for the stability of a university, for universities as a whole and for their independence than to have strong endowment funds. In the United States, more than 200 universities have funds of more than $100 million in endowment; there are only eight in this country. Princeton has $19 billion-worth; Cambridge has $8 billion-worth. That is an area where the Government can help other universities to build up endowment funds.

The last issue I will focus on, which has been mentioned today, is that of international students. It is a benchmark of our success that we are second in the world in numbers of overseas students. It is essential that we keep that up. Something near 12 per cent of our students are from overseas and they contribute nearly £6 billion to our economy. That link is invaluable for Britain. It brings in resources and focuses on post-graduate degrees. It is essential for the Government to show their support by making sure that we continue with government scholarship schemes. The reputation of our universities for excellence is at the heart of everything we are discussing today. It is essential that we maintain the quality of our institutions. For that, we have to be very imaginative. The next Government will have a very big challenge.

My Lords, I join noble Lords in congratulating my noble friend Lord Baker of Dorking on giving us this opportunity to take stock of the cuts and the uncertainty that they have caused among students, universities and colleges and to discuss their consequences. Much of what needs to be said has been said, but I believe it is important to repeat a number of the points raised.

No one has ever argued that people wishing to go on to higher or further education should not have the opportunity to do so, but to set arbitrary percentages and demand that universities and colleges respond without any long-term planning was not right. There is general consensus that previous levels of government spending cannot be sustained under current economic conditions, and the Minister now needs to say how much more his department is going to take away from higher and further education budgets and when universities and students will be told. Will he say how he expects FE colleges to make efficiency savings of up to £600 million by 2012 when rising adult unemployment will mean that more people will look to retrain and reskill?

We should be careful about trying to make a virtue of a regrettable necessity, as the Government have sometimes appeared to do. The Minister’s department has attempted to sell the cuts by emphasising the long-term benefits. We know that these cuts will lead to increased student-staff ratios, people losing their jobs and departments being closed. A promise by this Government to increase participation in higher and further education has been crushed by effectively refusing places to thousands of young people and penalising universities. Prospects and aspirations for economic mobility have been removed, especially for the groups that would have benefited the most. Moreover, it seems perverse to try to console academics who are being made to reapply for their jobs and whose departments are facing closure by making a case for the long-term benefits for those institutions. One way the Government could reassure universities and colleges is by saying definitely whether there are any more cuts in the pipeline. Will the Government take this opportunity to offer some consolation to universities and colleges and tell them truthfully whether the latest cuts will be the last? Can the Minister give assurances that there will not be any more surprises in the next funding letter?

Even before these cuts, the past year or so has revealed some worrying trends in some of our universities’ finances. I remind noble Lords that, last summer, the Department for Innovation, Universities and Skills, in response to a freedom of information request by Times Higher Education, released information on the Higher Education Funding Council’s secret list of bodies at higher risk of financial failure. I understand that seven institutions were judged to be at risk in June last year. It would be interesting to know whether the Government have made any predictions about the number of institutions whose finances might move into the red as a result of these cuts. How many more does the Minister estimate will be added to the list?

What concerns me most is the thought that these cuts will hit people from poorer backgrounds hardest. As I am sure noble Lords are aware, the Higher Education Funding Council last month published a report suggesting that, as a country, we are failing to tap higher education’s potential as a vehicle for social mobility. I fear that young people from poorer backgrounds will represent a disproportionate number of those students for whom universities can no longer find places. The Government have introduced a number of schemes to help widen access to such young people, through which universities engage with local schools. What is the future of these schemes?

We want a highly skilled, knowledge-based population in order to remain competitive in the global marketplace. We want our employers to have the best talents available to them. Yet as soon as the Government take us into an economic crisis of a size that we have never had to witness before, they shift their responsibility and place the burdens on employers, colleges and universities as if those institutions do not already have enough problems of their own. Perhaps that is why I have been frustrated by some recent articles and what has been said in the past few months in relation to the Government’s decision to make these cuts. The Government have fudged their real intent, which has been a failure to ensure that universities and colleges have the finances and funding that they require. I have one page left, but I have run out of time.

My Lords, I, too, thank the noble Lord, Lord Baker, for securing an, alas, too timely debate. I have some interests to declare as a life-long university teacher and a former president of the British Academy. We have no doubt that these are real and large cuts. My question is: how could we make them most intelligently with the least damage to what really matters? If we look back, I believe that there is a lesson to be learnt from the 1980s when the number of students was growing but the unit of resource was shrinking. Universities cut departments and units. With a nice rhetorical flourish, these were called efficiency gains. They were cuts. Unfortunately, they tended to impact certain areas in unco-ordinated decisions with disproportionate effect.

One might say that that was the inevitable cost of university autonomy. We will face unwanted cuts and unwanted patterns again, and we have begun to see that in another topic we have recently debated. The provision of language degrees has been cut here, there and yonder. But we need to think more strategically. For whose sake should the cuts be made? Do we want to protect universities, academics, students or regional employment and development? They are all important and one would like to protect them. But I believe that that is the wrong focus. We should aim to protect good research, good teaching and flourishing disciplines. We should not provoke crises in disciplines where suddenly we find that we need yet another initiative to rescue the teaching of strategic languages, such as Arabic, because we have just let it go.

There are difficult cases and we need to consider the incentive structures with which we are living. I believe that the present research assessment exercise—soon to be the REF—comes at a very high cost and that it creates incentives that go largely to universities, not to researchers. Of course, the universities press the researchers to conform to the requirements.

When we look at incentives for teaching, we discover that there are mainly sticks and rather few carrots around. As regards the incentives for protecting the strategic disciplines, we discover that dispersed decision-making makes it very hard to protect them. Do the Government have a comprehensive list of endangered disciplines? What action do they intend to take to ensure that that danger is not realised?

There is a suggestion that we would best alter the incentive by rewarding that research which has impact. For those with perfect foresight, it makes perfect sense. For the rest of us, it sounds a bit unlikely. One cannot identify which research will have impact antecedently. Research is done by individuals and by teams. They do not always need to be co-located. It does not have to be given to universities. We need to preserve the rewards for those who are doing good research, but we need not put them in one place. There are good examples of collaborative research across institutions, and I know of a number in Scotland.

We also need to recognise that good teaching can be done by small units, and we need to reward them for doing it well rather than telling them that, because they are not large enough to do the very best research, they cannot be maintained at a level to sustain the teaching. On the disciplines, we must not again disperse hard-won skills, particularly in the rarer languages and area studies.

Lastly, the impact is not good for any sort of institution. No one knows how to measure it. We do not know the causal pathways or the timeframe—I sit between colleagues who know far more than I do—in the STEM subjects. The research that feeds the creative industries is dispersed across a multiplicity of disciplines, including many in the humanities and social sciences, and so is the research that feeds effective public policy formation. When we think about impact, I remember the first time I heard the term, because it was a curious one. I was talking to conservation architects and through them met two church canons who were responsible for the fabric of Canterbury cathedral. They reported to two “canons” of the cathedral called Canon Impact and Canon Treasurer. I asked what Canon Impact did. “Canon Impact does pilgrimages” was the reply. When we think about impact, we must realise that it is a rather elastic term. In the mean time, we must be absolutely certain that we do not incentivise poor research in order to have a high impact.

My Lords, I will focus on one segment of higher education, that of the strong research universities, and I declare an interest as a Cambridge professor and college head. These “research universities” benefit us through direct knowledge transfer from university laboratories to industry, but their diffuse benefit is probably even more important in the form of the collective expertise of their faculty and the consequent quality of the graduates they feed into all walks of life. To retain their standing, such universities must sustain world-class faculty, and they will not do that unless they can provide comparable opportunities to those on offer in the US, Singapore and elsewhere. There is now an international market too for the very best students.

The present Government deserve credit for their commitment, sustained over a decade, to expand the university system, to strengthen its infrastructure and to support research. It would be a real own goal were this legacy to be put at risk by recent events. We should learn from history. The recent HEFCE cuts echo those of the 1980s which undermined university morale and pushed many scientists and scholars to go to the United States. But now the downside risk is greater because global competition is stronger. The Far East is striving for competitive excellence. Institutions on mainland Europe are competing for graduate students by offering instruction in English. Several countries such as Australia, Germany, South Korea and Canada have boosted their spend on science and innovation as part of a stimulus package. More important still, the Obama Administration have given America’s already world-leading scientific community a massive boost in both morale and substance. The US science budget rose by 5.7 per cent this year.

So, even to retain our competitiveness, we need to raise our game, but what is happening is the reverse. If the UK slides now, it will jeopardise our position at the forefront of global science, possibly for a generation. It is hard to recover lost ground. Earlier this week there were widely reported comments from three leading US scientists that the UK will suffer a brain drain, which will eventually act as a disincentive to young people entering science.

What can be done, given the realistic financial constraints? First, as many other noble Lords have said, we need urgently to expand other funding channels, especially student fees. Secondly, we need greater diversity in the sector. It is very different now that it is educating more than 40 per cent of each cohort rather than when it catered for less than 10 per cent. So we need not just one league table but many, measuring excellencies of different kinds, more varied courses and a credit system that offers a second chance to those who drop out.

There would be real benefit in more concentration in graduate education, especially at PhD level. It is good news that the RAE uncovered “islands of research excellence” in many departments across the university system. However, that does not require all universities to offer PhDs in all subjects. A student aspiring to a PhD needs more than just one good supervisor; he or she needs to be in a graduate school where courses are offered over a wider range. One should surely welcome the formation of groupings and clusters at universities and concentrate graduate education in a smaller number of centres. I differ from the noble Lord, Lord Krebs, only in preferring that the demarcation between research-intensive courses and others should be subject-dependent rather than a rigid reversion to a binary divide. It would be welcome if a former polytechnic were to establish a strong graduate school in a special area.

Why is all this so important? There is concern at the prospect of top talent in the finance sector leaving these shores, but the next phase of global economic growth will be associated with waves of new technologies; we must be equipped to ride these waves. So should there not be at least equal concern that dedicated academics spearheading frontier topics should not leave this country, or be discouraged from starting, for lack of support? It would surely be tragic if we squandered our current strengths.

My Lords, I, too, thank the noble Lord, Lord Baker, for introducing this timely debate at a time when the economic situation is extremely challenging to every aspect of the public sector; we all face difficult choices. It is clear that we will need to make better use of limited resources. At the same time, we need to protect quality and improve access. It is a difficult balancing act to pull off. It is also a time for serious innovation; a time to rethink the nature of higher education; a time to take very bold steps.

The Government’s strategy document, Higher Ambitions, called for greater diversity and choice in undergraduate provision. It wanted to see more part-time programmes, more foundation and fast-track degrees. In essence, it wanted to see real change. John Hayes said something similar when he spoke recently at Birkbeck. He said:

“We will not make progress towards socially mobile higher education until we recognise that rather than making people ‘fit’ University life, we must enable more Universities to ‘fit’ the circumstances of many more potential learners”.

I reinforce that plea. I would argue for innovation in higher education; for an engagement with information and communication technologies as a means of transforming what we now do; and that refocusing existing resources in new teaching methods and in ICT will help to bring the greater efficiency and the improved cost-effectiveness that we will undoubtedly be required to find.

I declare a number of interests as chancellor of the Open University and as a non-executive director of an educational technology company.

With public sector budgets under pressure, it is critical that we focus investment where it can have the greatest impact. There can be no doubt that, properly managed, ICT can make a major contribution to UK higher education. Indeed, the central question is not how HE can adopt and use ICT but, rather, how HE can find a new role for itself in a world that has literally been transformed by ICT.

This year is the 40th anniversary of the Open University—effectively the last serious innovation in the delivery of graduate-level education. The OU finds itself enjoying record admissions—well over 200,000 students from the UK alone. But if we are honest in the way that the noble Lords, Lord Butler and Lord Krebs, and my noble friend Lady Morris have been, then we have to concede that the higher education sector is not one that responds well to the type of challenge that this debate highlights. If you doubt what I am saying, read, I beg you, the debates that surrounded the introduction of the OU 40 years ago, when it was then called the University of the Air. It was not just the sector that took against the OU; neither House of Parliament comes out well in those debates.

The noble Baroness, Lady Morris, is right: this is a massive challenge. But in combination with the forthcoming report from the noble Lord, Lord Browne of Madingley, this is also a moment of extraordinary opportunity. The future will not be the same as the past—it will not even be the same as the present. Some 12 per cent of all this year’s cohort of 18 year-olds will not find a place at university, irrespective of their exam results. That is a tragedy and the type of crisis that no Government can possibly ignore. It certainly will not be solved by an attitude of “business as usual”. This is the time for a very fundamental rethink by whoever finds themselves in government of exactly what we want our higher education to deliver and what kind of future we need as a nation.

My Lords, I join other noble Lords in congratulating the noble Lord, Lord Baker of Dorking, on initiating this important debate. I am conscious of all the wisdom and experience that has gone into other contributions, but make no apologies for concentrating on an issue that has not so far been raised—namely, the impact of the cuts in higher and further education on offenders, both in prison and in the community. I admit to being seriously alarmed by a sentence in a letter dated 23 February from the Secretary of State to the noble Lord, Lord Baker, and those of us who added our names to a letter from him:

“There will be reductions therefore in the number of some adult course places next year as a result of efficiency savings, and reprioritisation of funding for apprenticeships and other work based learning”.

The Government pride themselves on the aim that they have given to the criminal justice system in this country—namely to protect the public by preventing reoffending. It is well known that the single most effective contributor to that process is education. I have not time to go into statistics, but remind the House that 65 per cent of adult prisoners have a reading age of less than eight, which suggests that educational underachievement is a problem of major proportions facing both the prison and probation services. Yet, despite all the increase in resources, of which the Government are so fond of telling us, only 36 per cent of prisoners currently have access to education. I suggest, therefore, that any reduction in that figure, which is bound to impact on the protection of the public, can hardly be described as an efficiency measure. This is compounded by the fact that, from April, instead of all prison education being funded by regional learning and skills councils, that responsibility is to be devolved to a number of different agencies, each responsible for making cuts. Who will be responsible for looking at the accumulated effect of all these different cuts on offender learning and skills training? That question applies to all levels but, because it is the subject of today's debate, I shall focus on further and higher education. Here, I declare an interest as a patron of the Prisoners’ Education Trust.

Bearing in mind the vast number of educational underachievers in the system, it is hardly surprising that most available resources are devoted to levels 1 and 2. As a result, there is virtually nothing for those capable of reaching level 3 and above, which gap is almost entirely filled by the Prisoners’ Education Trust. Last year, it funded over 2,200 prisoners to take distance learning courses, around 820 of whom began Open University study, for which the BIS helped with funding, as it, and LSCs, did for a further 220 distance learning courses. The trust also spent £480,000 on over 1,000 grants for courses at level 3 and above, many of which were specifically vocational, such as horticulture and plumbing, aimed at employment on release, for which it raised voluntary funding. Very sadly, a further 991 applications had to be refused for lack of funds. Applications this year are already up by 9 per cent, but the trust is having to discourage others because of uncertainty over funding.

Along with many education providers, the trust has two deep concerns about the future, following the cuts and the demise of the LSC. First, there is the impact on prison education of the 250 to 300 staff redundancies that have been announced by Manchester College, which is contracted to provide education in over 50 per cent of prisons. The second concern is that a number of prisons are already reporting that their capacity to support and co-ordinate distance learning has been reduced, no doubt due to the reprioritisation of funding of work-based learning announced by the Secretary of State.

There is one ray of hope in this unrelieved tale of gloom, which is the proposal, from a number of experienced people who are fed up with the inconsistency and lack of clear direction that characterise the current situation, to set up a national centre for offender education based at the University of London’s Institute of Education, which will focus on research, evaluation of good practice and the production of evidence-based syllabi. It is a sad reflection on the present position that frustrated practitioners should have had to come together to do what the Government should have done years ago. Would that the results of their proposed work had been available to the Secretaries of State for BIS and Justice before the meeting that they no doubt had, to confirm that the cuts that are the subject of today’s debate apply also to the protection of the public.

My Lords, I, too, am grateful to the noble Lord, Lord Baker of Dorking, for initiating this highly relevant debate, which would have been pertinent even if we were not in such a severe public spending environment. Before I commence, I should declare that I am chancellor of the University of Northampton and that I have affiliations with the universities of Birmingham and Oxford. As a member of the B team which seems to be present on all the Front Benches today, I apologise for my noble friend Lady Garden of Frognal, who is unable to be here due to a prior commitment.

I do not want to single out noble Lords who have spoken because, as my noble friend Lord McNally pointed out, there are those who are from the ivory towers and there are the rest of us—I will not use his language—who are the plebs. I defer to the wide expertise that we have heard in this debate, although I will single out one noble Lord by congratulating the noble Lord, Lord Puttnam, on a significant birthday today. I note that he has spoken in both debates and I am not sure that my dedication to the cause on a significant birthday could equal that.

I highlight at the outset the fact that we are in agreement with all noble Lords who have spoken about the need for UK universities to maintain their pre-eminent status in the international league tables. We, like other noble Lords, regret that the mismanagement of the national economy has left us with some unpalatable decisions. However, higher education will, like other sectors, have to adjust to prevailing conditions. In the time available, I will limit my remarks to the problems that exist in the current funding regime and propose one or two points as to where the debate should now go.

We are clear that higher education, in addition to benefiting the individual, benefits society overall, both in the more immediate benefit of productivity gains and in the higher taxation that is paid throughout a graduate’s career. However, until this last year, all the government pressure had been to lift participation to an arbitrary 50 per cent target, which was plucked out of the air by another Prime Minister preparing for a conference speech. We would have gone for a more targeted approach to widening participation and would have especially concentrated on the proportion of young people coming from lower socio-economic groups. The figures between 2002 and 2009 are not encouraging. For all their efforts, the Government have succeeded in raising the participation of the lowest socio-economic group from 17 per cent to only 19 per cent. However, it is not enough to focus on socio-economic groups. We also need to focus on technological training, HND-type qualifications and foundation degrees, which are rated at level 4.

For the moment, let me stay with socio-economics. What holds people back from going into higher education? Some fairly uncontroversial research shows that it is the combination of a lack of prior attainment, constraints on information and aspirations, and the credit constraint. I will briefly touch on each of these. Current policies concentrate too narrowly on the transition at age 18. Earlier interventions start with the availability of nursery education, actions to improve primary and secondary education outcomes and policies to encourage staying on at age 16. That is one reason why this party has been one of the first to embrace the idea of the pupil premium, meaning that the level of central government funding to schools is defined by individual pupils’ characteristics rather than geographical characteristics. Hence, the pockets of deprivation where children have low attainment will no longer lose out. The funding is tagged to the pupil and follows them as they move, so it goes through their educational cycle at school. GCSE attainment—which, in turn, results in improved A-level scores—and subsequent higher education outcomes are affected by that measure.

In a climate of cuts to funding, it becomes all the more important to improve information and raise aspiration among those who decide early on that further and higher education are not for them. It is evident that those young people whose parents are graduates are more likely to be better informed about higher education and to aspire to becoming graduates themselves. When investment is scarce, therefore, there has to be a level of information and encouragement from universities into schools in order to demystify higher education. Improving that also involves the information that a young person needs about financial planning and the architecture of the student loan system. There is little knowledge at school level about the possibilities of obtaining grant funding, bursaries, education maintenance allowances or other encouragements to stay on at age 16.

On the issue of a credit constraint preventing access to higher education, it is often argued that people from poorer backgrounds are debt-averse and hence unwilling to borrow, thereby impeding their access. Professor Nicholas Barr argues that it is a mistake to see it as a blanket phenomenon of debt aversion, and points to the fact that credit cards and mortgages are well taken up in that group. He argues that students from poorer backgrounds are less likely to go to university because of a lack of information and a fear of the unknown. When added to the lack of understanding of a degree’s benefits, including its employment outcomes, that becomes unsurprising.

The current method of financing student loans is based on a zero real rate of interest and, unsurprisingly, benefits the middle class most. That subsidy is justified on the basis that it will widen participation. The reason that it does not work is that those are not conventional loans but income-contingent repayments. A subsidised low interest rate does not reduce the loan or impact on monthly repayments; instead, it only serves to shorten the repayment period. Moreover, the subsidy is extremely expensive. The combined cost of the zero real rate and the 25-year write-off for fees and maintenance loans was about £1 billion in 2007-08, or 26 per cent of total lending to students in England.

Instead of spending billions annually, mostly to help the better-off, the resources should be used to promote access through better targeted activities and to raise quality. However, we may need to keep the interest subsidy for people on low current incomes, to make it more responsive to changes in earnings over a lifespan—so that it could be reinstituted, for example, when a woman graduate takes time off to bring up her family.

A further problem with the current loan structure is that it excludes other groups, including those in further and part-time education and postgraduate students. We argue that if you must work with the current structure, it is preferable to see a move towards loans being structured on the basis of real government borrowing costs, but to add in the principle that the subsidy must be available to those whose income drops off at a certain point. Other countries which appear to do that without affecting take-up are the Netherlands, Norway and Sweden, where a positive real interest rate is taken for granted.

In conclusion, I agree with other noble Lords who have argued that we will have to diversify the courses offered, the methods of delivery and, indeed, the teaching and research balance offered to staff. One size should not fit all. All aspects of the sector will need to think creatively if we are to deliver high-quality higher education to the many rather than the few. That intergenerational compact is at stake here, and it behoves us to bear it in mind more now than ever before.

My Lords, I join in thanking my noble friend Lord Baker of Dorking for initiating this important debate, and congratulate him on it. As we have heard from around the Chamber, universities and colleges face very tough times. The Association of Colleges says, and my noble friend Lord Baker reiterated, that the further education sector has recently suffered an average 16 per cent cut in the funding for adult learning—cuts which are affecting the sector right now. By my reckoning—and, again, I am grateful to my noble friend for confirming this—we are talking about cuts of £1 billion to higher education in the last year.

However, it is a question not just of the amount, but of how the cuts have been trotted out. In May last year it was announced that £180 million would be taken back to pay for student support reforms which the Prime Minister had announced in his first few days in office, but the costs of which he had not fully taken into account. Later that month a further £83 million was cut. Then the Pre-Budget Report took £600 million from the higher education, science and research budgets, just before a further £135 million of cuts was announced. This month we see a further cut of £51 million. Not only is the £1 billion terrifyingly large but coming as it has, in dribs and drabs, it sounds like death by a thousand cuts. The constantly changing figures reflect damaging and confusing policy indecision.

This confusion is not new. The FE capital spending fiasco last year showed the danger of broken promises. The student loans debacle left thousands of students without adequate funding because of huge backlogs in the student loan system. The confusion continues. On the one hand, as my noble friend Lady Perry said, the Prime Minister tells us that we must ensure that the recovery is securely embedded before any funding is cut. In this vein, in October even the noble Lord, Lord Mandelson, said in a speech to the CBI that in,

“equipping the UK for a post-recession global economy, higher education and adult skills will be not just important but decisive”.

On the other hand, here he now goes making dramatic cuts in funding. Again, on one hand Ed Balls promises that spending will rise, but on the other the noble Lord, Lord Mandelson, now tells us, by both his actions and words, that we are talking about “reduction” and “tighter budgets”. Indeed, cut after cut has been announced in accordance with that policy.

However, in other public sector departments, as my noble friend Lady Perry said, the clear public impression at least is of considerably less real cutting—certainly so far. Can the Minister put me right and detail some of the corresponding cuts that have been made in other public sector departments; or does this apparently disjointed policy, as I suspect, translate to universities and colleges suffering deep cuts while other departments are yet to have any serious reductions defined at all?

Continuing the theme of confusing signals, on one hand the Government have for years imposed targets to increase student numbers but, on the other, universities have now been threatened, as my noble friend Lord Baker said, with fines for overrecruiting. On 21 January, the noble Lord, Lord Mandelson, suggested in this Chamber that there could be beneficial consequences to tighter budgets, such as being able to,

“focus minds on teaching and research excellence”,

and finding,

“new ways of delivering higher education”.—[Official Report, 21/1/10; col. 1101.]

Like my noble friend Lady Verma, I rather hope that the noble Lord, Lord Young, will enlighten us as to what he meant. Can he tell us what the new ways that will cost so much less money are? Can he confirm that “focus” does not just mean “narrow”? The Universities and Colleges Union said:

“You cannot make savage funding cuts without serious consequences, despite Lord Mandelson’s insulting efforts to sell the cuts as an opportunity”.

The approach the Government have taken, however, does not adopt this ethos of opportunity.

The shortfall in university places is but one of the consequences of the Government’s confused approach and mismanagement of higher and further education. The resulting damage will be that, at a time of great economic strife, young people lose out on the education they need and—as several noble Lords have said—that we need them to have. A shortage of university places due to rising demand and demographic changes was entirely predictable, but the Government failed to head off the crisis. Nearly 23 per cent more people have already applied to go to university this year than at the same point last year. This, coupled with the cuts in funding, could result—as my noble friend Lord Baker said—in more than 200,000 applicants failing to find a place in 2010. We have already seen 110,000 lose out in 2008 and 140,000 in 2009. The figure for this year looks set to dwarf both of these. We simply cannot go on like this.

A further area of grave concern is the extent to which the cuts to the higher education budget themselves have a direct effect on the further education sector. I wonder whether the Minister could update your Lordships on authoritative concerns voiced to us that cuts in funding have seen universities taking back from FE colleges places which they had originally awarded to them. I hope that he will also be able to say whether HEFCE will be able to fund, directly, higher education modules in FE colleges.

We on these Benches think it is important to acknowledge that, while there is a need for cuts, there is still room to improve and innovate. Several outstanding contributions from noble Lords on the Cross Benches who are directly involved in academia showed us clearly that they are committed to this and have clear thoughts on how to do it. We have more than a million young people in this country not in any kind of work, education or training. Rather than allowing confusion about funding policy and cuts to allow fewer opportunities to be provided, we must instead create more options. As my noble friend Lord Baker said, that is why we have pledged to provide an extra 10,000 university places, funded by early repayment of student loans incentivised by discount, as well as an extra 100,000 apprenticeships and other training places. We have also pledged to provide 100,000 extra FE places over two years by allocating our NEET fund to increase FE college and other training places for those who have been on jobseeker’s allowance for six months.

We are very grateful indeed to my noble friend Lord Baker for the work he and his colleagues have put into reviving the concept of the technical college. We intend to embrace this idea with enthusiasm. To make sure that vocational and technical education meet the needs of modern business, we will set up technical academies across the country, starting in at least the 12 biggest cities, and we will free schools from regulatory restrictions so that they can offer workplace training that engages young people who currently drift away from formal education.

I am afraid that to answer my noble friend’s question about removing higher and further education from the business department is well above my pay grade, but I will enthusiastically take it back to my senior colleagues. I very much hope that the debate today will draw attention to the true facts. It is only by admitting that changes need to be made that we can hope to lessen the appalling consequences of these cuts. This is why we have long called for an independent review of higher education funding and student finance, so we look forward to the results of the review to which my noble friend Lord Patten, the right reverend Prelate the Bishop of Leicester, the noble Lord, Lord Krebs, and others have referred and which is now under way.

Universities and colleges are facing an undeniably tough financial situation, so it is vital that the Government rise to the occasion. We need not more confused messages but clear and definite policy.

My Lords, I, too, thank the noble Lord, Lord Baker, for giving us the opportunity to debate this vital issue. I cannot help feeling a little bit like the noble Lord, Lord McNally, engaging in this debate among these education titans. I do not describe myself as an oik, but having left school at 15 with only a few City and Guilds I suppose that I am probably in that category. However, I will do my best. I also feel as if everybody here has turned up for a really good show and the understudy is performing. I declare a deep, long-lasting and passionate interest in education throughout my life.

The noble Lord, Lord Baker, realises from his own years as Secretary of State for Education and Science that questions around funding often generate more heat than light. The past few weeks have certainly borne that out, especially since my right honourable friend published his grant letter to the Higher Education Funding Council for England.

I indeed recognise that there are concerns within the further and higher education sectors at present, and I welcome this chance, if not to allay them, then at least to place them in their proper context. That context is, of course, the tough decisions that have been forced on this country by the global recession, which were acknowledged by some noble Lords, but not all.

Let me first remind your Lordships of this Government’s record on student numbers, on increasing participation and on improving the skills base of this country. The achievements of the past 13 years are substantial. I do not accept that it was a joint achievement. I shall focus on where we picked up from the previous Administration. The salient details on investment in FE and HE since 1997 are as follows. We have increased public spending on HE in England by 25 per cent in real terms. That represents a real commitment to higher education. On the watch of the noble Lord, Lord Baker, and those of his successors, public spending per student actually fell by no less than 35 per cent. That is a little statistic that somehow seems to be affected by collective amnesia on the part of the Opposition.

Likewise, since 1997 more than £6 billion in capital funding has rectified the poor state of many university buildings, including laboratories and other facilities essential to maintaining our research base. These are now state of the art, and their scientific output is world class. We took a tough decision on introducing variable tuition fees because we wanted to put in extra money and not to have an arbitrary target. We wanted to extend the opportunity of higher education to many more young people than previously. We are putting an extra £1.3 billion each year into universities’ coffers, and I remind your Lordships that this money is fully additional. It has not been matched by reductions in public funding elsewhere.

Meanwhile, government investment in colleges for post-16 learners, including capital investment, rose by 57 per cent, again in real terms, between 1997 and 2009. Despite the problems in the FE capital programme—and I acknowledge that there were problems—the £3.4 billion that we have committed since 2001 has redeveloped more than half the country’s college estate. That contrasts starkly with the reality before 1997. That is another statistic that the noble Lord, Lord Baker, conveniently glides over. There was no capital budget for FE colleges at all. Back then, the National Audit Office, not the Government, found a crumbling infrastructure no longer fit for modern educational purposes. That was the legacy which we inherited from the previous Government.

Funding for apprenticeships is at its highest-ever level and stands at more than £1 billion this year for people aged 16 and over. There were barely 65,000 apprentices left when we came to power. Since then, more than 2 million people have begun apprenticeships, more than a quarter of a million are now in apprenticeships and there is a completion rate of something like 71 per cent. We have invested more than £5 billion in Skills for Life since 2001, which has gone a long way towards eradicating the national scandal whereby adults without basic literacy or numeracy skills were left to sink or swim.

The impact to date of these unprecedented settlements is clear. There are 2 million students participating in higher education in England this year, including more students from state schools than at any time in our history. There are more students from black and minority ethnic backgrounds, more from low-participation neighbourhoods, and thousands more who are able to say with pride, “I was the first person in my family to go to university.” I experience that when I visit universities. That represents real social mobility and real achievement by this Government. Somehow, again, there is collective amnesia and no real acknowledgment of that. Similarly, there are more part-time and mature students than ever before, and more students studying maths, engineering and science—the very people we need in order to remain competitive in the global economy.

Apprenticeships have taken their rightful place at the heart of our vocational training system. Since 2006, almost 1 million qualifications have been gained in the workplace through Train to Gain. I remind your Lordships that the honourable friend of the noble Lord, Lord Baker, the Member who represents Havant in another place, has said that his party would abolish Train to Gain. What a lost opportunity for ordinary working people that would be. I am proud of the way in which we have broadened the social make-up of the student body, of how we have made it easier for people to go on to university from their local college, and of how millions more people have the skills necessary to enjoy rewarding careers.

I will not detain your Lordships with a prolonged explanation of why we are not proposing overall funding increases for HE and FE next year. Like other countries, we have come through difficult times. It has cost an enormous amount of money to shore up our economy and protect our people against the worst effects of the deepest recession in my and other noble Lords' lifetimes. FE and HE institutions have played a prominent part in bringing us through the recession, and it is right that we acknowledge that today. However, we must stabilise public finances. This will be a salient feature of spending settlements for some time to come. It is right that HE and FE should be asked to shoulder their fair share of the burden of reducing the public debt. I stress “fair share”, as did my right honourable friend when he spoke on this subject a few weeks ago.

I will put this in context. In relation to FE, for the 2010-11 financial year, £3.5 billion will be allocated by the Skills Funding Agency for FE colleges and training organisations to deliver high-quality and relevant FE and skills training to an estimated 3.4 million adults. I remind noble Lords that this is an increase of 2.9 per cent on last year. We will focus on improving value for money by purchasing only high-quality training and by maximising the contribution towards training from businesses and individuals where they see the highest private returns. Government investment in colleges for post-16 learning, including capital, increased in real terms by 57 per cent from 1997 to 2008-09. This covers all funding to colleges, including capital investment.

The noble Lord, Lord Patten, talked about funding per student. Somewhere else, he said, “We doubled the number by halving the investment”. Perhaps I may remind him of that. Funding per student has been maintained in real terms, while student numbers have increased by 250,000—24 per cent—since 1997. We have introduced more funding streams for universities: not just fees, but voluntary giving and endowments, which were suggested by one or two other noble Lords.

The view was expressed that we are biased towards STEM. We do not dictate to universities what courses they put on: it is up to them to play to their strengths. We have some of the best arts institutions in the world, and that will continue. However, this year HEFCE decided to set aside £10 million for allocation in 2010-11 to support STEM subjects.

We are not cutting numbers with these efficiency savings. I remind noble Lords that the Government have provided extra money to finance a growth in student numbers. We have allocated an extra 40,000 student places for the three years between 2008-09 and 2010-11. Numbers are still rising. However, we must get this in perspective. We have never had a situation where everybody can get into university: it has always been a competitive scenario.

I apologise at this stage for the fact that I will not be able to address every point made by noble Lords in what I thought was a stunning debate. I will address one key point that emerged in the course of the debate. My noble friend Lord Mandelson, the First Secretary of State, talked about seeing this not just as a challenge but also as an opportunity. There has been a dichotomy here, with one group of noble Lords saying that the cuts put at risk the whole of higher and further education, and others saying, somewhat more candidly, that we have the opportunity to modernise and could offer more flexible approaches in higher education. We may be talking about two-year degrees or other more flexible approaches. I was grateful to my noble friend Lord Puttnam for reminding us of the reaction to the original proposals for the Open University: “Heaven forfend; it is the end of proper higher education as we know it”. Of course, it was not: it was an outstanding success. No one should tell us that higher education institutions do not have a propensity to offer a more varied and flexible agenda. We know that it is being offered by some institutions. Others should look at them and try to adopt best practice.

I am conscious of the time, so I will do my best to limit my remarks but at the same time pick up on more points. As I said, despite the savings of £340 million, total investment in training places for adults will increase by 2.9 per cent—a figure that I have already given—reaching a total of £3.5 billion.

I also remind the House that business spending on adult skills has always dwarfed public spending. It is right that we continue to encourage employers to make that investment and to reap the benefits in terms of the profitability that we know it brings. The skills strategy that we published at the end of last year highlights the greater emphasis that we are placing on skills in emerging sectors, such as low carbon.

On the HE side, finances are again in a much better place than they once were. In addition to the figures that I cited earlier, universities are now considerably better at generating their own income. In fact, total university income in 2007-08 was around £23 billion—some 39 per cent higher than five years earlier.

We would describe these savings of about 5 per cent for 2010-11 as modest efficiency savings, and we believe that universities or higher education institutions can rise to this challenge. HEFCE has already taken the decision to try to ensure that, when it comes to front-line teaching and so on, the cuts will amount to only 1.6 per cent. I think that I have already covered the situation in relation to student places and the fact that their number will grow again in 2010-11.

I take the opportunity to reassure the noble Lord, Lord Ramsbotham, that in fact we are going to spend £3 million extra on education in offender institutions. Therefore, we have increased the budget there. I do not necessarily say that that satisfies all his aspirations, but it is moving in the right direction.

Comments to the effect that these savings will cause the ruination of the sector are inaccurate. Or they should be, so long as universities continue to manage their finances prudently, to diversify their sources of income, as we have consistently encouraged them to do, and to seek efficiencies where they do not affect an institution’s core business. In any event, they must be seen in the context of that 39 per cent rise in university income.

A number of noble Lords expressed concern about research funding, and I want to give some reassurance on that. There are two relevant ring-fenced budgets for science and research: the science and research budget of £4 billion and HE research funding of £1.9 billion. Total investment in research funding will rise to a record level of £6 billion by 2010-11. As I said, that is made up partly by the science research budget and the HEFCE QR budget. The science research budget will have more than doubled in real terms by the end of the CSR7 period compared with 1997. We still have a world-class research base, second only in the world to the US for research quality, and we lead the G8 for research on productivity papers and citations per pound of public funding.

I understand the concerns expressed by noble Lords about the number of student places. As I said, the 2009 admissions round was tough for everyone concerned—for applicants and their families, for universities and for UCAS. This year, too, there may be significant numbers of qualified young people leaving school or college at the age of 18 who cannot get a place at university. However, it is far too early to say for certain what the situation will be. In most years, the proportion of applicants who gain a full-time undergraduate place is around 80 per cent. Not everyone gets the right grades and some will choose other options. I also point out that students expect a good-quality experience at university and, looking at the measures in the National Student Survey, we can see that we are fairly steady at about 80 or 81 per cent. Unsustainable growth is in no one's interest. Over time, it would undermine the quality and the high international standing of our system.

The future funding of universities is clearly a significant issue, which is why we have asked the noble Lord, Lord Browne, to consider all aspects of university funding in his independent review of student finance—he will report on his findings in the autumn—and that is why we are asking HE institutions to consider diversification and different forms of provision. Employers are telling us that further expansion of campus-based, full-time, three-year degree courses are not necessarily the answer. Clearly, that traditional model has served and continues to serve us well; it is popular with students and parents alike. However, we have to explore other options such as part-time, two-year foundation degree courses and three-year honours courses which are delivered intensively over two years or which can expand. I was grateful for the contribution from the noble Lord, Lord Butler, and his analysis of the need for change. Employers are looking for flexible options which are manageable in and around working hours and many potential students want the same.

On further education and what we have described as Backing Young Britain, I shall direct your Lordships to the broader effort which the Government are putting in to help young people through the recession, funding extra advanced apprenticeships for 19 to 30 year-olds up to 35,000 over the next two years. We need a modern technician class working in the space sector, in renewable energies, in nanotechnologies, deploying around £100 million to support around 160,000 training places in those areas.

Unfortunately, I do not have time to answer all the questions which were raised in what I thought was a very diverse, interesting and important debate. I thank all noble Lords who participated. Those questions which I have not been able to answer here I shall answer in writing.

My Lords, I thank all Peers who have spoken in a debate of outstanding quality. A debate of such quality is almost a justification for this House. Had it taken place in the House of Commons it would not have been of this quality.

Certain things have come out of the debate, such as diversity of provision, the humanities at Oxford, religious studies from the right reverend Prelate, philosophy and social sciences, alongside great pleas for development of the STEM subjects. There is also diversity of funding. The next Government will have to devise totally new funding for universities. The Browne review is only half the answer. If it comes up with uncapped fees and need-blind and so on, that will not be enough because, with the way that we fund student loans, that will mean a direct increase in the PSBR and no Government will accept that. I am glad to say that our shadow Ministers are thinking about all sorts of other schemes to do that. The best advice for all universities is: put not your trust in Governments for funding; they always let you down; they will never give you enough, not even a Conservative Government.

I was delighted to learn from my noble friend Lord Patten that, when I was Secretary of State, the unit fund per student was £1,500 more than it is today. I did not know I was so good. I am very pleased to note that figure, but we did rather better than the Minister has made out. Universities must be supported and protected and that has to come from funding. I thank everyone who spoke in the debate.

Motion withdrawn.

Employment Relations Act 1999 (Blacklists) Regulations 2010

Motion to Approve

Moved By

That the draft regulations laid before the House on 18 January be approved.

Relevant document: 6th Report from the Joint Committee on Statutory Instruments.

My Lords, now for something completely different. For a country proud of its tradition of tolerance and fairness, the blacklisting of trade unionists should be anathema. It is the sort of outdated practice we had hoped to leave behind long ago. It is underhand and unfair; it is discriminatory; and it blights people’s lives. Workers have a fundamental right to join trade unions if they wish. There is also a fundamental right for trade union representatives and other members to participate in their union's activities. Trade union representatives are the unsung heroes of the trade union movement. These volunteers provide valuable support for millions of workers and help to create safe, fair and productive workplaces. No one should lose out because of their union role.

We have long had legal protections in place to safeguard trade unionists from discrimination. These legal protections fulfil our international obligations to guarantee freedom of association, and are widely accepted as essential for good industrial relations.

For many years, it appeared that the protections were broadly sufficient. The last known blacklister—the Economic League—was exposed and its work terminated in the early 1990s. We had hoped that with its demise we had seen an end to that style of industrial relations. Sadly, that was not to be.

In March last year, a large-scale and clandestine vetting system was discovered in the construction industry, run by an organisation called The Consulting Association, or TCA. Through painstaking work, the Information Commissioner found evidence that 40 construction companies had engaged with TCA’s secret vetting system, containing details of some 3,300 people, many of whom were trade union activists. That vetting system had been systemically used to deny gainful employment to those listed.

TCA was successfully prosecuted by the commissioner for breaching data protection law, and it was shut down. Its proprietor, Mr Ian Kerr, was fined £5,000, and 15 enforcement notices were issued against TCA and some of its user construction companies to stop them collecting and using personal data for vetting purposes.

We have to ensure that that clear breach of rights can never happen again. That is why we are introducing the draft regulations. We believe that trade union blacklisting should be made expressly unlawful as a matter of principle. We should not rely on more general legislation, such as the Data Protection Act 1998, to achieve that effect. The regulations build on that legislation, extending it to ensure that we send a clear signal to employers and compilers that activities associated with such lists are wrong, damaging and unlawful. They provide clear and targeted remedies for individuals and trade unions. Blacklisting represents an aggravated form of discriminatory behaviour. In recognition of that, the employment tribunal is empowered under the regulations to award £5,000 as the minimum level of compensation, so most complainants should be able to receive higher compensation under the regulations than they would if they relied on existing protection under trade union law.

I will now briefly explain some of the other main features of these draft regulations. They are made under Section 3 of the Employment Relations Act 1999, which provides a power to introduce regulations which would prohibit the blacklisting of trade unionists. In Regulation 3, a prohibited list—the name that the regulations give to a blacklist—is tightly defined. Such lists need to contain details of trade union members or activists, and, importantly, they must also be compiled with a view to being used to discriminate in recruitment or employment on the grounds of trade union membership and activities. I stress that.

We believe that very few lists which employers or others hold would meet those criteria. For example, when the draft regulations were debated in the other place, it was asked whether the list of individuals barred or restricted from teaching or otherwise working with children and vulnerable adults would be prohibited by the regulations. That is an important, legitimate list, which is held by the Department for Children, Schools and Families and utilised for vetting and security purposes. It is possible—indeed likely—that some trade union members will be on that list. However, it will be unaffected by the regulation because the DCSF list was clearly not compiled with the purpose of discriminating on grounds of trade union membership or activity.

In Regulation 4, we provide exceptions for certain activities involving blacklists. For example, it will permit whistleblowers and lawyers to access such lists in certain circumstances. Under the regulations, there are avenues for complaint to either the employment tribunal or the court. In the latter case, the courts can exercise important order-making powers which are unavailable to the tribunal.

As our impact assessment shows, the costs of complying with the regulations are very low. Businesses and individuals should not be involved in blacklisting because, in the main, it is already unlawful under existing law. Some businesses will incur some modest costs in familiarising themselves with the regulations and checking their current listing practices. The impact assessment concludes that small businesses are much less likely to need to check lists, in part because union membership is very low in such companies. Small businesses are therefore much less likely to hold lists of trade unionists, such as lists compiled to enable trade union members to pay their union subscriptions from their earnings at source.

We must send out a strong message to all those who feel that it is acceptable to act in that corrupt and deceitful manner. We know that the vast majority of employers do not use blacklists, and the regulations do not interfere with their normal vetting practices. The draft regulations are balanced, reasonable, and robust. They have been through two periods of consultation. They have been built to complement existing protections in the area, which are found in trade union and data protection law.

The regulations have been debated in the other place and accepted, and the Joint Committee on Statutory Instruments has raised no objection to them. I strongly believe that this new piece of legislation will bring to an end the disreputable practice of blacklisting once and for all, and I therefore commend the regulations to the House.

My Lords, as my honourable friend Jonathan Djanogly made clear in the debate on these regulations in the other place on 8 February, the Conservative Party is absolutely opposed to discrimination against individuals, and discrimination on the grounds of trade union membership is no exception. In fact, it was under a Conservative Government that the Trade Union and Labour Relations (Consolidation) Act was enacted in 1992, Section 137 of which made it unlawful for employers to discriminate against individuals due to their membership of a trade union.

These regulations recognise that it is perfectly legitimate for employers to keep a list of union employees for a number of administrative reasons. However, they will increase the burden on employers because it will make it more difficult for those who hold such lists to know when their actions break the law. The same list could theoretically be kept by two employers and one could be in breach of the new regulations while the other is not. This uncertainty is likely to place further strain on the normal administrative practices of employers in dealing with workers, which necessarily involve compiling and keeping lists. There is also the risk that employers may be subject to unnecessary, perhaps vexatious, actions against them by employees for being in possession of such lists, which are, in fact, being used exclusively for legitimate purposes. For example, my honourable friend pointed out the legitimate need for an employer to know which employees are union members, so that negotiations can be had with the union on their behalf, and which are not union members and so need to be negotiated with directly. The end results of regulations such as these can only be to increase the number of wasteful employment tribunal claims.

It is already unlawful for employers to discriminate against individuals on the grounds of their trade union membership or activities. The final impact assessment on the regulations describes them as having,

“a wholly positive effect in safeguarding personal information”,

but are they really necessary? Surely better enforcement of existing legislation would have an equally positive effect.

Turning to the case of the Consulting Association, which inspired these new measures, it should be highlighted that the illegal actions were discovered not, of course, as a result of these regulations, because they were not in force, but as a result of the Information Commissioner’s existing investigative powers under the Data Protection Act. The creation of lists in relation to trade union membership is treated as sensitive personal data and is therefore covered by the Data Protection Act, which provides comprehensive protections for data subjects and imposes duties on data processors. It did not require these regulations. It is therefore difficult to see that the way to work towards solving this issue is through yet more regulation. Why would it not be more appropriate, if, indeed, it is necessary, to make improvements to the Data Protection Act to enable it to be put to more effective use in this area?

There is little or no evidence about the scale, if any, of blacklisting taking place. Indeed, the final impact assessment of the regulations describes blacklisting as,

“an unusual, and uncommon, activity”.

The Minister acknowledged that in his introductory remarks. The real problem is the covert nature of the blacklisting that takes place, which, unless I am mistaken, the regulations do not address. Legislation is already in force to tackle discrimination once it is discovered. The facts of the Consulting Association case suggest that the wrongdoers were not ignorant of the law but were keen to conceal their activities. The final impact assessment states that the objective of these regulations is to,

“give a clear signal about the unacceptability of blacklisting”.

Clearly, targeted measures would be far more useful than signals. The regulations do not create any new investigative powers, and further cases are likely to be discovered only by enforcement of the Data Protection Act. The burden on businesses is real, but currently unquantifiable, so it is completely unclear how accurately the costs to business have been measured by the Government. In July 2009, the initial impact assessment predicted costs of £526,000, but in the January 2010 impact assessment that figure was reduced by more than 50 per cent to £285,000.

The costs and burdens to businesses are twofold. First, there are the costs of them familiarising themselves with these new regulations and implementing changes. Secondly, there are costs associated with failures in compliance or in dealing with legal actions by employees where there have been alleged failures. The January 2010 impact assessment recognises but does not provide a figure for the potential additional costs where there has not or may not have been full compliance by businesses. It is estimated that 3,200 public and private sector employers will be impacted by these regulations.

It is an unfortunate time to lay this additional regulatory burden on businesses, particularly when it is demonstrably unnecessary. The fact that the Government initially postponed indefinitely implementation of these regulations suggests that they do not add anything to existing legislation. The CBI has described the measures as,

“knee-jerk reactions to one-off events”.

A further disturbing issue is the perfunctory response to feedback from the consultation process. The Government failed to address trade union concerns about the scope of these new regulations. The Union of Construction, Allied Trades and Technicians feels that there is inadequate protection under the new regulations.

In conclusion, we need a full explanation from the Minister if we are not to conclude that this is an example of yet more unnecessary, burdensome red tape at a time when the focus of all businesses should be on getting on with business without distraction from more expensive and unjustified regulation.

My Lords, I rise from these Benches to welcome the Employment Relations Act 1999 (Blacklists) Regulations 2010. The order has taken 11 years to be brought forward and we welcome the fact that the Government have decided to properly legislate on the issue only once clear evidence of its necessity has been proven. Liberal Democrats support all measures that seek to prevent discrimination on grounds of trade union membership or activities.

We would like to probe the Government on their plans for continued monitoring of this area of trade union law and on what direct consultations they held before bringing these regulations forward. We are well aware of the Consulting Association case referred to earlier, which has effectively required that these regulations are brought into force. What consultations did the Government hold before and after this case with trade unions and other employment-related bodies on these issues? What plans are there to continue to monitor their impact? What information and communication are the Government planning to make employers as a whole aware of the existence of these regulations?

My Lords, in response to the comments made by the noble Lord, Lord de Mauley, it is important that we explore the genuine concerns that he raised. In relation to legitimate lists, lists in themselves do not present a problem. It is the use to which lists are put and the abstracting of names from those lists, as we saw in the case that was put before us. It would take an employer making a decision to go down this road before there would be any danger of a prosecution under this Act.

The noble Lord, Lord de Mauley, asked why we do not amend the Data Protection Act. The problem is that it would involve changing primary legislation. We have a specific regulation-making power to prohibit blacklisting. It therefore makes sense to use this power rather than amend an Act which deals with many other matters relating to data protection. He said that there were not enough targeted measures and only signals for employers. The regulations make it clear that not only is blacklisting illegal, but set out remedies for the victims. The CBI said that this is a “knee-jerk reaction”. As the noble Lord, Lord Lee of Trafford, pointed out, we waited until we saw whether there was any need for regulations, and indeed it was nearly 11 years before a case emerged. Quite frankly, we hoped that there would not be any need for them, but it was obvious from this case that there was such a need.

We do not believe that we have underestimated the impact assessment. We think that we have it right and that for small firms there will be little or no effect and, for larger firms, little other than familiarising themselves with the provisions. We think that that is absolutely right. Good employers have nothing to fear in these regulations and they will not need to adjust their behaviour. The covert listing of personal information is already unlawful under the Data Protection Act. We have prepared guidance on the regulations for the direct.gov and BIS Business Link websites which will be posted when they come into force; indeed the draft guidance has been available on the BIS website since 12 January. The noble Lord asked what consultations had taken place. As I said, there were two rounds of consultation, the first taking place between February and May 2003 and the second between July and August 2009. A further question was put in relation to monitoring. I feel sure that we will need to monitor the impact and I am looking for inspiration from the Box. I think the answer is that we will review the regulations after two or three years and will check on any tribunal cases that arise. However, we doubt whether there is a good case for undertaking an early and formal review because of the rarity of blacklisting.

In conclusion, we firmly believe that these draft regulations are forceful enough to put a stop to this outdated practice once and for all. Some trade unions have indeed asked us to go further and make blacklisting a criminal offence, but it is worth remembering that these regulations do not exist in isolation. They operate in the context of closely related protections concerned with trade union rights and the use of personal data. It will be their combined effects which will curb blacklisting. We believe that the draft regulations are targeted, balanced and proportionate. I stress that they should not affect normal listing activity by employers so that fair and open vetting procedures can continue as before. Most businesses will be unaffected by the regulations and, as I have said, we estimate that the compliance costs will be low.

Motion agreed.

Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) (England) Regulations 2010

Motion to Approve

Moved By

That the draft regulations laid before the House on 5 January be approved.

Relevant document: 6th Report from the Joint Committee on Statutory Instruments.

My Lords, the regulations laid before the House on 5 January and approved by the House of Commons on 10 February set out a fee structure for new categories of planning application developed to introduce a greater degree of flexibility into the planning system and assist householders and developers as the country moves towards economic recovery. A new application type gives local authorities the power to extend the life of existing planning permissions that are due to expire for a further limited period without the need for a full, new planning application. In addition, the Government have also introduced a formal system to allow applicants to agree non-material amendments to existing planning permissions with the relevant local planning authority, similarly avoiding the need to submit a full new planning application.

These new legislative provisions were laid before Parliament on 8 September 2009 and came into force on 1 October 2009. If approved by noble Lords today, the associated change to the fee regulations will be brought into effect tomorrow.

The regulations also establish a lower fee cap specifically for planning applications falling within category 9(b) of Part 2 of Schedule 1 of the regulations, reducing the cap from £250,000 to £1,690.

The principle underlying the planning fee regime is that would-be developers, rather than the council tax payer, should meet the bulk of the costs incurred by local planning authorities in considering any application submitted. The Government have worked closely with local authorities, developers and other interested parties in establishing a fee level that reflects this driving principle of cost recovery in the planning fees system.

In the case of an application submitted to extend the life of an existing planning permission, the Government propose that, if the applicant is a householder, the relevant fee will be £50; if the application is for major development, it will be £500; and in any other case, it will be £170. In the case of an application for non-material changes to a planning permission, if the applicant is a householder, the relevant fee will be £25; in any other case, it will be £170.

The fee levels proposed reflect the outcome of the government consultation on this issue undertaken between 18 June and 13 August 2009, where a flat fee of £170 was proposed for extensions to planning permissions and for non-material amendments, with the exception of non-material amendments to householder applications, for which a flat fee of £25 was proposed.

In response to the consultation, a number of local authorities noted concern that the £170 fee for extending planning permissions would not cover the costs of processing larger applications. In response, the Government undertook a further consultation exercise involving earlier consultation respondents and an expert panel on planning fees. They proposed a higher fee of £500 for all major applications, and a lower fee of £50 for a householder application. These fee levels attracted support from a significant majority of respondents and are the levels that we now propose to take forward.

The reason for these applications having a lower fee than would be paid for a new permission is that there is less work for the local planning authority due to the extent to which material considerations have changed the original permission. The fees proposed will enable the local planning authority to undertake the necessary work on a cost-recovery basis.

Finally, the regulations also establish a lower fee cap specifically for planning applications falling within category 9(b) of Part 2 of Schedule 1 of the regulations, reducing the cap, as I said earlier, from £250,000 to £1,690. This cap was raised in error to the £250,000 maximum in the last revision of the regulations in 2008, when it should have been increased in line with the overall fee increase. The lower cap on this category was to ensure that schemes such as habitat creation were not subjected to an unrealistic fee as a result of the area of land that they cover. The amendment reinstates that lower cap and corrects the error made in the 2008 regulations. I commend the regulations to the House. I beg to move.

My Lords, I shall rise briefly on these regulations; I do not think that they are particularly controversial. In fact, many elements of them are welcome. I thank the Minister for the way in which he set out the rationale behind the regulations. It is notable that the Government acknowledge that there was an error in raising the threshold in the first place. It is always encouraging to hear that kind of admission and a desire to correct the error. Also encouraging is the fact that there seemed to be a meaningful consultation exercise. As the Minister said, local planning authorities’ representations were taken into account as a result of that and changes were made to the proposals. The way in which the exercise has been conducted is encouraging also because it is likely to save applicants substantial amounts of money in the planning process. The overall saving is estimated in the impact assessment to be between £4 million and £14 million per annum—although that seems a pretty broad range —with administrative costs for business being reduced by between £5 million and £18 million per annum. Again, one has to applaud all that.

These matters are important because the consultation document shows a worrying trend which I hope the Minister will comment on when he responds—if he can; he is not to worry if it is not possible. The schematic shows that the number of applications which have progressed has declined from a high of 65 per cent in 2003-04 to half that in the third quarter of 2008. We do not have later figures but it would be interesting to see them. In 2007-08, over 1,000 major applications were progressed; that number has fallen to fewer than 200. Those figures reveal the true impact of this. If it is possible for the Minister to update those figures, it would be extremely welcome.

While it is very good news for business that the cost of applications is being reduced, there are fewer applications. The fee income from applications is an important revenue stream for local government. What consideration has been given to the impact of the reduction in fee income on pressures that may occur elsewhere in the budgets of local authorities?

My Lords, the Liberal Democrats welcome flexibility for local authorities given the difficult economic environment and the need to lay the groundwork for future recovery. Flexibility will be needed as the recovery proceeds at different speeds in different areas. A working planning system can aid this.

On the £250,000 maximum limit which the regulations will revise back to £1,690, I understand that this was a mistake made under the 2008 regulations, the intention of which was to increase the cap by 25 per cent. Is it a change in policy or was it indeed a mistake that we now have to rectify? From what the Minister said, we can be clear that it was a mistake.

As the noble Lord speaking for the Official Opposition said, councils have suffered a loss in fee income during the downturn, with fewer applications made. I repeat his question: what measures have the Government taken to help local authorities with this? The concern is that if the fee income falls substantially as a result of any amendments, there might be additional costs for local authorities. Further, what assessment have the Government made of the potential impact of these regulations on the prospects for development sites which are currently empty?

Broadly, though, we are happy and supportive of these regulations.

My Lords, I am grateful to both noble Lords for their support for these regulations. The noble Lord, Lord Bates, said it was good to see the Government put their hand up when an error had been made and to confirm that it was an error. I can confirm also for the noble Lord, Lord Lee, that it is not a change of policy that we are dealing with here. A number of amendments were made to the schedule to increase the cap; this one was included in error. We understand that not too many people have been affected by it in the interim, but obviously now is the first opportunity we have had to correct it and to put matters right.

The noble Lord, Lord Bates, also acknowledged that we had a meaningful consultation and he is right to say that it changed our original proposals on the fee structure. He referred to the fact that this would lead to administrative and cost savings for business.

He also mentioned the number of applications that have been progressed in recent years and asked for an update on that. I may be able to provide him with further information in writing but I understand that major applications are significantly lower and that there has been a 22 per cent fall in major applications in the past year. I think that his point was on applications progressing to action. Of course, a key component of the changes introduced last year, by giving the opp