House of Lords
Thursday, 18 July 2013.
Prayers—read by the Lord Bishop of Norwich.
To ask Her Majesty’s Government whether they will discuss with the Church of England how to commemorate the 304 British soldiers who were executed by the British Government in World War I and who are currently not commemorated in any existing war memorials.
My Lords, the Commonwealth War Graves Commission commemorates by headstone or memorial the more than 1.1 million British and Commonwealth men and women who gave their lives in the First World War. This includes those executed for the more serious of what were called military offences. A memorial initiated by the Shot at Dawn association at the National Memorial Arboretum commemorates 306 British and Commonwealth soldiers who were shot for serious military offences during the war. All their names are part of the memorial.
My Lords, I thank the Minister for that response. Does he agree that the total dead recorded for the First World War amount to 705,000? I believe that there are at least 10,000 names missing from the war memorials scattered around our country. It is quite disgraceful that the act of annual commemoration is in effect not complete because nothing has been done to restore those names. We should now look to the Government to lead, in line with the church and hopefully the education system, a national campaign to research and restore the names of every missing person. Can we please have some undertaking from the Minister that he will lead the department, with the co-operation of the church, in a national exercise to restore all the missing names by 11 November 2018?
My Lords, my understanding is that the Commonwealth War Graves Commission commemorates all names on headstones or, if they are missing, on the memorials. My noble friend’s main point is that new names are emerging. One of the interesting things from the research is that bodies are being discovered and named, and military ceremonies are being held to acknowledge them. A lot of work continues to be done.
My Lords, while I am sure the Minister is aware that the Church of England does not have sole responsibility to add names to war memorials but would be glad to work with others on this important issue, is he aware of the work being undertaken by the Church of England, the Imperial War Museum and the War Memorials Trust together to develop educational materials linked to the centenary of World War I to help school children and the wider public to learn more about all the people commemorated and to cherish these memorials and all that they represent?
I entirely agree with the right reverend Prelate and I am aware of the very important work being done by the Imperial War Museum, the Commonwealth War Graves Commission and the Heritage Lottery Fund. The important thing is that English Heritage is restoring, as we all see, the national memorial in Whitehall. I commend it for doing that and I hope very much that others will take that lead so that war memorials across the land, in whosever ownership or custodianship, are in very good order for the commemorations.
My Lords, like the noble Lord, Lord James, I would certainly like to see the 306 more widely memorialised around the country, but that is best left to the churches and local communities rather than to the Government. Would the Minister join me in paying tribute to my noble friend Lord Browne of Ladyton, who five years ago next month, against much opposition, as the newly appointed Secretary of Defence, sought and obtained a pardon for the 306? That has brought great comfort to the families. I know that there is a principle of other times and other customs, but this was long overdue. It took great courage to do, and I salute him for it.
The noble Lord has out-trumped me, because I was intending to acknowledge what the noble Lord, Lord Browne of Ladyton, did with the Armed Forces Act 2006. It was very important for the families involved, and very important for the nation as well.
My Lords, does the Minister not think that the rest of the United Kingdom, as well as England, should be involved in the very proper inclusion of these names? Should not the whole discussion include the churches in Scotland, Wales and Northern Ireland?
My Lords, all the commemorations will involve not only all parts of the United Kingdom but all parts of the Commonwealth. They will also very much involve partnerships with all the countries that were allies and on the other side. The noble Lord mentioned local communities. We have war memorials across our land. They are the responsibility and the pride of their local communities. It is there that we should be directing and encouraging, through the Heritage Lottery Fund and the War Memorials Trust, this important work across the United Kingdom.
My Lords, I am extremely grateful to my noble friend for his recognition and the response of your Lordships’ House to that. I am embarrassed by it, too, because I was merely the last actor in a long campaign. Many others deserve that gratitude. They campaigned in much more difficult circumstances than I had to work in on this challenging issue. Beyond the pardoning of these 306 who were shot at dawn, there is unfinished business. We can only imagine the horrors of serving in the front line of World War I, thank goodness. The Minister is right that all those who were shot at dawn are memorialised. Unfortunately, they are memorialised in the context that they were shot at dawn. On memorials across Commonwealth cemeteries, there is a legend that says that they were executed for the crime that they committed. They did, however, also serve, and it cannot be beyond the wit of man to amend slightly but significantly that beautiful memorial in the National Memorial Arboretum to record the fact that they served as well as the fact that they were executed.
The noble Lord presents an interesting scenario. It is one that those involved with the Shot at Dawn association and others would need to consider when deciding how to deal appropriately and best with changing circumstances and views. One of the problems is that 60% of all records across the military were lost in the Second World War blitz, and there are sometimes difficulties in verifying the records because of that. Indeed, the records of the Indian Army have already been destroyed, I believe.
To ask Her Majesty’s Government whether they intend to release the records and files of the 1963 inquiry which led to the publication of Lord Denning’s report The Circumstances Leading to the Resignation of the Former Secretary of State for War, Mr J.D. Profumo.
Does my noble friend agree that the records relating to Lord Denning’s inquiry constitute an immensely valuable historical source which, if released, would deepen our knowledge and understanding of one of the most sensational political scandals in British history? Does he also agree that a cloud of suspicion hangs over the Denning report? It has been described as “the raciest and most readable blue book ever published”. It has also been depicted as an endorsement of tainted evidence from journalists and the police used at the trial of one of the principal protagonists in the extraordinary drama, Dr Stephen Ward. That is the view of Mr Richard Davenport-Hines, author of the latest detailed account of the Profumo affair. There was collusion between the police and journalists 50 years ago on a scale that would make Lord Justice Leveson’s hair stand on end. Do we not need to see if we can get to the truth through the release of the Denning records?
My Lords, I thank the noble Lord for giving me the opportunity to go into this fascinating case. There has been a series of constructive non-decisions. Had decisions been taken on several occasions, the papers would have been destroyed. Indeed, in a debate in this House in April 1977, Lord Denning announced that the papers had been destroyed. The following day the Lord Chancellor stood up to say that he had not permitted this and that this action had not been taken. Given, however, the assurances Lord Denning gave to all of those he interviewed that these records were entirely confidential and that they would never be published, it seems acceptable that they should not be published while those who were interviewed by Lord Denning are still alive.
My Lords, given the suspicions at the time of Soviet espionage and all the excitement of Cabinet members being involved in regular orgies, it is perhaps not surprising that 50 years on we still do not know the truth of the Profumo affair. Will my noble friend tell us by what criteria it is decided how much time has to lapse before such matters are made public? Who takes that decision? When and how are those decisions reviewed and by whom—or are these matters also secret?
My Lords, I am conscious that there are several Members of this House who would love to write the next book on the Profumo affair. If I were asked to advise on the decision on this, I would say that we should hold to the principle not that the content should never be published but that it should not be published while those who gave confidential information on the assurance that it would not be published are still alive—and some of those who gave that evidence are still alive. The decision will have to be approved by the Lord Chancellor and the Minister for the Cabinet Office. The Master of the Rolls—as Lord Denning was then—also plays a role in such decisions as chair of the advisory board on public records.
My Lords, I declare an interest as one who formerly had the custodianship of these papers. I can confirm that the evidence was taken by Lord Denning on the specific understanding that it would never be published. I think that one would need to be very bold to go back on that, certainly while people who gave evidence to the Denning inquiry or who were involved in events are still alive, and perhaps during the lifetime of their descendants. Does the Minister agree that it will need something like 100 years before one can consider whether these papers should be published?
My Lords, we are in an era where freedom of information and changes to the way in which information circulates mean that many decisions need serious review. Can the Minister confirm that this is a one-off situation? Or is he articulating a new policy whereby inquiries of the type led by Lord Denning will give rise to the curious situation of papers not being held in the Public Record Office in the way that all other papers are held?
I can give an assurance that this was a very exceptional circumstance. Officials have looked back at the archive on a number of occasions and have assured others, including myself, that there are still some sensational personal items in here which would be embarrassing if released. Therefore this is very much an exceptional case. The promises given by Lord Denning to those he interviewed were also rather exceptional. Therefore the line which the Government are in effect taking is correct; that is, to not decide at present either to destroy or to release the papers but to review the situation from time to time in the light of how many of those who gave evidence are still with us.
My Lords, I declare an interest in that my new musical is about Stephen Ward and I am presenting a documentary on him for ITV. Is the Minister aware—this is what concerns me—that the fact that these files will be closed for a staggering 83 years gives rise to an awful lot of unhealthy speculation about who the individuals might be within the files?
My Lords, I confess that I am slightly baffled by this. Did Lord Denning have the authority to give those assurances? I thought that the release of public documents was governed by various rules and regulations—there may even be an Act—that there was a 30-year rule and a 50-year rule, and that that was, so to speak, part of the governmental fabric. Is the chairman of an inquiry that has been set up by the Government in those circumstances to inquire into a matter like this entitled to give an assurance which, in effect, eats into or may even destroy the purposes of the various rules and regulations about release?
My Lords, this decision has been reviewed several times. As I remarked, the review has considered whether the files should be destroyed, maintained or released. As the noble Lord is well aware, there are a number of cases, particularly those with security and defence issues, where papers are retained for more than 50, 30 or 20 years. That has to have the approval of what is called a Lord Chancellor’s Instrument. It would now be appropriate to consider whether a formal Lord Chancellor’s Instrument needs to be applied to these files. I will add that at the time, Lord Denning refused to allow the head of the security services access to the papers.
House of Lords: Peers’ Entrance
My Lords, the new equipment at Peers’ Entrance is being trialled by the doorkeepers, who are moving from a paper-based system to an electronic one. The Administration and Works Committee has discussed the trial at two of its meetings, and members of the committee have been provided with a briefing note in order to brief other Members in their parties or groups. I also answered a Written Question on this matter on 17 June.
My Lords, I hope that Black Rod will now tell us that the equipment will not require the registration of visitor names and that the use of equipment by Members at this stage is to be voluntary, which will obviously thereby render the system of little benefit in terms of security. If ever it was thought that the use of the equipment should be mandatory, can we have an assurance that the House will be fully consulted and allowed to take the final decision on the introduction of its use?
The new system is not mandatory; I can give that clarification and assurance completely. I am very conscious that Members often arrange visits at short notice, which prevents them being able to give advance notice to the doorkeepers. Therefore Members will not have to pre-book their guests, who will not be turned away if they are not on the list. If they so wish, Members will still be able to record only the number of guests without the names. Furthermore, I assure the House that the system would not be made mandatory without the House being consulted and the House deciding. However, I encourage Members to book their guests in as it makes the processing of guests coming through that very constricted area much easier; I make that request.
On the issue of security, I partly fall back on the tried and tested formula that it is established policy not to comment publicly on specific matters of security on the parliamentary estate. However, I assure the noble Lord that security was not the primary reason for the introduction of the new system. One of the main reasons was to introduce a slicker, more efficient service for Members and their guests. We are trying to modernise a little and replace the pens and papers with computers. I appreciate that this is one of the challenges that the House faces as it struggles from time to time to come to terms with the technology of the latter half of the 20th century.
My Lords, notwithstanding the understandable caveat in the first Answer of my noble friend the Chairman of Committees, has there been any indication from members of staff, including police and custodians, that security issues may arise from the sharp increase in the number of visitors to the House, which is a welcome development but may pose problems like this, partly because many are sent by MPs to visit this House as well?
The noble Lord makes an important and valid point; it is always a matter of proportionality. We want to encourage people to visit their Parliament—that is absolutely right—but at the same time we have a responsibility regarding security, not only for Members of the House but also for the people who work for and with us.
My Lords, I am sure that my noble friend the Chairman of Committees would agree that security and safety are of prime importance in this House. Does he agree that it would be of great assistance to those who help us in maintaining that security, including Black Rod, if we played our part by reminding ourselves to wear our identity tags so as to assist them?
Human Rights: Burma
My Lords, the full range of human rights issues were raised. Ministers called for the release of all political prisoners and for an end to ethnic conflict. They invited Burma’s support for the preventing sexual violence in conflict initiative. On Rakhine State, Ministers welcomed the abolition of the Nasaka security force, raised concerns about the two-child policy and pressed for citizenship for the Rohingya minority. On anti-Muslim violence, they stressed the need for accountability, welcoming recent arrests.
Does the Minister agree that history shows that the only language that the Burmese generals understand and respond to is firm, sustained pressure? What steps did the Prime Minister take to set out explicit benchmarks by which progress in Burma will be measured, a specific timeline by which we expect to see progress, and the possible consequences if there is no such progress? The Burmese President is very good at offering the right words and promises when required, but less good at fulfilling them.
My Lords, I would agree that history shows that one of the most difficult periods in a country’s history is when it is attempting to move away from a highly authoritarian regime. The question whether it can move from that without a bloody conflict is, of course, always one of the difficult ones. We have taken the choice to encourage the moves currently under way in Burma; things are improving a good deal there but, of course, they have a long way to go. The opposition, including Daw Aung San Suu Kyi, have very much encouraged the move that the British have taken.
My Lords, is it not crucial that we take our lead from Daw Aung San Suu Kyi, as the noble Lord has just said? I met her just before Easter, when she said that we must engage in dialogue—but also that we must be realistic. During the discussions with Thein Sein, were limits placed on the new military relationship that has been announced by the Prime Minister? In particular, have we raised the Burmese army’s use of child soldiers, forced labour, sexual violence and land mines? Can he confirm that it is not our intention to sell arms to Burma?
My Lords, I can confirm that the first thing that Aung San Suu Kyi asked the British Government to do was to appoint a defence attaché to Burma some months ago. We are now offering military training to a number of Burmese officers in this country to help them through the transition. Requests have also been made to assist in retraining the Burmese police. These are all things that we think will help through a transition—not, of course, towards full democracy and a perfect resolution of all these problems, but we see the situation as improving. We are doing our best not only to help it to improve but to monitor how far it goes.
When the noble Baroness, Lady Kinnock, raised the Human Rights Watch report on ethnic cleansing and crimes against humanity against Rohingya Muslims in Arakan state, she was told that it clearly needed to be supported by further evidence. What has happened to the independent investigative commission announced by the Burmese Government as long ago as last September? Is it going to be established in the near future? To ensure its credibility, will my noble friend suggest to the Burmese that the UN High Commissioner for Human Rights, Navi Pillay, be asked to nominate the members of that commission?
My Lords, I will have to write to the noble Lord with a specific answer to his question, but I can confirm that Alan Duncan, from the Department for International Development, was in Rakhine state in June, that my noble friend Lady Warsi was looking at the refugee camps in Cox’s Bazar shortly before that, and that British officials are very regularly in and out of Rakhine state.
Is the Minister aware that the Burmese Government refuse to allow the UN access to military sites so that it can identify and discharge children present in the Burmese army border forces, border guard forces and other armed groups? Following on from the question asked by the noble Lord, Lord Alton, in the issues that the noble Lord said were raised, there was no mention of any representations by the Prime Minister to the Burmese President during his visit about ending the recruitment and use of children, some as young as 11, as soldiers in Burma. Can he give an assurance that the issue was not overlooked during the visit?
My Lords, noble Lords will have seen the Written Statement issued yesterday on the visit. It does not specifically mention the issue of child soldiers, but it touches on a very large number of human rights issues. I will check and get back to the noble Baroness on the specific issue of child soldiers. We are monitoring the situation; we recognise, for example, that the Kachin ceasefire has been agreed but not yet fully implemented. The President promised, when he was here, that all remaining political prisoners will be released by the end of this year, and we will of course be watching to make sure that that promise is carried out.
There is a sort of race here. The Chinese are pouring in vast sums of money and investment into Burma, which is potentially a very rich country indeed. While we must obviously maximise our pressure, counselling and support for overcoming human rights abuses, as the noble Lord, Lord Alton, has specified, the right approach must be to embrace as fully as we can that country in its efforts to modernise and move away from military rule, and we should consider supporting it and working with it, perhaps in the context of a future membership of the Commonwealth.
My Lords, I congratulate the noble Lord on managing to get the Commonwealth into this discussion. Burma is currently the poorest country in south-east Asia. If it is to pass through this transition successfully, it also needs economic assistance. My noble friend Lord Green has also been in Burma. We are engaged in the question of how far British companies, as well as British technical advice, can assist in the transformation of the Burmese economy.
My Lords, I think that I would prefer to stick to “monitoring”. We always have to remember the very complex colonial history. We therefore have to be very careful not to be too authoritative ourselves in dealing with the legacy of authoritarianism. We are however actively working to hold the Government to the promises which they are making, and we are working with all forces in Burmese society.
My Lords, I know that my noble friend Lord Alton is a courteous man, and will know that my noble friend Lady Berridge has been trying to get in, and indeed has started her question on four occasions. I am sure that the House might give my noble friend Lady Berridge a chance.
My Lords, the overwhelming improvements are of course welcome, but there is growing concern that Burmese citizens are suffering discrimination on the basis of their religion. Therefore there is a danger that the millions of pounds of UK aid that are now going to Burma will not be distributed equally to all Burmese citizens. What discussions did the Prime Minister have with the President regarding freedom of religion and belief, particularly in regard to the rising intolerance towards Muslims and other non-Buddhists?
We welcome the recent arrest for the first time of a number of Buddhists who have taken part in anti-Muslim demonstrations. We have sadly discovered that even Buddhism is a religion that is not entirely under all circumstances used as a religion of peace. This is part of the discussion which is well under way.
Private Notice Question
To ask Her Majesty’s Government why they have halted the triennial review of probation trusts in the face of a House of Lords amendment to the Offender Rehabilitation Bill which would require the approval of both Houses to any changes to the probation service, and which the House of Commons has yet to consider.
My Lords, the triennial review of probation trusts has been formally closed, because as part of the development of the Transforming Rehabilitation strategy, the Ministry of Justice conducted a detailed options assessment of how we could organise the public sector probation service in the most efficient manner to discharge its new responsibilities as detailed in the strategy. This is in line with the requirement of the triennial review to look at the function and form of a non-departmental public body and to consider the best delivery model.
My Lords, yesterday’s Written Ministerial Statement, expressing the Government’s determination to press on with the abolition of probation trusts and make other changes to the probation service, is another example of the Government pre-empting the parliamentary process, recently criticised by your Lordships’ Constitution Committee. Does this not constitute contempt for the expressed opinion of this House and raise the question of why we are here at all?
I cannot agree with the noble Lord. Your Lordships’ House has discussed a particular Bill, and as he has pointed out, amendments have been made. There will be further parliamentary debate on these issues as the Bill moves through the Commons after the Recess. At the current time, in line with current powers as set out in the Offender Management Act 2007, any ultimate dissolution of probation trusts will be subject to the negative resolution procedure.
My Lords, as the Minister knows, during the passage of the Bill many questions were asked about the way in which it was to be processed and how the structures needed to process it would be produced. Many of those questions remain unanswered, particularly as regards the future of the probation service and how individuals joining that service will have a career which is properly structured to enable them to gain the expertise to carry out their tasks. Last week, on the same day that it was announced that G4S and Serco had performed tremendously badly in relation to the tagging contracts, which had been poorly overseen by the Ministry of Justice, I attended a conference at which probation service staff told me how little they knew about the plans being made for them. What this House is deeply concerned about is that a major change to the protection of the public and the community is being proposed at vast speed without us knowing the details. When will we be told exactly what these details are if, indeed, they have been worked out?
As regards G4S and Serco, I assure your Lordships’ House that that is something which the Government are taking very seriously. An internal audit has been initiated by the Lord Chancellor and Secretary of State, the outcome of which will be with us around the autumn. I can reassure your Lordships that no further contracts will be awarded to either company until we have the findings of that audit and they are satisfactory in terms of awarding future contracts. As regards the probation trusts, the noble Lord comes to this matter with great expertise and is fully aware that the Government are proposing not to abolish the disparate probation trusts up and down the country but to create a new national probation trust and open up the market to the private and voluntary sectors to enable experts to come together to address the issue of probation, which, I am sure all noble Lords agree, costs too much and has been inefficient for far too long.
My Lords, does the Minister accept that these changes seem to be very controversial and therefore full discussion of them in Parliament is vital, as my noble friend Lord Beecham pointed out? Does he also accept that there is great fear that, as a result of these changes, the service will become less professional and that therefore public safety will be at risk? It seems that some excellent probation services, such as the one in Northumbria, are going to be reorganised when they are working very successfully.
On the noble Baroness’s first point, Parliament is sovereign and your Lordships’ House has had a very detailed discussion on this issue. Indeed, various amendments were tabled on the Offender Rehabilitation Bill and were passed to the other place. I cannot agree with the noble Baroness’s second assertion. As I have said in a previous answer, I believe that the proposed reforms are about creating a national probation trust that brings together the best expertise. The expertise of existing staff will be taken up in the new probation service. Indeed, private providers will look to recruit staff from the current probation service. So I do think that there is perhaps an alarmist attitude that is not really necessary.
My Lords, the newly constructed probation service plans to operate at about 20% of current capacity and deal with very specialised groups. Meanwhile, the Government plan to give subsequent support in the community to 50,000 or so short-term prisoners. The only body with the skill and the experience to deal with this kind of thing is the probation service, which dates back 100 years. What is the rationale for destroying a probation service that is greatly admired, loved and respected the length and breadth of the land in favour of completely unknown, inexperienced and unhelpful private sector providers whose reputation is rock bottom?
While I accept that there are many positives in the existing probation service, I cannot agree with my noble friend that the Government are seeking to destroy it. I reiterate that the initiative will bring together the best of what is available in the public sector, the private sector, the voluntary sector and, indeed, the market as a whole. We need to acknowledge that. Why are we doing it? The MoJ currently spends £3 billion on prisons, of which £800 million is on probation. The reoffending figures show that 57.6% of prisoners sentenced to 12 months or less go on to reoffend on release. That, frankly, is not good enough. We need to address the issues. Of course, we learn from history but we plan for the future.
Does the Minister agree that we are indebted to members of the probation trusts for all they contribute to the well-being of our society? That being so, what are the Government doing to ensure that, as they embark on a massive change, those who are going to be affected by that change will be engaged in it, will understand it and be helped to come to terms with the change in a way that makes sure that we continue to value their contribution?
I agree with the noble Lord that the country owes a huge debt to people such as the noble Lord, Lord Ramsbotham, who brings great expertise to the subject. I have fully acknowledged that in debates on the Bill and again today. We need to harness that expertise and ensure that the probation service learns from the lessons of history but is also fit for purpose in the future. We pay tribute to the people who work terrifically hard up and down the country to ensure that the people we are there to help—the prisoners—are helped to become productive citizens when they come out after serving their sentences. I am sure all noble Lords will agree that that should be our ultimate aim.
My Lords, does the Minister agree that, whatever the Government’s intention, the perception is that there is an ideological commitment to downgrade public service and to refuse to recognise the priceless value of commitment and experience which exists in so many of our public services? The probation service has been exemplary in that respect. As so much of the community is to be involved if the Government’s hare-brained scheme is to succeed, is it not all the more imperative to make sure there is no further impression that, whatever may come, the Government are determined to drive through their ideological objectives?
It is certainly true that the Government believe in ensuring that in all projects—in this case it is probation—we harness all expertise. If that expertise is in the public sector we will harness it; if it is in the private sector we will also harness that; if it is in the voluntary sector we will harness it. I can assure noble Lords that the proposals will ensure that the number of offenders who go through rehabilitation is increased—as my noble friend Lady Linklater acknowledged, an additional 50,000. They will increase the number of providers that are part of through-the-prison-gate projects which combine the expertise of the public, private and voluntary sectors. Finally, they will create a new, public sector body, the probation service nationally, the ultimate aim of which is to protect the public.
Business of the House
Timing of Debates
Economic Prosperity and Employment
Motion to Take Note
My Lords, we are all concerned about the future of our economy and we all have a different view as to where the answer lies. However, I think that we all agree on one thing: the relationship between government and business is central to whatever the future may hold. I thank all noble Lords who have come to debate this important issue.
I will start by speaking of my early experience of government and business. Many, many years ago, new, higher standards were introduced for fabric safety, particularly for the flammability of fabrics in aircraft. As a young textile engineer, I had to develop fabrics and processes to meet these standards. I did this with the help of Bolton Tech, now Bolton University. At that time, the big market was the US. I went over there to sell our product but was amazed to find that a similar product was already available. It had been developed by the US military and was offered for sale, not only by large companies, but by smaller ones by virtue of a government assistance scheme.
I am pleased to say that we did rather well because of superior design, which is another lesson. That is how I learnt that, at the same time as preaching tough capitalism, the US Government have been engaged in risky research, on a large scale, in radical new areas from which business has benefited with products like the touch screen, GPS, the internet and nanotechnology: I could go on.
True, there must have been failures that we do not know about. However, over the years, this has illustrated the advantages of business and government consistently working together, not only in research and development but in reducing risk by taking public funding much closer to the market—far closer than EU regulations allow here.
Here in Britain, we have veered between extremes. When I started in business in the 1960s, the state had a role through public ownership and the public interest. It was a sort of command and control. Then we moved into a phase in which markets ruled through liberal capitalism. Private initiative, private enterprise and risk were encouraged. Markets were left largely to self-correct and self-regulate. The year 2008 demonstrated that that system did not really work. Some still see the solution in lower taxes, less red tape and less regulation, but an increasing number of people are calling for an industrial strategy that defines the relationship between the state and business. The problem is that the Government, the CBI, academia, finance and manufacturing all have different ideas as to what that strategy should be, largely because of sectional interests.
I would like to find a way in which government and business can work together, while allowing market forces and private initiative to flourish. Business would be free to experiment with new ways of doing things, with government having an enabling role that supported the public interest, not the factional interest. My noble friend Lord Sainsbury put this together rather well in his recent book, Progressive Capitalism. Unfortunately, he is not able to speak today, but he argues that prosperity is fostered by market-supporting institutions of an enabling state. They should be enabling, not market-directed, and far stronger than the weak institutions of the minimal state. These he calls progressive capitalism. These institutions do not start up and evolve spontaneously but are designed to resolve conflicting interests, and involve a strong measure of social justice. They are institutions with a purpose, not set up as an apology for failure.
Recently I have noticed frequent calls for such institutions. For instance, the Royal Institution of Chartered Surveyors’ Housing Commission recently proposed that such an institution was necessary to address the housing crisis in order to end the,
“short-term and partial policies”,
that created it. During the Second Reading of the Energy Bill, several noble Lords were concerned that its implementation was likely to continue over the lives of two or even three Governments and of many Ministers, and that, if nothing else, we needed an institution to provide continuity. I concede that this may take power away from Ministers, but it would be an enabling and more effective implementation of policy that is seen to be in the public interest and free from unpredictability.
Science and technology is one area in which we are already doing this. When the Labour Government came to power in 1997, one of their first priorities was to increase the funding for science and to prepare a 15-year road map for large research facilities. The then Government supported collaborative and applied research, which was first administered by the DTI but then handed over to the Technology Strategy Board, an executive, non-departmental public body. That gave it the independence necessary for it to be staffed by people with industrial and technological backgrounds and experience. It is to the credit of the coalition Government that they have continued this work. They have made a number of key investments, including a national network of technology and innovation centres, as a means of improving our innovation performance as an essential component for growth.
An evaluation in 2012 of earlier R&D projects showed an average return of £6.71 in additional gross value added per pound spent. So we know that this pays. Perhaps this explains why Germany spends nearly 10 times as much on its equivalent institutions However, there are still doubters. An announcement last week that the Government will match £500 million of industry investment to develop cleaner car engines was greeted by the Institute of Economic Affairs with the comment that if the Government have £500 million to spare, they should cut taxes.
Transferring this work quickly into products and processes is a key to growth. Knowledge transfer is a means of achieving this. I declare an interest as the honorary president of perhaps the largest knowledge transfer network, the Materials Knowledge Transfer Network, funded by the TSB, the Research Councils and some 4,500 business members. I am trying to practise what I preach.
Although we have made progress in science and technology, we have failed in other areas. If we are to raise our game, technology is not enough. We must also raise our game in skills, finance and infrastructure. The latest McKinsey paper on innovation says that research and development is only 25% of what it calls our knowledge capital.
We have rehearsed many times the failures of the financial system. John Kay told us how savers have been let down by the system. The banking commission told us of serious flaws. We have rehearsed hostile takeovers, poor governance, short-termism and the isolation of shareholders many times. To achieve prosperity, we must ask again: what is the purpose of the financial markets and are they performing efficiently? The task is to create enabling institutions with a compelling vision that will change the culture and the narrative, so that the financial sector, rather than serving itself, serves society and the rest of business. I join many in thinking that the proposed banking Bill fails in this by not going far enough.
Some tell us that the economy is improving. Others ask if it is improving in the right direction, and point to the dangerous use of housing and consumption, instead of productivity, to rebuild the economy. A strong enabling institution, rather than a data institution, would recognise and help sort out these priorities.
Another area where we have failed is in the supply of technicians. This failure is there for all to see. There are currently many able young people who are unskilled and unemployed, in a nation that is desperately short of technicians. We are getting it right on technology, which is shaping our markets, economy and society. We are not getting it right on skills. We have millions of people working in jobs that do not earn them a living. Temporary work, zero-hour contracts and low wages characterise a trend that has been made worse by the recession.
Some seek inspiration from Germany. It is the strong trade associations in Germany that set the standards. Taking on apprenticeships is a condition of being in the trade association—and if you are not in the trade association, you are not in business. There are penalties for poaching and for apprentices who leave their courses early. The lesson is not just to copy Germany but to recognise that Germany’s success is associated with strong and long-lasting institutions that ensure that the world of education and training is synchronised with the world of work.
If we are to create strong institutions, Whitehall, too, has to raise its game. Yes, Whitehall does review its capabilities and is well aware of its problems. Its style of employment career planning, which rotates people, ignores building up the very expertise that Whitehall and Ministers need to create our lasting institutions. Even in the time of Harold Wilson, the Fulton Commission drew attention to these matters. So did my noble friend Lord Adonis in his recent review of BIS, as did the Institute for Government in its report today on the way that government outsources public services to the private sector. This was again referred to in the Private Notice Question.
So what about the private sector? There was a time when we had complete faith in private enterprise. Now we are not so sure. G4S, Serco and other companies seem to treat us as a business opportunity—an opportunity where vulnerable people who have no voice can be exploited, and where the private provision of public services is seen to be sometimes incompetent, often unaccountable and sometimes uncaring.
We tried to create institutions to support localism. They did not last long. We abolished the RDAs on an ideological whim, instead of developing them and building on what was there. The LEPs set up to replace them are embryonic and need time. The noble Lord, Lord Heseltine, tried to come to their rescue with a major amount of money. The Government watered this down to £2 billion, and then it transpired that this money was taken from local housebuilding support and the local road-building fund—hitting the political target, maybe, but missing the institutional point.
Many noble Lords will have heard businesspeople say that a major block on investment and business confidence is a lack of continuity, and uncertainty in government policy. A series of initiatives, however clever and generous, dealing with market failure or other problems is seen as short-termist and intermittent. Addressing this has to be shared between government and business. Properly conceived institutions will do this, as has been demonstrated by the TSB. We have to repeat this in other sectors with institutions which are long-term, continuous, in which we can take pride and which will look after the public interest in the battle between the parties. Whatever the future may hold, a crucial part of our competitive advantage must lie in the quality and closeness of the relationship between government and business. We have work to do. I beg to move.
My Lords, the noble Lord, Lord Haskel, and I served together on the Select Committee on SME exports. We all warmly thank him for instituting this debate and, indeed, for the way in which he has introduced it.
My long-held view is that while economists argue continuously over monetary and fiscal policy, what really matters is whether SMEs flourish in home and overseas markets. That is what will decide whether our children and grandchildren live in prosperous times—I cannot help but mention that a fourth grandchild has just been born to my wife and me, to focus our attention even more on the future—but what the Government do about SMEs is crucial to the future.
Many business men and women when asked what government can do best for them say, “Keep out of the way”. I sympathise, but I do not agree. In 1967, I helped Lord Weatherill to write a pamphlet urging the Wilson Government to get much more involved in SMEs to emulate the small-business administration of America. A couple of years later, that Labour Government, to their credit and particularly to the credit of Harold Lever, took a few minutes off nationalising things and command and control and set up the Bolton committee on small businesses, the first authoritative study.
These days there is general recognition of the importance of SMEs. In support of continuity, to which the noble Lord, Lord Haskel, referred, the Government have taken over from their predecessors, UKTI—UK Trade & Investment—and it has grown in stature and effectiveness under my noble friend Lord Green of Hurstpierpoint. His energy, focus and constant travelling have contributed notably to UKTI’s success, and I am sorry that he is leaving later this year.
Since the debate on our SME report last month, my noble friend Lord Green has told us of two new initiatives: the Future 50 programme, to help 50 selected companies grow to the point of being listed on AIM, and the creation of an alliance of high-tech digital clusters similar to Tech City. These are excellent, but the first reaction of some will be: can the Government or their agencies successfully spot winners? We know that it is difficult to spot winners, not only for the Government but for the investment industry, whose job it is. The oldest mantra in investment, after all, is, “Spread your risk”. The reason is the difficulty of picking winners and avoiding losers. The Government should not be put off by that. If only some of the 50 succeed, it will be worth it.
Part of what SMEs mean when they say, “Keep out of our way”, is “Do not keep changing the rules”. The noble Lord, Lord Haskel, referred to this, too. SMEs understand that it is necessary to collect tax and regulate employment, health and safety, but they hate spending hours mugging up on the latest initiative that has just come to their attention.
The latest example is PAYE. From April 2013, or April 2014 for some small businesses, RTI—real-time information—has been introduced. New PAYE software —not all small businesses use software—triggers automatic direct debit payments for PAYE and national insurance on pay day. This is necessary to the smooth working of universal credit. But for the small business with few employees, some part-time probably, striving to remain legal over the minimum wage expressed in hourly rates and changing every October and/or bumping up against the lower earnings limit for PAYE expressed in weekly rates and changed every April, all this is complex and a complete overhead on top of actually selling things and earning a living for the employer and their staff, which is obviously what they have to do to succeed. It is all desirable, no doubt, and perhaps it will be simpler in the long run. Technology often works that way, but it does not mean that it is easy to grasp in the first instance. Changes for small businesses mean more hours of trying to understand new forms and procedures, simply to stay in line with the latest requirements.
My basic message is always that if SMEs flourish, the economy will flourish. We must nurture our entrepreneurs. Only some of them will succeed, but we need them to do so.
My Lords, let me begin by congratulating my noble friend Lord Haskel on having introduced the debate in such an elegant fashion. I also congratulate the noble Lord, Lord Cope, on his expanding family.
It amazes me that some people still seem to think that the economic crisis is cyclical. After all, it is the most profound crisis since the 1920s and 1930s. It is still in play after five years. No country—not the United States, not Germany and not this country—has shown, as yet, a sustained economic recovery. This crisis, to my mind, is clearly structural and demands a fundamental rethinking, much of which has to be done in the academic world. Neoclassical economic theory will have to be replaced by a 21st-century version of political economy. A reappraisal of the role of the state and active government will be central to that process. No one of course, as my noble friend Lord Haskel has said, wants a reversion to the old model of top-down planning, but the economic free-for-all of the past 30 years has collapsed in a most spectacular way, with the state having to pick up the pieces, causing suffering to many of the most vulnerable in our society.
That rethinking is starting, and has begun with what I would describe as a sort of historical retrieval process, a kind of hidden history, of the state’s key involvement in all the major technological transformations of the past 20 or 30 years and in all the surges of economic prosperity associated with them. The idea that the role of the state is to stand aside, reduce red tape and let entrepreneurial instincts flow turns out, through recent research, to be much of a myth. All the major transformations affecting economic development have had heavy public involvement, and it is only now that the research is being done by economic historians to bring that out. My noble friend Lord Haskel referred to several of them. They include the most massive one of our age, the internet. We still do not really understand it, and it has caused an absolute transformation in human history. However, it has its origins, as is very well known, in state involvement, although, it has to be said, that was in part for defence purposes, not for economic prosperity.
These findings are as true of the US as elsewhere. Noble Lords might remember the story that circulated a little while ago—it is probably apocryphal—of a major American leader, who will remain anonymous, who was looking at the difference between the United States and Europe and said, “The trouble with the French is that they do not have a word for entrepreneur”. Well, we do not have a word for entrepreneur either, expect for that one. However, we do have a new book by Mariana Mazzucato, The Entrepreneurial State, which I recommend to noble Lords because it is a detailed study of how the state is essentially a risk taker. In countries that have an active state, the state has taken risks that private capital will not. Whatever private capital breakthroughs have come, they have been the result of the preparation carried out by active government.
Rather than using the examples that Mazzucato offers, I will take the case of shale gas, which has been studied in detail recently by the Breakthrough Institute in the United States. In the US, conventional gas began to decline in the early 1970s, which started a collaboration between the industry and the federal Government under a Republican President, Gerald Ford. Everybody knew that there were large deposits of gas, but the existing techniques of extraction were not up to it. There was an extensive partnership with federal agencies and, incidentally, with universities. National laboratories across the country, such as those in Lawrence Livermore, were crucially involved. A tax credit for unconventional gas was introduced in 1980, which lasted until 2002. The Department of Energy and the federal Government continued the funding of research when no one else at all was interested. The towering figure in the industry, George Mitchell, who I like very much—partly because he is a very good tennis player, and I admire people who can do two things really well—came along and applied the final touch, as it were. He made the final breakthroughs, but this would have been impossible without state involvement.
I am a supporter of shale gas, as long as it is properly regulated and coupled with the closing down of gas-fired power stations, but supporters of shale gas who decry subsidies for renewables should remember the tale that I am telling, because breakthroughs will come there too. The trouble with the UK is that they are likely to come in the United States and China, which are making the most substantial investments. The US might have led in shale gas, but it is also a big leader in renewables.
My Lords, I join in the thanks to the noble Lord, Lord Haskel, for this important debate. Since I have only a few minutes, I am going to follow in the footsteps of the noble Lord, Lord Cope, and focus on small businesses. I think we are all aware that job growth is no longer going to come primarily from large companies opening large factories. Those days are over. Small businesses provide more than half our jobs. Many do not realise that they provide more than half our exports. Some will have heard of the rule of one in three. If one in three small businesses added one additional employee, this would wipe out unemployment. That is pretty much true across the developed world.
All government policy has been very slow to recognise the need to row in behind and provide the necessary support for small businesses. I am incredibly conscious that there is a wide range of programmes, such as EIS and other tax incentives to invest in small businesses, and the removal of stamp duty from AIM so that small businesses can raise public shares. UKTI also has very effective programmes now to provide support for exports, and the Government are reshaping export finance programmes so that they suit small businesses. But most small businesses do not have a clue about what is going on and what is out there and available to them as support.
I want the Government to look at the whole communication channel to this complex world of small businesses. It is certainly worth looking at the German approach, which tells every business that it needs to become a member of its local chamber of commerce—I do not care whether they pay only 50p to do so—so that they are in the system and contact can be made, communication can happen, education can flow through, and exchanges and networks can be built. We have to get serious about communication. If it is done through the structures of LEPs, that is fine with me, but we have to start making sure that there is an effective mechanism to reach out to that wide net of small businesses.
When I ask small businesses what is constraining their growth, the answer is always skills—I suspect that other noble Lords who are better equipped on this subject will talk later—but it still astonishes me that we manage to develop a highly sophisticated educational system at school and university level that delivers people often with extensive qualifications that simply do not match the job demand that is out there. Again, with a mechanism of more locally driven decision-making, local networks can try to counter that, but this surely has to go to the top of any agenda that we deal with.
In the three minutes that remain to me, I would like to focus on funding for small businesses. The major banks have long said that they finance anything—a small business, a large business, whatever else—that is bankable, but to those of us who have talked to so many small business and with various trade bodies it is evident that this is not true. I think that banks are finally facing up to that reality. They give us two reasons. I am interested less in their reasons and more in the actuality. One reason is that to work with really small businesses, highly knowledgeable people with exceptional capabilities are needed, because it is so granular when you work with a small business. The skills that have to be mastered are way too costly, given the structure of our banks. It is just not possible, given the way in which we organise ourselves and where we want our priorities to be.
The second issue is capital requirements. Banks have to be properly capitalised. We cannot give on capital requirements in a general way. Banks tell us that this is highly risky stuff, and that they are required to hold large amounts of capital, which essentially makes it uneconomic for them to offer credit on reasonable terms.
How have other countries that face exactly these problems dealt with them, and what can we learn from them? As I have only a short time, I shall look at the US example only. The US Government made a commitment a long time ago to what they call “the last mile”. How do you get money out to the small people in a community, much as we have the Post Office deliver a letter the last mile? The US Government decided that major US banks were not capable of that activity. You have to set up a different sector to deliver that, and because making sure that that happens is a public good, the US has been willing, through its Community Development Financial Institutions Fund, which sits in Treasury, to put substantial amounts of money into making sure that a sector exists that can deliver that. The US funds it by billions. As partners in that effort, it has drawn in its big banks. It has done it largely through a stick, the Community Reinvestment Act, which most noble Lords will be familiar with, so I shall not go into the details.
The effect of being required to put money into these entities and to provide them with knowledge, support and expertise is that it now seems normal to US banks. I have been talking to those here. They find it astonishing that it is a reflex action of our major banks to say, “This is an area we are not going to serve. It is not right for us”. It is exciting to be able to get in there with relatively small amounts of money and do it. I ask the Government to look at those opportunities.
My Lords, I, too, thank my noble friend Lord Haskell for initiating this timely debate. The state has many roles. Often it has not sought them, but has had them thrust upon it by the failure of markets in important respects. At the moment, the list of roles tends to grow as the country’s problems are no longer masked by the windfalls of the North Sea and booming financial services; they are not completely over, but they are a lot less significant than they were. The problems are not new—economic historians trace them back to the 1870s—but they seem to be getting worse in some fundamental ways: the shrinkage of manufacturing, a persistent balance of payments deficit and too few companies still thinking for the long term, with a relatively low spend on innovation and training. Investment in new machinery is apparently at a lower level than in Austria, Turkey or Mexico. The low productivity levels that we are experiencing reflect inadequate skills, low capital investment and, sometimes, poor relationships at work.
While we are proud of our open economy, can we really be so relaxed about the continued foreign takeovers of successful British companies? The latest is Penguin Books, which has recently been taken over by a smaller rival, and it seems that Invensys is shortly to go as well. There is no comparable traffic in the opposite direction, nor is there a flowering of new UK companies of the same size and importance. A large part of what could be called the commanding heights of the economy is now held abroad. Too many managements and shareholders are governed by thoughts of value extraction—the price they can get—rather than adding value to what they have. There is not a squeak from Eurosceptics or Europhobes about what this means for national sovereignty. A small proposal from the European Commission sends them into paroxysms of anger but when this fundamental change is going on, nothing is said.
We also have a systemic tendency for rewards to go disproportionately to people at the top and for them to outstrip performance. The inequality statistics are truly frightening. Will the Royal Mail in private hands follow the same depressing path by charging higher prices and contracting out delivery services to lower paid, less securely employed workers? Then will we see the Royal Mail sold off, perhaps overseas, like so many of our privatised utilities? Must we watch helplessly as private equity or other predators move in for quick kills? Why are golden shares so out of fashion in developments of this kind?
The stark truth is that private ownership has not unleashed a fresh burst of investment. Thames Water and BT are seeking government guarantees for major investments in the super sewer and national broadband; there is not much appetite for risk among many of these large privatised companies. Centrica withdrew from the new nuclear power project because its shareholders wanted higher returns over a shorter period. This rather frenzied approach to short-term gains continues to enfeeble UK companies. If you add in the periodic devaluations of sterling, which make UK assets relatively cheap, you can see the vulnerability of our economic model.
Some are using the term “responsible capitalism”. I use it myself sometimes; it is a nice thought. However, there is a risk of many in the citadels of deal-making seeing it as an oxymoron and treating it risibly and not seriously at all. We have good economic models among our neighbours, particularly on the other side of the North Sea. Why do we not learn more from them and build, as others have said in this debate, a stronger training culture, foe example, comparable to their economies? Why do we celebrate so much a deregulated labour market while our northern European neighbours reject easy hire and fire, zero-hour contracts and the trend towards making jobs less secure? They are relaxed, even enthusiastic, about collective bargaining and extensive information and consultation arrangements.
Finally, what about our management cultures in this country? We claim some of the world’s leading business schools. I declare an interest as a visiting professor at Manchester Business School. However, they are often seen as transmission belts to put people into financial services or into the finance function of business—accountants and so on. How can they be transformed to become the staff colleges to make the UK a new, North Sea-style economy? The noble Lord, Lord Heseltine, has sought to address some of these issues and I believe that the Business Secretary recognises the problem, but as yet we are well short of measures to promote an economic model and culture that will be both successful and sustainable.
I end with a remark from a senior Siemens executive. When asked what the key factor in the company’s success was, he replied, “Continuity”. Would many top UK executives say the same? I doubt it. We must change that culture so that in due course they will consider that to be the normal way to describe their business.
I declare that I am chief executive of London First, a business membership organisation, which includes companies involved in infrastructure and development.
I thank the noble Lord, Lord Haskel, for introducing this debate and presenting such a cogent argument. However, I want to gently challenge the title and suggest that the role of government is not to generate economic prosperity and employment but to create the conditions in which that prosperity and employment can flourish. Timely interventions by a Government can do that. However, the most efficient, easiest and least costly interventions are often avoided because they are politically uncomfortable. Where business would act, government prevaricates.
Take our international links. To provide us with much-needed air routes to emerging economies we should have built a new runway in the south-east years ago. While we have been staring at our navels, Frankfurt, Paris and Amsterdam have built four-runway or six-runway hubs. There is an easy solution: the Government could just say yes to any of the privately funded offers to build more runways that are currently on the table.
Back in the real world, while I support the creation of the Davies commission, the business community needs assurance that whoever might be the Government of the day will act on its recommendations. Can the Minister reassure me that the current Government would? Can he also reassure me that, while we wait a decade or more for even one runway to be built, the Government will do everything in their power to enable more flights to emerging economies in the mean time?
On immigration, Paris attracts eight times as many high-spending Chinese tourists as London. Why? Because France is part of the Schengen visa, on which you can visit 26 European countries but, to add the UK to a European tour, visitors need to go through the hassle of applying for a separate visa. I accept that, politically speaking, we are unlikely to join a single visa system, strong as the business case may be. However, if we are to acknowledge that political reality, can we please do whatever we can to take the hassle out of applying for two visas? Let us build on the Government’s recent improvements to our visa process, but recognise that incremental improvements will deliver only incremental increases in visitor numbers. The step change will be achieved by sharing application centres in China with key European partners, once Schengen introduces biometric requirements.
In a similar vein, the practice of treating international students as a balancing number in our net migration target has had the unfortunate consequence of giving countries such as India the impression that their students are unwelcome here. Higher education is our eighth biggest export and we should be cultivating rather than inhibiting that sector.
I turn to an area in which positive government intervention can make a real difference, albeit at a cost: investment in infrastructure. I pay tribute to the Government on their recent spending review. A five-year settlement for Transport for London’s capital investment programme makes much more sense than an annual one. The guarantee for the Northern Line extension has enabled the redevelopment of the iconic Battersea power station, paving the way for up to 26,000 jobs.
We must keep that momentum going, though, and with a sense of urgency, if real progress on vital projects such as the Thames tideway is to be made before the next general election. If creating 9,000 jobs to build this new sewer is not enough of an incentive, then the Government might also consider the benefit of allowing the residents of London’s thousands of new homes to flush their new toilets. I am confident that the Government will do the right thing and give the go-ahead.
Finally, I must mention Europe. The UK is one of the most successful global trading nations. We are the third highest exporter of services and the sixth highest of goods. The global companies that base themselves in London do so as a centre for Europe. They have no interest in or understanding of the UK breaking away. While they certainly struggle with aspects of European regulation, particularly of our financial services post-credit crisis, they understand the need to address failures in regulation and for intensive negotiation to find solutions that balance stability, reputation and growth. I have not met anyone in any of these companies who is looking for an exit. Indeed, for most, talk of a referendum suggests a trigger-happy approach to sensitive diplomatic matters.
There is, though, the need to reassess the relationship between those inside and outside the eurozone, and to do that the Government need to fully engage and negotiate as an equal partner, rather than with one hand on the escape hatch. While there are political realities, therefore, there are also economic realities, and if the Government are serious about prosperity and employment, there are occasions when they need to recognise that government itself is the problem, rather than looking for new, politically easy solutions.
My Lords, I, too, pay tribute to the noble Lord, Lord Haskel. He has a well deserved reputation for, over many years, seeking to improve the understanding, particularly in the Labour Party, of the role of management of the private sector. Having listened to the speech of the noble Lord, Lord Monks, I suggest that his work is yet undone; he still has much to do in that important area.
The noble Lord, Lord Haskel, sets an important task for us, which is to take,
“note of the role of government in generating economic prosperity and employment”.
That begs the question, “Does it have one?”. Of course, the answer to that is yes. The role of government is to generate economic prosperity through untying the wealth-creation potential of enterprises and allowing them to flourish; to maintain a tight fiscal control on the costs and operations of government, through the avoidance of waste and unnecessary regulation; to construct the tax and benefits system in a way that rewards those who work, cares for those who cannot and incentivises the risk-takers while protecting consumers and upholding fair competition; to provide a stable monetary policy which creates the right balance between borrowers and savers in the economy; to provide the investment in the physical and intellectual infrastructure that we will need for the future; and to maintain and develop strong international trading relationships. In short, the role of government is to prepare the ground and regulate the climate for economic prosperity and employment while recognising that, ultimately, it is enterprises which will actually build and maintain it. That would be my definition of an enabling or entrepreneurial state.
If this is the description, how have the current Government performed? I do not think that many in this House would argue against the proposition that no post-war incoming Government have had a more favourable economic legacy than that which fell into the lap of the Labour Government in 1997; I declare no interest as a Treasury Minister at the time. At the same time, there would not be many who would argue that any incoming Government have had a less favourable economic inheritance from their predecessors than that which befell the current coalition in 2010.
The coalition arrived in office to face a debt that was unsustainable, government spending that was out of control, and a public sector that was too strong, and a private sector too weak, to sustain it. We had grown too dependent on financial services and lost our competitive advantage in manufacturing. We had become obsessed with the old, established markets and trading relationships of Europe, and paid insufficient attention to the rising new markets of Asia and Latin America. We had taken no note of the fact that the tax and benefit system could provide perverse incentives that made not working more attractive than working. Wealth creators and risk takers were insufficiently rewarded. Our education was failing generations of young people through its lack of rigour, and vocational training was not delivering the skills that industry needed.
Three years on, what has been the result? Well, we have seen a reduction in the deficit; it is down by a third. We have seen sustained cuts in corporation tax which will mean that we will have the lowest corporation tax rates in the G20 by 2015. We have seen businesses create 1.3 million new private sector jobs, which is close to three jobs created in the private sector for every one lost in the public sector. This week, we have seen unemployment fall further, by 57,000, and the claimant count fall below the level of May 2010. The reform of the benefits system will ensure that people are always better off in work. Through raising personal tax allowances, people working full time on the minimum wage will have had their income tax bill halved during the time of this Government. We have seen investment in infrastructure. Danny Alexander, the Chief Secretary, announced £100 billion of investment in infrastructure between now and 2020. There were 520,000 apprenticeship starts in the last academic year, up 80% on the last academic year under the previous Government.
We are seeing the evidence for this in increased economic indicators showing, for example, that exports are at records levels according to the British Chamber of Commerce and the purchasing managers’ index. We even see this morning an announcement that retail sales have gone up by 2% in the past year. We see that our exports, particularly to those new, dynamic markets such as Brazil are up 25%, with China up 40% and Russia up 80%. That is extremely welcome.
The culmination of this is that the predictions for a double-dip or triple-dip recession that were so frequently made from the opposition Dispatch Box turn out to have been wrong. There has been a reassessment which shows that we are now into growth, and the IMF has reassessed its forecast to show that it expects this economy to grow strongly. I urge those on the Benches opposite to recognise that it is time for them to reassess the record of this Government and their own policies in the light of that performance.
My Lords, I thank my noble friend Lord Haskel for choosing such an important topic for this debate. He is a passionate believer in manufacturing and technology. I declare an interest as chairman of Warwick Manufacturing Group at the University of Warwick, where we have worked for three decades to deliver growth, both at home and abroad.
It is vital to remember the positive difference the previous Government made to our society and economy. Since 1997 we have seen huge improvements in the infrastructure of the nation in rail, schools, hospitals and science. If we had not made those investments, our public realm would have resembled that of a third-world nation. The Labour Party should be proud of those achievements. There are problems, of course, but real successes too. For example, the importance of the science budget is reflected in the current Government’s decision to protect that funding. Naturally, there is a need to go further. We have already heard about the need for infrastructure spending as a driver for growth and I strongly support projects such as HS2. A single driver such as HS2 will create not only a different mindset among industrialists throughout the world but also employment. I also support innovation policies to create a more broadly balanced economy.
We can learn, too, from fast-growing nations. I often visit China. On a recent trip I saw that when growth faltered, the Chinese Government announced 25 major rail projects. They also announced further investment in innovation, aiming to surpass American R&D spend in the next decade. This approach creates a framework for long-term growth, encouraging business investment and increasing the likelihood that jobs created by these businesses will be sustained over a period of time. Here in Britain similar policies are vital, not least for the many young people who face long-term unemployment if there is little growth. Of course, Britain faces real financial constraints. This means we need a better understanding of the impact of our policies.
The real question is not whether government should contribute to economic growth, but how effectively it makes that contribution. I am reminded that the original title of Lloyd George’s Yellow Book of 1928 was Britain’s Industrial Future. Since then we have had many such mantras, such as national champions, white heat, sunrise industries or industrial activism. All of them have agreed with the fundamental judgment of the Yellow Book on industrial policy, which was:
“There is no question of principle at stake but only one of degree, of expediency, of method”.
A focus on expediency and method should make us sceptical of grand claims for any growth policy. As Karl Polanyi said of the industrial revolution:
“No one had forecast the development of a machine industry; it came as a complete surprise”.
Similarly, no one could have forecast what is happening today with the digital revolution.
Governments can never guarantee, or even predict, disruptive innovation. Instead, they should focus on incremental change, supporting infrastructure and innovation, thus creating a framework in which innovators prosper. This means better understanding of what government does well and where it must do better. In this spirit I propose a practical change to encourage the effectiveness of growth policy. It is simply that we commit to a higher standard of evaluation of public policies to support growth.
The noble Lord, Lord Haskel, rightly proposes enabling institutions to support growth. We also need an evaluating institution. All too often—whether in RDAs, LEPs, research councils or government departments —a policy is announced, a programme is delivered, the impact is evaluated by a consultancy firm, a number is put in a press release and then it is ignored. Frequently, bodies responsible for spending money, whether research councils or the Technology Strategy Board, define their own impact and decide if their objectives have been met. As Professor Henry Overman of the LSE said of RDAs, many of which have created important growth in their regions, you can read thousands of pages but evaluating them is very difficult, unless the current Government come in and get rid of them. The issue is not that projects have performed well or badly but that too often we do not know how they performed at all.
It is time that we had a national impact office with a duty to monitor the effectiveness of all government policies to support growth in the real economy. That happens in other countries. Such a body is crucial, especially if we are to embrace devolution in growth policy, for example with LEPs. As the noble Lord, Lord Heseltine, pointed out, the ability to share best practice and identify where things are going wrong is crucial. How can we do this without a neutral body examining what is best practice?
I have always been a passionate believer in the positive role that the state plays in industrial policy, but all good engineers know that it is only by critically evaluating the strengths and weaknesses of any past design that you gain the knowledge to help you do better in the future. We should be absolutely fearless in assessing which policies deliver growth. That is what we should be evaluating in future.
I, too, add my thanks to the noble Lord, Lord Haskel. I am going to take a rather different line from some noble Lords. I have worked in industries which employ engineers. Engineers were my colleagues. They were highly respected. Over my career I have seen that respect for engineers go down and down so that now the engineer is lucky if he sits at the top table because it is crowded out with people qualified in finance, human resources and other things, when it is the engineers who actually drive our businesses forward.
Several noble Lords have referred to the list of apprentices and how the number is increasing. I ask you to look very carefully at who these apprentices are. They are not technically trained. There are people with apprenticeships in things like catering, business services and law, but those are not the skills which drive the economy forward in the way that I think we all want. I also want to comment on our professional institutions. The professional engineering institutions went through a period where they insisted on graduate entry, yet many of my colleagues started their careers as premium apprentices, took their higher national certificate, got practical experience and then qualified as professional engineers. Fortunately, that approach appears to be coming back—at the Institution of Mechanical Engineers, for example—because people need to know what they are doing. I want to draw to your Lordships’ attention the paucity of maths and physics teaching in schools. It is awful in many schools and there are so few students actually studying these subjects. Without an understanding of these subjects, we are not going to be able to provide the engine for the growth which all of us desire.
I was struck by the question that the noble Lord, Lord Bhattacharyya, raised about evaluation. Many large infrastructure projects of the sort which are being discussed here are judged on the values of time. This is an old system that was invented to evaluate rival road schemes in the 1970s. It was overseen by an organisation called the Standing Committee on Trunk Road Assessment, and it forms the basis of a lot of Treasury thinking. If you can prove that you can save 10 minutes going to Birmingham or a few minutes by putting an extra lane on the motorway, that will often be the deciding factor. However, if you build an extra lane, say on the M25, and at the end of three years you still have congestion as bad as when you started, I cannot see that that value of time is delivering a measurable quantity. On a visit to city hall this week I was heartened to hear that the Mayor of London is saying to people, “Are we creating jobs and building houses? Are we doing good?”, not focusing on how much time people are saving in whatever they happen to be doing.
We need to have a target for funding registered technicians. We should look very carefully at where the money spent on apprenticeships is going and make sure that enough of it is going towards engineering technicians. We are not going to re-equip our railways, modernise our water system, build new power stations or engage in fracking unless we have the skills here or we import them. The Government have more or less set their face against immigrant labour, so we have an urgent task in encouraging some indigenous labour to do the job. Finally, we really have to recognise the status of the engineer and his value to the community.
My Lords, I thank my noble friend Lord Haskel for initiating this important debate. I will concentrate on a couple of things that the Government should not be doing and then move on to some large but neglected sectors to which the Government should turn their attentions.
First, the Government should stop messing about on Europe. Of course there is a need to reform its institutions, but the opt-out approach to Europe is counterproductive and isolating. As John Cridland recently wrote,
“we must focus on a positive vision of reform”.
A recent CBI study looked at the relationship between Norway and Switzerland and the EU. Both countries are outside the EU but Norway is part of the single market through the European Economic Area agreement. It pays €600 million a year for the privilege, making it the 10th-highest contributor to the EU, just to be allowed to follow the EU rules as a non-member. A Norwegian conservative, Mr Nikolai Astrup, said:
“If you want to run Europe, you must be in Europe. If you want to be run by Europe, feel free to join Norway in the EEA”.
The Government should also stop trying to kid themselves that they can opt out of the social wage when rights for part-time workers, maternity leave and all the other workers’ rights enshrined in various directives have become part of the fabric of society and the expectation of a new generation of workers. Not just the trade unions will resist the undermining of those rights.
My second “not” is that the Government should not mistake Whitehall reorganisation for progress. Abolishing departments and even non-departmental public bodies is wasteful if the functions have to continue elsewhere. It halts momentum and it is costly. That is not to say that things should never change, but so often the problem is poor interdepartmental co-operation or a Government who want to prove that they are different from the previous one.
The proposal to increase the number of party-political appointees in government departments is another area that will help things grind to a halt. If the proposal is implemented, I doubt that the appointees will be from diverse backgrounds with plenty of management experience—or even engineers, as the noble Lord, Lord Bradshaw, urged us. They are more likely to consolidate the very narrow background of Oxbridge-educated political advisers who have already caused such alienation between the political classes and the population as a whole.
I turn to the areas on which the Government should spend more effort. Two weeks ago the noble Baroness, Lady Shephard of Northwold, initiated a debate on preparing young people for the world of work, and she made a powerful speech about the importance of careers advice in which she said that the Government’s own National Careers Service had estimated that,
“the cost to the economy of young people making wrong choices amounts to some £28 billion”.—[Official Report, 4/7/13; col. 1330.]
In his summary of the debate the Minister acknowledged the importance of careers guidance. However, he preferred to lay emphasis on the role of good schools. Although that is an admirable sentiment for an individual, it does not constitute a national strategy. Without a more systematic reform, it is difficult to see how the reform of vocational qualifications will have the impact that we all desire. The noble Lord, Lord Cormack, and the noble Baroness, Lady Fookes, also took part in that debate and spoke about the “unfortunate attitude” towards those who work with their hands in craft and horticulture. A good vocational system needs to take account of these areas, which have the potential to employ hundreds of thousands of people.
The situation is even worse with engineering, science and technology. The Royal Academy of Engineering has predicted that in the next eight years there will be an average shortfall of 40,000 new graduates in science, engineering and technology every year. In Germany last year, engineering was the most popular choice in higher education, after law. I pay tribute to the university technical colleges, but we need many more of them; we need an initiative on the scale of the Robbins report for HE. As well as meeting the needs of employers, it is clear that an increase in vocational learning leads to lower youth unemployment. Surely there is a clear role for government here.
To conclude, the Government should focus on functions rather than wasteful institutional reform. They should focus on skills, advice and guidance on careers for our young people and do more to promote Cinderella industries, such as tourism, which could lead to quick results on economic growth and youth unemployment.
My Lords, I am grateful to the noble Lord, Lord Haskel, for introducing this important discussion. He has been rightly impressed by the argument put forward by the noble Lord, Lord Sainsbury, that the state must play a key part in fostering innovation, and I agree with that. However, of course, that does not exhaust the role of the state in creating prosperity. In the last chapter of his General Theory, the economist Keynes pinpointed as,
“The outstanding faults of the … society in which we live … its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes”.
I believe that these are still the outstanding faults of the society in which we live and that the state has a vital role to play in remedying them. Moreover, that is clearly connected to the topic of the noble Lord, Lord Haskel. The worst environment for innovation is rampant economic insecurity and excessive inequality. The private sector will not invest in jobs and skills unless it sees a market. The state has a role to play in sustaining that market in general, as well as in providing support to particular sectors. Once again I apologise for being the only macroeconomist taking part in this debate—I feel very lonely.
Let us consider two arguments. After the Thatcher-Reagan revolution, politicians and economists no longer believed that government policy should aim directly to influence the level of employment. Noble Lords will remember the new doctrine announced by the noble Lord, Lord Lawson: government should concentrate on controlling inflation and leave employment to the market. Let us see how well the market has done. Between 1950 and 1973—the period when economic policy was influenced by the Keynes doctrine—UK unemployment averaged below 3%. Since 1979, when the Lawson doctrine held sway, the average has been almost 8%. Today, Britain’s unemployment rate of 7.8% tells only half the story. The widest indicator of joblessness, which includes unemployment, part-timers seeking full-time work and those who are economically inactive but who nevertheless want a job, is estimated at about 12%, or 6.4 million people. On top of that you have to add the much higher level of youth unemployment. The Prime Minister and the Chancellor constantly tell us that the nation must live within its means and that the Government cannot spend more money than they have. Has it occurred to these great thinkers that our means include those unused resources and that if they were being properly utilised, the Government would have more money to spend?
The second revolution that has been associated with Lady Thatcher was the abandonment of any commitment to equality. The ideology of the 1980s was that undue compression of incomes brought about stagnation: get taxes and welfare benefits down in order to increase the incentives to work and innovate and the result would be a more dynamic economy and one in which wealth would steadily trickle down without any need for obvious redistributionary policies. The trade-off has not happened—growth was slower than it was in the Keynesian period and we are waiting for the trickle-down to happen. In the past 30 years, the share of income captured by the top 1% has more than doubled to 14%, leading to the joke that the new class struggle is between the have-nots and the have-yachts.
The economist Tony Atkinson, the great expert on distribution, writes:
“Moves towards reduced income inequality were dramatically reversed in the 1980s with a sharp rise in inequality”,
a rise which was historically unprecedented. Margaret Thatcher and her successors—we should note this historical fact—dismantled two of the main drivers of equalisation: the system of progressive taxation, and strong trade unions. The old tax system set, in effect, a cap on post-tax incomes and profits. The call for caps on bankers’ remuneration today simply reflects the failure of the current tax system to limit its stratospheric rise. The main achievement of the trade unions was to push up pre-tax earnings in line with productivity. This function has now collapsed.
The triumph of greed over professionalism and restraint has been most obvious in the financial services sector, which, ironically, new Labour decided was to become the powerhouse of the British economy. I understand well the frustration of the noble Lord, Lord Sainsbury of Turville—as a Minister for Science and Innovation under new Labour, he was told that the financial services were a great source of innovation. When he asked for examples he was told that,
“tax avoidance is an art where we are very innovative”.
I have no doubt that we will recover from the present semi-slump; we may even recover sufficiently by 2015 to give the coalition—or the Conservatives at least—another term of office. My great fear is that, having got to something like normal, we will come to believe that we can continue much as before, except for a few watered-down reforms to the banks. I believe, on the contrary, that the system of political economy that has evolved since the 1980s has, for all its benefits, grave flaws that, if allowed to continue uncorrected, will land us in a succession of crashes and crises of differing degrees of severity, which will cumulatively destroy support for the free-market economy. The chief of these flaws in our system are, to repeat Keynes,
“its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes”.
The Government have a big role to play in addressing both. I am grateful to the noble Lord, Lord Haskel, for giving me the chance to set out my ideas on these matters.
My Lords, I welcome this debate, which was introduced by my noble friend Lord Haskel, and the remarks made by the noble Lord, Lord Cope, following him, which very much set the tone for the importance of SMEs, which I will touch on. I declare an interest as a director of a small scientific consulting company in Cambridge and former director of the Met Office. I did a quick calculation while listening to the noble Lord, Lord Skidelsky, of what the ratio was of the highest and lowest paid people in those companies and it was somewhere between three and four, which is perhaps a bit less than in the City.
As my noble friends Lord Haskel and Lord Giddens explained, modern economies are partnerships of the public and private sectors. The present Government did not understand this when they came to power. I quote Mr Willetts, who made a speech at the Foundation for Science and Technology, under the watchful eye of the noble Earl, Lord Selborne, the chairman:
“There has been a real shift in thinking”—
that means “our” thinking, Tory thinking—
“over the past few years. Many of us”—
“used to think that the only thing Government had to do was to get out of the way. Large numbers of businesses still want that; they simply want lower taxes, easier planning rules, less red tape. Yet an increasing number of businesses and industrial sectors look to Government to play a far more creative role”.
Mr Willetts thinks quickly, of course, and in two years he has learnt what we now all understand. Perhaps the noble Lord, Lord Bates, might have a talk with the new Mr Willetts.
Lessons have, however, been learnt by this fast thinking Government and we now have the Technology Strategy Board, which has survived with some great successes—and I declare an interest as an adviser to the company, Tokamak Solutions, which has benefitted from important input. Nevertheless, many smaller companies, as the noble Lord, Lord Cope, said, find dealing with the TSB and BIS quite difficult, and the general view is that it is often easier for these companies to work through European Commission projects, which are much easier to enter and have been very effective, as I know myself. I also did a recent survey of some companies at the Cambridge Science Park, which also found that working with EC projects was at least as easy, if not easier.
Another important role for the TSB in future might be to assist smaller companies—SMEs—in providing technology to larger companies. In the United States, there is a very strong push by government to ensure that big companies sponsor smaller companies and use their products. The same thing does not happen so widely here in the UK. We need a survey of these developments. I hope that in winding up the Minister will explain these Damascene conversions of the Government, how current regional development assistance compares with the previous RDAs, and whether it meets the ambitions of the noble Lord, Lord Heseltine, for this.
What can the UK learn from the industrial and technology policies of Germany, France, and the USA, which we have been hearing about? One matter that we have not discussed is industrial democracy, which is no longer a very fashionable term. There was a great report by Lord Bullock in the 1970s. One of the important roles of the supervisory board in Germany, as some leading businessmen have told me, is its considerable breaking effect on the business of buying and selling companies. It sometimes seems that companies in Britain are just a higher form of gambling—buying and selling and buying and selling. The Evening Standard gets frightfully excited when there is more buying and selling. For the workers, however, this is not always brilliant, and in Germany there is a clear way of looking at this.
Nevertheless, despite the normal Manchester economic liberalism of the Treasury, it is now looking at the idea that industrial democracy, or employee partnership, might have some advantages. Everybody knows that when companies have strong employee involvement—notably, John Lewis—they tend to use UK suppliers, and they help to support other British companies. If a company is bought by an overseas company, it might put together cars, for example, but a lot of the research is often done abroad. I note the example of my noble friend Lord Bhattacharyya, who has been very successful in getting excellent research by incoming investing companies, but this does not always happen, as we have seen with the utilities and other companies.
Another feature of the question whether business is to provide services for the community or a higher form of gambling is that there is now a tendency to think that high-tech science is also a form of high-tech gambling—you find a company, its shares shoot up, it goes on the stock exchange, you sell it, then poof, off you go. I am afraid to say that we have seen a lot of that in the UK. If, in receiving government money, these companies had to ensure a much clearer relationship with the community and the Government, we might very well stop this gambling. I have friends now living in rather exotic places around the world because their companies went whoosh, and off they went. This is not business, it is not science, and it is not helping the country.
Mr Willetts also learnt through government laboratories, in his fast-thinking mode, that technology is very important. We used to have the world famous Royal Aircraft Establishment and the Royal Radar Establishment. Where are they? We had the National Physical Laboratory, which Sir Keith Joseph went to visit and which does survive. When he saw annual reports of research on the shelves of that laboratory, he said, “Why do you do that?”. Of course, Sir Keith Joseph went to Oxford and did not understand science. There are brilliant scientists at Oxford, but All Souls has a problem.
Nevertheless, despite these trends, we have world-famous laboratories. The Met Office has a world-famous laboratory, and we have others run by the Government. The important thing is to ask where we go from here when we have lost many of our laboratories in electricity, hydraulics, gas and so on. What are we going to do? We need a stronger effort to work in partnership with Europe, which has the world’s greatest laboratories, as we have seen with CERN and the European weather centre—and I helped to set up a thing called Ercoftac, which brings together all the aerospace companies and universities across Europe. This is the kind of networking approach that we need. I hope that some of these suggestions will be useful.
My Lords, first, I congratulate my noble friend Lord Haskel on securing this debate. After his recent illness, it is wonderful to see him back in his place, giving them hell as usual. The noble Lord is my mentor in your Lordships’ House. Whenever I need advice, and often when I do not, he has been there to guide me and give me the benefits of his huge experience and wisdom. I thank him most sincerely.
Noble Lords will recall the atmosphere this time last year as we eagerly awaited the opening of the Olympic Games. When the Hammersmith flyover needed major repairs, a whole group of people could hardly conceal their glee. Noble Lords might remember the people who said that it was going to be too expensive at £9 billion, the transport system would not work and the whole place would collapse. They said that it was going to be a national embarrassment, and many of them decided to get out of the country. They went to France or America or wherever, and was it not good to see that we proved them so wrong? Who today complains about the cost?
One reason why the Games were so special was the extraordinary success of Team GB, but this achievement did not happen by chance. That glorious summer of Olympic success was not achieved by a Government who retreated and let the athletes get on with it, nor was it done through government picking winners. The unpredictability of sport, as with business, would have made that a foolish gamble. Instead, it was sustained by an active government programme that provided practical support and funding to British athletes. We in business can learn a lot from this, too.
Britain needs a proper British investment bank with strong regional presence and a long-term focus. We are the only country in the G8 without a state-backed institution like this. Its absence has made it much harder to correct the collapse in small business finance after the banking crisis in 2008. We need an active industrial strategy that can help to remedy one of the chronic weaknesses in British business—a lack of investment and a lamentable achievement in productivity. From the 1970s onwards, investment has been lower in Britain than in most of its competitors. The fall in investment after the financial crash has been greater and longer lasting than for any comparable recession since 1973 or 1990. Without radical change, there is a danger that any economic recovery will be based upon a consumer take-up, rather than an investment surge. It will leave us extremely vulnerable to future economic shocks.
I have serious concerns about the Government’s progress on infrastructure investment. Of the 576 projects that have been announced by the Government, only seven have been completed; 80% have not even been started. I simply do not understand the Chancellor’s recent statement announcing so many infrastructure projects, all of which will be delayed until after the election. Why wait? Why dither? Just do it, and do it now.
I am particularly concerned that poor planning and implementation have hampered the delivery of super-fast broadband to many areas of the country, particularly rural areas. Despite all this, e-commerce in the UK is thriving. We have a higher share of our GDP in this area than any other developed nation. This is brilliant, but we cannot take our feet off the accelerator. I have been horrified by how many business-led reports I have read recently that seem to totally ignore the digital revolution taking place before our eyes. Sometimes I think that politicians think that they are digitally savvy just because they use Ocado or Amazon. In their mind’s eye, too many still seem to regard the digital revolution as a bit player in the wealth of the nation. As I have said before, if business people are not having sleepless nights over their potential exposure to the digital onslaught, their future will be bleak.
Here is the truth: the digital revolution is Schumpeter’s creative destruction writ large. Just look how traditional channels of distribution have been destroyed by the new media—music, movies, printed news, books and photography—and the companies that have gone to the wall, including Jessops, HMV and Blockbuster. There are many more to come. The sectors just about to fall to the advent of this tsunami of technology include banking, medicine and education. The changes in these sectors are particularly breathtaking. This new digital order represents a flat world where my competitor and the person challenging me for my job may well live halfway around the world, and our thinking needs to reflect it.
I take as an example HS2, which I must say I first enthusiastically supported but which I am now having second thoughts about. I do not think that we have factored in the technological changes that are upon us. I do not understand the logic of spending £40 billion and more just to enable people to get from Birmingham to London 23 minutes earlier or Manchester to London 50 minutes earlier for them then to be stuck in monster traffic jams on the Euston Road. I adore using the TGV in France, and I have been envious of that country’s achievements, but could it just have been a 20th-century phenomenon? Just for once, why do we not try and project what the world will look like in 20 years’ time, when HS2 is scheduled to be completed, and in doing so remember what the world looked like 20 years ago? Which of us could have predicted Skype? Who would have thought it would be possible to speak to one’s children in Australia holding a small device in one’s hand, to receive the transmission in high definition and perfect sound, and for there to be no delay in transmission? Who would have guessed it would also be free of charge?
Now let us project forward. In 2033, can we imagine a technology that could transmit a perfect hologram of a person halfway around the world sitting on a chair in front of us—a hologram where you are hard pushed to tell the reality from the image? If this and thousands of other technologies are bubbling away, who in their right mind would journey to a meeting starting early in the day and getting home late at night, no matter how fast the train will travel? That is why we need to project the technology forward in all these mega-expensive infrastructure decisions.
I was going to talk about my new role, which is no longer on the Front Bench, but I shall leave it because I have hit my time.
My Lords, it is a pleasure to follow the noble Lord, Lord Mitchell, in his interesting and powerful speech, with which I entirely agreed. This is an important and timely debate. The thing that I am picking up from the debate—I hope that the Government are picking it up —is that things are really seriously changing, not just economically but technologically, in a way that is often hard to grasp. Governments need to make plans on the basis of a much longer-term perspective to try to accommodate some of these changes. We have heard that from the noble Lord, Lord Monks, with whom I agreed, the noble Lord, Lord Skidelsky, with whom I agreed as well, and the noble Lord, Lord Giddens. All of them made important analytical speeches and all were looking forward and trying to understand the significance of the extent of the change that we have seen. I certainly think that investment banks and digital revolutions are part of that consideration and analysis.
The role of Government is twofold. First, we need to start thinking about managing expectations better in terms of what the future is realistically likely to hold. As part of that discussion, we need to consider how sustainable growth will look and can be provided in the middle to longer-term future. I have real fears that the rather loose assumption that we are going back to the trend levels of growth that we have known in the past is likely to be wrong. The Government need to be brave enough, if they believe that the analysis justifies it, to start discussing these issues in a grown-up way with the public and shaping people’s expectations about wages, growth and living standards over the middle to longer term. That is a very important role for the Government at the moment because of the exponential levels of change that we may be witnessing.
Secondly, the Government need to plan a little more coherently and systematically what the future policy framework is. We had some powerful speeches from colleagues earlier about the need for continuity. Two or three colleagues mentioned the importance to SMEs of continuity. I agree with that. As a foot soldier in the modern coalition Government, I struggle sometimes to understand what the growth policy is. I understand what the austerity policy is because that hits me in the face every time I turn a political corner, but I struggle to understand exactly where the five to 10 year programme is heading. I am a little surprised that the important work of the noble Lord, Lord Heseltine, No Stone Unturned, has not been referred to more often today. I wonder whether the Government are founding their thinking on that. Many of the recommendations of the noble Lord, Lord Heseltine, are correct and should be pursued.
How are all of these major programmes—whether it is No Stone Unturned, the European structural funds, apprenticeships schemes or the Work Programme—melded into a vision that the coalition Government can put forward with confidence at the next election in answer to the middle and long-term challenges? That vision is absent at the moment. It is going to be quite difficult because the election is looming and that makes it harder for any sensible policy-making to be worked through and promoted.
The other thing is that in the spin and the stunts that are used to announce important policies—we had an announcement this week about the pupil premium—the policy gets lost in a lot of noise. The Government should really be much clearer in what they are saying. They need more focus, they need more persistence, and they need to concentrate more on delivery than on making public announcements. They need to separate the signal from the noise. I looked at the Financial Sustainability Report, which was published yesterday. Its long-term views about demographic assumptions, climate change costs and a decline in North Sea oil revenues compound my fear that there are some real problems that we are not yet properly addressing.
Finally, I turn to some issues which are second order but are very important to me. They come into the category of inequality to which the noble Lord, Lord Skidelsky, rightly referred. The Government need seriously to address long-term and youth unemployment. Incidentally, if people are trying to address the housing benefit budget in a meaningful way, we need to have some plans for development of social sector housing units over the next five to 10 years. There is a huge agenda that the Government need to be addressing in the middle to longer term. If we do not do that, in the near future we shall find ourselves during an election with only half a story to tell. That would not be in our interests as a coalition Government and it would not be in the long-term interests of the country.
My Lords, I thank my noble friend Lord Haskel for introducing this debate and for the way in which he did so. Of course, the Government have a major role in generating prosperity and the employment prosperity should promote. The problem is that, as many of us see it, the present Government appear to believe that it all should be left to market forces, even though experience indicates that this is mistaken. We are told that there are “green shoots” and that things are improving, but I have doubts about that. Living standards are continuing to fall. Vital benefits are being cut or frozen. Housing is in crisis, particularly in London. I have said repeatedly in this House that rents are too high and wages are too low.
It is said that employment opportunities are improving. Only a little, it seems to me, and not for young people—or older. Those over 50 have great difficulty getting other employment if they are made redundant. All this indicates that the Government’s policies are not working, and we have yet to feel the effects of the public service cuts due to come onstream in the autumn.
Meanwhile, the Government are proceeding with their policy of cutting back employment rights. Access to tribunals is being made more difficult and will now be charged for. Changes in the law will make it more difficult, if not impossible, for an injured worker to claim compensation. Whistleblowers intent on drawing attention to dangerous situations are to lose some protection. The ridiculous scheme—defeated in this House but endorsed by the Commons—whereby workers can give up all employment rights in return for shares has nevertheless been introduced by the Government, although I think without much success. The Government seem to believe that all this will increase employment opportunities. I do not think so. The Government should understand that an enthusiastic, committed and well paid workforce is a major asset. SMEs have already benefited from a low-paid workforce, and this has not produced an economic revival: quite the contrary.
The role of the unions should not be underestimated. My own union has recently drawn attention to the work being done in the automotive industry, which is currently very successful. There is an industry committee, on which unions participate. The union has drawn attention to the very successful arrangements in Germany where the workforce is involved through workplace committees. Unions are not enemies, although some newspapers insist that this is so. Their contribution in the field of education and training should be encouraged and respected. The TUC programme, Unionlearn, is well known and successful.
Investment, however, is of course the key. There are many areas of the country which were once thriving but where the factories and workshops which once employed the local population no longer exist. As a result, the local economy is stagnant. There is a need for area development. It is now generally agreed by speakers in this debate this afternoon that our economy needs to be rebalanced; we cannot rely just on financial industries, which we have done in the past. There needs to be an investment bank under government direction so that appropriate investment can be made.
None of this will be easy, but current policies are making things worse, not better. Inequalities are becoming wider—a small minority is rich but others are much poorer. It is time to review current policies.
My Lords, what I am about to propose in this debate possibly applies more to the following debate on the future of civil society, but I am only going to speak here. Perhaps Hansard can cut and paste my speech into the next debate so that I do not have to speak twice.
Seriously, these two issues are inextricably interlinked. The way in which we generate economic activity affects civil society enormously, and when we use terms such as “businesses”, “the Government”, “society” and “the economy”, we must remember that they comprise unique individuals interacting together as a whole, and that the way in which we conduct ourselves as individuals within government, in generating prosperity, and in civil society is greatly affected by our self-knowledge.
I am pleased to be associated with an organisation called Self Knowledge Global Responsibility. It exists to educate and to raise greater awareness of the connection between individual self-knowledge and sustainable development and civic responsibility; and to encourage people to be better citizens in fields such as social business, sustainable agriculture, ethical investment, low-impact buildings, and education and conflict resolution. Essentially, it is saying that if you are globally responsible you must strive for self-knowledge, and with self-knowledge you must be globally responsible. The founders of SKGR, Aaron Cass and John Hill, know that self-knowledge can be engendered by mindfulness. Mindfulness is the gift of mental functioning that can be engendered with practice and, with it, insights and awareness arise.
Your Lordships may feel that I am straying from the subject and that I am talking like some head in the clouds 1960s “flower child”. I suppose I was that—but I was also the joint managing director of Marks & Spencer when we were generating profits of more than £1 billion a year. David Sainsbury was running Sainsbury’s at that time. When we both entered your Lordships’ House both businesses were profitable and growing because the management and the whole team treated as individuals our customers, our staff, our suppliers, even our competitors, our shareholders, the community in which we traded and the global environment. We sought to manage in a caring, responsible, enabling way, with long-term vision. We understood that the effects of our actions in running these businesses were felt by all people at all times.
Coming back to the role of government, Congressman Tim Ryan of Ohio brought out a book recently entitled, A Mindful Nation, in which he shows that mindfulness is being taught and used effectively in classrooms, hospitals, research labs, military bases and in boardrooms and businesses across his country A brilliant business coach, Manj Weerasekera, says that mindfulness can positively impact productivity in all areas because mindfulness is paying attention on purpose in the present moment and in a non-judgmental way and, through this, insights and awareness arise. By the way, studies also show that mindfulness can lead to happier communities.
Returning to the theme of my noble friend Lord Haskel, we have a duty of care to lead the way to economic prosperity and to look at new options with an open mind, especially as so much of the old has failed. Alongside the suggestions made today by noble Lords about quality institutions, pragmatic regulation and enabling government, we must also consider a mindfulness strategy for Britain. I was delighted when David Cameron, the Prime Minister, introduced a well-being measure into the Office for National Statistics, and said that it was not all about GDP. This is a cross-party issue. Mindfulness is the path leading back to the individuals who comprise our society and handing responsibility back to them. It is an energy model based on self-knowledge that is designed to increase productivity. When people are more self-aware, they become more aware of the contributions they make in business and in society as a whole.
This year, a mindfulness strategy is being designed by my honourable friend Chris Ruane MP and my noble friend Lord Layard and others. It builds upon the work currently being done in this field by universities such as Bangor, Oxford and Exeter. They are working on mindfulness in schools and universities for students and teachers, in the health service for patients and staff, in business for employees and management and in the criminal justice system for offenders and police. By the way, for information, noble Lords may wish to know that a mindfulness course is operating here on the estate, with Members of the other place from all parties and a number of Peers. It is run by Professor Mark Williams and Chris Cullen, using their scientifically proven method of training contained in their book, Mindfulness: A Practical Guide to Finding Peace in a Frantic World. We have a new series starting here in the autumn.
Her Majesty’s Government, in considering our approach to the role of government in addressing the need to invigorate the economy, sustain the environment and create a civil society, may wish to help us develop a strategy for mindfulness across several areas of society where scientific proof of its beneficial effects is already on record. Drawing all this together in a cohesive plan could engender widespread well-being and stimulate the economy at the same time.
My Lords, I thank the noble Lord, Lord Haskel, for enabling me to say that I count myself as a progressive capitalist. I understand the importance of profit and the private sector to drive growth and tax revenues and the central role of government to intervene in market failure and to prevent abuses of capitalism when it consumes excessive wealth rather than creating it. It is for the public sector to provide leadership in infrastructure, education and training, public research and particularly leadership in business and innovation, identifying and helping to finance growth areas that will increase our competitiveness.
It is, of course, a fundamental task of government to redistribute wealth to reduce social and regional inequalities, otherwise capitalism cannot be progressive. I therefore support the concept of the enabling state. Are the present Government enabling? We have low interest rates, competitive tax rates, an increasing emphasis on science and technical subjects in education, significant investment in infrastructure and increasing access to finance. The Government have, among other things, supported innovation, seen the creation of 1 million private sector jobs and made major investment in roads and railways. There is the Green Investment Bank, the business bank and improved access to superfast broadband. This is all happening as we pursue the rebalancing of the economy away from an overreliance on London and financial services. In this respect the Regional Growth Fund, which is now worth £3.2 billion, is helping to drive that change, so, yes, I think that the present Government are an enabling Government.
There are three areas to which I wish to draw your Lordships’ attention and to which I hope my noble friend the Minister will respond. The first is skills. Employers in manufacturing, processing and engineering have problems recruiting right across the UK. It is a sad reflection of all the money that successive Governments have put into skills that we still have major skills gaps in our economy. Local growth funds may well provide an answer as they can require skills providers to be locally accountable for failures to meet demand, and much better forward planning should result. The concept of local growth funds is drawn from the report by the noble Lord, Lord Heseltine, No Stone Unturned.
Secondly, the Government are doing well on apprenticeships but we need to do much more. Fifteen per cent of our under-24s are unemployed but only 5% of graduates are unemployed. As the noble Lord, Lord Bradshaw, pointed out, we need more high-quality apprenticeships in the right high-level skills. Rightly, we compare ourselves with Germany, where there is much greater structural coherence between the private and public sectors in creating apprenticeships that turn into sustainable jobs. The Higher Apprenticeship Fund is an important contributor but we need to learn much faster from the German experience than we have done.
The third thing that I would like my noble friend the Minister to respond to relates to public procurement policy in the construction sector. We seem to be developing a procurement system between national and local government that favours big national construction companies at the expense of mid-sized regional ones. This is potentially damaging to regional growth. Building firms working up and down the country have recently bid for a place on a national procurement panel for the Priority School Building Programme. While 12 firms have been selected for the north panel and 12 for the south, nine of the firms selected are on both panels. We talk a lot about a lack of competition in the banking and audit sectors, but are we heading in the same direction in the construction sector with the big nine? It is impossible for medium-sized firms to qualify for a place on these procurement panels. Even as a joint venture with a combined annual turnover of £250 million, they are still ineligible even though they may have done excellent and relevant work in the past. Since all these firms ask for is the right to compete and to tender, it is hard to see what public interest is being served in preventing them doing so. There are serious implications for the prospects of regional firms because they will lose the opportunity to grow bigger and generate more jobs and wealth in their local areas.
Then there is the Scape framework used for procurement by some local authorities, housing associations, some parts of the NHS, some police authorities and universities. This framework requires contractors to have an annual turnover of more than £500 million to be eligible to carry out jobs starting even as low as £2 million. Very few mid-sized regional contractors can meet this turnover requirement but they could carry out the work just as well. There is a requirement to take into account local supply chains and subcontractors because they are supposed to be used by national contractors, but it seems that this is frequently not the case. That is an erosion of job opportunities for local people, often in areas of high unemployment.
Then there is the question of the reinvestment of profits. Ten of the contractors on the northern panel that I referred to are headquartered in the south. Do the surpluses made on the projects undertaken in the north of England get reinvested in the place where the work was done, or do they get siphoned off to spend elsewhere? We need to know. The Government accept the need to boost the regions but I ask the Minister to look very closely at regional procurement so that local people can get jobs, skills can be maintained and enhanced in all regions and cash surpluses can be reinvested locally to train the workforce of the future.
My Lords, this House is at its best in debates like this. Everyone who has taken part has tried to be constructive and point the way for the future. We would not be having this very useful debate if it had not been introduced by my noble and good friend Lord Haskel.
I was very pleased that the noble Lord, Lord Bradshaw, talked about engineers because they are not very often talked about anywhere. I say that because I started my career as an engineer in the railway workshops at Horwich. Although locomotives, particularly steam locos, look extremely glamorous when they are going up and down the track, it is not quite so glamorous when you are working in a smoke-box and doing repairs on them. I followed what he was saying on taking National and Higher National Certificates. If you live in a village they know everything about you, and I remember two people talking about me in my own village. One was saying that I started as an apprentice engineer and then took my National Certificate, then my Higher National Certificate, then my Post-National Certificate. The other one said, “You’ll tell me he’s won the ruddy Grand National as well in a moment”.
I start from the importance of manufacturing industry in those days when it was all about manufacturing. From the 1970s onwards we lost about 30% of our manufacturing industry. It was not fashionable to talk about manufacturing industry then; it was all about the service industry. My noble friend Lady Turner and I know this perfectly well, as service industries were a recruiting ground for our trade union activities. We have to have a balance and do all that we can to help the manufacturing industry to succeed. Manufacturing industry went down from 32% in 1970 to 11% in 2010 but, despite that, 46% of our exports are from manufacturing industry. That is why we need to look at where the growth areas are in those fields. We would all agree that the one great manufacturing industry that remains is the aerospace industry, where our success is quite remarkable. I could mention the defence industry but we have to be very careful, given the press reports on some of the countries that we are exporting to—that is a debate for another day, isn’t it? There is room for growth in the pharmaceutical, micro-electronic and chemical industries.
This has been a very progressive and helpful debate. I agree with almost everything said by my noble friend Lord Mitchell. There is a need for a business investment bank to help to promote industry and small industry in particular—a business investment bank that leads and, as my noble friend rightly said, is backed by regional banks. We need to do all that we can and I hope the Minister will agree that the Government ought at all times to favour British industries in its procurement if they possibly can. In this way, and by going for research and development, we can begin to reverse the decline that has occurred in manufacturing industry. If we do that, we have a great future in this country.
As my noble friend Lord Haskel said, Germany, quite unlike us, has always relied on the manufacturing sector. It is the most successful country in Europe and we can learn a lot from it. As my noble friend Lady Turner also said, we must increase the participation of employees and look at the German model of including employers and trade unions in management. They have benefited from that and there is a lot that we can learn.
I see that my five minutes are nearly up. I hope that the Government, who have a central job to do, take note of a lot that has been said in this debate. There is a big role for the future of a business investment bank, backed by regional banks. If we do that, not only will we benefit, but all of us in the country and the country as a whole will benefit as well.
My Lords, the House owes a debt of gratitude to my noble friend Lord Haskel for introducing a debate that has produced so many varied but constructive speeches about the circumstances in which we find ourselves. My noble friend emphasised the advantages to be derived from business and Government working together, and identified the way in which this co-operation was essential if we are to get out of our present difficulties.
Two speakers also put the present position into a more general perspective. My noble friend Lord Giddens stressed the fact that the crisis is very far from being over. No country has successfully re-established itself from the crisis which obtained in 2007 and 2008. In any case, Britain is well down the list. That helps to explain why there are so many difficulties right across our economy and puts into perspective the anxieties of noble Lords such as noble Lord, Lord Cope, and the noble Baroness, Lady Kramer, about SMEs. The reason why the banks have been reluctant to lend is because they have been at the centre of this devastating crisis. That has presented them with problems so great that the state had to step in for two of the major ones, and huge sums of money are at stake.
The noble Lord, Lord Skidelsky, also indicated that if the Government took no responsibility for restoring demand in our economy then it was likely that we would continue in the present difficulties, which are not to be underestimated. Real wages are lower under this Government and, when they go out of office in 2015, will have fallen by 2.4%. We all know about cuts in benefits, so that section of the community is paying the price. So wage-earners and those on benefits are suffering, and we all recognise that unemployment goes right across the economy and affects a very large number of people.
In its economic survey of the UK economy, the OECD made the nature of the problem quite clear: productivity underperforming in relation to the rest of the OECD countries. We had fallen, at the onset of the recession, by more than other countries in the OECD. The noble Lord, Lord Bates, indicated successes with regard to exports, but we have an increasing balance of payments deficit. Despite a 20% sterling depreciation, Britain is still nowhere near earning its way. That is the depth of the crisis into which we must put the context of what we need to do about policy, particularly in relation to industry.
It has been argued that we are making clear success in some areas, and indeed we are. The noble Lord, Lord Bhattacharyya, speaks with great authority about the relationship between science and research, and the fact that we have high-class universities that help our industry. However, the noble Lord emphasised that we need to identify the results of such investment. That surely must be critical because we can live in a fool’s paradise if we think we are doing the right things but have no measurement of the outcome of policy.
This is crucial in one area that emerged in this debate and was raised by many speakers on both sides of the House; I refer to the skills gap and the skills dimension. Successive Governments have addressed themselves to this and gone in with great intentions to invest. Certainly, the previous Labour Government invested greatly in colleges and the Learning and Skills Council, and addressed the skills deficit. We have not solved the problem; indeed, far from solving it, as many noble Lords have identified, we are well behind other European comparators. It is not easy for the British economy and society to adopt German perspectives on how to run industry and develop skills. The German apprenticeship system is very different from the situation that confronts British industry. However, we certainly need to address our minds to the level of skills, which is palpably too low to serve the needs of the nation.
The other question is what can be done to invest in infrastructure to promote jobs and demand, as the noble Lord, Lord Skidelsky, mentioned. One can only say that the Government are acting late on this. They have so far done nothing of any merit with their programme, and it will still be the case that capital investment will be lower in 2015 than it was in 2010. That is not a recipe for success or for the development of our economy. That applies to schools policy and particularly to housing. After all, there should be investment in the construction industry to give some stimulus to the economy but, of course, the Government have done little about it. It is therefore not surprising that the noble Lord, Lord Cope, and the noble Baroness, Lady Kramer, can identify the difficulties faced by small and medium-sized enterprises in obtaining resources.
On our side, although we have faint hopes on this, we think that the Government ought to do what my noble friend Lord Mitchell first referred to, as did my noble friend Lord Hoyle, and establish a business investment bank. We need a bank with a network of regional banks because if there is one clear casualty of this crisis it is the complete collapse of our regional infrastructure. We all know that the Government dispensed with the RDAs and then discovered that the noble Lord, Lord Heseltine, had some pretty sharp advice for them on the problems and how the RDAs actually produced investment in the regions. At present, precious little is being done.
My noble friend Lord Haskel and other noble Lords—generally those on my side, including my noble friend Lord Monks, who was emphatic—raised the issue of how we tackle short-termism in British business. “Quick results reflected in share value” is the nostrum of how our businesses work, and it is not therefore surprising that if one is faced with potential takeover bids, to which the only defence is to enhance share value, that becomes the issue rather than investment in research, skills and development of a longer-term perspective for industry.
My noble friend Lord Haskel referred to the noble Lord, Lord Sainsbury, whose absence from this debate we greatly regret. He is concerned to see how we can build a business model in which shareholders have greater strength to hold boards to account. If anyone wants an illustration of why boards need to be held to account, just consider the salaries of chief executives, board members and directors over the past 20 to 30 years. The enormous disparity between them and the people who actually do the work in industry and companies is a reflection of the power of the boards, which we do not challenge effectively.
We may have to go some way before we follow what my noble friend Lord Stone suggested in relation to Marks and Spencer or the illustration given by the noble Lord, Lord Hunt, in terms of John Lewis Partnership. It may be a considerable time before we are able to engender a framework within which businesses can be organised on those bases. However, at the very least, surely the other side, having preached for so long that the Government must lay off business and let it pursue its own objective, must recognise that the cost of the short-termism of British business—particularly the absurdity of the short-termism of British banks—is that it has contributed to the crisis that we are all facing, which we desperately need to remedy.
I conclude with some questions. I wish to come off the macro and step down a notch. My noble friends Lord Mitchell and Lord Hoyle mentioned the Department for Business, Innovation and Skills. It is a Treasury Minister who is responding to this debate but if we are to make a change to business structure, the Department for Business has to be reformed also. The department is being reduced in size; its staff are recruited increasingly from the south-east, where it concentrates its resources; and it has very little representation in the regions. It is small wonder, therefore, that we have real anxieties about the capacities of that department.
My Lords, I join other noble Lords in thanking the noble Lord, Lord Haskel, for introducing this debate, particularly because he gave me advance notice that he was to draw some of his remarks from the recently published book by the noble Lord, Lord Sainsbury, which meant that I spent a happy time reading that book while watching the cricket last weekend. I recommend it to all noble Lords.
One of the challenges for a Minister in my position after such a wide-ranging debate is to try to have a theme running through my concluding remarks. I would like to take as my theme—my text, if you like—two of the three defining beliefs of the noble Lord, Lord Sainsbury, in what he calls progressive capitalism. They are the importance of institutions, which he says need to be market-supporting rather than directed, the need for an active and competent state and the need for fairness. We have been talking very much about the first two today and I shall concentrate on those. I should like to take as my core text one sentence from the book of the noble Lord, Lord Sainsbury, which underpins a lot of what noble Lords have said. It states:
“I can think of few more challenging or socially valuable jobs than building up a high value-added business in today’s knowledge economy”.
If that is the text, I think that we are all progressive capitalists now.
The noble Lord, Lord Haskel, discussed these themes and made the point with which no one would disagree: we need to raise our game in a number of respects. I start with skills, and draw noble Lords’ attention to a press release issued today by Young Enterprise about the skills challenges that employers face, and they are quite interesting. The press release states:
“The five most important skills British employers think young people should have when entering the workforce are: communication and literacy … a positive attitude … self-management … people skills … and team working”.
As we discuss curricula and structures, at least four of those five areas of core skills are very rarely debated. I will not spend much time on them today, other than to say that we need to think about them more. I am very pleased to see that the noble Lord, Lord Stone, agrees.
In terms of raising the game, I agree with the requirement of the noble Lord, Lord Haskel, that Whitehall must raise its game. The noble Lord, Lord Mitchell, also talked of games—the Olympic Games. He commented on how much was achieved by the Government working well with high achievers. There are lessons to be taken from that, and the Government have taken one of them in appointing my noble friend Lord Deighton, who oversaw the Olympics, to bring some of the disciplines that he used there to government, not least in terms of the way in which we manage infrastructure. Everybody agrees that Governments in this country have been poor at delivering infrastructure projects to time and on budget. He is focusing his attention on getting government departments to produce infrastructure capacity plans, use private sector expertise and worry, a lot more than they have sometimes done under past Governments, about delivery.
I agree very much with another comment by the noble Lord, Lord Haskel, about the need to replace short-termism with long-termism. I commend to all noble Lords the LSE Growth Commission, which specifically looks at these issues. I am very pleased to say that members of the commission are in detailed discussions with Infrastructure UK to look at how some of their learnings can be brought to bear in the way that we do things.
The noble Lord, Lord Cope, and the noble Baroness, Lady Kramer, concentrated their remarks on SMEs, which they said were crucial. That is something on which we all agree.
The noble Lord, Lord Cope, talked about UKTI’s shift in focus towards SMEs. This is very welcome and is having a real impact. The other specific initiative taken by the UKTI—one of the most cost-effective initiatives that the Government have undertaken—is its appointment of trade ambassadors from across your Lordships’ House. These are having a material impact on developing trade links with some of the countries that we have traditionally ignored; my noble friend Lord Sharman in Morocco and my noble friend Lord Risby in Algeria, for example. We are finding that there is considerable scope for enhanced UK trade with parts of the world that we have tended to ignore.
The noble Lord, Lord Cope, talked about the challenges of the PAYE system. I agree with him. He may be right in saying that companies will find it simpler in the long run to adopt the latest technology. With regard to national insurance, we have introduced a £2,000 per year allowance for businesses. That will be particularly beneficial for SMEs. That is not a mechanical point but it is a hard cash point.
The noble Baroness, Lady Kramer, talked about funding, particularly the challenges in getting new forms of funding into SMEs. I very much agree with her. One of the leitmotifs of this debate has been people drawing on experience from elsewhere in Europe and North America. We can learn from these countries but it is quite difficult, as the noble Lord, Lord Sainsbury, says in his book, to replicate exactly their institutions. The American community development and investment funds work very well in the States, but it is not easy simply to transpose them here. On the question of new sources of funding for SMEs, one of the key things to have happened is that the PRA has in effect torn up the old methodology of the FSA in terms of getting new banks going. It was virtually impossible to start a new bank in the UK and we clearly need a raft of new banks, not least business banks. I believe that the PRA’s approach to this will prove to be extremely beneficial. In the mean time, the Government have introduced the Funding for Lending scheme, which should help small business funding and is in the process of establishing a business bank.
The noble Lord, Lord Giddens, thinks that we should be academic-led in the way that we look at these issues—I suppose that, as an academic, he would. I hope that we do not need to wait to have a raft of academic literature in front of us before we can start doing a lot of the things that he would like us to do. He talked, for example, of shale gas and whether we could take that opportunity quickly enough. As he will know, when the spending review was announced, we announced that we were taking a series of steps in the very near term to move forward on the development of shale gas here. These include developing technical planning guidance for shale gas exploration and looking at how we can put in place a generous community benefits scheme so that those communities that will be affected will be fairly recompensed. We are also consulting on tax incentives to encourage exploration. Hopefully, we are making a lot of quick progress in an important area that is bound to be controversial.
The noble Lord, Lord Monks, used a phrase that I have not heard for a considerable time, “the commanding heights”. It used to be extremely prevalent in political discussion. One of his main concerns was that too many UK companies have been bought by foreign companies and that foreign owners have different priorities from domestic ones. That is right, sometimes. However, we must have a more nuanced view. One of the most impressive success stories in British industry in recent years is that of Jaguar Land Rover. Does anyone think that there was a company in Britain that could have taken over Jaguar Land Rover and made the success off it that Tata did? I do not. It has been a phenomenal success. The Kay review, looking at short-termism and long-termism, will play a part in trying to redress the balance here, but I do not think that a great constraint on foreign ownership of British companies is a good idea.
The noble Lord spoke of the problem of top salaries and growing income inequality. That has been a very significant development in recent years, driven largely, but not exclusively, by the financial services sector. When I served on the top pay board, we looked at methods of beginning to redress this, not least by shareholder activism, and the Government are implementing a large proportion of those measures. Bank bonuses, without a bank bonus tax, have fallen very significantly—they are down 70% in the case of RBS and 40% in the case of Barclays.
The noble Baroness, Lady Valentine, raised a number of issues. I cannot deal with all of them. On airports, all I will say is that the Government taking quick, decisive action would be extremely easy if there were no such thing as public opinion. In this case, any Government would, quite rightly, take public opinion into account, as well as the narrower, though crucial, economic analysis that would underpin any decision.
The noble Baroness made a point about immigration and visas. As she knows, we are looking at methods of improving the situation in respect of visas, not least for China. We have introduced a VIP visa service for visitors from China. I could not claim that we have this right. It would be easier, in a narrow respect, if we were members of the Schengen agreement, but she knows as well as I do that that simply will not happen. We are looking at other ways of redressing the problem.
She pointed out that London is a centre for businesses that want to trade in Europe and that we need to engage in the EU as an equal partner. I agree with everything that she said on that subject. I also agree with the noble Baroness, Lady Donaghy, who pointed out the costs of adopting a Norwegian posture. To me, that is simply a risible option.
I thank the noble Lord, Lord Bates, for his speech, not least because he has saved me from saying a great deal of what I would otherwise have said about what has been happening.
The noble Lord, Lord Bhattacharyya, referred to protecting the science budget. The Government have done that. Any debate about science, particularly this one, should recognise the seminal role that the noble Lord, Lord Sainsbury, played as the first politician for a very long time to take science seriously. Without his persistence, we would not have had the expenditure on science in the previous Government that this Government have been able to build upon.
I share the support of the noble Lord, Lord Bhattacharyya, for HS2. While I agree with the noble Lord, Lord Mitchell, that the way we do business is changing, I have spent a great deal of time travelling to Birmingham over the past 20 years—once to do with developing Brindleyplace, as it now is, in its early stages and, secondly, working for a charity—and in both cases there is no way I could have done that without being there and engaging people face to face. While I am sure that a hologram of myself in front of Birmingham City Council or a head teacher would have been mightily impressive, I simply do not believe that at any point in the foreseeable future we will be able to do without transport.
We will need more of it. One of the things that has not been mentioned is that the population of the UK is set to increase significantly over the coming decades, which means that all forms of transport will need to be enhanced. That is why the Government have put so much effort into looking for longer-term infrastructure proposals, and why those proposals are included in, and form the basis of, the spending review last week.
I liked the point of the noble Lord, Lord Bhattacharyya, about evaluating the way in which we do things. I shall certainly raise that issue with my colleagues in BIS.
The noble Lord, Lord Bradshaw, referred to the value of engineers and said that there were too many apprentices who were not engineers. What we have got to do is to increase the number of engineering apprentices and not reduce the number of apprentices in a range of other industries. An apprentice in the catering industry is as important to me as an engineering apprentice. There are good examples of leading companies in the UK who have terrific records on apprentices—BAE and Rolls-Royce, for example. The university technology colleges will help to change, to a certain extent, the bias against a vocational approach to careers and I hope that they succeed.
I have referred to the points made by the noble Baroness, Lady Donaghy, but I would like to comment again on the shortfall in engineering graduates. One of the matters that the noble Lord, Lord Sainsbury, mentions—and with which I strongly agree although it is controversial—is that we need to better align the courses that we provide in further and higher education with labour market needs. This is a major challenge, not least because many young people are working very hard to obtain degrees in subjects that they think are quasi-vocational, such as law, and then find that the careers that they had envisaged for themselves simply are not available because of the excessive competition. I agree with the noble Baroness that tourism is a hugely important sector that is sadly overlooked.
The noble Lord, Lord Skidelsky, raised a raft of macroeconomic conjectures. The only part of Keynes that I would like to quote back to him is the importance of animal spirits. It seems to me that animal spirits are now operating in a different direction than they were a year ago. That is one of the key reasons why we are seeing growth, and will see faster growth in the future.
I agree with him completely about looking at the unemployed as a resource. However, I think his analysis is flawed because when you look at the level of unemployment in London—8.6%—who can say that there are not jobs in London for every Londoner who wants one? London has hundreds of thousands, if not millions, of people who come from the rest of the world to take up jobs that could be done by Londoners if they were properly trained. This is not a macroeconomic failure. There is a huge supply-side failure that we have completely failed to grapple with over the years, and we need to do better.
The noble Lord, Lord Hunt of Chesterton, referred to the Damascene conversion of Mr Willetts and asked me to comment on it. I am afraid that I cannot see within the mind even of my own colleagues, far less those of my coalition partners. I am sorry that he did not mention the fact that the Government have confirmed that they are investing in the new high-performance computer for the Met Office, which I am sure he will welcome.
The noble Lord, Lord Kirkwood, talked about long-term unemployment, which is a huge problem. The Work Programme is designed to address that. Although it is doing better it needs to be more flexible, and I hope that it will be.
The noble Baroness, Lady Turner, referred to investment being the key. Indeed it is. The Green Investment Bank has £3 billion of government funding, and so far, of the £633 million it has committed, for every government pound committed private investment has brought in three.
The noble Lord, Lord Stone, raised the question of self-awareness. I hope that he will start with Members of your Lordships’ House.
The noble Lord, Lord Shipley, raised a number of key points, some of which I have dealt with. On public procurement policy, the problem that he raised, which was new to me, seems to be a very real one. I shall take it up with my colleagues and write to him.
The noble Lord, Lord Davies, basically suggested that things were extraordinarily gloomy. The only thing I would say to him is that there was a 1.4% growth in real household disposable income last year; over 1.3 million more people are now working in the private sector; last year employment grew faster than in any G7 country; and the number of women employed is the highest it has ever been.
This has been a fascinating debate. We have discussed fundamental issues relating to the economy and society and I am extremely grateful to the noble Lord, Lord Haskel, for initiating it.
My Lords, unfortunately our time is up and I cannot respond to each individual speech. I hope that the Minister on the Woolsack will give me a moment to say that this has been an informed, interesting and lively debate. I thank the Front Benches for their responses, which have been most fulsome. I hope that the rest of the Government are listening with an open mind because an awful lot has been said today that is based on knowledge, experience and an enormous amount of good will, which we can all value.
Motion to Take Note
My Lords, I am pleased to have been given the opportunity to lead this debate today on the future of civil society.
The impact of organisations that we collectively describe as civil society has for many years been recognised across many walks of life as of importance and value. There is, however, sometimes confusion about the term. That is not surprising, because civil society is made up of many and various people and organisations. We have the truly voluntary, such as the Scouts and the Guides, amateur boxing clubs and golf clubs, the National Federation of Women’s Institutes, church groups and play groups. Then we have umbrella groups such as Community Service Volunteers and the National Council for Voluntary Organisations, which among other activities provide networks of support and advice. In the past, CSV has provided educational training on citizenship as part of the school curriculum.
The third wing, known generally as the voluntary sector or the third sector, provides professional help often including advice and representation. This group includes law centres, CABs and advice centres of many kinds, dealing with issues of race or gender, or helping those who have been trafficked or abused or those without housing. Some services are very specific, for example for children and young people, the elderly or drug addicts.
Where does the government initiative on the big society fit in here? The Conservative Party website states:
“The Big Society is about putting more power in people’s hands—a massive transfer of power from Whitehall to local communities. We want to see people encouraged and enabled to play a more active role in society”.
No one, I am sure, would disagree with the second sentence, but a transfer of power from the state to local communities should be considered more warily.
The TUC’s 2011 report, Civil Society and Public Services, contends that the overall concept of the big society is the outsourcing of public services to providers from civil society and to social enterprises. It says that it must be seen in the context of huge cuts to public spending.
The report quotes from another report, Cutting It: ‘The Big Society’ and the New Austerity, produced by the New Economics Foundation. It argues that there might be merit in the theory of empowering communities, opening up public services and promoting social action, but that these aims cannot at this time be separated from the Government’s programme of deep and rapid spending cuts. As the foundation puts it:
“Unpaid labour and the charitable and voluntary sectors are due to fill the gaps left by public services, providing support to increasing numbers of poor, jobless, insecure and unsupported individuals and families”.
Was it a little harsh? Was it jumping the gun in 2011 when the big society had hardly started? We shall see.
Let us look at where we are now. The Charity Finance Group’s March 2013 report, Managing the New Normal—Adapting to Uncertainty, found that 93% of the charities that it surveyed said that they were experiencing a squeeze on fundraising, while two-thirds said that demand for their services had increased.
CSV declares that individual citizens in small community groups cannot tackle widespread complex and costly social, health and social care problems alone, and that a well resourced independent and responsive sector is needed to get the best fit and to find and support the vulnerable and needy. It also says that voluntary sector organisations that involve volunteers need to be properly resourced in order to effectively and efficiently recruit, support and retain volunteers, and that this is particularly important when volunteers are engaging with vulnerable families and individuals as well as people in difficult circumstances.
While the aim of the big society might be laudable, the funding of small, often isolated groups of individuals cannot and will not make up for the gaps that are being left by the cuts to local authority budgets and the subsequent reduction or loss of vital professional services. According to the NCVO, reporting this year on the June spending review, the further reduction in funding from local authorities, together with the negative impact of many welfare changes, will mean the likelihood of more and more people seeking support while the charities that are geared up to providing that support become more and more financially precarious.
The NCVO goes on to say:
“Given that charities play a major role in preventing social problems and therefore reducing costs, councils looking to balance their budgets will need to have meaningful discussions with the voluntary sector about how they can support their communities”.
I hope that when the Minister replies he does not tell us that these decisions are local and local authorities are free to choose their own priorities. While that might be factually correct, the size of the financial pot that largely determines these priorities is very much a national decision.
I turn now to some brief specifics, such as areas of service and/or need that have been hit particularly hard by the current austerity measures. The availability or lack of civil legal aid was discussed at length in this Chamber during the passage of the recent legislation and in a debate last week, so I will not labour the point. Suffice it to say that problems addressed early on do not often develop into major crises. The Law Society is quoted as believing that one in three law centres will be forced to close because of its reliance on legal aid funding. Most of these centres are in areas of deprivation and most need. With nowhere to go for help, many problems are certain to turn into crises.
The 2012 report, Perfect Storms, by Children England, which is the membership organisation for the children, young people and families voluntary sector, cites an example of a national charity providing advocacy, legal representation and information and advice to vulnerable young people and adults that uses both paid staff and volunteers. Despite the local authority duty to provide such a service, the charity has seen the allocation of core funding reduced on all its contracts, which has meant the loss of 15, or 10%, of paid staff, and 19, or 5%, of volunteers.
According to a survey by the National Children’s Bureau, more than 65% of children and young people’s charities responding said that they are reducing both the level and range of services they deliver due to public spending cuts. The TUC has reported that more than 30% of funding to sexual violence and sexual abuse services for women has been cut. Women’s Aid says that it has been turning away 260 women per day because of its cuts. Yet the Government’s announcement only this month of a £4.3 million boost to big society funds to put communities in control cites among other areas of priority: troubled families, improving maintenance arrangements for children of separated families, and improving social mobility. This is virtually the same client group as those currently losing funding. It seems very strange that we are starving well established and experienced organisations of the funds they need to deliver the services in which they are the experts and then providing more funding to set up something unprofessional and new.
The only conclusion I can reach is to go back to the Conservative Party website, which I remind the House talks about:
“a massive transfer of power from Whitehall to local communities”—
in other words, services on the cheap provided by local people with little or no experience to some of our most vulnerable and needy citizens. It will end in tears and somebody in the future will have to pick up the pieces of a very short-sighted and poor policy.
Finally, lest anyone thinks that I am more in favour of bureaucracy than the development of communities, I can tell the House that this is not the case. I spent many happy years in the 1970s and 1980s working in community development and a community law centre, and I absolutely believe that many communities have hidden strengths and that many people very much enjoy participating in local activities, helping those more in need than themselves. However, those people who are in need of help deserve to know that the assistance given to them comes from professional and experienced advisers. The volunteers working in local centres or agencies also deserve the support of those with professional know-how. I look forward to listening to the contributions of noble Lords.
My Lords, I begin by congratulating the noble Baroness on giving us the chance to discuss this important matter and, indeed, on drawing the attention of the House to the multifaceted nature of civil society.
Before I go into my remarks, I have what the police would call “form” on this matter and need to declare some interests. I chaired a task force for the Government that produced a report, Unshackling Good Neighbours, which sought to look at what stopped people volunteering and giving money and what stopped smaller charity and voluntary groups growing. My reward for that was to be appointed the official reviewer of the Charities Act. I produced a report a year ago and here I have to chide my noble friend on the Front Bench somewhat. The report, which contained 100 recommendations, was deregulatory and generally welcomed by the sector but has yet to receive an official response from the Government. It is 12 months now and I have to say to my noble friend that I do not think that that is quite good enough. The sector is anxious to hear whether any of the ideas which I proposed, after consultation, are going to be proceeded with, and the Government need to hurry up. In producing those two reports, I visited many parts of the country and saw at first hand what wonderful work was being done by men and women, often in small groups and with very limited resources, tackling some of the most deep-seated and intractable problems of our society. They deserve our support and encouragement.
I said that I wanted to congratulate the noble Baroness, Lady Prosser, on introducing this debate. I do so, but she will not be surprised to learn that I do not really agree with her analysis of the situation. I will not go through a point-by-point rebuttal but I will say that she completely failed to mention the appalling economic situation that this Government inherited from the previous Administration. There is no way that the charity and voluntary sector can be insulated from that. Indeed, the Government are to be congratulated in many ways on what they have managed to achieve.
I draw the House’s attention to three important aspects of government policy. The first is the coming into force in January of this year of the Public Services (Social Value) Act, which for the first time imposes a duty on commissioners to consider the social, economic and environmental benefits before commissioning a contract. That is a really important way of getting local input and commitment to projects. The second aspect is the changes in gift aid, which have simplified the whole process considerably through the Small Charitable Donations Act. The fact that no donor declarations are needed for smaller amounts of gift aid is really important and helpful to small charities in boosting their ability to raise money and cutting down the amount of paperwork they have to undertake. Last, and most important, is the development of the social investment market, which recent reports suggest grew by 25% last year. This is a win-win situation: more funding for the voluntary sector and the emergence of the UK as a world leader in this whole area of social investment and in the way in which we can carry it out. Those three aspects are extraordinarily important and the Government are to be congratulated on having pioneered them.
My noble friend would not expect me not to have a shopping list of things that the Government should be going on to execute over the remainder of this Parliament. I offer him two or three that he should get his officials to look at with expedition. The first is the rather technical issue of trustee duties. Our trustee law currently makes no distinction between trustees of an ordinary trust and those of a charitable trust. Preservation of capital is exceptionally important in an ordinary trust—you need the capital preserved in your pension fund in order to pay the pension. However, it is perfectly possible for trustees of a charity to spend some capital in pursuance of their charitable objectives. That is an important difference and I hope that the Government will persuade the Law Commission, which is beginning its review of charity law, to begin to undertake a really serious look at this in order to draw a distinction in law between these two types of trust in the future. It would have substantial practical implications and benefits for charities.
The second issue is volunteer and trustee liability. I discovered that there is a perception of risk out there. It is true that some of it is based on myths and some of it is based on completely counterintuitive outcomes to legal cases, which have been well publicised. However, we live in a litigious age and we need to offer our volunteers, trustees and workers in charities and the civil society sector protection and the understanding that the law is on their side when they are acting sensibly. I hope that the Government will continue to look for ways to provide that reassurance. I am sure it will have a great benefit in terms of the readiness of people to volunteer.
The third issue is commissioning. Commissioners tend to be risk-averse. If we are going to find a way to encourage the voluntary sector, we are going to have to provide commissioners with some air cover so that they are prepared to chance their arm, so to speak. We could establish yardsticks that the Government would help promulgate as best practice. The Government would not have to enforce them, but they could be there as a yardstick. These could relate to, for example, the number of tenders that you call for in relation to the size of the contract. You can have only one winner. If you have six or seven tenders, you have to have five or six losers, and all the work and cost that has gone into preparing those tenders is wasted. You could also have yardsticks about the cost of preparing a tender and the cost of monitoring in relation to the size of the contract. All these things would help the charitable and voluntary sector compete more effectively, as it would not be put under undue or unfair competitive pressure.
The last issue is that we are clearly going to see voluntary groups and charities begin to have to form syndicates. They are going to share services with other charities that are providing different expertise to that syndicate, which, of course, brings in the issue of VAT on shared services. Value added tax regulations are a bourn from which no traveller returns and are exceptionally complicated. The Government could do a great deal to help the development of syndicates and to help consortia of smaller groups compete in the brave new world if the VAT situation could be addressed.
Finally, I should like to address the question of failure. We should be prepared to expect and accept that some charities and voluntary groups will fail. The voluntary sector is tackling some of the most difficult and hardest-to-reach areas of our society and not all plans are going to succeed. My noble friend Lord Cope referred to the high failure rate of commercial enterprises and the charitable and voluntary sector is not exempt from similar ratios. Failure is not the same as fraud, but sometimes in the voluntary sector the two are confused. I hope the House will agree that this is not a matter to be defensive about. Indeed, some might argue that if there were not failures that would show that the sector had lost some of its dynamism and its entrepreneurial instincts.
My Lords, I congratulate my noble friend Lady Prosser on introducing the debate and welcome the opportunity to say a few words. Before I set out an example of civil society, I want to do a tiny bit of scene-setting. As we saw this week, the UK is home to three times as many banker millionaires as the whole of the EU put together. The RSPCA has raised the pay for top executives into the £150,000 a year range, despite falling donations, and, in my view, is wasting money on prolific private prosecutions. Under the austerity regime that we are experiencing at the moment, when civil servants have been on an effective pay cut due to the pay freeze and pension cuts, the very top Civil Service levels have continued to receive eye-watering five-figure bonuses. I am as annoyed as Eric Pickles is at CLG at the failure to tackle the runaway local authority chief executive salary trough and the perks that are added to it. The Charity Commission, as it appears from the recent BBC “File on Four” programme, is busy certifying non-charities as charities. Seven out of 10 commissioners on the board are new and only one of them has any significant experience in the sector at all.
That is a bit of scene-setting for talking about civil society. Then I read Peter Oborne’s column in the Telegraph today. He says that the coalition has been brave and ambitious in challenging the official culture,
“dominated by the assumption that controlled, state-directed action held the key to national happiness”.
I have never agreed with that and I do not think that my noble friend has, from what she said earlier on anyway. Peter Oborne goes on to say that the programme of social change and economic reform,
“in its scope and audacity has no precedence in the post-war period, including the Thatcher years”.
The undertone of what is happening is extremely dangerous. I do not disagree entirely with everything that he says, but he then fails to ask who picks up the pieces as the state withdraws. That is the key question. If the policy is to have a shrunken state, which it clearly is—it has nothing to do with austerity in many ways—who picks up the pieces?
The effect of local authority funding being decimated is having a real negative effect on some of the frontline civil society organisations. On the one hand, local authorities are retreating from work by raising the bar of intervention—say in social services—and on the other cutting support to the private and third-sector operators in those areas. A young woman I met recently in one of our large northern cities works for an organisation that helps young people who are either homeless or in danger of becoming homeless. Her case workload left me staggered. It did not compare with what I had experienced during my 27 years in the Commons when qualified social workers carried out the work that she described. Social services have not even contracted out the work. They have simply raised the bar, saying that they do not do this any more, and their intervention comes only at the crisis level and then after lots of chasing up. This young woman had recently taken on supporting a very vulnerable female teenager who had run away from home several times and no one knew where she had gone. She had a drug history and was associating with much older men. For the princely sum of a pay rate that was a few pence above the minimum wage, this young woman worked over and above the call of duty in hours, support and liaison, and at levels which I know from experience qualified social workers did in the past.
This cannot be the way to pick up the pieces. As my noble friend said, it will end in tears. I fully appreciate that agencies at the centre and locally are having to make savings. I do not complain about that. I fully understand it and do not wish to be involved in a party-political dialogue about who is to blame. The fact is that that is the reality. It is obvious that the desire to replace services and shrink the state, which is certainly a central policy, is leaving gaps in areas that are difficult at the best of times. These areas were difficult when there was plenty of money. That is the point. By definition they are labour-intensive—very labour-intensive if one gets into the support of families. They are very challenging and often very sensitive. In short, they are the stuff that makes big headlines and calls for public inquiries when something goes tragically wrong in a specific case. That is the reality that we will be called to account for.
Slow growth and austerity are here for a while. I accept that. It would be ridiculous to work on any other basis. The population is ageing. More families are moving away or being moved away from social networks. These types of case will multiply. We need somehow to find a way properly to support the voluntary organisations. They are the bedrock and I am in favour of their not having as much red tape as local government. We need to do this not only with grants—finance is one area—but also with better routes into and support by the existing, remaining public services that can no longer fill their traditional roles. We have to accept that traditional roles are not being fulfilled by the statutory services, but they remain there with expertise infrastructure. We must find a way of enabling the voluntary sector, which is providing these services, to link in. We do not have that at present. It will end in tears if things simply carry on as they are at the moment. This is not all a call for more money. There has to be a better way of operating in the civil society.
I thank the noble Baroness, Lady Prosser, for introducing this debate and I declare an interest. I have a small consultancy that works with charities.
I am not a big fan of the phrase “civil society”. Every time that I come across it, I think that it does a disservice to what it is trying to describe, but I cannot think of anything better. I am not always entirely sure what it is. I listened to the noble Baroness, Lady Prosser, giving her explanation at the beginning. For me, civil society means the point at which the statutory, voluntary and private sectors come together to make a difference to the common good and the lives of citizens.
If we had had this debate about 10 or 15 years ago, I do not think that we would have talked very much, if at all, about the role of the private sector in all of this, but we do now. It is the part of civil society about which we know least. There is a new report by Dr Catherine Walker, published by Directory of Social Change, which looks at corporate giving. There is some very interesting information in it that noble Lords will probably not have heard before.
The report is an analysis of the giving of the top 550 corporate givers. It uncovers that companies play an important part in political and social development, but there is little evidence about what they do. They give approximately £700 million to £800 million, though it is a bit difficult to tell, because some multinational companies do not declare. That represents 2% of all charitable income, and 20% of companies give 90% of the cash that is given to charities. Cash donations to charities make up about 77% of the donations and the balance is gifts in kind. The average donation by a company is about £1.1 million. There are 73 companies that give more than £1 million. As far as we can work out, the total contribution as a proportion of pre-tax profits is 0.3%. Does that not say something?
In England, the biggest beneficiaries of charitable corporate donations are in Greater London, which gets about 33%. The West Midlands gets 1%. As far as we can tell—where it is possible to tell—the giving is totally unrelated to need. Corporations give where their offices are. They give primarily to community and social welfare charities, to education and to children’s charities; more than 50% of all giving goes to them. Causes such as human rights and women’s issues are far less popular. They get less than 10%. Arts and culture are traditionally seen as the domain of corporate givers rather than of individuals.
Despite everything that has happened since 2008, the financial sector is still the top sector for charitable giving. It gives about £245 million in cash. The least charitable sector, with an average spend of just about £300,000, is technology. I am glad that the noble Baroness, Lady Lane-Fox, is now in her place. There are also corporate trusts, and they provide about half a billion pounds in grants, 50% of which goes to three causes: education, community and social welfare, and children. This is the first report of its kind and it has set a benchmark in reporting. I hope that it will be possible to repeat the exercise and grow the statistical basis. We know that we need more transparency in reporting. There are also some limitations. We know practically nothing about the corporate giving of small and medium-sized enterprises.
The report is an important piece of work. Why is it important? It shows that giving varies dramatically across the country and that there is a key role for government in making up the deficits geographically and in terms of sectors, because of the disproportionate benefit to different localities.
I hope the Minister saw the Institute for Government’s report Making Public Service Markets Work because the private sector increasingly plays a huge role in and benefits enormously from the delivery of public services. We know that the big four—G4S, Capita, Serco and Laing—get by far the majority of the billions of pounds of public service expenditure. We also know from last year’s NCVO and CAF survey that local charities are beginning to lose out because of the way in which commissioning and, in particular, procurement is being done. The noble Lord, Lord Hodgson of Astley Abbotts, was absolutely right.
In its submissions to government on government procurement, NCVO said that social value ought to be both the strategy objective and at the forefront of the Government’s policies on procurement and commissioning. The Social Value Act is incredibly important as public services will remain large and significant employers in different localities, particularly in hard-hit areas outside London. It is therefore important that we take all this information into account and that the Government rethink the part they have to play in relation to the private sector’s role in civil society and in enabling all citizens in all parts of the country to get the best from it.
My Lords, I, too, am grateful to the noble Baroness, Lady Prosser, for initiating this debate. I am also very grateful to the noble Baroness, Lady Barker, for her comments about the private sector. I declare an interest as the vice-chairman of the Global Agenda Council on the Future of Civil Society at the World Economic Forum. I draw to the House’s attention the report published at the World Economic Forum in Davos this January. I retain that position for a further two years. The essence of the report, which contains 80 expert interviews and insights from 200 analysts, including those from the charity, not-for-profit, business and government sectors, is that there is a new and very different paradigm for civil society going forward. It is far too easy to think of civil society as the domain of NGOs, charities and foundations and to miss the point—I am not suggesting that the noble Baroness, Lady Barker, did—that there is a lot beyond corporate giving that the private sector actively, persistently and continuously does. We need to see civil society not in purely cash terms but also in engagement terms.
I will give one or two examples and then try to draw a point. I was pleased to have a short conversation in the Bishops Bar with the noble Lord, Lord Livingston, who was introduced into the House this week. He will be the Government’s trade envoy, although he retains his position of chief executive of BT. For the past nine years, I have sat as a non-executive member of the BT responsible business board. The noble Lord and I spoke about BT’s Net Good ambition, which the noble Lord announced the day before the Prime Minister announced his responsibilities in this House and as trade envoy.
BT’s Net Good commitment is that for every tonne of carbon it consumes as a result of its activities, it will replace that effectively. Instead of putting carbon in the atmosphere, it will remove 3 tonnes from the atmosphere—a 1:3 ratio—by working alongside its stakeholders, suppliers and customers to help them learn about not just energy efficiency but different lifestyle approaches. This is not something BT needs to do. As one of the largest consumers of energy in the country, from a profit base it need only pay its bills, but the opportunity to engage the public in a responsible civil society approach to environmental responsibility goes way beyond merely the corporate saving of carbon or the massive contribution of BT to multitudes of charities and voluntary organisations around the country. That is part of the business/civil society engagement.
Another example is another organisation to which I am connected, as a trustee: the Vodafone Foundation. At a board meeting last Friday, we agreed to continue the active support that Vodafone is giving to the establishment of communication hubs in emergency centres around the world. The latest is being established in Goma in the Congo this very week. It will allow refugees to communicate closely with their families and in doing so not only retain those communications but benefit from the opportunity of a life beyond disaster. Again, this is not something that a mobile phone provider needs to do, nor is it CSR. It is the active collaboration of three sectors: the humanitarian relief sector, which would traditionally be seen as civil society; the responsibility of government; and the opportunity of the private sector.
Let us get a little more grainy. Just over a week and a half ago, I visited Wormwood Scrubs as a trustee of the Vodafone Foundation and in connection with the charity Only Connect. Only Connect was established by the great man Danny Kruger, who has written many speeches for David Cameron. It is a great charity that we all respect. It helps offenders and ex-offenders learn how to bring their lives into coherence by using the arts and by connecting to one another in prison to enable them to work together outside prison. During a meeting with the governor, we heard that one of his express desires was to help prisoners begin to build their own groupings of communication connectivity so that they can establish family networks and not be isolated individuals who return to repeat crime. We approved a grant on Friday to enable Only Connect to create its own LinkedIn-sourced connecting system for prisoners within the British system. That is not something that a mobile phone provider needs to do. It is not in the P&L and it is not CSR. It is the combination of all the factors that civil society now represents: the responsibility of government, the opportunity of the charitable sector and the privilege of profit to serve the interests of the public.
In just a few moments, I shall meet the Prime Minister’s special envoy for development in Afghanistan. He is coming to this House, having served in that role in Iraq and having previously been chief executive of KPMG International. Why would he take on that role? It was because, as Gordon Brown and David Cameron acknowledged, you need that kind of private sector expertise to deliver public goods in an efficient, effective and consummate way.
What is the future for civil society? In the judgment of this report—KPMG authored this report with the World Economic Forum, and I am directly responsible for its content—I firmly believe that the new civil society that we all need to welcome is where we allow the three sectors to stand as equal legs of the same stool and find solutions that are not based just on seeking cash from the private sector. I share some of the deep concerns about public sector cash restraints, but the reality of our new world is that we need to bring the three sectors into common understanding to find solutions that are not based just on more money.
I was proud to serve for 21 years as a trustee of Crime Concern and for 15 years as its chairman. One of the most important things it did before it merged with the Rainer Foundation and created Catch22 was to create in 1989 not just the backbone of Victim Support but the basis of Neighbourhood Watch. We all recognise the power of those realities as civil society truths through which we enjoy our safety and community to this very day. Unless we are prepared to take an open stance to involving the private sector, government, NGOs and common institutions in finding solutions, we will have three sectors fighting one another. There is no need for that in the future, and I hope that our speeches and the Government’s response will acknowledge this new opportunity and embrace it.
My Lords, I, too, thank the noble Baroness for securing this debate. I shall pursue the definition that the noble Lord, Lord Hastings, began to open up in his speech with the notion of the three legs of the stool and what civil society means. I start from the presupposition that we live in an age of liberalism in the technical sense; that is, we are very concerned for the individual to be free, and to be liberal about all those freedoms. Those freedoms are very good things, but any good often creates a problem.
I want to preface what I am saying with some words from TS Eliot. He said that the danger in liberalism is that it releases energy rather than accumulates it. It releases energy and then it is difficult to gather it together, because everybody is free, to make the building blocks of a civil society. He said that it relaxes rather than fortifies. The more we create rights, the bigger the problem with what we call cohesion. The more we are concerned about individual good, the bigger the problem with the common good. The more people have individual freedom, the more chance there is of becoming isolated, lonely and marginalised. It is very important to debate the civil society at this time when we desperately need energy to be accumulated around people for their well-being and flourishing and not dissipated into people being atomised on their own. The Government want to work with civil society—for the state to co-operate in accumulating energy for good things to happen. The National Council for Voluntary Organisations defines civil society as when,
“people come together to make a positive difference to their lives, and the lives of others”—
accumulating energy, making a positive difference to their lives and the lives of others.
I think, however, that we have to remember the historical context in which we seek to reaccumulate energy for human flourishing and public well-being, and I suggest that there are a couple of layers of civil society. The historic one is the institutions that existed between the individual and the state: the family, where there was a negotiation around gender and generation; the nation, which was a mix of kinship groups and regions; and the church, a spiritual hinterland that people explored and shared. Those three sites of civil society—the family, the nation and the church as a symbol of a spiritual hinterland—were not something that anybody chose; you were just born into them and negotiated your way within those frameworks. You started off with an accumulation of energy, in Eliot’s terms, through the family, through kinship groups and regions, through a spiritual hinterland.
Today, energy has been so liberated that civil society is now an elective exercise: people have to be persuaded to join together to create the energy and the momentum for human flourishing. The traditional bits of civil society—the family, the nation and the church, which gave a big framework—have got very weak. The Government desire a big framework for us to operate in so we are scrabbling about to bind people together for a common energy in something about which it is very difficult to persuade people, certainly beyond the local.
In my own experience in Derby and Derbyshire, where I work, the Government are inviting elective groups in civil society to co-operate with, as we have heard, the provision of services and well-being in the community. National charities are coming into our local area to bid for contracts and do the dealing—because they are organised, like the private sector, in a large way—and local charities are suffering, withdrawing and retracting, and the energy is dissipating. On the private model you need big-scale operations and the large charities are coming in to take the ground. That is very dangerous. The local is where you are in touch with people enough to understand what is going on in their lives, to listen to the stories of the homeless or whoever, and to focus the accumulation of energy appropriately to help people flourish and have the care and support they need.
There is a real danger that in trying to reduce big government we may be setting up big civil society. Civil society needs to be quite local and small-scale in many ways. If we set up a big civil society of big successful groups which can bid and deliver contracts all the local voluntary energy and connection is going to be marginalised and disappear. That would be catastrophic in many local communities. We need to encourage local civil society—small-scale civil society that people can elect to join. We need to remember that that kind of activity is committed to human flourishing, not to the delivery of services. It is a big framework, like the one that the family, the nation and the church stood for. People who get drawn in to civil society through their own choice want to share their values with others. They want to improve life on a big scale; they do not just want to deliver services and get a good return so that they can keep doing it. The Government somehow have to create an atmosphere of encouraging aspiration and idealism as well as instrumentalism in the design and delivery of services.
I want to raise three issues for the Minister to comment on. First, how will the Government endeavour to fortify the foundations of civil society—the traditional ones of the family, a sense of a nation and a sense of a spiritual hinterland? That is a big aspiration that excites people. They want human flourishing for themselves and for others and not just a narrow service delivery. Secondly, how will the Government help to encourage the smaller, more local agents of civil society and not dissolve big government into big civil society? Thirdly, how will the Government help civil society to be about human flourishing—the accumulation of goodness, in Eliot’s terms—and not about a more pragmatic, problem-solving exercise in trying to pick up the problems in society, rather than about raising human spirits in the way that civil society has always done and needs to do if it is to be a proper part of the three-legged stool that we have just heard about?
My Lords, I, too, thank my noble friend Lady Prosser for initiating this debate on civil society, for it gives me the opportunity to discuss the important contribution made by the women’s voluntary and community services as part of civil society. That is not only my view; it is a view supported by Theresa May MP. When she was Minister for Women and Equalities she said:
“the women’s sector is a model of the Big Society we wish to build. That is a society in which we all work together to address problems, conscious that government has a role to play but that it does not have all the answers, and recognising the role played by charities, voluntary groups and others”.
Irrespective of women’s organisations seemingly being a perfect example of the big society, within a year of the Minister’s comments the voluntary and community sector faced, and still faces, unprecedented uncertainty.
In concentrating my remarks on the women’s sector, I thank the Women’s Resource Centre, the Fawcett Society and other organisations for sending me information based on their own experience and research. Nearly 1,300 women’s voluntary and community organisations have been established since the early 1970s with the aim of challenging inequality and empowering women to overcome discrimination, building on the many initiatives of the then Labour Government. While the organisations vary in size and income, collectively they are a family of volunteers, providing holistic and integrated services, with a mission to ensure that women and children improve their life chances and lead independent lives. These services meet the needs of a diversity of women, young and old, some with multiple and complex needs, some who have experienced domestic and sexual violence, alcohol or drug misuse, or have mental or physical difficulties. These timely interventions improve mental health and well-being, improve financial inclusion, reduce reoffending, improve independence and social and communication skills and provide a pathway to educational and vocational development. For BME women they reduce social exclusion and introduce community cohesion.
In 2010-11 Brighton Women’s Centre, of which I am patron, provided open access and out-of-hours drop-in services for nearly 12,000 women who needed mental health and emotional support. Some 250 women attended counselling services, a 40% increase on the previous year, and 533 women offenders and women at risk of offending accessed Inspire counselling, which was able to demonstrate to them that support, not crime, could provide lasting solutions to their problems. A social-return-on-investment study of Inspire showed that for every £1 invested, £3.57 is generated in social value for women, children and society. An Inspire client said:
“I had to fall to the bottom, to be forced to stop and take a look at the problems I was hiding from. Thank you so much for helping me not only change but save my life”.
Women’s organisations have, however, traditionally found it challenging to find sustainable long-term funding. That might due to a misconception that equality has somehow arrived and they are not needed any more. Maybe donors are a little bit more sentimental about where they give their money. I have nothing against donkeys, but the Donkey Sanctuary receives more donations than the combined incomes of the largest violence against women and girls organisations in the UK.
For these organisations, the income stream has come from a combination of public donations from charitable trusts and grants by local authorities and health bodies. However, financial restraints to all these bodies have spiralled down to reducing support for the women’s voluntary organisations. Research by the North East Women’s Sector Network showed that half of the women’s organisations have lost funding, with those working on violence against women and girls facing cuts of over 40%—this is replicated across the country—while 70% of them are using or planning to use their reserves, leaving no buffer for the future, which could lead to ultimate closure. All the research shows that this is a reality. I was distressed to hear this week that the Government, in giving evidence to CEDAW, said that there is no evidence that women’s services are being affected by austerity. Perhaps the Minister can tell the House the basis on which such a statement was made.
The limited number of available income sources has severely affected organisations, meaning that more and more of them are chasing the same pots of money. There are also unintended consequences by changes to needs-led grants, by commissioning, by the new structure of health services and by payment by results. As the noble Baroness, Lady Prosser, and the right reverend Prelate said, many of the women’s voluntary organisations are too small. They rely solely on volunteers and cannot compete with larger organisations that can dedicate time and resources to compiling complicated bids in order to raise funding.
Coupled with those changes are the levels of cuts to legal aid and welfare reform. Of women suffering domestic abuse, 54.4% do not now qualify for legal aid under the new eligibility criteria. Their only recourse is to go to the voluntary sector for help, 94% of which has seen an increase in demand, with 77% of referrals coming from statutory bodies. The question is where those women will go. Where are they going to get the help and support they need? In an economic culture of budget deficit reduction, cost-effective services that produce positive outcomes are more essential than ever. There is no question that a small investment can produce an increased value to society, financially and practically.
What is the answer? How are the Government and local authorities going to understand that a little resource could have an enormous benefit? We need to think, perhaps, about how positively we can help and what action is required from both the Government and local authorities, which should give due regard to the crucial role played by voluntary women’s organisations, building an equalities framework into the commissioning process, thereby ensuring that the needs of specific communities can be met. The gender equality duty should be used to monitor the impact of policy and funding decisions—if it still exists after the review. If not, a key requirement to end discrimination will be scrapped, with dire consequences.
Commissioners are now commissioning more generic services, which further exacerbates the problem. Political agendas such as the Troubled Families programme do not include an understanding of the need for women-specific services, as they take a whole-family approach when, historically, the women’s sector has recognised that if we are to support our families and communities, we must start supporting women as the primary care-giver. Equally, it is important that women’s voluntary organisations are recognised as partners in meeting local needs, be it the police and crime commissioner, the clinical commissioning groups or the local authority. None of that can be achieved unless there is a mechanism to hear the voices and views of the women concerned. That, unfortunately, is not happening at present. Further, women must be represented on all key decision-making bodies, nationally as well as locally. Their value will then be understood as a crucial part of civil society.
My Lords, I, too, congratulate the noble Baroness, Lady Prosser, on securing this timely debate when the combination of public spending cuts, decreasing charitable donations from the public, and sharply falling trends in corporate giving have pushed the sector into a fragile financial state. I declare an interest as president of the National Children’s Bureau, vice-president of the charity Relate and co-chair of the parliamentary inquiry Growing Giving.
As other noble Lords have already said, civil society does not limit itself to the voluntary and charitable sectors but runs across all aspects of public life. However, it differs in one key respect from other sectors, in that it has a mission statement that is focused on the benefit of society and the collective good. Today I will be focusing my remarks on charities and the voluntary sector, concentrating particularly on three issues: the overall funding situation, the reduction in individual donations and improving the impact that the corporate sector can have.
On funding, a recent Charities Aid Foundation report on UK giving found that there had been a 20% fall in individual public giving, leaving charities £1.7 billion worse off. According to NCVO, 43% of charities’ funding is provided by individual donations—the sole largest contributor—and this has left many charities struggling to find other sources of funding. Indeed, one in six charities said recently that it is likely that their charity may have to close in the next 12 months. Other charities, as we have already heard, are having to make heavy cuts to frontline services at precisely the time when the need for the crucial services they provide is going up, particularly for the most vulnerable. The second biggest funding contributor is the state, providing 37% of charities’ income. This is a dangerous balance at a time when, as we all know, public funding is in short supply and approximately 50% of local authorities are cutting charitable grants disproportionately to the rest of their public services.
So the problem is very clear, but what are the solutions? Many charities are adapting to a new climate, and I know from my own experience that many have been doing this through mergers and collaborations, developing new business models such as social enterprises, and seeking new sources of finance, including the newly emerging social investment market. It is also important to remember that the vast majority of charities—the figure is thought to be 75%—do not receive funding from statutory sources and so look to the general public for money. However, there is a clear need for the Government to assist charities in this major change, and I look forward to hearing from the Minister what the Government are doing and what more they plan to do in this respect.
I turn to individual giving. The cross-party parliamentary inquiry, Growing Giving, chaired so ably by the right honourable David Blunkett and of which I am a co-chair, has highlighted a reliance from charities on support from older people and is looking into new innovative ways of getting younger people involved and excited about giving their time and money to charity, with a particular focus on the importance of charities providing volunteering opportunities and helping young people to get involved as youth ambassadors, young trustees and so on. The inquiry has highlighted the need for charities to be more involved in the current citizenship curriculum in secondary schools in order to highlight the issues that they tackle and to give students as much information as possible.
A key point is finding organisations that young people feel passionately about, but also trying to match that with charities that are in greatest need of support. Perhaps it is unsurprising that charities that affect children in particular were found to be the most popular among children, with some 35% of 9 to 11 year-olds selecting those as the type of charity they would most like to support. It is vital that charities can clearly demonstrate the impact of their work to children and the wider public, and I think that this is easier when their involvement is local. What are the Government doing to encourage schools to develop partnerships with local charities, to enhance not only the immediate prospects of those charities but also the long-term benefit of educating children from a young age about the impact that their money and time can make—something that can then take root and translate into more sustained giving in later life?
What is the role of the corporate sector? A recent report by the Directory of Social Change, referred to by my noble friend Lady Barker, found that companies are keen to encourage giving in the workplace by their employees, including by providing volunteering opportunities through company foundations and associations with charities, as other noble Lords have said. Simple initiatives such as Movember—the competitive growing of moustaches for donations to testicular cancer in November—have proved very popular with employees who enjoy showcasing their charitable efforts. The introduction of payroll giving, which takes place in a relatively small number of companies, has certainly helped in the giving of money to charity by providing an easy way for employees to give money every pay day. It has proved a popular scheme. However, it would seem many companies are missing a trick. A recent Charities Aid Foundation report found that one in three employees would be likely to give through payroll giving if they had a chance. That same report, however, showed that only one in 34 employees in Britain gives regularly through the payroll giving scheme, showing the huge margins by which this scheme could be expanded.
Like my noble friend Lady Barker, I was fascinated by the recent report showing the new data on corporate giving, particularly the fact that big private companies, in terms of reinvesting pre-tax profits, are nowhere near the 1% benchmark set, and that the top 420 companies are giving somewhere in the region of 0.3% in terms of cash, making up some 2% of charities’ income.
So what do I think the solution is? I think one solution would be to encourage companies to match the charitable giving of their employees. This has been suggested as one way of increasing the amount donated by companies. Matching schemes, while having the positive effect of the overall company giving, could also galvanise the workforce, giving employees the feeling that they have more power to make a difference if what they donate will be doubled. Perhaps the Government could look at ways of incentivising corporate giving, perhaps through the tax system.
It is important that we do not forget the roles of smaller businesses in the UK, which are also vital players in civil society, often at a more grass-roots level. The sponsoring of sports teams, giving to local charities and paying greater attention to the environment are all aspects that small businesses have worked on, and due to their greater geographic spread they have managed a much wider reach than some of the big corporations that are largely London-based. I conclude by also quoting from the World Economic Forum, which stated:
“Civil society should be the glue that binds public and private activity together in such a way as to strengthen the common good … based on the core values of trust, service and the collective good”.
My Lords, I, too, wish to thank my noble friend for instigating this debate. Today I want to concentrate most of my speech on voluntary organisations so it follows on quite well from the speech of the noble Baroness, Lady Tyler. Like my noble friend Lady Prosser, before I came into your Lordships’ House, I was a national official of a trade union. In my case it was the Manufacturing, Science and Finance Union, one of the forerunners of Unite. Like my noble friend Lady Prosser also, at one time I had responsibility for our members who worked in the voluntary sector, both full and part-time, in organisations and charities such as the NSPCC, the RSPCA and the National Children’s Bureau. I stress that these were and are workers, not volunteers, whose pay, pensions and working conditions are paramount to them. I always marvelled at our members’ dedication and commitment to those with and for whom they worked. These were and still are people on whom society relies every day to care for those least able to help themselves, such as children and adults, and especially the elderly and those with disabilities, or to take care of animals others no longer wanted or wanted to care for.
Workers in voluntary organisations often carry out the jobs that others do not want to do. I worked as a national union official in the 1980s and 1990s. Over the years views about the role of voluntary organisations have changed quite significantly, and Governments’ attitudes towards them are certainly very different today. Successive Governments have veered towards the voluntary sector and have wanted to work with it in developing political agendas—for example, in the health service, the education system and even in the criminal justice system.
More involvement with government and business has inevitably meant that the voluntary sector role has expanded and developed. In principle, for Government, business and the voluntary sector to work together sounds fine. As the NCVO has said:
“The voluntary and community sector … is a vital and vibrant part of civil society”.
As the right reverend Prelate the Bishop of Derby said earlier, civil society is where people come together to make a positive difference to their lives and the lives of others for mutual support, to pursue shared interests, to further a cause they care about, or simply for fun and friendship. It is where “me” becomes “we”.
This is both encouraging and to be encouraged. However, it must be remembered that if the new formations in society are to work, voluntary organisations must be funded well enough for them to operate properly, to respond to the new challenges facing them and to ensure that their independence is not compromised. Unfortunately, in many cases this is not happening. Stephen Bubb, of the Association of Chief Executives of Voluntary Organisations, recently expressed his worries about the possible impact of public spending cuts on this sector.
There are reasons for concern. I was recently contacted, as I am sure other noble Lords were, by the Charities Aid Foundation, a charity that works to improve the charitable giving environment to ensure that donations are used as efficiently as possible. Over the past year it has investigated the charitable sector and found some interesting but daunting facts. Donations to charities fell by 20% in real terms in 2011-12, the public having given £1.7 billion less than in the previous year. As the noble Baroness, Lady Tyler, said, 17% of charities believe that they may face closure in the next 12 months, 26% of charities have already cut frontline services and 25% said that they had already made staff cuts. These are just a few of those findings. The effect on the viability of the organisations concerned is obvious.
Of course, these were national statistics, but the effects of cuts on local people and services are also important and are vital to civic society. The best way of finding out about these is to read local papers. I have recently seen two good examples. In my own area, Essex County Council is closing a centre in a little town near Colchester because it wants to sell the property. It has given a month’s notice to the organisations that use the centre, which include a local school of dancing and a youth centre. Needless to say, the local people affected are very worried. In Lincolnshire, where I was born and brought up, the county council wants to cut staffed libraries from 40 to 15, and to cut their opening hours. The small market towns and the villages surrounding them will suffer most if this happens.
In the Charities Aid Foundation paper there are some proposals for government and employers to consider to encourage charitable giving which have proved successful. These include reminding people that money can be left to charity in wills and encouraging employees to give to charity by including in a company appeal a photograph of an employee who already gives to charity. It also suggests encouraging effective ways of giving such as payroll giving, as mentioned by the noble Baroness, Lady Tyler, encouraging businesses to maintain or increase their support for charities and getting the Government to work with charities to modernise and improve fundraising. Do the Government have any plans to encourage employers to guide their employees towards charitable donations and will the Government be taking positive steps to assist charities, such as modernising and promoting payroll giving?
Finally, I turn to another phenomenon brought about by the economic circumstances in which we find ourselves. Last week somebody asked me about food banks and I explained that when those of us who can afford to give to food banks do our weekly shopping, we buy an extra item to place in the food bank boxes, which can now be found in many supermarkets and local shops. That item could be a tin of soup, a packet of biscuits or a box of breakfast cereal—anything that would be useful to a family struggling with its finances. A local food bank then collects the boxes from the shops and families go to the food bank as and when they need to. The food banks are usually established in premises that are convenient to local people, such as a shop that might have closed down on the high street. The person to whom I gave that explanation thought it was an excellent idea as, of course, it appears to be. However, it is a sign of how times have changed and how we as a society assist those who would once have probably been helped by charitable organisations or by the Government. I wonder what the Minister feels about food banks and what they signify for the civil society in which we live.
My Lords, I, too, thank the noble Baroness, Lady Prosser, for introducing this timely debate. I declare my interests as recorded in the register and, in particular, that I chair two charities and am on the boards of three others, including one called Philanthropy Impact, which aims to promote and inspire philanthropy.
I welcome this debate for the obvious reasons that many others have already mentioned. Times are difficult for a great many individuals and families and, at such a time, a strong, active, innovative civil society has a vital role to play in addressing social and economic needs. I agree with those who have said that such a civil society has a real role to play at any time and I associate myself with the remark of the noble Lord, Lord Hastings, that this is a partnership between government, business and civil society. In a world where Governments cannot do everything, charities, social enterprises and NGOs can take risks, innovate and go to places at the cutting edge, where publicly funded bodies may not go. If times are hard for individuals, as others have pointed out, times are also very hard for civil society. Charities and voluntary-sector organisations are struggling to make ends meet and several others have already drawn attention to the remarkable figure that funding for charities fell by 20% in 2011-12. We need to recognise that this is a sector under severe pressure.
Against that background, I will focus on one aspect of encouraging philanthropy in support of civil society—as one report had it, encouraging more people to give and people to give more. When it comes to giving, it is not all doom and gloom. As many commentators have often observed, the British people are extremely charitable and, to quote the Charities Aid Foundation, research suggests that when times are difficult, donations to charity are often less likely to be cut back than other forms of spending. There are, as others have mentioned, signs that young people are very positive about giving time and money, and I associate myself with the remarks of the noble Baroness, Lady Tyler, about how important it is to encourage this.
For many, giving is becoming easier, through social media or online giving sites; as in so many other ways, technology is transforming the ways in which we do things. But my point in speaking today is not only to draw attention to the importance of philanthropy and to give credit to those many people who give generously to all sorts of causes, but to urge that we continue to look for ways in which to encourage more giving at every level, many of them mentioned already, including individual, corporate and governmental.
At the individual level, among other things, we need to support those campaigns that encourage people to give in different ways. I draw attention to the Give More campaign, which encourages people to give a little more this year if they can, and a little more than they did last year—a simple idea and a good campaign. I also suggest that we need to sort out how better to recognise generosity. Some donors do not want it, but others shun it because they fear unwelcome consequences. That is a pity. The honours system is better focused on giving recognition to philanthropy, but I hope that more can be done to recognise those who are generous, particularly in the media and at local level.
Many noble Lords have mentioned issues at corporate level. I particularly endorse the remarks about looking for ways to introduce more matched funding schemes, and I was very interested in the reference from the noble Baroness, Lady Barker, to the report about the level of corporate giving. I certainly agree with those who say that more could be done to encourage payroll giving. Many organisations have effective schemes, but many more could do so. Like much of the business of encouraging more philanthropy, it is a question of making it easier to give; payroll giving undoubtedly does this.
Mention has also been made of corporate social responsibility and community investment programmes undertaken by many enterprises. It is easy to dismiss some of these programmes as just a form of marketing but, having been involved in some of them, I think that this is probably too cynical a view. I believe that many young people are introduced to volunteering and engagement with civil society in this way. It needs to be further encouraged, and I welcome the fact that the Government have recently announced consultation to see how CSR could be made more effective.
I pay tribute to what the Government have done in difficult circumstances for philanthropy. Leaving aside perhaps the 2012 Budget, there has been progress with, for example, Legacy 10, encouraging people to leave more to charity in their wills, and a willingness to look at ways of streamlining Gift Aid. There is also the stated aim to look at tax incentives to encourage social investment, which is undoubtedly an exciting and important area where the UK is a world leader, as others have said.
There is more that the Government can look at. I, too, have a shopping list. I hope that they will continue to consider, when the time is right, further fiscal measures to encourage giving, including the merits of lifetime legacies or charity remainder trusts. I hope that they will encourage payroll giving, as I have said, particularly within the Civil Service. I hope that they will keep under review the level of funding of the Charity Commission, because it is in all our interests to have an effective regulator for the charity sector. Above all, I hope that they will continue to support and encourage more philanthropy and giving at every level, and encourage those who seek to make it more effective. This will have a direct benefit on the health and strength of our civil society, which is in all our interests.
My Lords, I congratulate my noble friend Lady Prosser on securing today’s debate, which is not just enjoyable and interesting but also important. It is important that we recognise and address the challenges facing civil society. I have three points to make.
The first is about the value of civil society. That is not a term invented by any Government; it has been around for a long time. We all think that we understand it, but we all interpret it differently. A key part of civil society is the voluntary and community sector, but I think it is a much broader, a much wider and a much more inclusive concept. When the current Government replaced the Office of the Third Sector with the Office of Civil Society, they relied on the more traditional definition of being synonymous with the voluntary and community sector. They announced that government policy would concentrate on three issues, all related to the voluntary and community sector. The noble Lord, Lord Taylor of Holbeach, in a parliamentary Answer, stated that the Office for Civil Society,
“will support charities, social enterprises and voluntary organisations … encouraging a big society and addressing disadvantage by making it easier to set up and run such organisations … the office will co-ordinate work across government to implement the big society and establish a number of flagship big society projects”.—[Official Report, 21/7/2010; col. 969.]
We now rarely hear about the big society, but my point is that those government definitions miss the point. It is not about structures. As important as the voluntary and community sector is, I will offer a different definition. Civil society is the glue that unites and connects society: the notion that we are not just individuals, but that by coming together and working together we can improve the lives of others, improve our own lives, improve society and contribute to our communities, however local or global those communities may be. It is not part of state institutions.
My second point concerns the role of civil society. I am coming to regret that the role is too often seen as just third-sector delivery of services. I am certainly not against contracts or third-sector commissioning. I declare an interest since I chair the board of trustees of a not-for-profit organisation, Resolving Chaos, and am involved with a number of charities and voluntary organisations that provide services. Some are commissioned, some funded and some are provided voluntarily. I am slightly disconcerted by the Government’s publication yesterday of the lobbying Bill, which, taken alongside comments made before the last election, could fetter and curtail the activities of such organisations in a way that could work against the benefits that civil society brings.
In the previous Government, I was the Cabinet Office Minister with responsibility for the charitable and third sectors. I made it clear that the Labour Government would continue to be a strong advocate for the campaigning role of civil society organisations. The role of voluntary and community sector campaigners provides a voice for some of the most disenfranchised, disengaged and vulnerable in our communities.
To assert, as Oliver Letwin did in a speech to the NCVO Conference in February 2010, that what he treasured about the sector was not its campaigning role but its “special contribution” to do something to “change things” and solve problems is to misunderstand fundamentally the inextricable link between the two. Those that complain that,
“so much … effort in some parts of the voluntary sector is devoted to campaigning”,
should recognise that such campaigning is an intrinsic part of civil society and wider democratic engagement in the system.
I will go further. I will give a hypothetical example of a charity that supports homeless people. It may have some contracts; it may have some funded services. It will raise funds and have supportive donors. If there is an area of council or government policy that in its professional opinion, at the sharp end of service delivery and support, is exacerbating the problem, surely it has a duty to its supporters, to its donors and to civil society to campaign to try to address that issue. It cannot turn away from its campaigning role and its responsibilities in that regard. It has an obligation to the homeless whom it is seeking to help.
It was Dom Helder Camara, a Brazilian Archbishop, who said:
“When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist”.
We need to take care that we do not slide into the position that we accept civil society as long as it knows its place, which is to provide direct help and support, but not to tackle or help tackle the causes of the problems and to campaign to address the causes of those problems. That would be plain wrong.
The lobbying Bill refers specifically to third-party organisations’ campaigns at election time. It does not specify which election, so I assume that it refers to all elections. There are issues to be discussed, but we need to ensure that we do not curtail legitimate campaigning activity or provide an opportunity for government or local authorities to issue bad news and unpopular policies just before elections, thus preventing third-party organisations campaigning against those policies.
My third and final point concerns financial issues. We have heard a considerable amount about the impact that cuts are having on organisations that support the community. I have genuine concerns that the future of civil society is being undermined by funding problems. The previous Labour Government had a number of programmes, including one I particularly liked—the Grassroots Grants programme—that directly supported more than 130,000 local groups to make a real difference in the heart of communities.
A report from the NCVO and research by Compact Voice show that the voluntary sector at the heart of civil society is facing an unprecedented level of cuts and further threats to income. Funding is not the only way of supporting civil society, but we need to take care that funding, whether through contracts, subsidies or grants, provides value for money in both financial and social terms, and the impact on civil society must be taken into account. My community is in Essex—as is that of my noble friend Lady Gibson. When Basildon borough council announced a cut in the subsidy to local community centres for pensioners’ hot meals, local residents were shocked and appalled. They understand the social benefit to civil society of the centres. Perhaps what made that cut particularly shocking was the fact that the responsible council cabinet member declared that the meals were not good value for money while her cabinet colleague defended spending £150,000 on consultants to measure grass—that is bizarre but it is true—as being good value for money, so measuring grass was more important than providing hot meals. I am convinced that the public see that as nonsense and understand that value for money is not just a purely economic judgment. They make those same judgments in their own personal spending. They understand value judgments, not just economics. It is about common sense, communities and the value that institutions of government at whatever level place on society.
Too often, it seems that local authorities find it easiest to impose cuts on the voluntary sector. I strongly believe in the power of volunteering for the volunteer and those being supported. As we heard from my noble friend Lady Prosser, some volunteering grows organically but needs structure and support to obtain the best value from it. Like many others, my local volunteer centre in Basildon has now closed. Due to funding cuts, it could no longer sustain its work. I have sincere worries about the impact that will have on civil society.
In conclusion, engagement in civil society adds value and improves quality of life. It is not something we can just pay lip service to here today and say how wonderful it is, then go away and do nothing. It is intrinsic and essential and it needs and deserves our support.
My Lords, I thank my noble friend Lady Prosser for giving us the opportunity to take part in this important discussion. Civil action in civil society has defined a generation of activism and activists who have changed communities and our country and have given us a more equitable society—we stand on the shoulders of giants.
I want to make a few points about a particular aspect of civil society—Muslim organisations. As a Muslim I think that this is the right moment to discuss civil society; it is the ninth day of the fasting month of Ramadan, which focuses on the Islamic understanding of community, civic duties and equity. During this month Muslims are encouraged to fast from dawn to dusk—an 18-hour stint at present—and share, forgive and show solidarity with those less fortunate than themselves. They are also encouraged to give alms—zakat—and to be aware of the needs and rights of those around them regardless of their ethnicity, culture and religion.
Ramadan is the ultimate month to reinvigorate and renew the recommended spirits of good, responsible and proactive citizenship. Muhammad, the Prophet of Islam, upon whom be peace and blessings, said:
“The best amongst you is the one who is the most beneficial to others”.
At its core, Islam is about enjoining good and forbidding evil, to encourage and facilitate virtuous, practical deeds. This month, British Muslims dedicate their energy and money to benefit their communities. A civil society is the backbone of Muslim communities and is the glue that bonds British Muslims’ lives together. It ranges from street-level self-help groups to the delivery of services. It is as diverse as drug rehabilitation programmes, fatherhood circles, supporting families, women fleeing violence, arts projects, sports clubs, community centres, mosques—masjids—Sunday schools and study circles. However, it is an ad hoc development that has taken place in the face of racism and Islamophobia and in spite of weaknesses in strategic planning and a serious shortage of formal financial support.
As a result, the Muslim leaders who are actively heading these organisations within the civil society sector are struggling and under severe strain. The Muslim-led third sector is unable to consolidate, risks being reactionary in nature and continues to work in silos. Sadly, it is not in a strong position to implement and share some of the core teaching of our faith, which is pertinent and much needed in dealing with some of the social ills facing our society and the vulnerable communities of today. We need to learn more about those who are working in organisations within this sector, have a vision to encourage them and courage to invest in their development.
The aim is to build relevant, sustainable social, cultural and economic institutions; to even more closely monitor the huge amount of zakat, or religious duties, and sadaqah, or charity; and to encourage debate and discussion in the way funds are raised in the UK. They should not be used only to support those who are in need abroad but also to strengthen some of the civic organisations within the UK. The long-term benefit of investment and attention from our institutions would and could be a counter to the imbalance in the attention constantly being paid to the so-called Prevent agenda.
It is estimated that nearly £200 million will be collected this Ramadan alone. The potential here is incredible but it is unregulated or, at least, not part of civil society discussions. Muslims in Britain, more than anywhere else, have a unique opportunity to rediscover and share their unparalleled historical precedent in creating civil society institutions. The pragmatism, wisdom and vision that created the Islamic ideal community in Medina during the life of our noble Prophet have many lessons for us all. The community brought together the generous and the persecuted, men and women, nobility and slave, people of faith and those with no faith. All British Muslims within the UK aspire to the ideals of such harmonious communities, especially during Ramadan, and this is a difficult ambition. Perhaps the most important challenge facing Muslims today is how to recreate this civic society after more than two centuries of colonialism, bad governance and social systems, not to mention migration. Civic society is in absolute tatters, shredded by the “me and me” culture—which has been mentioned before—and by greed and despair.
Not much work is being done with these organisations to consolidate their work or give them recognition and bring them into the fold. This is why I am proud to be part of a project called Faith, Khidmah and Citizenship: Connecting Spirituality and Social Action to Build Civil Society, which is bringing in all the organisations that are working in separate silos. It is a joint effort by an organisation called An-Nisa Society and the Radical Middle Way. Both these organisations have previously worked with the Home Office and other areas of government. The analysis of their report has produced an insight into how these long-standing reputable organisations have evolved and how they can contribute to strengthen communities in difficult times. The report also looks at organisations, how they function and contribute to the overall debate on civic society and civic actions, post-9/11 and 7/7. The report also proposes solutions for a durable and effective civil society to emerge in our country.
It has been interesting to hear the debate and what some have said about corporate social responsibility. Much of this corporate social responsibility has created an elite set of leaders of civil society that excludes many aspects of different communities, women being only one of them. Even when women are discussed, there are divisions over their status—who is included and who is not.
On our doorstep in east London are companies that are worth billions, many of which are owned by outside investors. Yet the connection on their doorstep whereby civil society can be empowered has been ignored—at the peril of the well-being of our common good.
My Lords, we are indeed all grateful to my noble friend for giving us the opportunity to have this far-ranging debate on civil society. However, I must say that at this stage of a debate, I feel a bit like the bishop who, when asked to make a speech about sin, stood up, said that he was against it and sat down again. If I am asked about civil society I can say, just as simply, “I am for it”. Similarly, when asked about the future of civil society, I can say, “There is one”. However, we are concerned to examine the current situation, the potential difficulties and the role that we expect civil society to play, although there are many different interpretations of what constitutes civil society, and we have heard them today. The single common factor that we should remember is that it is about participation in decisions about services in your community, in how services in your community are shaped, in delivering those services and, particularly, in decision-making.
We should be clear from this debate that, despite rashly delivered statements about a broken society, civil society is not in decline. Indeed, to the contrary, although membership of political parties, churches and traditional women’s groups may be in decline, membership of new social movements, non-governmental organisations and pressure groups is flourishing. I want to focus on some of the matters that have been reported to me, and I should declare my interest as patron and president of various charities and as chair of the All-Party Parliamentary Group for Civil Society and Volunteering.
The first thing that I want to mention is, inevitably, funding. I keep hearing Ministers say to the voluntary and community sector, “You must do more with less. Don’t expect government at local or national level to support you financially”. Okay, charities understand that; but let us not forget that, as we have heard, a quarter of civil society organisations rely on government for most of their funding, and that it is a drastic change to go from encouraging voluntary organisations to become service deliverers—encouragement which has been given by successive Governments—to finding that the funding is no longer there. As we have heard today, who is it who suffers when that funding is no longer there? It is, of course, the most vulnerable in our society.
Nor should we be tempted into thinking that more government necessarily means less civil society and that less government means more civil society, as the noble Lord, Lord Rooker, reminded us. It has been shown in inner cities in Russia and the United States that when the state retreats, the vacuum may be filled by crime and gangs, as well as by civil society organisations. Many of the nations with the most active civil societies still have very active and involved governments. We must be wary, too—with the greatest respect to the noble Lord, Lord Janvrin—of thinking that philanthropy will ride to the rescue. It is by no means certain that our society is yet at a stage where philanthropy can fill the gaps, as seems to be expected by some in government. Even the best community organisers and the most enterprising social entrepreneurs need support.
The Government seem to have a suspicion of the infrastructure that exists to support the charitable sector, and they are right to point out that that infrastructure may need reform and rationalisation—far be it from me to argue that we should not expect existing mechanisms to change and develop. As a veteran of two mergers I am an active advocate of mergers and collaborative working—and we have seen some very effective ones, such as the recent one between the NCVO and Volunteering England. However, we must not throw babies out with bathwater. Many of these infrastructure bodies are delivering through their local organisations exactly the kind of innovations—such as time banks, community pledge banks, social enterprises and civil action—that the Government and society need. Let us not forget that.
I turn to social investment. I was a member of the original Commission on Unclaimed Assets, which released the money in unclaimed bank accounts into the social investment sector, and am now a trustee of the Big Society Trust, which oversees Big Society Capital. There is no doubt that this field is developing. Social impact bonds are increasingly popular. They are designed to transfer the risk of social programmes from the public sector to the private sector. An interesting one was launched just yesterday. Developed by the Consortium of Voluntary Adoption Agencies and Baker Tilly, this social investment bond has raised £2 million from Bridges Ventures and Big Society Capital. The money is going into a fund called It’s All About Me, which is designed to invert the market so that a child seeks out adoptive parents, not the other way round. It is a very innovative and interesting approach. I recently saw another such social investment project in south Wales. It helps children who are normally very disruptive in class not to be excluded through intensive intervention. These are excellent initiatives and very welcome developments.
However, we must sound a note of caution. There is a long way to go before the concept is proved. Many would-be investors are having trouble finding investment-ready projects. I do not think that these can ever entirely replace the funding lost, about which we have heard so much today, although they certainly can be part of the funding mix. I would be glad to have the Minister’s view of what proportion of voluntary sector funding social investment will eventually provide.
I will say a final word about volunteering. The statistics about volunteering are always absolutely stunning. The proportion of people volunteering at least once a year has increased from 65% of the population a couple of years ago to 71% recently. The Olympic and Paralympic Games, as we know, inspired volunteering on an unprecedented scale—as is always quoted. However, we must remember that that particular type of volunteering was a pretty easy gig. It was fun, you got to see events, there was a nice uniform, a link with people who were volunteering alongside you and so on. However, it bore little relation to the kind of volunteering that goes on throughout civil society: bringing people back from suicidal intentions, driving people to hospital who are pretty difficult and often not grateful, sitting with people with dementia who are doubly incontinent so that their carers can have a break. I am sceptical about what the Olympics can teach us about volunteering, except for the fact that a lot of trouble was taken with recruitment and selection and fitting people into the right slots. There was a lot of emphasis on supporting those volunteers—investment was made in them. I hope that the Minister will reiterate that the Government continue to see that volunteering needs investment. Volunteering is very good value, but it is not cost-free. I think that that is also a pretty good description of civil society.
My Lords, we are all grateful to my noble friend Lady Prosser for securing this important debate, because civil society matters, in communities, nationally and here in your Lordships’ House, where so many Members draw on their experiences in a range of non-governmental groupings. Such activity, whether in a tenants’ group, trade union, advice bureau, book club, ramblers’ association, parents’ council or faith community, provides the vitality of civil society.
As we heard, my noble friends Lady Gibson and Lady Prosser first earned their spurs by representing fellow workers, while other speakers helped carers, women, consumers, the old, animal lovers, children or families, far away from any governmental structures.
A healthy civil society produces a community that fosters empathy, trust and respect—the most important feature of a good society, according to a survey commissioned by the Webb Memorial Trust, of which I am vice-chair. Civil society is also about citizens having their own space to develop, free from interference by the state and often outside their work environment. It is a good in itself: it should not be part of—in the words of the noble Lord, Lord Rooker—the shrinking of the state. While it can deliver state-funded services, that should be because the Government recognise the importance of community-driven provision, not because they seek to parcel off parts of our National Health Service to the lowest bidder.
As my noble friend Lady Prosser reminds us, the Government have indeed used the words “the big society”, but it is damaging the voluntary, flexible and innovative sector that gives voice to the voiceless and empowers those who are often only at the receiving end of decisions. Governments can support voluntary organisations but they should not see their value simply as an agent for service delivery, particularly as an agent on the cheap.
The cuts in public services and the economic situation are increasing demands on the voluntary organisations, as we have heard, just when their income is falling through a 20% drop in individual donations and half of local authorities disproportionately cutting their voluntary sector funding, despite three-quarters of voters disapproving of such cuts.
The Minister, the noble Lord, Lord Freud, who is not in his place, may believe that people go to food banks only because they are there but, as the right reverend Prelate the Bishop of Truro corrected him a day later, people are driven to go. They do not choose to go—they have to go. He described food banks in the 21st century as a complete scandal.
We also face a problem with they way in which services are commissioned. It might suit government but not the voluntary sector, particularly the small charities that comprise 97% of the sector. They have had nothing but a negative experience of the commissioning process. Indeed, only one-quarter of small charities surveyed by the FSI feel that they can carry on bidding for local authority contracts. The issues have been well described today by the noble Lord, Lord Hodgson of Astley Abbotts. If the commissioners fail to respond to what he says, small charities will be excluded from service delivery.
It is not only small charities that the process fails. I am a patron of the Blenheim Trust, which works with alcohol and drug misusers, and I am now going to report its views on the procurement, tendering and commissioning process. As has already been mentioned, the cost for the bidders and commissioners is estimated at £300,000 per tender. That is money that is not going to beneficiaries. Contracts are often one-sided, allowing cancellation with three or six months’ notice. There are often minimum turnover requirements of £5 million or £10 million. These preclude small and medium charities or force them into not necessarily advisable mergers. Providers are forced to compete on price rather than on quality, with no reference to the skills of advisers.
This impacts detrimentally on services and undermines the morale among committed, experienced staff and volunteers. Significantly, we are seeing the demise of local third sector organisations that are attuned to their communities as they are replaced by either profit-driven or growth-driven organisations, as has been described by the right reverend Prelate the Bishop of Derby.
I rise to the right reverend Prelate’s defence because the noble Lord, Lord Hastings, referred to conversations in the Bishops’ Bar. I make clear to anyone listening that not only have I never seen a Bishop there but that it is a tea room rather than a bar.
The worry about smaller organisations goes beyond this House. Chris White, the Conservative MP, has criticised his own Government for locking out charities and social enterprises from winning government contracts due to the large size of those contracts.
While under any qualified provider voluntary organisers can bid for NHS contracts, private health companies have won nearly half the bids. As today’s report from the IFG, mentioned by the noble Baroness, Lady Barker, shows, private firms are gaming £100 billion of government services for their shareholders at the expense of the taxpayer. The IFG analysis of outsourcing programmes, such as those to help the unemployed back into work, found private firms creaming off easy cases where they could make profits while parking problematic ones. Furthermore, big outsourcing companies are monopolising services, making it harder for smaller companies or charities to compete. The report says:
“a number of large providers now deliver a wide range of services (commissioned by separate departments) in particular areas of the country. This allows these providers … to undercut competitors, making their services attractive to commissioners”.
The Cabinet Office response was that the Government were encouraging the voluntary sector to get involved in delivering services but, it seems to me, with little understanding that smaller, locally-based organizations are even less able to compete against these giants.
Charity leaders are frustrated and demoralized by being sidelined in the provision of services and are watching aghast as the Cabinet Office’s annual funds for the third sector are being cut by 75% since the Labour Government’s last year in office. The leaders know that their energy is going to be devoted to fundraising rather than responding to their users’ growing needs. If charities cannot deliver services, beneficiaries suffer. Sadly, there is a paradox that civil society flourishes best where it is least needed, and is weakest in areas where there are highest rates of poverty, as the noble Baroness, Lady Barker, described. In the north-east, six out of 10 charities have lost funding.
As the voluntary sector increasingly has to deliver public services, its role in the public eye changes. If it is seen as an arm of the state, civil society risks losing its independence and uniqueness; its ability to enrich lives through connections with others; the informal education of citizenship; the encouragement of plurality and diversity; pioneering ways of doing things; representing users of public services; and holding authorities to account. We must not risk losing these roles.
More than 100 years ago, Beatrice and Sidney Webb set out their belief that the state and civil society should play different but complementary roles. According to them, the proper role for government is to take care of basic needs, guarantee rights and security, ensure a minimum standard of life and provide education and preparation for work. The role of civil society is to operate above this basic minimum and to ensure that citizens participate as full members of society. I could not put it better. Civil society contributes to a healthy, vibrant democracy that neither stagnates nor grows arrogant. We need it and we need the Government to foster, not hamper, its future.
My Lords, it is a particular pleasure to answer this debate on the future of civil society because with my FCO hat on I spend some time reading telegrams about attacks on civil society in other parts of the world—the tremendous pressure under which all autonomous institutions in Russia are now operating; the problems in Egypt; tremendous problems in Pakistan; resistance to the growth of autonomous bodies in Saudi Arabia and so on.
So we can at least start by welcoming the fact that we have in this country a thriving civil society alongside the state, but not too dependent on the state. It seems that we are moving towards a consensus in the United Kingdom that the state cannot provide everything that we are going to need in the next 10 to 20 to 30 years. We therefore need a strong and diverse of network of civil society institutions alongside the formal institutions of state and government at local and national levels.
When I was active politically in Manchester 30 years ago, and a parliamentary candidate for an inner city seat, I was appalled by the extent to which the local council and its officers treated the inhabitants of the largest single council estate in Manchester as people who had things done to them. The councillors and the council officials knew what was best for them, they would tell me, and were not going to change their minds—even though the large number of people I met and canvassed suggested that they were not happy with what they were doing—because, in the long run, it was best for them. As we all know, that left a lot of alienated people in our cities, who are still there. As I visit the big council estates in Bradford and Leeds, I find just how many alienated people there are, embittered by the fact that the state does not seem to do enough for them. However, they do not know what to do for themselves yet, which is part of the problem that we face.
On the other hand, as the noble Lord, Lord Rooker, warned us, some free-market radicals believe that there is no such thing as society, that we do not really need local government, that the only individual motivation we are talking about is economic and that the search for profit and financial gain is what drives everyone. I would say to him that it is not the aim of this coalition Government to radically shrink the state. There are some free-market radicals around who would love to do so, in the Institute of Economic Affairs and elsewhere, but we all recognise that we cannot shrink the state very far, given the enormous demands that we all face. I think that we all share, across the parties, a basic emerging realisation that, first, the state cannot provide all that our society will need in the coming years, particularly as the number of people over 70 continues to grow, and as the demands on the National Health Service, on social services and on other services will continue to grow exponentially. I remember an article by Polly Toynbee in the Guardian a few years ago, in which she said that the NHS budget would have to rise at a compound 2% above the rise in GNP, otherwise it would fail. That is part of the problem that we are now up against in the NHS and elsewhere.
Secondly, we are discovering that the public will not pay for the state to provide everything that we want. That, again, is a problem which all political parties now have to recognise. We have to persuade the public that these things are worth paying for. I am afraid to say that almost all of us find on the doorstep that the Daily Mail tells people every day that the state should cut taxes and raise benefits, but that is not possible. I think we also agree that financial gain and individual profit is not what drives everyone, and that altruism and community spirit also motivates citizens and provides, as has already been said, the essential glue that holds our society together. We have to find a way of building the strong local institutions—they have to be local institutions as far as possible—alongside the state, which will help provide the services that the state itself cannot entirely provide.
That raises all sorts of questions about regulation, how far organisations should be financially dependent on the state and how far the state should encourage, as a number of noble Lords have said, giving through one means or another, such as tax advantages. There are other forms of support as well, such as the nudge unit suggestion that one puts in the corner of various government things, saying that you should leave money in your will to various charities, which will increase the amount of giving that takes place.
I recognise the tension that has been spelled out in a number of speeches between national voluntary organisations and local civil society organisations. My experience in Yorkshire is certainly that some of the best voluntary organisations are those that are rooted in their communities, but they are very often too small to attract the attention of national commissioning authorities. The Cabinet Office and other sections of government are struggling with the issue of how you get down to discover which are the really useful local bodies.
Of course, part of that has to be that we devolve more decisions and eventually more authority to local government. The City Deals will help us in that respect, as will double devolution, which we have much talked about but not sufficiently carried through, to re-empower local communities. We also recognise that the character of the sector is in some ways difficult to pin down. Many of the most impressive voluntary organisations that I have met exist as they are because they have a small number of charismatic people driving them along. They can be impossible. Indeed, they succeed partly because they are impossible. That is part of what keeps voluntary organisations going and it is difficult to put that into a major institutional framework.
Much of this has to take place at the local level. I am conscious that the loss or the weakness of the church networks, and particularly the nonconformist ones that did so much, is part of what has gone wrong in many of these areas. I am conscious of this in particular because I live in a village, Saltaire, that has a historical society, a festival committee, an arts trail, a Friends of Roberts Park society and two allotment societies, and frankly does not need anything more by way of local civil society. Three or four miles away from us, in Bradford, there are a number of areas that have very little going on and in which the community organisers, who are part of the Government’s big society initiative, are doing their best to teach people how to get together and do things themselves, rather than sitting around being deeply bitter that someone else is not doing something for them.
I am a strong believer in the big society and there are a number of initiatives that are also pushing us in that direction. National Citizen Service is going into its third summer this year. I was entirely converted last summer by taking part in one or two National Citizen Service schemes in Bradford. We helped show teenagers what they could do for themselves and what they could do together for others, thus teaching them the principle of community service, including how to organise things together, raise money and work together. It is a similar case in local schools around the country. Primary schools and others are learning about how you work and help people in the community. This is all extremely desirable.
I am also a great fan of community foundations as a means of diversifying sources of funding for local activity. I would like to see the Community Foundation Network given a great deal more support. I say to the noble Lord, Lord Hastings, that part of the problem with community foundations and other local activity is that it was the local entrepreneurs and companies that provided local charity. As we have moved towards multinational companies, how you get them to think not only about London but about what happens in York, Bradford and Leeds, all of which have lost so much of their local corporate leadership, is a problem with which we all have to struggle. We are doing our best to learn from the process that is going on. I say to my noble friend Lady Barker that this morning I printed out the Institute for Government report on making public service markets work and it is one of the things that I intend to read at the weekend if my wife allows me not to pick all of the soft fruit on the allotment. I am a member of the Saltaire Canalside Allotment Society.
A number of other major points were raised in the debate. The noble Lord, Lord Hodgson, expressed his regret that the Government have not yet published their response to his extremely useful report last year. The Government thought that it might be preferable to wait for the report of the Public Administration Select Committee that came out on 6 June and was in many ways not just a post-legislative scrutiny of the Charities Act but a commentary on Lord Hodgson’s report. I assure him that the full response to both of these will come out shortly.
A number of noble Lords talked about the problems of a large drop in charitable giving. I am told there are different assessments of how severe that drop has been. Different surveys provide different answers, but in a number of ways, including by encouraging payroll giving and encouraging companies, we are doing our best to encourage more people to contribute.
Perhaps I should say at this point that part of what we all have to do in this country is to change the moral atmosphere from that which was around, in a way, in 2010—the corporate pursuit of individual gain and the City culture as such—and to remind everyone, including my neighbours in London who earn so much more than I do, that they are living in a society to which they should pay not only their taxes but their other dues. As we are all part of a national society and, within that, of various local societies, part of our responsibility is to contribute in all sorts of different ways in time and in money to the society around us.
I welcome those who mentioned the utility of the Social Value Act. We very much hope that that will help in shifting the way in which commissioning takes place. I welcome the fact that the Crown Representative for the voluntary community sector is now beginning to look at social enterprises. In my experience of visiting charities and voluntary sector organisations, I have on occasion been horrified to discover large charities that are entirely dependent on state contracting. That is not healthy for the third sector. I like those that do their best to make sure that they earn some of their income from what they do. That is a definition of a social enterprise that is also a voluntary organisation.
The Government have been making a number of efforts—payroll giving, Big Society Capital, the Innovation in Giving Fund, the Social Action Fund—to ease the transition and to encourage more people to bring in money to this very important sector. For example, the Communities First campaign is a £80 million government-funded programme that helps communities come together through different community groups. I am sure that noble Lords will be familiar with community challenge, the community right to buy and various other schemes that the Government are developing.
In answer to other points, we need to consider corporate giving further. I suspect that we will, in time—whether this Government will be able to do it or whether it will have to be post-2015, I do not know—have to consider a change in company law to make sure that a company’s duty is to all stakeholders, not just its shareholders, if we are to create a sea change in the approach to corporate giving.
The noble Baroness, Lady Gould, spoke about the role of women and the extent to which voluntary organisations support them. This is one of the most fascinatingly difficult areas in the evolution of civil society. My mother was a stalwart of civil society, among other reasons because when she married, she had to give up her job and her career. From then on, she poured her enormous energy not entirely into her children—thank goodness—but also into doing good works wherever she was living. We all know now that the transformation of the role of women means that that dimension of civil society has half disappeared as young women attempt to combine careers, children and family. In their place, the fit retired of both sexes have come to be part of what holds our civil society together.
The right reverend Prelate the Bishop of Derby asked how we maintain or revive the traditional pillars of civil society. I am not sure that that is entirely the role of the state. The state can do some of that, but it is certainly something that the churches themselves should be playing a very large part in and reminding us of. I am happy that the most reverend Primate the Archbishop of Canterbury talks about the church providing real moral leadership to the nation.
The noble Baroness, Lady Gould, mentioned confidence-building for vulnerable women. There is a wonderful charity in Yorkshire called Together Women which picks women up as they come out of prison and does its best to give them a sense that they really can do things again. This is an extremely important part of the work that needs to be done. I entirely share her view that it is a tragedy that we still have a society in which dedication to the welfare of animals is very often stronger, both in financial and commitment terms, than dedication to the welfare of human beings of both sexes and all ages.
The noble Baroness, Lady Gibson of Market Rasen, talked about the current challenges to the sector and asked about the Government’s plans to guide companies to encourage payroll giving. We are providing as many incentives as we can to encourage companies to expand payroll giving. Again, that is not merely a matter for the Government. Companies, the CBI and others should also be encouraging it. It is part of our shared corporate responsibility. None of these things is for the state alone. We can provide leadership but the rest of society has to provide it as well.
The noble Baroness, Lady Smith of Basildon, said a number of things about the Lobbying Bill, as published yesterday, which I did not entirely recognise. We are having an all-Peers meeting on this in Committee Room 3 at 4 pm on Monday and I very much hope that she will come along—
If it helps the noble Lord, I will explain the point I was making. The Lobbying Bill suggests that third-party organisations would not be allowed to be involved in campaigning during a general election. I wanted to ensure there would not be the unintended consequence of stopping them campaigning at all during elections when there might be legitimate reasons for them to do so.
I can allay her concerns on this. I was very struck when I was briefed this morning on this by the sheer scale of the funds some organisations have used and targeted. It is that sort of development we are thinking about. I hope I have covered most, if not all, of the points made in the debate.
I would prefer to write to the noble Baroness rather than give her a half-informed answer now, if she will permit me. There are a number of social investment schemes under way but I do not have them entirely in order in my head at the moment.
We all share a commitment to a stronger civil society. I hope we all share a commitment to a stronger local civil society. I am very struck by the problems of large communities in some of our cities who feel themselves powerless but do not know what to do about it. As I said to the noble Baroness, Lady Prosser, that is part of what the big society initiative is really concerned with. It will take a long time. For example, in Harehills and Gipton in Leeds the local Methodist, Catholic and Anglican churches used to do an awful lot but almost no one goes to church any longer. Creating alternative social networks and a sense of local empowerment and local confidence is a huge challenge for all of us and the state, society and others have to work together on it.
I hope we are all committed to this. I thank all noble Lords who have taken part in this debate and I recognise that this is a challenge that will face every Government in Britain for the next 20 years and more.
There were some more questions about the commissioning of services. It would be really useful if the Minister would undertake to ask other departments, beyond the Cabinet Office, to look at the commissioning process to see whether it can be made better. I do not know what his dialogue with the other departments is but it would be really useful if he was able to play a co-ordinating role.
There is now a commissioning academy. We are working with other departments. We are learning from experience how to work more effectively with local organisations where we can. The social value Act also helps us in that regard. I must not overrun my time; I give way to the noble Baroness, Lady Prosser.
My Lords, I thank all noble Lords who have participated in this afternoon’s debate, particularly the Minister for his opening comments, which reminded us that our discussion has been focused around the United Kingdom and civil society. His initial comments, however, brought to our attention the breadth, depth and history of civil society across the world. We ought not to forget that when we consider the importance of all of these matters.
I can safely say that the nature of the debate has demonstrated the huge variety of subject matter that comes under the heading of civil society and the huge variety of provision we have seen. Some parts of it we have had for many years; some have been developed more recently; some may be suffering slightly and in need of some assistance; and others that are developing with great speed—demonstrating the changed nature of the society in which we live—and we must face. Those are all big questions that we will all be chewing over for a considerable time to come.
Something that has struck me about this debate is that there is a great need to be clear when talking about civil society and the nature of the solutions that we might wish to propose. There are many different pieces to this jigsaw but in the discussion about solutions I have detected a blurring between solutions which are suitable for service provision and those which are suitable for what I would call community development. The Minister gave as one such example the people on a housing estate in the north, and that was my experience as well when working in community development in the London Borough of Southwark, where precisely the same issues and difficulties arose. In that project our role was to enable the local people to find their voices and to speak up. The Likes of Us, by Michael Collins, is an excellent book based around some housing estates in Southwark which records how the people there had said that they had been done to, but never given the opportunity to put their own point of view. It is an important point to make. The right reverend Prelate described it as “human flourishing”. I would put human flourishing under the community development umbrella.
Before concluding, I say to the noble Lord, Lord Hodgson of Astley Abbotts, that I was rather pleased that he disagreed with me—I would be asking myself questions about my analysis of these issues if he had said that he felt I was right. I am not upset by that—as I say, I am rather chuffed.
People with Learning Disabilities: Health Inequalities
Question for Short Debate
My Lords, this is such a timely and important debate, coming the same week as the Keogh mortality review, the Neuberger report and the latest report from the Health Service Ombudsman. Our focus tonight is on health inequalities for a group that comprises some 3% of the population. Our focus is on the remit and findings of the Confidential Inquiry into Premature Deaths of People with a Learning Disability. The inquiry’s report was published in March and the Government’s response was released last Friday. The House will wish to be reminded that I have worked as a psychiatrist with people with learning disabilities for over 30 years and that my adult son has a learning disability.
The institutional discrimination and health inequalities suffered by people with learning disabilities come as little surprise to many of us. For me it is a throwback to some of my own research from over 20 years ago when I reviewed the age and causes of death of people with learning disabilities in three London boroughs over a 10-year period. I found that adults with a learning disability were 58 times more likely to die before the age of 50 than the general population. Over half died of respiratory disease—which I presumed to be a final common pathway—compared with only 15% of the general population. The problem was that I could not get the results published. The BMJ and other medical journals said that it was not of wide enough interest. It was eventually published in a specialist disability journal. Government began to show leadership, however, with the White Paper, Valuing People, and Chapter 6, which addressed healthcare, accepted my suggestion that a confidential inquiry should be included as a recommendation.
In 2006 a formal investigation was conducted by the Disability Rights Commission and in 2007 Mencap published Death by Indifference. By this stage, although Valuing People had recommended a confidential inquiry, it had still not been set up. Death by Indifference was a landmark report and it told the stories of six people with a learning disability who had died in NHS care. It triggered an independent inquiry which was led by Sir Jonathan Michael—I should mention that I was a member of the inquiry team—and the Parliamentary and Health Service Ombudsman conducted an investigation into the six deaths. The Michael report, Healthcare for All, made a firm recommendation to set up a confidential inquiry and the Government at last agreed.
What is a confidential inquiry? It aims to identify common causes of deaths and to make recommendations to improve clinical practice. There are many in existence, some going back more than 50 years, with varying degrees of effectiveness. They involve the systematic review of cases with the identity of patients and clinicians remaining confidential and only aggregated findings being made public. Several of these inquiries have resulted in long-term monitoring and regular reports and one of these is NCEPOD, the National Confidential Enquiry into Patient Outcome and Death. It started with a pilot study of mortality related to anaesthesia but steadily expanded into a wider inquiry to cover all hospital specialties, now including near misses as well as deaths. NCEPOD distributes reports on very specific mortality concerns and if it feels that important recommendations are not being met, it lobbies at both local and national levels. It is this ongoing monitoring and national oversight of the uptake of recommendations combined with the fact that it has been in existence for decades which makes this inquiry effective.
In the confidential inquiry that we debate today Dr Pauline Heslop and her team have recommended the establishment of a national mortality review—basically a beefed-up confidential inquiry. This would guide detailed local reviews but also include a national overview panel. Its wider remit and role would provide an oversight of core data relating to all deaths of people with a learning disability. It could monitor and direct where more detailed reviews need to take place and, vitally, it would make recommendations for changes in practice. A longer-term commitment to this vulnerable patient group is needed for a real impact to be seen. The United States started similar mortality reviews and over the past 10 years it has seen an increase in life expectancy among people with a learning disability. The confidential inquiry we are discussing today was only established for three years—effectively as a pilot. It looked at the deaths of 233 adults and 14 children across five PCT areas in the south-west. Its focus was to determine whether the deaths of people with learning disabilities were premature. The principal aims were to detect factors which contributed to death as well as gaps in health and care services.
The results expose the gulf that still exists between the care received by people with a learning disability and that received by the rest of the population. It found that 37% of deaths would have been potentially avoidable if good quality healthcare had been provided. It found that on average, men with a learning disability died 13 years earlier and women 20 years earlier than the general population. Mencap says that this means that over 1,200 deaths each year across England could have been avoided with good-quality non-discriminatory healthcare—almost 25 children and adults per week. That is a shocking figure, which equates to the number of people thought to have died needlessly over a four-year period at the Mid Staffordshire hospital.
I am sure that other noble Lords will address some of the findings in more detail, but I will focus on the wider picture for a little longer. While Mid Staffs rightly hit the headlines, as did Sir Bruce Keogh’s report earlier this week, the avoidable deaths of people with a learning disability, some of the most vulnerable people in our society, go largely underreported and consistently fail to feature prominently on the parliamentary agenda.
What are the Government doing about premature mortality? On 5 March 2013, Jeremy Hunt said in the other place:
“Today, I am publishing ‘Living Well for Longer: A call to action to reduce avoidable premature mortality’”.—[Official Report, Commons, 5/3/13; col. 60WS.]
Sadly but perhaps predictably, the document did not even mention people with learning disabilities. That is despite the fact that in the 2011-12 NHS outcomes framework, the Department of Health added a placeholder indicator for measuring premature mortality in people with learning disabilities. This was further specified as the,
“Excess under 60 mortality rate in adults with learning disabilities”—
“under 60” because that reflects the current average age of death for people with learning disabilities. Unfortunately in the latest NOF—national outcomes framework—for 2013-14, this indicator is still in the inactive “development” stage. Will the Minister advise when the Government will give it live status and assure the House that the threshold will be reviewed year on year to bring it closer to the threshold of age 75, as in the general population? That would ensure the collection and publication of some vital data.
However, one of the problems is the difficulty that we still have in the identification of people with learning disabilities in health and care records. This was one of the recommendations of the Michael inquiry and, again, the confidential inquiry notes it as being of critical importance. Dr Heslop explains that concerns would never have been raised about many cases reviewed by the confidential inquiry had their care not been scrutinised. I agree with her that professionals learn more and change their practice more by being reflective and reviewing cases using a root-cause analysis approach. Merely telling a professional to do something rarely works, as is evidenced by the lack of adherence to the Mental Capacity Act and the Equality Act.
This inquiry provides a firm foundation of knowledge upon which the Government could take real and purposeful action—urgent action—to address these startling and persistent inequalities. However, this is not borne out in the Government’s unambitious response which acknowledges the findings that health inequalities exist but contains no set goals or timescales and no ways of measuring improvements. They could instead have followed the structured style of response they made to the Winterbourne View hospital scandal by working with stakeholders, including families and carers—many of whom are listening to the debate today, and whose presence I welcome. Will the Government consider a concordat to take forward the confidential inquiry recommendations and the construction of a clear, timetabled action plan?
The lack of commitment to the inquiry’s central recommendation about a mortality review body is disappointing. Despite the overwhelming evidence that this is the right thing to do, a decision will not be made until March 2014, by which time another 1,000 children and adults will have died prematurely. I urge the Government to bring this to the top of the agenda, not to push it down the priority list yet again.
As for the Francis inquiry, we say yes; but what about the enormity of the challenge that the Government face in achieving equality in access to healthcare and in health outcomes for this group? I ask the Minister to persuade the Secretary of State to include in the remit of all future health reports and inquiries, and in the work of the new Chief Inspector of Hospitals, the question, “Did people with learning disabilities fare better or worse?”. At the moment the answer is probably “worse” in all aspects of healthcare. I know that noble Lords will pick up many of the specific issues that I have not touched on, and I thank them for their support and passion for this debate. I also look forward to the Minister’s response and hope that he will be able to reassure this House that the Government are not indifferent and will act much more persuasively in future.
My Lords, I refer the House to my registered interests regarding disability and health and I congratulate the noble Baroness, Lady Hollins, for bringing this very important debate to the Floor of the House.
I begin with the part of the report that deals with annual health checks. Such checks for people with learning disabilities are an excellent way for doctors to pick up early even more serious problems than the patients themselves realise they have or are able to articulate. In some cases, if a person is not medicated, it could be the only time in a year when a GP sits face to face with them.
Linking the health check with health action plans is extremely important. The regular screenings that the rest of the population almost take for granted—because we are reminded that we are due a certain screening and we welcome this preventive and early opportunity to check whether there is a problem—is something that people with learning disabilities may lose out on because, when a letter arrives telling them it is time to phone for an appointment for a particular screening, they may simply throw away the letter and never have the screening. The annual health check therefore provides that opportunity.
The confidential inquiry found that the weakest link in the chain of the care pathway for people with learning disabilities was problems with diagnosis. It is very easy to misinterpret or ignore something from someone who is unable to articulate their symptoms or pain. I believe that it is key that the annual health check is expanded beyond its current very useful functions to ensure that it is used to provide a much more comprehensive look at, and a holistic approach to, that person’s health. The Government have accepted that there is inequality in healthcare investigations. They have detailed how NHS England will address this through working with clinical commissioning groups, and I understand that they will set out the details later in the year. That will be a crucial piece of work, which I hope will include tangible and measurable objectives on improving investigations that lead to diagnosis.
For people with learning disabilities in particular, and—the House will not be surprised to hear me say—for those on the autistic spectrum, many of whom also have learning disabilities, communication is a major issue. It is important for primary care services to understand the patient; if that person needs to attend a GP or nurse appointment accompanied by someone who can interpret their mood, behaviour and articulation, the primary care services must take into account that this can be quite painstaking and time-consuming. If people with a learning disability are to be treated equally, it is very important that the primary care service, and the services in hospitals when investigations often take place, allow for the fact that there may need to be a person in support who will help the clinicians to interpret how the other person is feeling.
I turn now to the part of the report that deals with the Mental Capacity Act. A number of reports, including the Confidential Inquiry into Premature Deaths of People with Learning Disabilities and the Francis report, have identified problems with how the Mental Capacity Act is understood and applied. They identified the lack of compliant practice with the Act as a barrier to effective NHS care. The inquiry found evidence of disagreement about what professionals understood by “serious medical treatment” and thus a lack of consistency about appointing independent mental capacity advocates to support those without family members to represent their views. There has also been evidence of unlawful NHS practice.
Declaring an interest as a mother, I add at this point that it is not just people without relatives to speak up for them who are not always listened to. In that shocking report from Mencap, Death by Indifference, which the noble Baroness mentioned, and reports that have followed on from the original report, we have seen the deaths of young people whose mothers have stood by their bedside and tried to explain the symptoms of their adult children to clinical staff, only to be told, “He’s over 18 and he hasn’t expressed his wishes in that way”. There is no other word for it but wicked.
So what are the Government pledging to do? The Department of Health has apparently agreed that mental capacity advice should be available 24 hours a day. It said:
“There should be staff trained in the MCA available 24 hours a day, and there should be specialist advice available in all care settings”.
It also says:
“Service providers have the primary responsibility for ensuring existing staff have the required knowledge and awareness of the MCA … The responsibility for the content of education and training curricula … lies with”,
Health Education England and,
“the professional regulators and the appropriate Royal Colleges”.
As a member of the Select Committee in this House that is currently looking at the post-legislative scrutiny on the Mental Capacity Act, I was somewhat concerned, when we took evidence at our first session on 18 June, that we were told by Department of Health officials when asked about the ability to assess for mental capacity,
“the assessment revealed an inconsistency in assessing capacity in some trusts to ensure that the Act was fully embedded”.
Claire Crawley, who spoke on behalf of the Department of Health, said:
“In terms of hard evidence, could I sit here and say, ‘I absolutely know that every local authority has appropriate plans and training processes in place’? I could not say that because I have no way of getting that evidence. The regulator of the industry, as it were, the Care Quality Commission, does not monitor local authorities or inspect them any more, so I would not know”.
Very often the local authority appoints the person who has the day-to-day care for the patient, so local authorities are as much involved in this as the NHS. When pressed by the noble Baroness, Lady Andrews, about the position of NHS trusts with regard to assessment of capacity was concerned, Claire Crawley told us:
“That would probably have been the CQC’s process … rather than the department’s process”.
I say to my noble friend that when a department, particularly the Department of Health, puts a piece of legislation such as the Mental Capacity Act on the statute book, it has a duty and responsibility to ensure that it is complied with, particularly for this vulnerable group of people. It is simply not good enough to say, “Not me, guv, it’s somebody else’s responsibility”.
My Lords, I refer the House to my interests as a vice-president of the National Autistic Society. I congratulate the noble Baroness, Lady Hollins, on securing this timely debate, coming, as she said, so soon after the publication of the Government’s response to the Confidential Inquiry into Premature Deaths of People with Learning Disabilities and just two days after the publication of this report from the Health Service Ombudsman, which I want to speak about.
I welcome this debate because it affords us the opportunity to debate the wider subject of health inequalities affecting people with a learning disability. The confidential inquiry is a crucial piece of work and shows that 37% of deaths could potentially have been avoided if good-quality healthcare had been provided. It is a terrible indictment of our care support system for the most vulnerable group of our fellow citizens, who are being let down. They and their carers often find it hard to express themselves in a way that might help prevent the tragic happenings that the inquiry has revealed. Like many noble Lords, I am aware that the support groups and those who work with people with learning disabilities have significant concerns about the Government’s response to the inquiry, a point well made by the noble Baroness, Lady Hollins. They feel that it is simply not strong and purposeful enough to really drive the change that we all wish to see.
On a wider point, a report from the Health Service Ombudsman, laid before Parliament on Tuesday this week following an investigation into a complaint against a GP practice, makes some pretty awful reading and should act as a wake-up call. It reveals how a GP service let down a young man with severe learning disabilities and it starkly draws into focus the attitudes that pervade in the system.
The young man is just 23. He has severe learning disabilities and behavioural problems, and he has epilepsy. He has historically been prescribed a series of medicines in liquid or dissolvable form because he becomes very distressed if he has to take tablets. One of the medicines was midazolam, used in emergencies if his epileptic seizures lasted beyond three minutes. In April 2011 his mother asked their GP for a repeat prescription in liquid form to help her son’s epilepsy. The GP refused her request because it was too expensive. He would only prescribe her son suppositories or tablets in future.
The mother advised the GP that her son had been prescribed only liquid medicine from a very young age, as his learning disabilities caused him to become very distressed if he had to swallow tablets. Despite this, the GP said he would no longer prescribe any of the young man's medicines in liquid form for cost reasons and would prescribe only tablets in future. The doctor told the mother to find a GP,
“‘who has bigger budgets’ and who would ‘be happy to prescribe the medications’”.
The mother was clear that the decision not to prescribe her son suitable medication put him at risk, including of death. However, when she subsequently complained to the GP practice about the doctor's decision, the response was far from understanding and helpful. She got a letter informing her that there had been a “total breakdown” in the doctor-patient relationship and advising her to find a new GP within 21 days as she and her son were to be removed from the practice’s list.
I can only ask noble Lords to imagine the significant distress that followed. The General Medical Council guidance is clear: doctors must ensure that prescribing of medicine is appropriate and responsible and in the patient’s best interests. The guidance also states that doctors should, when appropriate,
“establish the patient's priorities, preferences and concerns”,
“discuss other treatment options with the patient”.
After investigating the case, the ombudsman found that the GP had not given the young man the medication he needed on the grounds of cost, and had ignored disability discrimination law in the process. The ombudsman was clear in the report that the doctor,
“did not act in line with the Mental Capacity Act, GMC guidance and established good practice.”
The report found that the doctor,
“did not consider his responsibilities under the Mental Capacity Act in reaching his decision”,
about the young man's medication. He did not assess the young man’s,
“capacity to make a decision about his own treatments or medications. Nor did he take any of the required actions that could have led him to reach a ‘best interests’ decision”,
on the young man's medication.
The case shows a lack of understanding of reasonable adjustments and disability rights. Public bodies are required to comply with the Equality Act 2010, which includes the duty to make reasonable adjustments. They should also have regard to the various statutory codes of practice that have been published to assist in the interpretation of the legislation. The ombudsman’s report brings into sharp focus a specific case and uncovers the treatment that people with a learning disability and their families can face within the health service. The ombudsman, Julie Mellor, said:
“This is yet another case where someone with learning disabilities has been failed. When there are failures in the care and treatment of people with learning disabilities, there are consequences in terms of their health and in too many cases, their life expectancy.”
Unless the Government take strong action in this area, cases such as these will continue to occur. That is why I strongly support establishing a national mortality review body, which would allow for the collection of mortality data and, importantly, for investigations of specific cases, a point made by the noble Baroness, Lady Hollins. Critically, it would provide the opportunity to improve the understanding of the causes of premature deaths and enable the National Health Service to improve care for people with a learning disability.
The ombudsman’s report highlights a terrible wrong committed against a vulnerable young person. I hope that this Parliament and this Government will act to stop these awful and discriminatory cases occurring in future.
My Lords, I, too, thank the noble Baroness, Lady Hollins, for bringing to the attention of the House the report that gives us the opportunity to discuss this issue. The report makes for sobering reading. Many noble Lords speaking in this debate have far more expertise in these matters than I have—in fact, looking around the Benches, I think that they all have—but the first NHS trust board that I sat on more than 15 years ago was a community trust with learning disability, mental health and community health responsibility for all of Cornwall, so I come at this with at least some understanding. I commend the work in this area by both the noble Baroness who, during her tenure as president of the BMA, sought to raise the profile of learning disability, and the noble Lord, Lord Rix, a long-time advocate of those with learning disability, and president of Mencap, which I thank for producing an excellent briefing.
In the past, there have been plenty of situations and reports, and we have heard about some of them today, that should have given successive Governments a wake-up call regarding poor provision for people with a learning disability—Budock Hospital and Winterbourne View, to name two, both of which point to the inevitable health inequalities. For many years now we have known that the health commissioning of learning disability services has been poor. Many PCTs wrote a cheque to providers and effectively asked them to get on with it. Indeed, there is a historic similarity with mental health service commissioning. Mental health now has parity of esteem status with physical health, but it does not feel as if the same can be said for learning disabled people.
The history of a lack of communication between health and social care in this area is well known, too. It was as if, after the move to take people out of large establishments and put them into domestic settings, commissioners and providers decided that the job was done, the spotlight went off, attention moved elsewhere and quality was forgotten. I must acknowledge that there are some splendid services, but that standard is not yet universal.
So what are good services? Here I have to thank Professor Jim Mansell of the University of Kent for the list from his 2010 report, Raising Our Sights. Good services should be individualised and person-centred, treat the family and carers as expert, focus on staff relations with the individual, sustain the package of care and be cost-effective. In addition, they should be supportive, use appropriate advocacy and be predictive and well implemented. I do not wish to belittle the work of the professor but none of this list should come as a surprise to the House. The surprise and shame is that this list is not part of universal practice.
That brings us to the Confidential Inquiry into Premature Deaths of People with Learning Disabilities. The report was commissioned by my right honourable friend Paul Burstow following the events at Winterbourne View. It is thorough and contains a detailed and practical set of recommendations. In the time that we have, I am unable to cover all aspects of the report so shall focus on information, staffing and the Mental Capacity Act. The report puts the spotlight back on mortality. As we have already heard, it is particularly appropriate that we are discussing the mortality of people with a learning disability in the week when the Keogh report did just that for the total population served by 14 hospitals. Sir Bruce was able to do that because he had the data. This report is based on a dataset that is not normally collected for people with a learning disability.
The report’s first recommendation is that people with learning disability should be clearly identified on the central NHS registration system and in all healthcare systems. Although outside the scope of the report, this information should be recorded on social care records too. A learning disability flag should be part of a standardised dataset and I would hope that a combined, patient-held record would be a reality in the not too distant future. Not only does this make identification easier, it would aid audit and research, make joint strategic needs assessments far more accurate and easier to produce and make reasonable adjustments easier to flag, thus improving commissioning and contracting. This is not an unreasonable request, it is an issue of equality, and without it people with learning disability cannot be treated equally. I would like the Government to commit to a clear timeline for this work, so would the Minister tell us what that is, or when we might know what it is?
Moving to staffing, the report calls for a named health worker to be allocated to those with complex or multiple health needs, and I welcome the Government’s response and further suggestion of a named worker in acute settings. There is also a need for specialist learning disability liaison staff in community settings. Can the Minister give an indication of when it is intended to roll this out?
These changes bring a need for training. Will the Minister reassure the House that Health Education England can put training programmes for health workers in place, and when they might become available in local training settings? Would he also confirm that training will be mandatory and included in continuous professional development for all health workers?
Finally, I turn to the Mental Capacity Act, which the noble Baroness, Lady Browning, has covered well. As she has said, it is currently under scrutiny in your Lordships’ House and is pivotal to people with a learning disability, as it is to any vulnerable group. Advice under this Act should be available at all times and easily accessible. That will pose challenges in delivery, and I ask the Government not to forget or ignore patient involvement and engagement in this. Members of the sector are very good advocates, but there is a real need for people with learning disability to be consulted and involved in improving access to the Act.
In conclusion, I have outlined the issues around records, data and information, the Mental Capacity Act and staffing. Would the Minister ask his colleague, my honourable friend Norman Lamb, the Minister for Care and Support, to come to the House in the autumn with NHS England’s new lead for learning disability to share with members of the House its thinking on these issues and the action plan that has arisen from this report?
I think that it was Gandhi who said that society could be judged by how it treated its most vulnerable. Reducing health inequalities should be central to that. It is not an issue which will attract the attention of voters; it is something that we do solely because it is the right thing to do. I would hate it if, 10 years on, we were seen to be wanting.
My Lords, I declare an interest as patron of Mencap Wales and Autism Cymru. I welcome the opportunity to speak in this most important of debates. As the noble Baroness, Lady Hollins, has set out very clearly, the figures are shocking and should rightly make us very angry indeed. The fact that 37% of deaths investigated by the confidential inquiry could have been prevented with better healthcare should rightly motivate us to do all that we can to tackle the startling health inequalities that people with a learning disability face. I share her concern that the Government have not gone far enough in order to bring about the change we really need to see. It is particularly disappointing in light of the fact that the issue was brought to the attention of the Government before and met with similar inaction.
In 2006, I was a commissioner at the Disability Rights Commission and worked on the formal, 18-month investigation into healthcare given to people with mental health problems and learning disabilities. It was then that I first came across the findings of the work undertaken by the noble Baroness, Lady Hollins, that those under 50 years of age with learning disabilities or mental health issues were 58 times more likely to die from medical conditions not associated with their disability than was the general population of that age group—58 times more likely is a staggering figure.
The DRC’s resulting report, Equal Treatment: Closing the Gap, found that those with learning disabilities or mental health issues regularly get worse treatment than others. The study, carried out in England and Wales, examined several million health records and found that people with learning disabilities and mental health problems were more likely to have a major illness, to develop a serious health condition younger, and to die sooner than the rest of the population. Despite this, the same group of people were less likely to have routine tests and screening to pick up signs of a problem at early stages. For example, people with learning disabilities who have diabetes have fewer measurements of their body mass index, while those who have had a stroke have fewer blood pressure checks. The investigation also identified a problem known as diagnostic overshadowing, whereby symptoms of physical ill health are often seen as part of a patient’s mental health problem or learning disability and are not properly investigated or treated.
One of the aims of the work was to see which areas of the NHS would need to improve in the context of the then recently introduced Disability Discrimination Act, including the duty to make reasonable adjustments for disabled people, something which was in place since 1999. We were clear that GPs needed to make reasonable adjustments in order for people with a learning disability to access healthcare effectively. This included simple things such as making appointments by e-mail, providing treatment information in alternative formats or sending text or phone appointment reminders. Also important in terms of reasonable adjustments was raising awareness and understanding among both GP clinic and hospital staff in terms of learning disability.
This is demonstrated powerfully through the story of Susan. Susan died on 1 February 2011 in St Christopher’s Hospice in Sydenham, having been transferred the previous day from Lewisham Hospital. She was 59 and had cancer. Although Susan had been diagnosed with breast cancer some years previously, she had lived happily with her sister Brenda. Both were actively involved with their local Mencap in Lewisham and Susan often volunteered at events and outings. Susan was admitted to Lewisham Hospital on 15 January 2011 with vomiting and jaundice. Like so many other family members and carers, Brenda visited Susan every day and made herself known to staff as Susan’s main carer. As there was no learning disability specialist nurse available on the ward, Brenda found herself regularly explaining to staff about Susan’s care needs and becoming increasingly frustrated by the general lack of understanding and awareness about learning disability, which seemed to permeate the hospital. At one low point, Brenda was told by the matron that her staff, “don’t encounter people with learning disabilities in hospital that often”. Consequently, no adjustments were made to accommodate Susan’s needs, leaving Brenda fearful and anxious for Susan’s treatment unless she was there on an almost round-the-clock basis. Despite a complaint to the hospital by Brenda about a potential breach of the Equality Act for a failure to make reasonable adjustments to accommodate Susan’s learning disability, progress was slow, and a year after Susan’s death, the hospital had still failed to demonstrated that staff had any more awareness about learning disability and their duty of care and duty to provide equal access to healthcare to patients with a learning disability.
I emphasise the need for reasonable adjustment. Sadly, it seems that things have not changed nearly enough since our investigation. In 2006, we made the point on numerous occasions that reasonable adjustments were not being made as a matter of course. The confidential inquiry builds on this by highlighting that:
“The lack of reasonable adjustments to facilitate healthcare of people with learning disabilities, particularly attendance at clinic appointments and investigations, was a contributory factor in a number of deaths. GP referrals commonly did not mention learning disabilities, and hospital ‘flagging’ systems to identify people with learning disabilities who needed reasonable adjustments were limited”.
Its recommendation therefore seems sensible and measured that reasonable adjustments required by, and provided to, individuals be audited annually and examples of best practice be shared across agencies and organisations.
The Government’s response to this is far from purposeful, saying that they will instruct NHS England to look at the possibility of strengthening provider contracts to include an annual audit. Public authorities have a duty to make reasonable adjustments, and that includes adaptations and accommodations to ensure that people with a learning disability can access healthcare on an equal footing. Back in 2006, we were clear that there was no excuse, the duty having been there since 1999. In order to move this forward, strong leadership is needed by the Government and key agencies if we are to avoid these failures persisting within the healthcare system and thousands of vulnerable people paying the price.
My Lords, as president of Mencap, I welcome the opportunity to speak in this important debate, having rushed from the other Lord’s in St John’s Wood to support my noble friend Lady Hollins in her battle to achieve health equalities for learning-disabled people.
As someone who has worked in the world of learning disability for more than 60 years, I am of course aware of the persistent health inequalities that exist. The figures from the confidential inquiry are shocking and the report makes sober reading. That over a third of those investigated died due to poor healthcare is nothing short of an outrage and should be front-page news. The fact that, on average, men with a learning disability die 13 years earlier and women with a learning disability die 20 years earlier than the general population should be reported alongside the horrific facts, figures and stories from the Mid Staffordshire scandal. Instead they appeared in only a handful of articles, well tucked away. It is a further disappointment that no Oral Statement was made, either when the inquiry was published in March or last week when the Government published their response. That is why this debate is so important.
As many of your Lordships know, I chair the All-Party Group on Learning Disability together with the right honourable Tom Clarke MP. For many years we have brought in people with a learning disability, their families, advocates and professionals, to create a dialogue with MPs and Peers. On Monday I chaired a well attended meeting on this very subject where we heard from the confidential inquiry team and the learning disability public health observatory together with people with a learning disability, family members, carers and the Minister, Norman Lamb.
The inquiry team is to be commended on an excellent, robust piece of work, exposing the stark health inequalities that people with a learning disability face and providing the Government with 18 excellent recommendations on which to move forward. As my noble friend Lady Hollins stated, it seems that the key recommendation, that a national mortality review body be set up to collate data and investigate and report on deaths, is critical in order to keep momentum going, as well as to start the kind of culture change that we must see within the NHS. It is therefore deeply disappointing that the Government have shied away from this critical recommendation, putting off any sort of decision until March 2014. Like my noble friend, I wonder how many more people will have died unnecessarily by that date.
The most powerful account given at the meeting was that of Christine, a mother who tragically lost her daughter Tina in 2009. Tina lived at home with her parents and her sister. She had learning disabilities, epilepsy, Russell-Silver syndrome—a form of dwarfism—and severe scoliosis of the spine. Tina had generally been physically well but developed a cough and a high temperature. Her parents called the doctor and Tina received a home visit from her GP during which she was prescribed antibiotics and paracetamol. Her condition deteriorated, however, and her parents rang the surgery to request a second home visit. This was refused, as was their first request to the out-of-hours service.
It was not until a second call to the out-of-hours service—which resulted in a home visit and a diagnosis of aspiration pneumonia—that Tina was referred to Basildon hospital. Once in hospital she was diagnosed as suffering from pneumonia and a chest infection. The hospital did not give her the treatment she needed or even meet her basic care needs. She suffered several seizures in hospital and went for four days without food. She died on 30 January 2009.
Tina’s death has had the most profound impact on Christine, of course, and her family. At the meeting she said:
“Our daughter was a human being and we protected her and cared for her all through her life until she became ill. We argued with the Doctors from day one; firstly the GP and then the hospital. They saw a child laying there with a disability and decided her life wasn’t worth saving”.
The Parliamentary and Health Service Ombudsman’s investigation of the case found failures and delays in diagnosing Tina’s condition, a failure to act in line with the Mental Capacity Act 2005, failures in the communication of Tina’s condition to her parents, a failure to implement Tina’s transitional care plan and a failure in meeting Tina’s rights as a disabled person.
Christine is rightly concerned about Vikki, her other daughter, who also has a learning disability. She described at the meeting how she and her family were fearful every time Vikki became ill and when she had either to visit the doctor or go to hospital.
We owe it to Christine and her family, as well as to countless others, to stop these health inequalities leading to death by indifference—the apt title of a report by the Royal Mencap Society.
My Lords, I add my congratulations to the noble Baroness, Lady Hollins, on initiating this critically important debate. As the title of the debate states—it bears repeating—we are today discussing the health inequalities of a particularly vulnerable group, highlighted by the confidential inquiry into the premature deaths of people with learning disabilities. I speak today not because of any specialist knowledge but because of my interest in health inequalities, of which this is such a stark example, and I am grateful to the National Development Team for Inclusion for its briefing.
I am sure we can all agree that many of the findings of the report were horrifying. I will not repeat the statistics that many other noble Lords have already given the House. Suffice it to say that nearly three times as many people with learning disabilities die avoidably than die among the general population. Like many noble Lords, I find this shocking. Surely the issue should be treated with the same seriousness and urgency as responses to the appalling events at both Winterbourne View and Mid Staffs. The latter led to the highly influential Francis report and the immediate implementation by government of some of its key recommendations.
I will first make a few points on the factors leading to this vulnerability and these premature deaths. The confidential inquiry found that a fifth of people with learning difficulties experience significant difficulty or delay in diagnosis of their illness and that, as a result, there is often too little proactive care for this group and too many crisis-driven responses. It found a lack of reasonable adjustments to help healthcare, particularly in basic things such as attendance at GP surgeries and clinics; that GP referrals often do not mention learning difficulties; and very limited hospital flagging systems. Additionally it found that poor record keeping is creating problems and that, in some instances, even “do not resuscitate” orders in patients’ records have been found to be inappropriately or poorly documented. As others have said, there was poor adherence to the Mental Capacity Act and, finally, the inquiry identified poor co-ordination of care across and between different disease pathways and service providers, which failed to understand the episodic nature of care provision. That is only a few.
We know a great deal about the problem and we cannot continue to allow one group of people, those with learning disabilities, to experience such drastic healthcare inequality. It is because I know that the Government have such a strong commitment to reducing health inequalities that today I ask the Minister to consider immediate action in the specific areas on which I will focus my contribution. I am encouraged to do so in the knowledge that the Care and Support Minister, my honourable friend Norman Lamb, recently said:
“It is not good enough that people with learning difficulties are at a greater risk of dying earlier due to poor health care. … We are making progress on improving standards of care but we have to go further and keep driving forward our plans”.
I could not agree more.
First, regarding the confidential inquiry’s concern about a lack of adherence both to the Mental Capacity Act and the Equality Act, outlined by other noble Lords today, will the Minister clarify the Government’s plans to address this concern? Secondly, while details about the deaths of people with learning disabilities identified by the inquiry illuminate the severity of the problem, they only provide a snapshot. As anyone who has taken at least a basic course in statistics knows, cross-sectional data—what the confidential inquiry has assembled—cannot tell us as much as longitudinal data.
The confidential inquiry recommended that the Government should create a mortality review body and has offered three different models for doing so in subsequent discussions with the department. This would provide a critical ongoing lens into the mortality of people with learning disabilities. Will the Minister explain the Government’s plans and timetable for creating such a body?
Thirdly, the confidential inquiry also describes the current healthcare situation as one largely driven by crisis, with a lack of evidence of sufficient forward planning. Will the Minister provide his reaction to this assessment and say how forward planning can be improved?
Finally, on the care of those with learning disabilities, the only support currently available to clinical commissioning groups and local authorities is provided through the Learning Disabilities Specialist Public Health Observatory, which is part of Public Health England. This work involves a specific work strand on promoting learning and on sharing that learning with the wider sector and local areas. It is very important that this work continues and, given the number of people with learning disabilities who are supported both through social care and who live with their families, that this work programme includes specific action to support social care, understands the action needed to reduce premature deaths and works alongside action targeted at family carers. Will the Minister say what support the Government intend to put in place to ensure that local areas are able to implement the recommendations of the inquiry?
I finish by suggesting some additional practical actions for the Government to consider to try to improve the current situation. First, they could identify those people with learning difficulties who are afraid of seeking medical assistance and provide them and their carers with support and training now, before the need for urgent medical treatment arises. Secondly, they could offer a named healthcare co-ordinator to all people with learning difficulties with two or more long-term conditions and to those who live unsupported or with minimal support in the community with one or more long-term conditions. This would be akin to the Government’s recent proposals to refresh the NHS mandate, including by providing a co-ordinating clinician for the non-hospital care of another very vulnerable population—the elderly. This is something I very much support.
Thirdly, the Government could require all health and care services to assess and document the reasonable adjustments that individuals with learning disabilities need to access healthcare equitably and to share this information with providers so that people with learning disabilities are properly identified and providers have the duty to ensure that these reasonable adjustments are made. It must be possible to co-locate community learning disability nurses into GP practices to work alongside GPs.
Finally, will the Government consider requiring all acute hospitals to have at least one learning disability liaison nurse in post? These are just practical and specific examples—we have already heard others today and I am sure that we will hear more. I look forward to hearing the Minister’s response to these and other points.
My Lords, I thank my noble friend Lady Hollins for this timely debate and for her contribution over the years on the issue of learning disabilities. I declare an interest as a retired general nurse. Not holding any qualification in mental handicap, as it was then referred to, I have limited experience with learning disabilities, mainly associated with relocating patients from the large hospitals in the 1970s until the late 1980s. However, that experience was one that has stayed with me in terms of demonstrating that people with learning disabilities and their families are a group who require a range of specialties to come together to ensure that their quality of life is the best possible.
Although this debate is asking the Minister what steps the Government are taking to address health inequalities, it is difficult just to debate health, as has already been illustrated today, because so much is dependent on the part played by education, social care and families. The opportunity has now been given to us, with the new Health and Social Care Act and the Care Bill, to develop healthcare pathways further. We should take this opportunity to ensure connection and communication through the education system, social care and specialist mental health care and that learning disability staff are involved in the total well-being of the individual and the family. Otherwise it is likely that there will be gaps which, in turn, may be detrimental to the general health of the individual with the learning disability.
It is now 65 years since the NHS was introduced with the assurance of free care for all at the point of delivery. During those 65 years, we have seen many developments for those suffering a learning disability, which have come step by step and usually following the unfortunate findings of inquiries into poor care, such as in Ely, Farleigh and Whittingham—all large hospitals that were found wanting in the delivery of care. In the 1970s, we abolished long-stay large hospitals and moved patients into the community, which was a big step towards a pathway for each individual that set a programme of care according to their needs. However, even within the 20 years since that move, we have cause for concern about small units that have failed in their delivery of care.
This confidential inquiry into premature death provides the opportunity to address the pathway for learning disabilities and for health and social care professionals, support workers, educationalists and families to contribute to the development of a meaningful, holistic pathway for every individual person with a learning disability. This surely demands a culture change and leadership, as well as offering a learning opportunity for all health and social care professionals and general educationalists to understand the philosophy of caring for those with a learning disability. It requires good communication links between all of those, with each of them understanding the overall philosophy and strategy of an integrated pathway for the individual. It is clear that this would be a large piece of work and would take time to be achieved. It will require all of the disciplines to be involved, as well as the families, who we know have had to fight a long battle to break down the barriers between all the involved agencies. There needs to be shared ownership of that responsibility—everyone has to ensure that the pathway is high quality and leads to people living as normal a life as possible with the appropriate support and with regular physical health checks.
Coming back to the confidential inquiry, I would make four points. The first is about health records, which has already been mentioned in detail by the noble Baroness, Lady Tyler. I am sure that in this day and age it is not beyond the wit of any of us to see that it would be possible to get a health record that can not only integrate the issues relating to the handicap but attach a personal profile to the health action plan that could be implemented and given quickly to the person and to the family.
Secondly, there is advanced healthcare planning. I suggest that the Government need to give further guidance once long-term problems are diagnosed. There should be a trigger for the plans to be instigated and a risk assessment and a crisis-point plan drawn up. These health plans could easily be put together as long as there is communication between all aspects and that the medical side is aware of the way forward.
My noble friend Lord Rix has already mentioned palliative care and the dreadful time that the patient in Lewisham experienced. The confidential inquiry identified some problems with end of life care. It is clear that palliative care teams need to be supported during the time that palliative care is being provided to a learning disability patient. A specialist learning disability nurse should be available to those teams when this is required. At least two patients in every hospital have a learning disability. Of these some may have profound multiple learning disabilities. The role of the registered learning disability nurse is important in giving guidance in hospitals on the specialist support of patients. Can the Government ensure that workforce planning outcomes include a calculation for the roles of nurses qualified in learning disabilities to be available for such teams?
If the noble Earl agrees that this should be the way forward, what steps will the Government take to ensure that that NHS England, Public Health England, local authorities and professional regulators develop the curriculum and standards for health and social care professionals and general educationalists, Healthwatch, well-being boards, and charities such as Mencap to meet the requirements for the best possible pathway for healthy living within the capabilities of the individuals suffering a learning disability and their families? This would include a model to maintain general good health and the reduction of the rate of premature deaths as is suggested by the inquiry.
If the philosophy and strategy are clear for the person suffering from a learning disability, we can then be assured that all aspects of their life will be taken care of, with the support in place where necessary. This in turn will be effective for other members of the family who, over time, as experience tells us, have had to overcome tremendous difficulties through sheer lack of professionals understanding the situation being described or the damage that can occur, including breakdown to the family unit.
My Lords, I declare an interest as president of GS1, chair of a foundation trust and a consultant trainer with Cumberlege Connections.
It is a great pleasure to follow the noble Baroness, Lady Emerton, and to congratulate the noble Baroness, Lady Hollins, on her initiative in securing this debate. I applaud her efforts in again raising in your Lordships’ House the appalling health outcomes of so many people with learning disabilities. I shall not repeat what other noble Lords have said. The statistics are clear and there is a clear consensus that they are accurate, and the outcomes are very disturbing. We must recognise that this is now an issue that has been identified for at least six years; the evidence from Jonathan Michael’s report, Death by Indifference, which found that patients with a learning disability experienced delays in diagnosis and treatment, a lack of basic care and poor communication from health professionals, is now six years old. Clearly, the confidential inquiry findings have endorsed the original findings of the Jonathan Michael inquiry.
The noble Baroness, Lady Hollins, was a member of the inquiry team, which is significant. Sir Jonathan Michael is a very distinguished chief executive of an NHS trust. In some ways, it was even more persuasive coming from that quarter, when he found so many examples of indifferent healthcare for people with learning disabilities.
As noble Lords have said, when one thinks of our recent impassioned debates about health outcomes, the Keogh inquiry and the Mid Staffordshire inquiry, the number of premature deaths of people with learning disabilities is so shocking that it is disappointing that society as a whole, the media and the political world are not taking it as seriously as they ought. These debates are very important in alerting the public and the Government to the need for action to be taken.
The noble Baroness, Lady Browning, made some very good points about the need for annual health checks and screening and the substantial problems of diagnosis and communications. The noble Baroness, Lady Tyler, mentioned “do not resuscitate”, and it made me wonder whether the follow up to the Liverpool care pathway that will be taken forward in the light of the report by the noble Baroness, Lady Neuberger, will be an opportunity to look specifically at the needs of people with learning disabilities to ensure that they are captured within the new approach. I hope it is something that the Minister may be able to take on board.
The noble Baroness, Lady Tyler, spoke about the employment of specialist staff in hospital. My trust has recently employed two people to do that. If one looks at the recent seminar that the noble Baroness, Lady Hollins, chaired under the auspices of the BMA, it is noticeable that many of the recommendations coming from it are about communications; training staff to identify and understand the needs of intellectually disabled and mental health patients; changing the culture of the NHS from unfounded, ill informed judgments about mental health and intellectual disability patients; and ensuring those patients are subject to the same access standards as physical health patients. Given all the problems over the past few years, there is no doubt that specialist staff within hospitals have an important role to play.
Given all this, it is difficult to know why the Government seem to be dithering over establishing a national confidential inquiry. The noble Baroness, Lady Hollins, described the national confidential inquiry into perioperative deaths. Over the decades, it has done outstanding work in indentifying patterns of death that have led to improvements in services. The noble Baroness may recall Mr Brendan Devlin, one of the great pioneers of the ECEPOD, who never achieved the recognition that he ought to have received for his work; I suspect that at the time he was not popular with his colleagues in the profession. I remember talking to him and seeing the results of those inquiries and the reports that were issued. I hope that the Minister will be able to say something a little more positive about the Government’s intentions. The benefit of a permanent confidential inquiry is that year after year, in report after report, evidence will be brought forward and statistics will be made available. I am convinced that it is a very powerful way to drive up standards in future. The great risk is that if we do not have another inquiry, the issue will go away and will be forgotten in the health service. That is why one needs permanent machinery to enable it to be done.
If it is a question of finance—I have to be very cautious about what I say on funding issues—comparisons concerning the cost of a permanent national confidential inquiry into the deaths of people with learning disabilities could only be minimal in terms of the human cost to those people and their families of the premature deaths that are caused by the current problems in services.
When the appalling events at Winterbourne View came to light in the report—it is not so long ago that the Minister made a Statement to your Lordships’ House on this—a great deal of discussion concerned the role of commissioners. In the case of Winterbourne, once the commissioners had placed a person in the home there was virtually no contact. What is being done to enhance the role of commissioners? We have an opportunity to come back to this on Report in the Care Bill, in which there is a provision around the role of the CQC in regulating the commissioners of local authority services. I hope we might come back to debate whether we can give more power and ammunition to the CQC in this regard.
I have two final comments. My noble friend Lord Touhig raised an important issue about the role of general practitioners and some of the failings in our primary care medical services. The Minister knows now that the responsibility for contracting with GPs lies with NHS England. It would appear that NHS England also has a big role to play in ensuring a continuous and permanent confidential inquiry. Is the Minister satisfied that NHS England has the capacity to develop and drive policy in this area? Surely it is in its hands. It has the ability to fund and organise a national confidential inquiry. It also has the ability to ensure that the issues my noble friend raised about access to GP services are dealt with effectively in contracts with general practitioners. I hope there will be further opportunities to debate these important issues in the future and that the Minister might be prepared to take back the pressing question of a permanent confidential inquiry.
My Lords, I thank all the speakers in this excellent debate for their very powerful contributions, not least the noble Baroness, Lady Hollins. I want to start by paying tribute to Mencap, which has been campaigning vigorously against the preventable deaths of people with learning disabilities. Mencap has revealed fundamental failures in communication between care providers, on the one hand, and parents and carers, on the other, as the main cause. However, it has also concluded that the only other explanation for these preventable deaths is prejudice. The disturbing reality is that this prejudice, although rarely revealed in words, finds its expression in deeds, sins of omission and neglect. Any failure to understand what should be a fundamental tenet of NHS practice is shameful: every life is different, yet every life has the same value.
I want to take this opportunity to make the Government’s position clear. Mencap’s report, Death by Indifference, marked the start of six years of shocking revelations of inhumane and degrading treatment, culminating in the recent publication of the Confidential Inquiry into Premature Deaths of People with a Learning Disability. We established the confidential inquiry in 2010 and funded and supported it for three years. As Sir Jonathan Michael’s report, Healthcare for All, recommended, it was time limited. Its purpose was to provide evidence on the relevant issues and guidance on preventing premature deaths. It has done this very effectively and I thank the confidential inquiry team for its excellent work.
This important report reached the conclusion that people with learning disabilities are continuing to die or experience poor outcomes because they are not getting the right care, and noble Lords have cited some graphic and disturbing examples this afternoon. Although the report makes for sobering reading, it gives us a clear indicator of the areas that need to be tackled, preparing the ground for the Government’s response to the confidential inquiry which was published last Friday. Our response makes clear our determination to eradicate substandard practice and to work in partnership across the health and care system to deliver the improvements that we all want to see.
In our response, we set out a series of specific actions. We will use the information strategy for health and care to improve how we identify and respond to people with learning disabilities and their health and care needs. We will link data about cause of death with other information to better understand and respond to premature mortality among people with learning disabilities. We expect local organisations to use local mortality data to inform joint strategic needs assessments and joint health and well-being strategies. We will support named healthcare coordinators being available to people with learning disabilities. They will coordinate a person’s care, talk to other professionals and be involved in planning the individual’s care.
NHS England will review plans for learning disability annual health checks. We know that appropriate health checks can identify needs which can then be addressed by referral to appropriate services. We will try to strengthen the NHS standard contract to improve the care of people with learning disabilities. We know that the contract is a powerful lever to incentivise good practice. We will monitor, through the mandate, the progress the NHS is making to ensure that people with learning disabilities in vulnerable circumstances receive safe, appropriate, high-quality care all the time.
We will work with partners to review awareness and understanding of the Mental Capacity Act and how it works in practice in making sure that people receive appropriate care at all times, including at the end of life. We will work with partners to review guidance on cardiopulmonary resuscitation. NHS England will appoint a national clinical director for learning disabilities, who will help improve the experience of people with learning disabilities in care. Local areas can set up their own arrangements to review mortality in people with learning disabilities. Some are already doing so, working with the confidential inquiry team. This work will be shared more widely for other areas to develop similar approaches. Building a strong understanding of what is happening in local provision will be critical to making change happen.
Over all that, in the Health and Social Care Act, we have a new specific statutory duty on the Secretary of State, NHS England and clinical commissioning groups, with the aim of focusing on reducing inequalities throughout the health service in both access to services and outcomes achieved. This will be an enormously powerful tool in addressing the health inequalities which people with learning disabilities face.
However, the response to the confidential inquiry is just part of a programme of activity from government and partner organisations designed to deliver system change and a shift in culture and attitudes. Changes in health and social care delivered by the Health and Social Care Act 2012 provide the building blocks for that shift. First, safe, appropriate, high-quality care is a key priority for NHS England. The noble Lord, Lord Hunt, asked about the capacity of NHS England to focus in this area. It is under a specific legal duty to tackle inequalities and advance equality. Priority areas where we expect progress to be made by 2015 include supporting people with multiple long-term physical and mental health conditions and improving their quality of life, and preventing people from dying prematurely.
Secondly, the NHS Outcomes Framework 2013-14 will allow us to measure the quality of services and outcomes for people with learning disabilities. This framework includes an indicator on preventing people with learning disabilities from dying prematurely. Improvements for people with learning disabilities will also be a crucial element of success across the framework as a whole.
Thirdly, Transforming Care, our national response to Winterbourne View hospital, sets out a programme of actions to ensure that people with learning disabilities or autism no longer live inappropriately in hospital, and receive optimum care. A wide range of delivery partners signed up to a programme of action designed to deliver transformed care in the Winterbourne View review concordat. The concordat sets out a number of specific actions for NHS England, including ensuring that all primary care trusts develop registers of people with learning disabilities or autism who have mental health conditions or behaviour that challenges, and making clear to clinical commissioning groups that they are expected to maintain local registers and, with the local authority, review individuals’ care. All reviews will be completed by the end of July. By next April, every area will have a joint plan to ensure high-quality care and support in line with best practice. By next June, everyone will have moved to community-based support where appropriate.
I hope the noble Lord will forgive me. The Winterbourne View concordat does not address the physical health needs that we are talking about in this debate. I asked whether the Government might consider a similar concordat to look at the physical health needs of people with learning disabilities. Would the Minister care to comment?
My Lords, I would like to deal with some of the points raised in the debate. Can I say, as I always do, that if I fail to cover all the questions raised, I will of course write to noble Lords afterwards? On the issue of a concordat, which was raised also by my noble friend Lady Jolly, our response makes clear that we have already been able to take action in some areas—for example, by asking organisations to review and update guidance. In other areas, progress relies on several issues, such as new and emergent organisations developing their strategic approach, and key individuals being in post. Across all of the actions, there is a broad timescale with a commitment to provide regular updates on progress. The Department of Health will continue to review progress through the Learning Disability Programme Board.
On records, data and information we are working with the Health and Social Care Information Centre, NHS England and the Improving Health and Lives Learning Disability Observatory to address the issues. There are several areas we need to look at. For example, we know that there is already information in GP practice learning disability registers. We want to make better use of this by linking it to other data that is already collected. We will have an update on progress by the end of the year. I will write to supplement those comments because my time is running short.
My noble friend Lady Tyler asked what support the Government will give to local areas to implement the confidential inquiry recommendations. The department is working closely with the public health observatory to make sure that its work to share good practice includes the issues raised by the confidential inquiry. We have already suggested to the inquiry team that we need to work in partnership with NHS England and other stakeholders. To make progress on the actions we need to align with work that the inquiry team is already doing at a local and regional level.
The noble Baroness, Lady Hollins, asked when the outcomes framework indicator on premature deaths will be live. It is live from 2013-14. We are currently collecting data to underpin the indicator and we will have data by November of this year.
The national mortality review body was a subject raised by many noble Lords. The department and the confidential inquiry team organised a meeting in March to discuss the proposal for a mortality review body. I am aware that the noble Baroness, Lady Hollins, and other stakeholders with expert knowledge and interest attended that meeting. Our response confirms that NHS England will consider the proposal to establish a national mortality review body, including looking at the costs and benefits by March next year. Noble Lords expressed their concern about that timeline and I have no doubt that NHS England will take note of the strength of feeling expressed by noble Lords on this issue during today’s debate.
I have a lot more to say about liaison staff, the Mental Capacity Act, reasonable adjustments and other themes, not least those raised by the noble Baroness, Lady Emerton, on care pathways and the role of nurses. I will write on all of those issues. I want to end with a reassurance that people with learning disabilities and family carers remain at the heart of everything we do. The Government must lead by example. That is why the Learning Disability Programme Board includes learning-disability self-advocates and family carers as well as a self-advocate and the chief executive of Mencap. We have a long way to go but change must be effected at scale and pace. There can be no more excuses or procrastination from any part of the system if we are to achieve our collective goal of a society where everyone is valued and has the chance to lead productive and, most importantly, healthy lives.
House adjourned at 6.04 pm.