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Lords Chamber

Volume 787: debated on Monday 18 December 2017

House of Lords

Monday 18 December 2017

Prayers—read by the Lord Bishop of Leeds.

Retirement of a Member: Baroness Sharples

Announcement

My Lords, I should like to notify the House of the retirement, with effect from today, of the noble Baroness, Lady Sharples, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I thank the noble Baroness for her much-valued service to the House.

Unpaid Internships

Question

Asked by

To ask Her Majesty’s Government what steps they are taking to enforce minimum wage legislation to end the practice of unpaid internships, and whether they have considered any legislative change.

My Lords, existing legislation already prohibits the practice of using unpaid interns as workers, and therefore we believe that further legislation is not necessary. What is needed is for employers to play their part by being good employers and making sure that they pay at least the national minimum wage for all interns from day one.

My Lords, in the light of low rates of reporting, lower rates of investigation and a near absence of prosecutions, does my noble friend not agree that it is time to deploy all of HMRC’s powers and to introduce legislative reform to put an end to the pernicious practice of unpaid internships once and for all?

I thank my noble friend for his question and of course for the enormous amount of work he is doing in this area. There has been a step change in the amount of resources that HMRC has to tackle this problem. Funding has doubled from £13 million to £25.3 million in 2017-18. In two years, we have doubled the funding. The Government are taking this issue very seriously and we are recruiting extra compliance officers so that we can proactively identify those exploitative businesses that go on to exploit interns.

My Lords, if there has been this step change, why did the recent IPPR report show a dramatic increase in the number of unpaid internships? I fully agree with the noble Lord, Lord Holmes, that it is not fair to get a leg up if others cannot afford one. As a trustee of City Year UK, an excellent charity which works with social action, I am a strong supporter of youth social action, which is very different from unpaid internships. Will the Minister confirm when the youth full-time social action review will be published?

My Lords, I will have to write to the noble Baroness on the last point, but I will say that accurately predicting the number of unpaid interns in this country is extremely difficult. There are no accurate forecasts. To return to prosecutions, it is interesting to note that from a criminal perspective, we prosecute only those companies that are the most pernicious offenders but that HMRC takes action on a civil basis through the civil courts. In 2016-17, 1,134 businesses were taken through civil proceedings and we clawed back nearly £11 million for 98,000 workers. That is progress, but I recognise there is much more we can be doing.

My Lords, will the Minister assure me that any action the Government take in this respect will not damage the numbers of wonderful people volunteering for charities and various organisations, where they are doing a lot of good? That should be kept quite distinct from internship.

My noble friend makes a very important point; it is one of the reasons why further legislation might be difficult and would have unintended consequences. In 2015 1.93 billion hours were volunteered by people in this country. I think all noble Lords will agree that that is marvellous, but it was 7% less than the hours volunteered in 2012. We need to keep our volunteers able to do the work that they do because it is extremely valuable.

My Lords, on the wider point about minimum wage contraventions, the Minister has outlined the steps that the Government are taking to tackle what she rightly described as a scourge, and those steps are welcome. However, on the point of criminal convictions, between February 2014 and September 2016 only three employers were prosecuted under the criminal law. Although criminal prosecutions are effective in enabling people to get back money that is owed to them, what steps is the Minister taking to bring the full weight of the law to the most extreme cases of non-compliance?

My Lords, as I have already mentioned, during the time that this legislation has been in place there have been 14 prosecutions and, as I said, those were for the most pernicious and serious cases. We tend to choose the civil route so that people can get their funding much quicker. However, there is one other way in which we can ensure that employers step up to the plate and stop exploiting workers: only last week we named and shamed an additional 260 companies across the country that are not doing right by their workers. I do not know whether noble Lords have had a chance to look through their local media, but I have recently, and it is interesting to note how often local media pick up these stories and ensure that people in their local communities understand what their local companies are doing.

My Lords, can the Minister explain to me the difference between an internship and work experience? Will she go out of her way to praise those employers who give young people the opportunity to have work experience, which is so important in order to gain employment in the current market?

My noble friend gets to the heart of the matter because this is about social mobility. We have to ensure that placements are available; for example, people who are on work experience placements as part of a university degree are not liable to the minimum wage in those circumstances because those places would not exist if that requirement were not needed. We must pay tribute to all companies that take young people and give them the confidence to proceed in their career as they want to do.

My Lords, just because the Minister says things are improving does not mean that they are. Can she provide to the House and put in the Library the information on which she is basing her claim?

I will certainly see what evidence I can find and put it in the Library. As I have already said to noble Lords, it is very difficult to give an accurate forecast or indeed any evidence as to how many people are in unpaid internships. What is important is the extra money that will mean that HMRC can be far more proactive about the work that it does. This is up to third parties as well. I encourage the noble Lord and indeed all noble Lords: if they see a person working and they should be getting paid, it is up to all of us to take responsibility and report that behaviour so that it can be dealt with.

My Lords, the Minister made some important points about being able to identify the right level of evidence. Further to the letter sent by her noble friend the Minister to the noble Lord, Lord Holmes, where we are looking at the body of evidence, why does Her Majesty’s Revenue and Customs have no records of prosecutions in relation to interns? If Her Majesty’s Revenue and Customs has never measured it, how can she make such claims?

I think I said earlier that there have been 14 criminal prosecutions under national minimum wage legislation, and that none of them related to interns. However, there is much further activity going on in civil action, some of which will relate to interns, but we do not have centralised data.

Disaster and Emergencies Preparedness Programme

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the Disaster and Emergencies Preparedness Programme.

My Lords, DfID has monitored and assessed the disasters and emergencies preparedness programme through annual reviews, which are publicly available, and an external evaluation was conducted. Based on this information, the core part of the programme will run its course and end in March 2018, as planned, and the innovation window will run its course and end in March 2019, again, as planned.

I thank the Minister for his response, but does he agree that the disasters and emergencies preparedness programme has shown that investing in preparing for humanitarian disasters is a lot more effective than responding in a hurry? I am glad that he has cleared up some of the confusion about when the programme will end. What might be replacing this very cost-effective programme?

The noble Baroness is right: UNICEF and the World Food Programme have identified that every £1 spent in preparedness can save £2 in humanitarian assistance. It is absolutely right that we are spending approximately £175 million this year on resilience and prevention programmes. We looked at the specific DEPP programme she mentions. It was very complex in how it delivered. The overheads were quite high at about 25%. We have said that we would like to take a good look at it again to see whether we can deliver a more effective programme, but our commitment to preparedness and humanitarian intervention remains absolutely the same.

My Lords, the key feature is that the World Humanitarian Summit said that this a priority area. Irrespective of the outcomes of the specific programme, how will DfID approach this subject in its priorities? Will it comply with the World Humanitarian Summit and develop programmes? Tell us exactly how we will continue to make the savings that he described.

We will certainly do that and comply with the Grand Bargain—we were a driving force behind it. That is why we have set out that preparedness and resilience ought to be a key part of the UN’s mission. We have said that and withheld a proportion of its core funding to ensure that it lives up to it. That is also why we are the largest contributor to the UN Office for the Coordination of Humanitarian Affairs and the central emergency relief fund. We recognise the importance of that and will continue to live up to our obligations.

My Lords, I think the Minister said that the programme will end in March 2018—in other words, in a few months. How many of their 45 NGO partners in this programme have the Government consulted, and did they consult them in writing or orally? Finally, I understand that the external evaluation was conducted by the Harvard Humanitarian Initiative. Is that report available for public assessment? If not, when can we expect to see it?

On the last point about the Harvard review, yes, we have it on DevTracker, which is a website for all contracts: all the reports are listed there. On the 45 NGOs that play an important part in delivery, DfID chairs that committee, so they were informed at the meeting in October or November. We underscored our commitment to this area and the significant amount of money we are putting in to humanitarian response, but also underlined to them our concern about some of the overhead costs that might be attributed to the complexity of the scheme as it currently stands.

My Lords, will my noble friend take back to his department and the whole DfID team that the loss of Rebecca Dykes in these circumstances is felt very deeply? Can we pay tribute to the work that she and all the DfID team do, often in very dangerous circumstances, particularly at this time of year, for humanitarian purposes?

We can certainly do that. It is obviously a very distressing time for Becky’s family but also for the people who worked with her. It reminds us of the sacrifice made by over 1,200 DfID personnel who work around the world, often in the most difficult and dangerous environments. The family have asked that we respect their privacy at this time and allow the facts to be established. We will of course recognise that wish.

My Lords, as the Minister will know, disasters and emergencies happen in the UK as well. Has he looked at what would happen to the Isles of Scilly, which are served by one 40 year-old ferry half the year round, if something happened to that ferry? What might be the contingency plans?

The noble Lord has caught me out. I did not have the Isles of Scilly in my brief. If he had gone for Antigua and Barbuda, I would have been able to answer him. I am happy to look into that and respond to his question.

Children: Mental Health Assessments

Question

Asked by

To ask Her Majesty’s Government, further to the remarks by Lord Nash on 23 November 2016 (HL Deb, col 1947), what progress they have made with testing new approaches to mental health assessments for looked-after children which were due to commence in April or May this year.

My Lords, the pilots were delayed by the general election but will start next year. Delay has enabled the design to effectively address the problems identified by the noble Baroness, Lady Tyler, and the Education Select Committee. In particular, we have taken forward recommendations of the expert working group on the mental health of children in care, which the Government commissioned to look at how to improve mental health and well-being support for looked-after children. We are currently identifying an organisation to support implementation.

I thank the Minister for his Answer and will not dwell on my disappointment that it has taken so long to get the pilots off the ground. It will now be important to understand how these pilots will fit with the new trailblazers announced in the Green Paper to trial new mental health support teams working with schools. Does the Minister agree with me that it would make sense for at least one area to trial both the new children-in-care assessment pilots and the new mental health support teams to see how they best fit together?

My Lords, we will work with our delivery partner to identify pilot sites, and there will be an up-front commitment to help meet any needs that are identified during the assessment process. One advantage of the delay is that we now have the mental health Green Paper, and we are trying to dovetail as much of the work from that into these pilots as we can.

Will the Minister join me in congratulating Hammersmith council, which on Thursday took in to look after a Syrian refugee boy from Greece who has serious mental health needs? Is it not a good sign that a local authority is doing that and showing what can be done for vulnerable refugees with mental health needs?

My Lords, I certainly congratulate the local authority on that great work. A number of pilots are operating across the country—over 80—experimenting with different ways in which to help these vulnerable children. Only last week, Ealing had an open day to showcase some of the work that it has been doing for vulnerable children, and invited every other local authority in the country. It has been able to reduce the number of children going into care, and to save money as well. So there is a lot going on and, with the launch of the pilots that I have discussed with the noble Baroness, Lady Tyler, we will be doing a lot more on this.

My Lords, I declare my interests in the register in children’s mental health. Can the Minister assure the House that the recommendations of the expert working group will be fully funded by the Government? In particular, will recommendations around children’s homes be fully funded? Children’s homes have the most damaged young people, who are placed there as a last measure, yet their staff are still very poorly qualified. David Berridge, the eminent academic, commenting on the predation on children in homes in Rotherham, said that we must start moving towards having higher qualified staff in children’s homes, given the complexity of their needs and their vulnerability to predation.

My Lords, in answer to the first question, the expert working group made 16 recommendations and we will seek to include all of them in the construction of the pilot programme. In relation to secure children’s homes, we all acknowledge that these are some of the most vulnerable children in our society. There are 14 secure children’s homes in England, covering 133 welfare and 117 criminal justice placements. The mental health Green Paper underlined the need to increase the number of qualified staff working with vulnerable children and we will certainly look very carefully at that.

My Lords, should we not welcome the determined efforts being made by charities and other bodies to secure more places for looked-after children suited to a state or independent boarding school, where good, externally inspected care is available for pupils with mental health problems?

My Lords, I very much agree with the noble Lord. At the moment we have the Boarding School Partnerships, an initiative which works with a number of local authorities and boarding schools to increase the number of referrals for children who might be defined as on the edge of care. My own home county, Norfolk, is one of the largest users of this scheme. It is doing a longitudinal study, which we hope will be released next year, to show the impact of these children being prevented from going into care by going to a boarding school. If, as I hope, this shows very strong improvements in these children’s lives, we will be showcasing it to other local authorities to encourage more of them to do it.

My Lords, it would be grossly unfair, particularly during this season of good will, to hold the Minister responsible for the sins—or at least the prevarication—of his predecessor, the general election notwithstanding. As has been mentioned, the expert working group on improving mental health support for young people in care reported last month. I hope the Minister can give an assurance that the Government will show rather more urgency in response to that report than they have in testing new approaches to mental health assessments for looked-after children. These children are five times more likely to develop a mental disorder than children living at home with their families, but only one-third of those diagnosed accessed children and adolescent mental health services—known as CAMHS. Will the Minister ask the DfE to ensure that areas where CAMHS access is low will be prioritised when selecting the local authorities and clinical commissioning groups for those pilot studies?

I reassure the noble Lord that we will be looking at all the recommendations of the expert working group, some of which included the points that he made. These include things such as establishing a virtual mental health lead, based on the success of the virtual school head process, and improving the strengths and difficulties questionnaires, which we discovered are not always being carried out as well as they should be. In the debate on 23 November last year, the noble Baroness made a point about the importance of assessing mental health at the same time as a young person’s general health assessment is carried out, so reducing stigmatisation. I hope this offers some reassurance to the noble Lord. It is quite right that he holds us to account, even in the Christmas period.

My Lords, what happens if children are identified, through the pilot assessment, as having mental health needs but there is no capacity to meet those needs in the local area?

My Lords, the pilots will be looking very much for the potential to join up with other government programmes that support the mental health and well-being of looked-after children. This will include the scope to link with the Green Paper proposals, which I have mentioned, and other related work such as NHS England’s testing of personal mental health budgets for looked-after children. There will be an up-front commitment to try to meet any needs that are identified during this assessment process.

My Lords, is the Minister aware that although the Health and Social Care Act gave equal priority to mental and physical ill health, even today a very vulnerable mentally ill child suffering deep pain may wait 18 weeks or longer for any medical intervention while a vulnerable child with comparable physical pain can expect treatment within a day? Does the Minister find that acceptable?

My Lords, I do not find that acceptable. As part of this process, we are looking at ways of ensuring that treatment for mental health issues identified in these vulnerable children is accelerated. We expect to have the invitation to tender for the pilot programme available in April next year, but, as I say, this is one of the issues that we are looking into.

UK Borders: Surveillance

Question

Asked by

To ask Her Majesty’s Government what steps they plan to take to improve surveillance of the United Kingdom’s borders, including at smaller ports and harbours, coastal waters and private airstrips.

My Lords, the Border Force works closely with other law enforcement agencies, security services and international partners on an intelligence-led approach to identify unlawful maritime and aviation activity. It also uses a combination of cutters, radar, onshore assets and aerial surveillance to detect and stop small craft.

I congratulate the Government on the announcement that they are going to double the number of cutters around our coast from two to four. I think that means that we will have one cutter for every 3,000 miles of coastline if they all operate at the same time—rather fewer than the Dutch have for a far shorter coastline. Has the Minister read the Public Accounts Committee’s report of two weeks ago that points out that there are 21 departments and agencies in Whitehall concerned with the management of borders, not one of which is in overall control? Does she know of the report issued last March by the Independent Chief Inspector of Borders, which pointed out that nearly half the small ports on our east coast had not been visited by any member of Border Force in the preceding 15 months? The leave campaign talked about taking back control of Britain’s borders. Is it not the case that we do not have effective control of British borders at present and that perhaps we ought to consider putting more effort into that?

My Lords, I note what the noble Lord says but, of course, it is not a question simply of the number of cutters and RIBs that we have in the sea. We are heavily reliant on the most effective method of border control: namely, the multiagency, intelligence-led information that we have. We deploy on the back of that intelligence and risk assessment. That is the most effective way of manning certainly our maritime borders.

My Lords, given what the noble Lord, Lord Wallace, has just said, would my noble friend the Minister confirm that it was a very good thing that we did not join the Schengen agreement when it came out, and that there were people in this country who wanted to join Schengen to show up their European credentials?

I note what my noble friend says—but, as we move towards exiting the European Union, Border Force will make sure that its recruiting plans are flexible to ensure that its approach can be flexed as future requirements become clearer.

My Lords, the Minister makes rather light of the real problem. There is no doubt whatever that all the departments and assets looking after our territorial seas and exclusive economic zone are not being co-ordinated at the moment. I know that there are plans to move forward, but it is not being done. The intelligence from the NMIC, which was established some five years or so ago, is very good but we are not co-ordinating assets, and we do not have enough assets. However, my question relates to our British Overseas Territories, each of which has territorial seas and exclusive economic zones. Indeed, we have responsibility for the largest area of ocean of any country in the world. In that circumstance, does it not make sense not to get rid of the offshore patrol vessels, which are relatively new, when the new ones come online, and to use those to look after these vast areas of ocean that at the moment are not being properly protected?

The noble Lord makes a valid point about our offshore patrol vessels—and there are no plans to get rid of them. However, my point, which I hope I was not making lightly, was that the most effective work we can do at the border is intelligence-led work that is successful at pinpointing areas of high risk.

My Lords, in April last year the then Home Secretary, Theresa May, confirmed in the other place that in 2016-17 the Border Force agency’s revenue budget, which covers staffing, would be 0.4% less compared with 2015-16. However, the Government insist that Border Force spending has been protected because spending on technology such as electronic passport gates has increased. Can the Minister explain what happens at many of the ports of entry where there are no electronic passport gates in the light of the reduction in Border Force staff? Can she also confirm that most of the time, even where there are electronic passport gates, there are not enough staff to keep them open?

On the first part of the noble Lord’s question, he is absolutely right that we have invested in technology such as e-gates, and just before the Calais clearance, my right honourable friend Amber Rudd in the other place stated that £36 million would be committed to support France in the Calais camp clearance. However, on his main point, which is about people being at ports and borders at all times, if we lined this country wall to wall with people, it would still not be as effective as going after the intelligence-led risk, which operates so well.

My Lords, as someone who uses airstrips and small airfields in this country, perhaps I might ask the Minister to confirm that, as regards the operations of light aircraft and business aircraft, the regulations already in place are greatly enhanced to protect us and our borders from any illegal intrusions? Would she not agree that anything too onerous as extra requirements could harm our general aviation and business aviation unnecessarily?

My noble friend is absolutely right that good measures and regulations are in place to ensure that our GA flights are notified to Border Force. We continue to assess 100% of them, aiming to meet all GA flights to ensure that flights are met by immigration staff and that all checks are completed.

CPS: Disclosure of Evidence

Private Notice Question

Asked by

To ask Her Majesty’s Government whether the Attorney General, in his statutory supervisory role over the Director of Public Prosecutions for England and Wales, will take steps to satisfy himself that, in carrying out their work, the Crown Prosecution Service have adequate resources to fully disclose all relevant evidence that might support a defendant’s case, or undermine the prosecution’s.

My Lords, prosecutors are obliged to disclose relevant material that could assist the defence case. That obligation is not determined by issues of cost. The Crown Prosecution Service is considering with the police a recent independent review by Her Majesty’s Chief Inspector of the CPS of disclosure policies and practice.

My Lords, the then chairman of the Bar Council, Ms Heather Hallett QC, complained as far back as 1998 about non-disclosure. I believe I took steps to put matters right. Matters seem to have gone backwards since then. In the light of recent events, will the Attorney-General set up an independent inquiry, headed by a judge, to examine whether disclosure rules are being complied with, to ensure the timely delivery of justice?

My Lords, disclosure in the context of criminal cases has not gone backwards since 1998. There is no present intention to set up an inquiry of the type referred to by the noble and learned Lord.

My Lords, I think we can all agree that early and adequate disclosure is at the heart of a fair criminal justice system. Given that the senior independent prosecutor at the Bar who averted a recent miscarriage of justice, in addition to being a senior and experienced prosecutor, is a former Conservative MP, who described a system “creaking” for lack of resources, will the Minister please consider my noble and learned friend’s request and, in any event, return to this House with a Statement after more full and adequate consideration of what happened here?

My Lords, the matter to which the noble Baroness, Lady Chakrabarti, alludes was a recent case in which the Crown withdrew and the matter did not proceed. There is to be a joint internal review by the CPS and the police to determine what occurred in that case. With regard to the case that she alludes to, the CPS has acknowledged that its standards may have fallen below what is expected and it has apologised to all the parties involved.

My Lords, one of the problems is that there is a great deal more to disclose than there once was in terms of the number of records that are kept. However, does not the obligation go both ways? Not only must the prosecution make sure that everything is available to the defence, but defence lawyers must make sure that every single piece of relevant information is disclosed to them and that it is analysed properly for the benefit of their client, which places a considerable burden on them. Is my noble and learned friend satisfied that adequate resources, by way of legal aid or otherwise, are made available to enable them to do this?

I am obliged to my noble friend. It is of course important that the defence has the opportunity and the means to consider what requests should be made of the prosecution in the context of disclosure. Indeed, in the context of the case alluded to earlier, that point will be addressed.

Could the review also look into this simple question? It is reported that it took 14 months for this young man to be charged, which means that he was on bail uncharged for 14 months. What on earth is the reason for that?

My Lords, I am not able to determine why the charge took as long as it did in that case. I appreciate that investigations take longer in some cases than they do in others, but I cannot—

I wonder whether noble Lords wish me to continue. I am obliged to the Opposition Benches. To give an example, there are instances in which a considerable amount of digital data relevant to a particular complaint have to be considered.

My Lords, in the case of Liam Allan, it was fairly obvious that this material should have been looked at, and what happened was either the result of lack of resources in the police service or in the Crown Prosecution Service or a deliberate attempt to pervert the course of justice. Can the Minister estimate how many people are unlawfully imprisoned as a result of similar mistakes having occurred in the past?

I believe that the noble Lord probably knows the answer to his own question. Nevertheless, the alternatives that he advances do not exhaust the issue of why, if it occurred, disclosure was not made at an appropriate time, and that will be the subject of a joint high-level review by the CPS and the police. It is not for me, in this place, to anticipate the outcome of that review.

I do not anticipate that the review itself will be published, but I am confident that its conclusions will be.

My Lords, would not my noble and learned friend acknowledge that there is very widespread concern about this clear near miscarriage of justice? Could he at least say that he understands why people’s confidence in the police service has been significantly undermined?

My Lords, again, I am not going to anticipate the outcome of the review that will be undertaken jointly by the CPS and the police in respect of this case.

My Lords, why is it that the full detail of the internal review should not be published, given the public interest in the matter?

My Lords, at this stage it is anticipated that the conclusions of any review will be published, but it is not usual or normal for the full terms of an internal review to be put into the public domain.

My Lords, will the review look at the culture of “sales targets” within the police—as it was described by the person in this case—as an issue?

My Lords, I am not familiar with the term “sales targets” in this context. Clearly, a balancing exercise has to be carried out to ensure that, particularly in cases of this kind, complainants are able to come forward uninhibitedly and, equally, that anyone complained against is given a full and fair opportunity to put forward their defence. However, I reiterate that I am not familiar with the term “sales targets” in this context.

My Lords, will the review take into account past cases in which injustice may have been done because of the failure to disclose information to the defence solicitors?

My Lords, the terms of any review are yet to be determined, but it will be an internal review into the particulars of this case.

But that is where the problem lies. The noble Lord’s question is relevant: what about all the other cases? I have handled a lot of cases over the years in which people have been accused of rape. What about those cases in which a mistake or error of judgment was made?

My Lords, here is a criminal cases review board, which was set up to address the sorts of issue to which the noble Lord refers.

My Lords, would the Minister concede that the reason this case has much wider relevance than the particulars of the individual concerned, however dreadful his circumstances may have been, is that it allows credence to be attached to the notion that there are more examples of injustice against people who are accused of rape than against those who have suffered rape? The review really ought to take that into account.

I note what the noble Baroness says on that matter. I reiterate that it is fundamental that justice is fair to both the accuser and the accused.

My Lords, as I understand it, a recent change in the Crown Prosecution Service is the demise of the disclosure offices, and those duties have been passed back to the police. Barristers are expressing concern about whether the police are adequately resourced or trained to do that. Will my noble and learned friend outline whether that is indeed the case and that there will be a time at which we will review whether that is also having an effect on disclosure?

I am not in a position to say whether that is having an effect on disclosure, but that is why, at the highest levels, the CPS is looking at the outcome of the inspector’s review of the CPS disclosure policies and practice. No doubt that is an aspect of the review that will be taken into account.

Procedure Committee

Motion to Agree

Moved by

That the 2nd Report from the Select Committee Revisions of Private Business Standing Orders (HL Paper 34), and the proposed changes to those Standing Orders, be agreed to.

My Lords, the report proposes amendments to the private business Standing Orders. Most of them are the product of the first stage of the review of hybrid Bill petitioning procedure, which my predecessor the noble Lord, Lord Laming, commissioned in 2016 together with the Chairman of Ways and Means in the House of Commons. They are intended to remedy a number of issues which came to light during the passage of the High Speed Rail (London-West Midlands) Bill by modernising and clarifying some of the procedures for petitioning against a private or hybrid Bill, and by enabling a Select Committee charged with considering petitions against a Bill to group petitions. A small number of changes not arising from the review are also proposed. These are also intended to modernise procedures relating to private and hybrid Bills. Noble Lords may also wish to know that amendments with similar effect to those set out in this report were agreed by the House of Commons on Tuesday 7 November. The details of the changes proposed are set out in full in the report. I hope that noble Lords will support these amendments, and I beg to move.

My Lords, I draw attention to the fact that I currently live near the agreed line of HS2 as it tunnels through part of the Chilterns and that I was a petitioner during consideration of the HS2 Bill in the House.

We owe a great debt of gratitude to those of our number who serve on Select Committees for hybrid Bills. I observed a number of sittings of the recent HS2 Bill and read all the transcripts of it. They did a heroic job. It is fair to say that they were heavily constrained by the Standing Orders in place at that time. I am very pleased that the House authorities have carried out a review of the Standing Orders currently used for hybrid Bills, and I support the changes recommended to the House this afternoon. I agree with all the points made by the Senior Deputy Speaker.

When a Select Committee of Parliament considers a hybrid Bill, it has an unusually direct engagement with thousands of individuals and organisations through the petitioning process. In that part of the hybrid Bill, Parliament is in effect acting as a planning authority for projects, with all that that implies. Since major infrastructure projects can have a devastating effect on individuals and businesses directly affected by them, it is very important for our reputation and for the trust that is placed in all of us that both Houses of Parliament do the best we can to allow those who wish to make representations to us to do so as simply and efficiently as possible. The changes in Standing Orders before us today try to make sure that the system and processes used for petitioning, whether in writing or in person, are not phrased, as they are at present, in archaic language or bedevilled by jargon and procedures from an earlier age. These procedures currently dissuade or even prevent people from participating to the full, and I therefore support the changes.

The decision to go ahead with this group of changes, which have, as has been noted, been agreed already in the other place, will of course greatly improve our procedures in relation to the next HS2 hybrid Bill, which is imminent. But there will be other Bills before too long and the papers before us represent merely the low-hanging fruit of the changes that might be required. I would be grateful if the House would consider at the appropriate time that other issues should be addressed. There should be separate Standing Orders for hybrid Bills that properly reflect 21st-century language, and they should be separate from those other Bills that currently share their procedures with us. Using and adapting the procedures set out for other Bills leaves far too many uncertainties and does not take the trick.

It is important that the House clarifies that, as with other Bills, the two Houses have co-equal powers in respect of hybrid Bills. The systems employed in hybrid Bills must be such that the public interest in the proposal is properly tested and Parliament must insist that there is full transparency. The systems must be permissive enough to allow those materially affected to be heard if they wish and to be represented and the physical conditions of these meetings must be greatly improved. Do they have to be held in Parliament?

It should be possible for a Select Committee to require issues to be grouped and marshalled and more can be done to deal with their outlier issues through correspondence. Where a compromise position is identified between the promoter and petitioner, much more effort and resources should be devoted to getting these dealt with properly and for them to be formally registered and agreed. I look forward to progress on these issues in the months ahead and I fully support the present arrangements.

My Lords, I have been known in the past to express some concerns about this issue and, on this occasion, I want to make it absolutely clear that the Senior Deputy Speaker should be commended for the work that he has done. It has been a long and detailed exercise carried out withMy second point is in relation to committees. The more ignorant observers of this House seem to think that getting up, asking questions and making speeches in this place, as I tend to do from time to time, is the only important work that this House carries out. That is as far from the truth as one can get. This House carries out a huge amount of detailed, painstaking and important work in committees. Incidentally, I tried to get the producer of the three documentaries on the Lords to film some of them. I was told that it was too boring. It may be boring, but it is very important—some of it is not boring, by the way.

We should try to get this message over, especially on these Bills. My noble friend Lord Elder and others served on the high-speed rail Bill. He spent hours, days and weeks on it for almost no public recognition or, even more importantly, awareness of what he was doing. We need to take every opportunity—I know the Senior Deputy Speaker and the Lord Speaker will do this—to shout from the rafters and explain, when we go to schools and other institutions, that a great deal of work by this House is done outside this Chamber and is not fully recognised.

My Lords, my noble friends have made some very interesting comments on this report. I join in congratulating the Senior Deputy Speaker on what he has achieved. One other thing we possibly ought to look at, given the fact that there may be two or three more hybrid Bills coming on HS2 and maybe other projects in future, is whether in certain circumstances there should be Joint Committees of both Houses, which would save quite a lot of reading time for MPs and your Lordships. More radically, we should consider using the same procedure used for building motorways these days through the Infrastructure Planning Commission—I think it is called that—and build railways that way. Railways are built with hybrid Bills for historical reasons—there were no motorways when the railways started and everything had to go through both Houses. It is a bit ironical that a motorway can be built using one procedure and a railway can be built using another. Maybe it is time to start looking at them both to see whether there are benefits in doing them all one way or the other.

My Lords, I take the opportunity to very strongly reinforce the words of the noble Lord, Lord Foulkes, who put very clearly the point that there are a vacuous and ignorant few outside the House for whom the only measure of activity is what goes on in and is spoken in this Chamber. The noble Lord is entirely right. A vast amount of work goes on not merely in parliamentary and sessional committees but in all-party groups and less formal groups connected to the outside, such as charities. This aspect of what the House of Lords does has so far not reached most of the media. It is time that we reinforce this message powerfully to get over the truth of what we really do.

I thank noble Lords for their comments on the report. I welcome the warm words of support from the noble Lord, Lord Stevenson, for the changes to the private business Standing Orders being considered. He has been vigilant in ensuring that the work that the Chairman of Ways and Means in the House of Commons and I do is scrutinised. We have had many meetings on that. I look forward to many more as we take this through because, as he mentioned, this is low-hanging fruit.

The noble Lord has taken a keen interest in HS2 legislation and the hybrid Bill procedure more generally. He has first-hand experience of the procedure. I know that the House officials involved in the hybrid Bill review have been grateful for those insightful contributions to their work. As he rightly said, there is a great deal of further work to do on the low-hanging fruit. During 2018 this further work will be undertaken in conjunction with the House of Commons with a view to developing clearer and more modern Standing Orders applicable to private and hybrid Bills.

The noble Lord has identified a number of examples of what needs to be done. I have a great deal of sympathy with many of them. However, one that he mentioned that could be more problematic is the one about the House clarifying that, as with other Bills, the two Houses have co-equal powers in respect of hybrid Bills. That is because the House of Commons has to agree to any changes that the House of Lords wishes to make in additional provisions or whatever, as he said. I assure him that, while the mountain may be quite high, I will take up that issue with the Chairman of Ways and Means. I will ensure that each of the points that he has raised will be addressed in the forthcoming review stages. Either I will report back to him personally or my officials will do so.

The comments from the noble Lord, Lord Foulkes, were very important—and very welcome. The Select Committee and scrutiny work done by the House of Lords is really important—we undersell ourselves in that area. For example, by the end of this week, the EU committees in the House of Lords will have produced 28 reports. The House of Commons has produced two or three. I know that the environment is different there, but the big issues being discussed at the moment in Brussels—for example, the Irish border—were identified very early on in this House in the summer. Joint press conferences were given by the noble Lord, Lord Jay, in Dublin and the noble Lord, Lord Boswell, in London when that report was produced. The relevance of that report is very much alive, but the House of Lords undertook it a long time ago.

The noble Lord, Lord Patel, is coming to see me in relation to the Science and Technology Committee. It has the greatest number of followers on Twitter— some 60,000. He wants to enhance the footprint of the committee. That, too, will be very important in terms of Brexit. I do not know whether the noble Baroness, Lady Tyler, is in her place, but she produced a simple and easy-to-read ad hoc report on financial exclusion. She has come to me and said, “Look, Michael Sheen, the actor, is quite interested in this. Can we invite him into the House so that we can discuss this issue of financial exclusion?”. We do not sell ourselves enough in areas such as that. One of my tasks is to ensure that we do.

The noble Lord, Lord Berkeley, mentioned committees and speaking to groups. On behalf of the Liaison Committee, I am undertaking the first review of committees for 25 years. I have been around the groups—my last meeting this week will be with the Liberal Democrat group. I hope that there will be a call for evidence on that in the new year. We will look at issues such as Joint Committees. That issue will not be off the agenda. The point made by the noble Lord, Lord Howell, reinforced those made before. As chair of the International Relations Committee, he oversaw the report on the Middle East. I know how influential that report was, but we need more resonance.

Can the Senior Deputy Speaker confirm that the way in which committees are appointed will also be subject to some examination?

I do not think that I am breaking any confidence in telling the House that the noble Lord has both written to me on this issue and come in through the door of my office to discuss it. I therefore cannot deny that that will be on the agenda.

With the enlarged footprint of our debate today, I commend the Motion.

Motion agreed.

Environmental Protection (Microbeads) (England) Regulations 2017

Motion to Approve

Moved by

That the draft Regulations laid before the House on 27 November be approved.

Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee

My Lords, it is a privilege to introduce these regulations. Microbeads are small plastic particles which have been added to many personal care products. One shower alone can send 100,000 microbeads into the water system and subsequently into our seas and the habitats of the marine animals that live there.

Most significantly, once released into the environment, it is impossible to recover microbeads or remedy the effects that could subsequently emerge. These regulations will ban the manufacture and sale of rinse-off personal care products containing plastic microbeads. The range of personal care products that can contain plastic microbeads is considerable, from products such as shower gels, face scrubs and toothpaste to hand-cleaning products such as Swarfega. Subject to your Lordships’ consent and a positive outcome in the other place later today, these regulations will be signed tomorrow and 21 days from that point of signature the manufacture in England of any rinse-off personal care product which uses microbeads as an ingredient will be banned. Six months from that point, a further ban will come into place to prevent the sale of any rinse-off personal care product containing microbeads. Crucially, this means that those products will neither be able to be imported and sold here nor able to be exported.

We know that there are various sources of plastic entering our seas and oceans due to human behaviour. Recent estimates suggest that up to 12.2 million tonnes of plastic are entering the global ocean every year and 80% of the plastic that is in the ocean has come from land-based actions. Furthermore, it is estimated that personal care products containing microbeads contribute 35,000 tonnes of plastic into the global oceans each year. Put simply, this cannot go on and our generation must act. We have a responsibility as individuals and as a Government not to shirk the global challenge of marine pollution. We must act together to stop this pollution at source and there is no time to lose. Anyone who disputes this should be prescribed a course of “Blue Planet II”.

The regulations before your Lordships help us take a step forward. This will reduce the unnecessary release of plastic into the marine environment and lessen harm to marine organisms caused by this form of microplastic. We have been working closely with the devolved Administrations. Very few cosmetics and personal products are manufactured in Scotland, Wales or Northern Ireland. The ban on both manufacture and sale of microbeads will come into effect on the same day there as the English ban, which is likely to be 9 July. I hope your Lordships will accept the need for these regulations and that the need is pressing. The approach here is another strong example of the continuing role that the UK has taken to protect the marine environment, not just not around our coastline but throughout the world, including our overseas territories. This legislation will deliver one of the strongest, if not the strongest, bans on microbeads in the world. There is clearly much more work to be done, both at home and internationally, on marine litter and pollution and the protection of our seas and oceans.

Evidence concerning microplastics has provided us with information about the potential environmental impacts of microbeads. Ingestion of microplastics by some marine organisms can reduce digestion of food and adversely affect reproduction. They can also be passed along marine food chains. In addition, we know from current evidence, some funded by Defra but also available from other sources, that chemical pollutants can leach from and attach to microplastics, with the potential that these could increase exposure levels of toxins when ingested by marine organisms. Microplastics themselves may also contain potentially harmful chemicals.

I recognise the efforts that industry has taken to address the problem of microbeads. A number of manufacturers and retailers have already stopped using microbeads in their products or have committed to do so, but we have now reached a stage where we have to take more decisive action. Natural alternatives for microbeads do exist. These are readily available and, indeed, were used successfully in personal care products before plastic microbeads were introduced. The approach we have taken is based on clear evidence and as a result has the support of a wide range of stakeholders. Our action on microbeads is a further demonstration of our commitment to address marine litter and protect our seas and oceans. This is an important measure. Marine pollution is no respecter of boundaries and we must work collaboratively, but today we have a particular opportunity for our country to send out the strongest of signals. I beg to move.

My Lords, I am delighted to welcome these regulations to ban the production of microbeads in water-soluble cosmetics. I agree with absolutely everything that the Minister said. I declare an interest as a district councillor; it will become clear why later on.

As the Minister said, there are other suitable non-plastic alternatives available to the cosmetics industry. Around 72% of manufacturers have already switched from plastic microbeads to other, more sustainable alternatives, but this leaves 28% of UK cosmetics manufacturers to fall into line. At the end of 2016 and the beginning of 2017 there was an extensive public consultation, which supported the ban on microbeads. As the Minister said, currently that applies only in England but it is expected to be extended to Wales, Scotland and Northern Ireland in July next year. The cost of the ban is approximately £500,000. This is clearly a manageable sum for the largest cosmetics manufacturers. Smaller, local manufacturers do not use microbeads and so are unaffected by this legislation.

As the Minister said, these microbeads are small plastic particles which move through the sewage system and out into the sea, where they are consumed by marine life, sometimes adversely affecting digestive systems. The impact assessment states:

“There is little evidence of the impact to human health”,

although the Department of Health is conducting a review. Fish digestive systems, where microplastics are likely to get caught, are usually removed when preparing fish for human consumption. This is a personal warning to me as I am a great fan of sprats, which I eat whole. Perhaps I will have to change my eating habits.

That apart, my only real concern relates to the enforcement of the regulations surrounding the ban. This is to be allocated to local authorities. As most noble Lords are aware, local authorities have had their budgets cut drastically and are finding it extremely difficult, if not impossible, to make their income stretch over the services they deliver. To add another burden to them could mean that the regulations are not properly enforced—not because local authorities would not wish to do it but because they simply may not have the money to carry out the function effectively. I flag this up to the Minister and seek reassurance.

Regulation 2 relates to who will be enforcing the regulations. Sub-paragraph (d) states that this will be,

“in relation to an area in the rest of England, the county council for that area or, where there is no county council for that area, the district council for that area”.

So is it only county and district councils which will be carrying out the enforcement in most of England? In sub-paragraphs (a), (b) and (c) there is no mention of metropolitan areas apart from London or of unitary authorities. Is this an unfortunate omission? Are these areas excluded? Have I missed something? I would be grateful to the Minister for some clarification.

That apart, I am absolutely delighted to support these regulations, and thank the Minister for his very helpful briefing. I very much look forward to further bans on the unnecessary use of plastics, which the Secretary of State announced this morning.

My Lords, I am grateful to the Minister for his clarity in introducing this secondary legislation, and for discussing some of the issues arising from it in advance of today’s consideration. If I could take a small amount of credit for the fact that this SI is before us today, I think I was the first person to raise the issue of microbeads in your Lordships’ House several years ago. I can still remember the look of growing dismay on the faces of noble Lords in the Chamber, who realised for the first time that this plastic was not just an environmental issue, it was actually getting into the food chain and potentially contaminating their fish supper.

Since then, awareness of the dangers of microbeads has risen significantly and the more the public have become aware of them, the stronger the call for microbeads to be banned. The latest polling shows that some 85% of people want action to stop plastics polluting the oceans. As well as concerns being raised on a cross-party basis, both here and in the Commons, there have been some very effective campaigns by Greenpeace, the Marine Conservation Society and other NGOs. As has been said, the wonderful work of David Attenborough and the “Blue Planet” series has also helped to harden attitudes against the wider contamination of the sea by plastics.

It is also clear that microbeads and microplastics represent a particular challenge because apart from the health implications in the food chain, which, as has been said, are still being analysed, once those microbeads are washed into our oceans that is irreversible. It is hard to imagine how they can be cleaned up in the future, so we welcome this initiative by the Government in taking a first step to clean up our oceans by banning microbeads in cosmetics and toiletries. The evidence and science are there to back the initiative up, while it can be delivered without human detriment and with considerable public and business support.

It is fairly obvious that microbeads are not an essential ingredient in personal care products. We clearly managed without them in the past and, as has been said, many companies are already using natural alternatives such as ground almonds or apricot kernels to replace microbeads. As the Minister said, there has already been a voluntary ban by a number of cosmetics producers, so this proposal will create a level playing field and consistency across business. There have also been successful initiatives to take action on microbeads in other countries, notably the US and France. However, as he said, the framing of this proposal in the UK will potentially deliver the widest ban in the world, incorporating both the manufacture and sale of goods with microbeads. We obviously welcome that status.

Having said all this, I would like to put a few questions to the Minister. First, these proposals cover only rinse-off personal care products, not products which remain on the skin. Can the Minister explain the differentiation between those two categories of toiletries and what further consideration is being given to a wider ban? Secondly, it has been suggested that microbeads in personal care products represent only one-fifth of total use, with the remainder used in industrial cleaning products. Can he clarify what the actual proportions are and what steps are being taken to find alternatives to microbeads in other sectors, so that a complete ban can be introduced? Thirdly, as the noble Baroness, Lady Bakewell, has just pointed out, the ban will be only as good as the enforcement measures put in place. The legislation envisages local authorities, specifically trading standards officers, enforcing the ban. What training and guidance will be given to these officers? Does the Minister think that they will have the resources to police the microbead ban, given the pressures already on the service and the cuts they have endured?

It seems that the real challenge will be in policing not the household names, many of which are already taking action, but the small niche companies and cosmetics imported from overseas. In this regard, the Commons Environmental Audit Committee drew specific attention to the problem of labelling. It is currently impossible to tell from packaging whether a product contains microbeads. If the ban is to be upheld by enforcement bodies, they will need greater clarity on what cosmetic products contain without having to resort to chemical analysis. Can the Minister clarify whether any further thought is being given to product labelling, which would help consumers and enforcement agencies alike? Finally, as he acknowledged, plastics in the oceans do not respect borders. A ban in this country will have a marginal effect unless other countries follow suit. What steps are the Government taking to persuade the EU and other global nations to take this issue seriously and follow our lead?

These reforms are welcome but we have to be realistic about what they will achieve. Microbeads are a small proportion of the microplastic problem and, literally, a drop in the ocean compared to the wider plastic contamination of them. I hope the Minister can reassure the House that this small beginning is a symbol of a larger determination by this Government to take a global lead in preventing further plastic pollution and clean up our oceans for the next generation.

My Lords, I intervene briefly to warmly welcome the statement by the Minister. This issue demands urgent attention, and I am glad to see the Government doing this. I have a couple of brief questions. First, with regard to the delay in implementing equivalent steps by the devolved regimes, will he confirm that this is not because of any lack of enthusiasm but is a question of process and that some other steps to this end are being considered by the devolved regimes? Secondly, will he confirm that there is no question of allowing the import of products containing microbeads, particularly from the United States, and that the Government will withstand this with all the means they can?

My Lords, I am most grateful for the contributions that have been made because they symbolise the fact that when there is an environmental imperative, very little else matters and unity of purpose is important. I am most grateful to the noble Baronesses, Lady Jones of Whitchurch and Lady Bakewell of Hardington Mandeville, for their endorsement of these proposals.

In response to the noble Lord, Lord Wigley, the reason for the slight difference is purely that, I understand, there are hardly any manufacturers of cosmetics in the three other countries of the United Kingdom. Therefore, it will be brought together with everything in July. I certainly do not want to suggest that there is any sense of delay. There is unity of purpose across the United Kingdom. These regulations are about manufacture, sale, import and export. We are going to have a very robust regime in this country. Potentially New Zealand might have the strongest regime—there is a slight argument about that—but we intend to have the strongest ban that we can.

A number of points were made. The noble Baroness, Lady Bakewell, raised the issue of local authorities. I am looking at the interpretation and I will want to look at it fully because there is no intention of leaving any body out of this. I note the references to the City of London, the rest of London, the council of the Isles of Scilly and, where there is no county council, the district council. I am very confident that this would be a shire county or a metropolitan district, but I will clarify that because there is no intention of being lax about any part of the country on this point.

The noble Baroness, Lady Jones of Whitchurch, made a number of points. At this stage we think that there is a distinction between run-off and leave-on products, because leave-on products tend to be removed in other ways and disposed of in bins and other receptacles which we believe lessens their chance of ending up in the marine environment. However, we have asked the Advisory Committee on Hazardous Substances to look at other sources of microplastic, including industrial cleaning products, with regard to their potential to harm the marine environment. As soon as we have had that, we will know more. Our assessments have indicated that industrial cleaning products used and manufactured in the UK contain a small number of microbeads, but I do not want to discount that. We will be asking the advisory committee to look at that thoroughly.

On the question of training and guidance for trading standards officers, which both noble Baronesses raised, it is essential that we ensure that people who will be asked to do this job are well trained. Officials in Defra have worked closely with local authority trading standards bodies to develop a guidance document for enforcement officers to use. This document contains information about likely products and ingredients that we have gathered from cosmetics associations and experienced trading standards officers to help surveillance.

The document also sets out a series of tests which officers may conduct to help them determine whether or not a product contains microbeads. Officials met a large number of trading standards officers who work at borders around the UK, who informed us that they will be able to inspect products for microbeads alongside the safety testing they already do. We have also committed initial funds of over £100,000 to support the potential increased burden on the Ministry of Justice.

The noble Baroness, Lady Jones of Whitchurch, also asked about labelling. These regulations will ban the manufacture, sale, import and export of all products in this category. We are confident that the ban will stop the use of microbeads in personal care products, and therefore that a new law on labelling will not be necessary. However, we will of course continue to consider these matters because, again, we genuinely want to make progress on ensuring that our oceans and seas are in a better condition.

As I and other noble Lords have mentioned, this whole area needs to be dealt with in collaboration internationally, with the EU and other nations. The importance of the environment is consistently discussed at the international fora in which this country participates—whether it is the G7, the G20 or the UN. We have ensured that at recent meetings, especially at the UN Environment Assembly, we were clear on the reasons for our ban and that we support action to improve our oceans. Fortunately, many other countries, including the United States, Canada, Australia, New Zealand and France are already working on similar bans. Although not all are as strong as ours, the majority of them will come into effect in July this year. The EU is currently considering its position, and other countries such as India are looking to make similar legislative changes. Of course, we will make sure that we use future events to get our message across and show leadership in this area.

I sense the importance to your Lordships of the global lead that we surely must take in terms of further plastic pollution and cleaning up our oceans for the next generation. This country has a long tradition of taking action regarding caring for the marine environment. More recently, this legislation has taken 15 months of hard work. I believe that the success on plastic bags is remarkable, with the reduction in the number of plastic bags found on beaches and the marine environment. We have just finished consultation on a potential deposit return scheme, and we are on track to establish more marine protected areas. We are also looking at how we can increase recycling and decrease the reliance on plastics in our everyday lives.

It is clear that there is much more to be done to tackle the issue of marine pollution. It is a problem that we must not and cannot shy away from. Reducing marine litter at the source will be key to beginning the work towards improving ocean health. The action proposed through this legislation shows that the United Kingdom is determined to face the issue of marine litter head-on by reducing the flow of plastic litter into the oceans. For these reasons, I beg to move.

Motion agreed.

Sub-national Transport Body (Transport for the North) Regulations 2017

Motion to Approve

Moved by

That the draft Regulations laid before the House on 16 November be approved.

Relevant documents: 11th Report from the Secondary Legislation Scrutiny Committee

My Lords, these draft regulations establish Transport for the North as the first subnational transport body, making the north the first area in England with statutory influence over strategic transport investment decisions.

For a strong, prosperous and balanced UK economy, we need a northern powerhouse, and getting transport right is central to that idea. The aim is to improve transport to, from and within the north, boosting economic growth and rebalancing the economy. That is why we have set up Transport for the North, so the region can exercise real power and make its voice heard on how we can best invest in transport. Having such a body allows areas to combine their strengths and plan transport to grow their economy.

Establishing Transport for the North will formalise local input into strategic transport investment, allowing it to give advice on proposals that could boost growth and development to the north and improve the lives of millions of transport users. Creating Transport for the North permanently by statute will ensure that its impact and influence, and the transformational change that can result, will be felt for years to come.

The north is a region with enormous potential: over 15 million people; over 1 million businesses; exports upwards of £50 billion; thriving and regenerated major cities; and world-renowned universities. If it were a country, in economic terms it would be the 10th largest in Europe. Its vast potential remains undiminished, but it has the potential to be so much more, and the best way to unlock that potential is to invest in a world-class transport system that connects the great cities of the north.

To achieve this, the Government are already spending record amounts on transformational projects such as HS2 and the Great North Rail Project, new trains and extra services through improved franchises, and £3 billion on roads to make journeys faster and more reliable. As important as investment is, though, the north also needs a long-term strategy to drive economic growth—a strategy developed by the north, for the north. Such a strategy will be the core function of Transport for the North, giving it more influence in national transport planning and ensuring that links between transport and economic development are maximised.

Transport for the North is already making a difference in many areas: Northern Powerhouse Rail, the development of smart ticketing and the pan-northern strategic transport plan, to name but a few. However, in order to drive sustainable and transformative change and take a genuinely long-term strategic view, it must have permanence and statutory status. This status gives Transport for the North the credibility and authority to allow it to plan, recruit, enter into contracts and spend effectively the £260 million that it has been allocated to take forward its work.

Over the last three years, both civic and business leaders have come together to forge an ambitious vision for the north. The Secretary of State responded to Transport for the North’s proposal setting out its role in March this year, and no fewer than 56 separate local authorities have provided official consent to this statutory instrument. The role for Transport for the North set out in these regulations strikes a balance between what is right for the north and right for the country. The Government and our agencies are already working closely with Transport for the North on national infrastructure decisions and, as a formal partner with statutory status, this role will be strengthened and made permanent.

Speaking with a strong, unified voice will be fundamental to bringing our cities closer together and creating a modern, reliable and improved transport system in the north. I beg to move.

My Lords, I strongly welcome the regulations. I am glad that the Government are bringing them forward, and I echo the words of the Minister when she said that some excellent work had been done by Transport for the North since its inception.

I shall raise two issues. The first relates to the constituent authorities and the definition of them. There is a list of them on the second page of the regulations. What happens if the structures change? There could be different structures of combined authorities, for example. How easy might it be to change the regulations to reflect any structural changes to those constituent authorities? I am thinking in particular of the North East Combined Authority and North of Tyne, but also of the discussions going on in Yorkshire.

The Minister is absolutely right that the main function of Transport for the North is to prepare a transport strategy for its area. It is hugely welcome that there will be one; as the Minister said, it will be by the north for the north. However, I would like to ask the Minister about money. Does she accept that the north of England has not had its fair share of investment in recent years? Given that, does she accept that one of the key roles for Transport for the North will be to define and prioritise the resources needed across the north of England? In that event, do the Government accept that there would be little point in Transport for the North doing a lot of work and raising expectations if the Government do not meet the financial consequences of that work?

My Lords, I declare an interest as a member of Cumbria County Council and, more particularly, as a railwayman’s son from Carlisle. I, too, welcome the establishment of Transport for the North. I think it is excellent that we will now have a planning and co-ordinating body that will bring some coherence and, we hope, a transport strategy for the north.

I follow up what the noble Lord, Lord Shipley, said about resources. In repeating the statement, the noble Baroness referred to a sum of £260 million for which Transport for the North would be responsible. What caught my eye in the recent Budget Statement was paragraph 4.53 on infrastructure delivery, which talks about the Infrastructure and Projects Authority setting out a 10-year projection of public and private investment in infrastructure in Britain of around £600 billion.

The interesting question is how much of this £600 billion will come under the purview of Transport for the North. I very much look forward to the noble Baroness being able to tell me in her reply. Mr Hammond promised some worthwhile things in the Budget. For instance, in the transforming cities fund, there was £243 million for Greater Manchester and £134 million for the Liverpool City Region. There was a £300 million fund for ensuring the links between HS2 and other infrastructure in both the north and the Midlands, but £300 million is not very much. Of course, there is the new rolling stock for the Metro—one of the finest achievements of my friend the noble Lord, Lord Rodgers, when he was Transport Secretary in the Callaghan Government.

We need more information. My county of Cumbria has vast unmet infrastructure needs. I have a letter here that I could read out about Cumbria’s requirements for road investment. I am conscious of the requirement for rail investment. The west coast main line has been modernised, but the coastal railway, which goes through some of the most beautiful country in England, up to Sellafield and then on to Carlisle, is back in the 19th century in its infrastructure. Yet we are talking about a new nuclear power station being built in west Cumbria and how we try to relieve traffic congestion in the Lake District. These questions need to be addressed, and they will all cost money.

I say just three things on money. First, in my view, London and the south-east should make a bigger contribution. They constitute one of the richest parts of Europe, and I would like the Mayor of London given power to raise more money through property taxation in London for infrastructure investment. Secondly, as long as you stick to the traditional cost-benefit analyses of how transport schemes are assessed, you will always end up with London and south-east projects at the top of the list. That is because there is not a broad enough conception of public value in how transport projects are assessed.

Thirdly, I do not want the Secretary of State for Transport telling us that he has no money in his budget, because that has been exposed as a total fallacy by his decision on the east coast franchise in the last few weeks. He has basically allowed Virgin and Stagecoach to run away with hundreds of millions of pounds that they owed on their franchise payments—possibly as high as £1.5 billion, I am told. He has allowed them to run away with that, because he was not prepared to go along to the House of Commons and admit that their franchise had failed. That is money that could have been spent on transport projects in the north of England; it has not been spent—and what is the explanation?

My Lords, I welcome the fact that so many local authorities have got together and persuaded the Government to form this new organisation. As the Minister said, in geographical terms it is probably the 10th-largest area of its kind in Europe. It goes from Newcastle down to Lincolnshire, right across to Cheshire and Liverpool and up to Cumbria; it is an enormous area, and it is a real success that they have managed to do this.

The Minister said that it would be useful for the Department for Transport—I hope that I have got this right—to give advice. From Regulation 5, “General Functions”, it seems to me that Transport for the North will be giving advice to the Secretary of State. It says that among its general functions is,

“to prepare a transport strategy”—

yes. Then it refers to providing advice to the Secretary of State about how he should exercise his transport functions. Thirdly, it has the function,

“to co-ordinate the carrying out of transport functions”.

Fourthly, it says that it must tell the Secretary of State if it thinks that TfN can do it better. To me, that is very much the Secretary of State retaining control. Perhaps the Minister could explain where the devolution is in all this. It is nice having lots of advice, and everything, but the devolution does not seem to be there; it is still going to be the Secretary of State who has the control.

Other noble Lords have mentioned money. The £250 million that the Minister mentioned is really pretty derisory, compared with Crossrail 2, which I believe will cost £30 billion and HS2, which I think will cost £100 billion, which, of course, connects to the north. But I suspect that many people in that enormous area, as other noble Lords have said, would like to be better connected within the area rather than getting to London 10 minutes quicker. So there is a real mismatch between what London is getting and what the north needs to get. I hope that the Minister can put me right on both those issues. Is it real devolution? Can Transport for the North really make decisions and have the money to spend it as it wants?

Last week, in a local newspaper in Bolton, Lancashire, a comment was made that the Secretary of State had refused the Mayor of Manchester—and this may also be the case regarding other big stations in the north—control of the station so that they can do it up and make it more attractive, getting more passengers and more retail. Why does London have to control the colour of the paint, or what is done locally in these stations, if the local people want to do it and can make some money? We really have to let go of London having control of everything and let this new organisation have real powers. If it fails, the Government know what to do, but I think that it will be a great success.

My Lords, I welcome the authority that is being given to Transport for the North by these regulations and, indeed, welcome the work that Transport for the North has done so far, even without the status that the regulations give it. It is my hope that the strategic planning that it does will lead to some of its advice being taken by the department and some correction of a very serious imbalance to which other noble Lords have referred in levels of transport infrastructure investment in the north as compared with the south-east of England. That area has recognisable problems that require some fairly expensive solutions—but not at the expense of ensuring that we have the kind of transport system that encourages prosperity, business and innovation in the north of England.

When I say the north of England, I think particularly of the north of the north, not simply of the Hull-Manchester-Leeds-Liverpool corridor, important though that also is. As I have done previously, I want to encourage Transport for the North—given the powers that it now has—to address some of the issues that are important to us in the far north. That includes, of course, the franchise problems to which the noble Lord, Lord Liddle, referred. I say “problems”, but the reality is that every single commercial operator that has taken on the east coast franchise has been unable to deliver the terms of the contract and has left it—in the most recent case—on terms that are extraordinarily favourable to the contractor. In earlier cases, the terms were not so favourable to the contractor. This is the most important transport link for the north-east of England, as well as Scotland, and that issue will clearly require further attention.

Among the issues that I hope Transport for the North will be able to give the department strong advice on are issues which it has worked on for some time but which we want to see come to fruition. These include the extension of the trans-Pennine route through to Edinburgh, up the east coast main line; the reopening of services such as the Ashington rail link; and the development of commuter services into Newcastle, such as the one from Chathill, which is a small, Cinderella service. Newcastle has its own requirements for transporting people into the city centre and problems with excessive use of cars for that purpose. There is a lot of work to be done and I am glad that Transport for the North has been given the authority to get on with it.

My Lords, I declare an interest as a resident of Newcastle and a member of the local authority. I also have the misfortune of being a regular traveller on Virgin Trains East Coast. I had the pleasure of sitting in a train outside Spalding for four hours recently while the train ahead of us had broken down. The relief train that was sent to deal with the problem also broke down. That is only one of the more dramatic examples of Virgin’s failure. As my noble friend Lord Liddle and the noble Lord, Lord Beith, have referred to, Virgin is now withdrawing, five to six years ahead of the date by which the contract should have ended. It is known that it had pledged £3.3 billion. I do not know whether the Minister is in a position to say how much it has benefited—or will benefit—from its decision to withdraw. Looking to the future, I join other noble Lords in welcoming the new organisation. Will it have a role in deciding—along with others, of course, because the train service runs from Scotland down to London—who will obtain the next franchise and on what terms? That is really important.

I mentioned Scotland. The north does not only look south; it also looks north. We need better road connections. A certain amount was done shortly before the general election, which was some time ago. That no doubt assisted on a political level, but it has not yet provided the improvements required. I trust that TfN will have the opportunity to press the Government on that.

Another aspect of the relationship with Scotland, to which I have referred from time to time in your Lordships’ House, is the question that still hangs over the future of air passenger duty. It is thought that, given the opportunity, Scotland may well exercise its right to abandon that duty. That would have a very adverse effect, certainly on Newcastle Airport and, I suspect, on other airports across the northern region. I have yet to get an indication from the Government of what their attitude would be if Scotland exercised its apparent right to abandon the duty. I would hope that, in the interests of the whole of the north, they would be able to follow that decision and apply it to the north of England. It may be that the Government would wish to see the whole thing gone, nationally. One way or the other, it would be extremely disadvantageous to the north if Scotland was able to do away with APD and the north was stuck with it. I am sure that TfN will have views about that, and I hope the Minister and her colleagues will take note of them, should the situation arise.

I thank the Minister for her explanation of the purpose and content of these regulations. I note that the Chamber is fairly full, but I am not sure it is because noble Lords have come to listen to either myself or, I am afraid, the Minister; I suspect that they are here for the next item.

Transport for the North was established in 2014 as a partnership of northern authorities and local enterprise partnerships to formalise co-operation on transport issues in the north, working with Highways England, Network Rail, HS2 Ltd and the Department for Transport. TfN will, under these regulations, become the first subnational transport body in England. Transport for the North’s responsibility is to set out the requirements of the transport network through a strategic transport plan for the north, and it has a remit to focus on movement between cities and key economic centres to support a more productive and integrated northern economy. Indeed, the Northern Powerhouse Independent Economic Review found that, if the north receives the right level of investment to improve connectivity across the region, it will create over 850,000 jobs and add almost £100 billion gross value added to the economy by 2050. Transport for the North also has a role to play in supporting local and national government to ensure that local investment in public transport and national transport infrastructure projects form a coherent investment programme.

We support putting Transport for the North on a statutory footing from April next year, but we doubt whether what is now being put forward is adequate in addressing underinvestment and the significant disparities in transport spending between the north and the south. Following the debacle over the cancellation or postponement of rail electrification on the trans-Pennine route, the Secretary of State asserted that the future of transport in the north was in the hands of the north because he would give it the powers necessary to address its own transport needs. What the Government are now proposing for Transport for the North would not appear to deliver what they said would be delivered.

All the regions of the north combined receive less in transport investment than London, despite the north having twice the population. If the Government will not address poor transport infrastructure in the region, they should at least give the regions of the north the power to do so themselves. However, the regulations we are discussing today would appear to give the north neither the necessary investment nor the necessary power in this area. It would appear that, instead of receiving “client status”, Transport for the North will instead be a “statutory influencer”. Although the Secretary of State will have to have regard to the views and recommendations of Transport for the North and its statutory transport strategy, it will, as I understand it, be a matter for him to decide what improvements to the transport infrastructure will get the go-ahead, and when, since Transport for the North has no decision-making powers in that regard and neither will it have either its own, or access to, financial resources to be able to finance and deliver significant infrastructure schemes.

There is a real danger that Transport for the North will spend a lot of time, enthusiasm and energy drawing up a strong economic case for significant transport infrastructure improvements, with the support and backing of local authorities, business and community organisations and representatives across the region, and then find that the Secretary of State just kicks them into the long grass, perhaps because this Secretary of State, the most politically partisan we have had for a long time, is reluctant to give money or additional decision-making powers to areas that do not share his political outlook—as opposed to effectively giving money to failing east coast main line franchise operators.

Perhaps that is why he has not delivered on his earlier statements that the future of transport in the north was in the north’s hands and that he would give it the powers necessary to address its own transport needs. If Transport for the North does not get the support of the Secretary of State for implementing and overseeing the delivery of its transport recommendations, it will lead to frustration all round rather than progress, since people have had enough of talking shops and want to see imaginative and well-thought-through plans see the light of day.

Could the Minister say what amount of money is available for implementing and delivering Transport for the North’s strategic transport plan—and whether, if TfN had already been in existence as a statutory body and had included the electrification of the trans-Pennine route in its strategic plan, the Secretary of State could nevertheless have disregarded the plan and not agreed to electrification of the route? Hence our view, if I am correct, that Transport for the North does not have any great power; the power remains firmly in the grip of the Secretary of State.

Could the Minister also say what it means in reality for the Secretary of State to “have regard to” TfN’s statutory transport strategy when developing national transport strategies and plans? How does the Secretary of State prove that he has had regard to that strategy—and, alternatively, how does anyone prove that he has not? Would it be open to Transport for the North to take legal proceedings against the Secretary of State if it considered that he had not had regard to its transport strategy—and, if so, will TfN have the statutory power and the financial resources to initiate such legal proceedings?

As I understand it, Transport for the North will also have a role in the co-ordination of regional transport activities, such as, for example, smart ticketing and co-management of the TransPennine Express and northern rail franchises through the acquisition of Rail North Ltd. What exactly will that co-management involve as far as Transport for the North is concerned, what exactly will co-ordination of regional transport activities involve, and what statutory powers is Transport for the North being given in respect of each role?

What will be Transport for the North’s budget for its administration over each of the first three years from 1 April 2018, how many staff will it employ, how much will it receive in grants—the Minister mentioned £260 million—and from what sources and what purposes over that same three-year period? In how many years’ time do the Government anticipate reviewing the role of Transport for the North as a statutory body, including the effectiveness with which it is able to carry out its role under the powers that it is being given through this instrument, and whether there is a need to either reduce or increase the powers and the role that Transport for the North is being given under these regulations?

I believe that the Minister, when she introduced the regulations, referred to Transport for the North achieving “transformational change”. What goals are the Government seeking to achieve over the next 10 years that will represent the transformational change referred to by the Minister?

On the resources made available to Transport for the North, I repeat that I think the Minister mentioned £260 million. To most of us that sounds like an awful lot of money, but can the Minister say how that compares with the cost of Crossrail for London, for example, so that we can see how significant a part of the cost of Crossrail that £260 million represents?

We hope that Transport for the North will be able to exert a positive influence on transport in the north and that it does not become a largely toothless, penniless, powerless talking shop, drawing up persuasive and compelling strategic plans which are then largely ignored by the Secretary of State.

My Lords, I thank all noble Lords for their contributions and for their broad support for this measure. I will do my best to answer as many of the points raised as I can but, if I do not manage to answer them all, I will write to noble Lords.

The noble Lord, Lord Shipley, asked how the change to constituent authorities will work. It would require a further affirmative statutory instrument once it had been proposed and approved by the existing members of Transport for the North.

There was some discussion about the powers for Transport for the North. These powers have been agreed after extensive engagement with TfN and the northern leaders over the last 12 months. Both the Government and TfN agree that the role outlined in this statutory instrument allows TfN to build its capability and capacity over time, and we think that it strikes the right balance between national and regional priorities. Of course, Transport for the North can seek approval from the Secretary of State for additional functions and take on more responsibility to improve transport planning or make provision to enhance economic development in the area.

The noble Lords, Lord Shipley, Lord Liddle and Lord Berkeley, raised the question of regional disparity. This Government are reversing decades of underinvestment in the north, with the biggest investment for a generation. Including all projects, the Government are spending more per head on transport in the north-west than they are in the south-east. This is backed up by the recent publication of the National Infrastructure and Construction Pipeline by the Infrastructure and Projects Authority, which shows that per head spending in the north is expected to be £10 higher than in the south. Indeed, just today we have published our rebalancing toolkit, which is designed to help authors of strategic cases assess how a programme fits with the objective of spreading growth across the country.

On funding, raised by probably every noble Lord, the initial funding settlement of £260 million reflects TfN’s initial role. There are also the resources needed to deliver the programme set out in the Northern Transport Strategy. I am afraid that I am not able to give a specific figure as requested by the noble Lord, Lord Liddle. TfN is aiming to publish its draft strategic transport plan in the new year, and a 12-week consultation will follow. It should be finalised in the summer of 2018 and, from there, we will look forward to working with TfN, as it becomes a statutory body, on how best to move that forward. We are already spending £13 billion on transport in the north and, as I said, we must wait to see what TfN’s strategy comes up with.

On the question of who makes the decisions, TfN will, through its strategic transport plan, make decisions on the transport priorities for the north. It will provide the evidence to make the case but Ministers here, who are ultimately accountable to Parliament, will make the funding decision, so that will sit with the Secretary of State.

The noble Lord, Lord Beecham, asked about future franchises. TfN will be a statutory consultee on all future franchises.

The noble Lord, Lord Liddle, mentioned Cumbria. I understand that the LEP there is developing a strategic outline business case and we look forward to considering it. We are working with the LEP and the county council to help them develop that business case.

The noble Lord, Lord Berkeley, asked about Manchester rail stations. The Secretary of State has recently written to the Mayor of Greater Manchester to propose a further discussion on how we best answer that.

We see the establishment of Transport for the North as a significant step for the north and for the country. It will work with the region’s transport authorities and elected mayors to build a long-term vision for transport across the north of England. As the voice of the north on transport, TfN will have unprecedented influence over government funding and decision-making.

This Government are clearly demonstrating that, in setting up Transport for the North and backing the election of metro mayors, we are giving the north greater autonomy and control, and a powerful voice to articulate the case for new transport projects.

Perhaps I could remind the noble Baroness that I raised the question of air passenger duty. Could she make some comment on that?

My apologies for missing that. We are aware of the potential issue of the different rates of APD in Scotland and the north of England and indeed in the rest of the UK. In the Budget last week, that change was not made, but we keep a close eye on it.

The Minister is confirming that Transport for the North is about “articulating the case”, to use her words, and that decisions on how much will be spent and where will continue to rest in Whitehall with the Secretary of State. Transport for the North is purely about articulating the case, and I use the Minister’s own words.

As I hope I made clear, Transport for the North will articulate the strategic decisions, setting out how it wants to develop transport for the north, but the ultimate decisions on funding will remain with the Secretary of State.

Motion agreed.

European Council

Statement

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

“With permission, Mr Speaker, I would like to make a Statement on last week’s European Council. Before turning to the progress on our negotiations to leave the EU, let me briefly cover the discussions on Russia, Jerusalem, migration and education. In each case the UK made a substantive contribution, both as a current member of the EU and in the spirit of the new, deep and special partnership we want to build with our European neighbours.

Russia’s illegal annexation of Crimea was the first time since the Second World War that one sovereign nation has forcibly taken territory from another in Europe. Since then, human rights have worsened: Russia has fomented conflict in the Donbass and the peace process in Ukraine has stalled. As I said at the Lord Mayor’s Banquet, the UK will do what is necessary to protect ourselves and work with our allies to do likewise, both now and after we have left the EU. We were at the forefront of the original call for EU sanctions, and at this Council we agreed to extend those sanctions for a further six months.

On Jerusalem, I made it clear that we disagree with the United States’ decision to move its embassy and recognise Jerusalem as the Israeli capital before a final status agreement. Like our EU partners, we will not be following suit. But it is vital that we continue to work with the United States to encourage it to bring forward proposals that will re-energise the peace process. This must be based around support for a two-state solution and an acknowledgement that the final status of Jerusalem must be subject to negotiations between the Israelis and Palestinians.

On migration, when we leave the European Union we will be taking back control of our borders and laws, so we will be free to decide our own approach independently of the EU. But as part of the new partnership we want to build, I made it clear at this Council that we will continue to play our full part in working with the EU on this shared challenge. We will retain our maritime presence in the Mediterranean for as long as necessary; we will work with Libyan law enforcement to enhance its capability to tackle people-smuggling networks; and we will continue to address the root causes of the problem by investing for the long term in education, jobs and services, both in countries of origin and transit.

When it comes to education, our world-leading universities remain a highly attractive destination for students from across the EU, while UK students also benefit from studying overseas. UK and EU universities will still want to work together after we leave the EU and to co-operate with other universities from around the world. We will discuss how to achieve this in the long term as part of the negotiations on our future deep and special partnership. In the meantime, I was pleased to confirm at this Council that UK students will be able to continue to participate in the Erasmus student exchange programme for at least another three years, until the end of this budget period.

Turning to Brexit, the European Council formally agreed on Friday that sufficient progress has been made to move on to the second stage of the negotiations. This is an important step on the road to delivering the smooth and orderly Brexit that people voted for in June last year. I want to thank Jean-Claude Juncker for his personal efforts, and Donald Tusk and my fellow leaders for the constructive way they have approached this process. With Friday’s Council we have now achieved my first priority of a reciprocal agreement on citizens’ rights. EU citizens living in the UK will have their rights enshrined in UK law and enforced by British courts, and UK citizens living in the EU will also have their rights protected. We needed both, and that is what we have got, providing vital reassurance to all these citizens and their families in the run-up to Christmas.

On the financial settlement, I set out the principles for the House last week and the negotiations have brought this settlement down by a substantial amount. Based on reasonable assumptions the settlement is estimated to stand at between £35 billion and £39 billion in current terms. This is the equivalent of around four years of our current budget contribution, around two of which we expect will be covered by the implementation period. It is far removed from some of the figures that have been bandied around.

On Northern Ireland, as I set out in detail for the House last week, we have committed to maintain the common travel area with Ireland; to uphold the Belfast agreement in full; and to avoid a hard border between Northern Ireland and Ireland while upholding the constitutional and economic integrity of the whole United Kingdom, and we will work closer than ever with all Northern Irish parties and the Irish Government as we now enter the second phase of the negotiations.

The guidelines published by President Tusk on Friday point to the shared desire of the EU and the UK to make rapid progress on an implementation period, with formal talks beginning very soon. This will help give certainty to employers and families that we are going to deliver a smooth Brexit. As I proposed in Florence, during this strictly time-limited implementation period, which we will now begin to negotiate, we would not be in the single market or the customs union, as we will have left the European Union. But we would propose that our access to one another’s markets would continue as now, while we prepare and implement the new processes and new systems that will underpin our future partnership.

During this period, we intend to register new arrivals from the EU as preparation for our future immigration system, and we will prepare for our future independent trade policy by negotiating and where possible signing trade deals with third countries, which could come into force after the conclusion of the implementation period. Finally, the Council also confirmed on Friday that discussions will now begin on trade and the future security partnership. I set out the framework for our approach to these discussions in my speeches at Lancaster House and in Florence. We will now work with our European partners with ambition and creativity to develop the details of a partnership that I firmly believe will be in the best interests of both the UK and the EU.

Since my Lancaster House speech in January we have triggered Article 50 and begun and closed negotiations on the first phase. We have done what many said could not be done—demonstrating what can be achieved with commitment and perseverance on both sides—and I will not be derailed from delivering the democratic will of the British people. We are well on our way to delivering a smooth and orderly Brexit. That is good news for those who voted to leave, who were worried the negotiations were so complicated it was never going to happen, and it is good news for those who voted remain, who were worried that we might leave without being able to reach an agreement.

We will now move on with building a bold new economic relationship, which, together with the new trade deals we strike across the world, can support generations of new jobs for our people, open up new markets for our exporters and drive new growth for our economy. We will build a new security relationship that promotes our values in the world and keeps our families safe from threats that increasingly do not recognise geographical boundaries. And we will bring our country together—stronger, fairer, and once again back in control of our borders, our money and our laws.

Finally, let me say this. We are dealing with questions of great significance to our country’s future, so it is natural that there are many strongly held views on all sides of this Chamber, and it is right and proper that we should debate them, and do so with all the passion and conviction that makes our democracy what it is. But there can never be a place for the threats of violence and intimidation against some Members that we have seen in recent days. Our politics must be better than that. On that note, I commend this Statement to the House”.

My Lords, I thank the noble Baroness for repeating the Statement. The past couple of weeks have been very eventful for the Government. The Prime Minister has travelled to Brussels three times. On the first occasion, she returned empty-handed because of her partners in the DUP. The second was a last-minute dash across the channel for breakfast with Barnier to save the deal that allowed for progress to phase 2. Now, on the third occasion, she returns home early as the UK once again has to sit out the second day of a major EU summit.

When the Prime Minister returned last week to make her Statement to Parliament, for one, brief, shining moment, her Cabinet was united. Some on the Tory Benches even found themselves echoing the warm words of EU figures such as Donald Tusk and Jean-Claude Juncker. We all paid tribute, quite rightly, to the Prime Minister’s tenacity in securing a sufficient-progress decision, first from the Commission and then from the European Council.

Unfortunately, the Cabinet unity was short lived and gave way to a weekend of unsanctioned briefings and policy proposals. Yet again, the Foreign Secretary used a newspaper interview to engage in an open conversation with the Prime Minister, with a warning that she should not seek to maintain full regulatory alignment with the EU to avoid the UK becoming what he described as “a vassal state”. The Environment Secretary suggested that the Tories should abandon their manifesto commitment to keep EU-derived employment and workers’ rights and scrap the vital protections contained in the working time directive. Such briefings from Cabinet members are not only unhelpful and undermine the Prime Minister and her Government, but could damage the UK’s wider interests.

Despite the positive news that EU leaders gave formal approval for the launch of phase 2 talks, the summit served as a reminder that, while we focus on our withdrawal from the EU, the EU is focusing on its own challenges and shaping its own future. Important discussions took place on co-ordinated efforts to stem illegal migration; the need to increase the resilience of the economic and monetary union; education and culture; and climate change. While Theresa May confirmed the UK’s intention to remain a part of Erasmus+ until 2020, the EU27 took decisions on the longer-term future of that programme and many others. The conclusions also feature important commitments to the implementation of the Paris agreement, the continuation of sanctions against Russia, and restating the agreed position on Jerusalem and a two-state solution. To give the Prime Minister credit, she has spoken out on these issues, but will the Leader tell the House whether President Trump has returned the Prime Minister’s call from last week? If he has, what discussions took place regarding Israel?

It is quite an irony that while Michael Gove prepared to launch his broadside on EU-derived workers’ rights, EU members committed to implementing the European pillar of social rights, accelerating important social initiatives already in progress at national and EU levels, and taking renewed action to tackle the gender pay gap. I suspect that the Prime Minister might have a particular interest in the last area, given last week’s revelations of a significant gender pay gap among special advisers at No. 10.

Returning to the Brexit negotiations, it is clear that the second phase will be challenging and needs good will and trust on all sides. In that respect, I repeat my comment from last week, to which I have already alluded: the Cabinet must stop freelancing and the Prime Minister must insist that her Ministers back her. David Davis’s mixed and contradictory messages last week were unhelpful. I hope that at the next Cabinet meeting, which I think is tomorrow, the Prime Minister will be able to ensure that all Cabinet members are prepared to accept the principle of collective responsibility and accountability, even during the upcoming Christmas Recess.

Tomorrow, the Cabinet discusses our future relationship with the EU. Perhaps because of deep divisions, it has taken 18 months for that discussion to take place. The clock is ticking down. It is clear that a transitional period will be possible only if there is high-level agreement on a future relationship that can be struck in the EU’s original timescale, but with phase 2 talks beginning shortly it is essential that these discussions are productive and that the Government can set out their end goal, engage with the public to explain it, urgently communicate it to the EU and remain committed to securing that outcome.

Assuming that consensus is achieved at tomorrow’s Cabinet meeting—that might be a big “if”—will the Minister confirm when the UK expects to communicate its detailed wish list to Parliament and to Michel Barnier’s team? The noble Baroness will understand why I raise this key point again: businesses are making decisions now about their future regarding location and employment issues. Will she confirm the terms that the UK is seeking for the transition period? In the light of the comments made from the EU side that it would not extend transitional arrangements to Gibraltar, will she confirm that the Government will challenge that position?

The noble Baroness referred to Northern Ireland in the Statement. What we have heard on Northern Ireland so far has been nothing beyond the aspirational. Will she tell us what practical considerations have been made and what decisions are being taken to ensure there is not a hard border, given the Government’s commitment to saying it cannot remain in the single market and the customs union? Some of us are struggling to understand how that can be achieved.

The Prime Minister’s very welcome commitment on Erasmus+ was in the context of only the current Budget. When can universities and students expect certainty on their ability to participate in the programme post-2020?

Last week, the noble Baroness disappointingly confirmed that the joint report does not cover onward movement of UK citizens living elsewhere in the EU but said that this would be revisited in phase 2 of the negotiations, yet today’s Statement refers to UK citizens’ rights being “protected”. Can she reflect on that? “Reciprocal agreement” implies equal status between citizens of the EU and citizens of the UK. However, a Commission memo published on 12 December suggests that UK citizens will have to rely on limited rights under the Blue Card directive or the ICT/students and researchers directives to settle in another member state. I would be grateful if the noble Baroness could comment on this and give a definitive answer on whether the Government expect to maintain and secure full onward movement rights for UK citizens in the EU. If not, the Statement is possibly not being entirely accurate in saying that UK citizens’ rights will be fully protected.

The Prime Minister said in her Statement that until the UK withdraws from the EU, it continues to play a full role in meetings. Can the noble Baroness therefore say whether the Fisheries Minister, George Eustice, last week left the Agriculture and Fisheries Council early to attend votes in the Commons? If so, has there been any detrimental impact on the UK fishing fleet or has it lost out on access to any EU quotas as a result? Or did it really not make any difference?

My Lords, it is the time for end-of-term reports, and this Statement represents that of the Government in respect of Brexit. Like the assiduous student that she was, the Prime Minister has carefully presented her course work. She has one agreement to show for almost nine months of negotiations since the triggering of Article 50. It is in three parts. The Government have agreed to honour their financial commitments—good, but this was merely bowing to the inevitable. They have agreed to allow EU migrants to stay in the UK—good, but this principle was never seriously in contention. They have kicked the Northern Ireland problem down the road—bad, but given the fundamental incompatibility contained in the Government’s position, this is an inevitable delay until or unless the Government work out what they want their trading relationship with the EU to be.

In terms of legislation, we are to have at least eight Brexit Bills and 1,000 statutory instruments before March 2019, and in reality many of these will be needed well before then. Yet not a single piece of primary legislation, far less a single statutory instrument, has been enacted and no Brexit-related Bill has even completed its passage through a single House. It is extremely difficult to see how the Government plan to get all this legislation through in a timely manner, but given the importance of the subject matter, can the Leader of the House give us an assurance that the Government will produce their proposals in time for both Houses to deal with them properly and within the normal conventions on timetabling?

As far as the future trading relationship is concerned, and indeed on a host of other issues, including the Government’s attitude to ongoing migration to and from the EU, it is pointless pressing the Leader on the Government’s attitude because they literally have no policy. Can she, however, confirm that last week’s agreement means that Northern Ireland citizens who retain their EU citizenship will have more rights than other UK citizens? If, as I believe, this is so, it will be deeply offensive to many people. Given that the noble Lord, Lord Callanan, said to your Lordships’ House last Monday that,

“we are not ruling out”—[Official Report, 11/12/17; col. 1368.]

UK nationals retaining EU citizenship, will the Government now positively propose to the EU that UK citizens will be able to retain their EU citizenship so that the majority of us are not reduced to second-class status in comparison with our Northern Ireland compatriots? Given that when the Government do eventually adopt a policy on our future trading relationship with the EU this will be of fundamental importance to the Brexit negotiations, and indeed the country’s position going forward, will the Leader of the House give an assurance that both Houses of Parliament will be able to have a full debate and vote on the Government’s proposals before they are transmitted to the EU? Would not anything less be inconsistent with Parliament taking back control?

In order that people at large might have a clearer understanding of the consequences of Brexit for the economy, will the Leader now seek to persuade the Prime Minister and the Brexit Secretary to publish the infamous sectoral reports? They contain nothing which is commercially sensitive or could jeopardise our negotiating position and there is no reason why everyone should not be able to see them. The current arrangements for parliamentarians to see them are disproportionately restrictive and should in any event be relaxed, but the documents should simply become publicly available. The only conclusion one can draw from the Government’s current approach is that they do not want people to see how complicated Brexit will be in practice or to understand the depth and beneficial nature of our current economic relationships with the EU.

Finally, will the noble Baroness confirm the estimate in today’s Financial Times that Brexit is already costing, not benefiting, the UK some £340 million a week, as a result of lower growth which has flowed from the referendum result? It is very tempting at this stage of the term to give the Government an overall mark for their term’s work, but I fear that that would be embarrassing. I simply pose the question asked by many a frustrated and disappointed supervisor: “Don’t you think it would be better if you took another course?”.

My Lords, I am grateful to the noble Baroness and the noble Lord for their comments, but I am somewhat disappointed that they do not seem to have fully welcomed the fact that we have made sufficient progress and that we can now move to talk about the future. They have been saying that this is what they want for months, yet now we achieve it, unfortunately it seems that they are not as keen as perhaps they said they were originally.

To answer the noble Baroness’s question, we will start talking to the EU 27 about the shape of the future relationship and the details of the implementation period straightaway and the EU will be producing guidelines in March to further aid those discussions. The noble Baroness also asked about Gibraltar. I can confirm that the UK Government are committed to engage with the Crown dependencies and overseas territories, including Gibraltar, of course, as we prepare to exit the EU, to ensure that their interests and priorities are taken into account. We will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of any other state against their wishes. We had the fifth meeting of the UK-Gibraltar ministerial forum on 11 December with DExEU and Treasury Ministers taking part alongside the Chief Minister, Deputy Chief Minister, Financial Secretary and Attorney-General of Gibraltar, so I can assure her that we have Gibraltar’s interests at the centre of our thoughts and will continue to do so.

The noble Baroness asked about Erasmus. As she rightly acknowledged, the Prime Minister announced our intention to continue to participate in the Erasmus programme for at least another three years, until the end of the current budget period. Anything further than that is for the future negotiations, but that commitment shows how much we value the Erasmus programme and understand its importance. In relation to onward movement, I fear that I can say no more than I said last week: this was an issue we were hoping to resolve, it has not yet been resolved but we have been very clear that we want to come back to it at the next stage of the negotiations. On her question about the Fisheries Minister, he certainly managed to balance his responsibilities in representing the UK in the recent discussions with taking his role as a parliamentarian extremely seriously.

The noble Lord, Lord Newby, asked about citizens’ rights. As we have said all along, we wanted a reciprocal agreement on citizens’ rights and that is what we have agreed. We now want to make sure that we turn the agreement into the legal agreement we will see in the withdrawal and implementation Bill. He asked about the sectoral reports. Everyone can see them, they are available for anyone to see and I certainly encourage all noble Lords to do so.

Was there any agreement, either in the margins of the meeting or in the meeting itself, as to what would happen if the full terms of Article 50 were applied in the event of there being no agreement in the discussions?

The discussions in relation to us leaving the EU were very constructive. We have now agreed to move on to phase 2 and to start to talk about our future relationship, which is extremely welcome.

My Lords, given that the Northern Ireland question was responsible for rescuing the Prime Minister in the first stage of negotiations when she agreed a regulatory alignment on standards and the adjudication of those standards, not just physical controls on the Irish border, within the whole of the UK—that is, the customs union and the single market have to be aligned in order to keep the border open—and now that has been accepted for the transitional talks, what is the point of leaving the single market and the customs union? Does she think that the EU is magically going to give us a better deal by being exactly aligned with the customs union and the single market outside it?

We have always said that the details of how we maintain an open border will be settled in phase 2 of the negotiations, when we agree our future relationship, and that is what we will do. We have also been very clear that alignment is about pursuing the same objectives, but achieving this could be done through different means. It does not require regulatory harmonisation.

My Lords, the Leader seems disappointed that the Statement has not been welcomed as it might have been. I do welcome it but I do not think it is as it has been portrayed; that is, the progress that has been made thus far is simply the opening gambit and the real hard work is going to come in the next phase. It seems to me that so far not a great deal has been achieved, except that we can go on to talk about the next phase. I will make a quick observation and then put a question.

I have some knowledge of Russia. It seems that Russia does not need to defeat the West because it gets the West to defeat itself; the Russian policy seems to be to destabilise, and Brexit and the way it is being conducted actually feed that agenda. We do not talk about that enough. If you look at the rise of the far right, such as what has gone on in Austria, the very strong links with Russia are there. This is not simply about Ukraine.

I would be much happier if I heard the word “might” rather than “will”. We talk about how we “will” get the best deal. By definition, we will get the best deal because it will be the only one that we come up with so it will be the best, but that is not the same as saying that it will be the best deal that we could have got or the best for this nation. Would it not be better for the Government to get away from thinking that if you make assertions, that creates reality, and to be more honest with the British people by saying we “might” get, rather than we “will”, when it might not be in our power to achieve the “will”?

I am afraid I do not agree with the right reverend Prelate that progress has not been made. We have made a lot of progress in phase 1, not least in giving clarity to UK citizens living abroad and EU citizens here about their status. We have discussed a financial settlement. We have discussed the very important issue of Northern Ireland and have all agreed that we do not want a hard border and have thought about how we might achieve that. In terms of where we go next, I think we are in a good position. The EU Council conclusions state:

“The European Council reconfirms its desire to establish a close partnership between the Union and the United Kingdom … The European Council reconfirms its readiness to establish partnerships in areas unrelated to trade, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy”.

These things are the basis for a good deal.

My Lords, I am sure we welcome the good news brought by the noble Baroness from the Prime Minister, but I think many in your Lordships’ House share the confusion about how we are to get to the Panglossian outcome in Ireland without remaining part of the single market. Is the noble Baroness able to explain that, and how having the Government,

“work closer than ever with all Northern Irish parties”,

fits with the Prime Minister’s confidence and supply measures with the DUP? Has she asked Arlene Foster?

My Lords, I am afraid I can say only what I have said already today and several times last week. Everyone has pledged that there will be no hard border between Northern Ireland and Ireland. We have always said that details of how to maintain an open border will be settled in phase 2 of the negotiations. If we do not achieve that outcome, which we believe we will, we will look to negotiate specific solutions for the Northern Ireland border.

My Lords, does my noble friend agree that it is unhelpful for negotiators on the EU side to say, as I understand Michel Barnier is reported to have said, that no bespoke agreement can be reached with the UK? Every single trade agreement that the EU has reached with third countries has been a bespoke agreement, and it is manifestly absurd to argue that ours cannot be one. This will be about trade but also about co-operation on security and intelligence. Does my noble friend agree that effective collaboration, particularly on intelligence, depends at least as much on trust in relationships as it does on the legal framework, and that evidence of serious good will in wanting this to be genuinely a deep and special relationship will be of huge importance in ensuring that security and intelligence collaboration can be as effective in future as it certainly is now?

My Lords, if the Minister is saying, as I believe she is, that the UK will have left the European Union on 31 March 2019 and the single market and the customs union on the same date, but that over the transitional period virtually identical rules to those of the single market and the customs union will persist, on what basis cannot those rules persist indefinitely?

As we have said, we are looking for a time-limited implementation period to ensure that businesses and individuals have to make only one set of changes. We want a swift agreement on the implementation period. Our objective is for access to each other’s markets to continue on current terms, based on the existing structures of EU rules and regulations but for a time-limited period.

My Lords, last week my noble friend told the House that the Cabinet was united. It really is not helpful when articles and interviews are given by members of the Cabinet, particularly those intimately involved with these negotiations, which in effect undermine the Prime Minister’s excellent work, which we should all be applauding. If the Prime Minister cannot bring herself to give the sack to some of them, can she at least put gags in their crackers?

I can only repeat what I said last week: the Cabinet is united and we are looking forward to a very constructive discussion tomorrow.

My Lords, I suggest that we hear from the Labour Party and it may then be the turn of the noble Lord, Lord Pearson, and the Lib Dems.

My Lords, to try to keep her party united the Prime Minister makes a lot in her Statement of preparing,

“for our future independent trade policy by negotiating and where possible signing trade deals with third countries”,

in the implementation period. Does the Leader of the House accept that, once you have gone for signing trade deals with third countries, you require a hard border, because in order to enforce rules of origin and ensure that as a result of trade deals which bring in agricultural produce from other parts of the world that do not meet EU standards, you have to have a border that enforces those standards? Does she therefore accept that that statement is incompatible with her assurance that there will be no hard border in Ireland?

No, I am afraid I do not, because we have all pledged that there will be no hard border between Northern Ireland and Ireland.

My Lords, I am sorry, but I did give the noble Lord, Lord Pearson, the next go and the Lib Dems after that. We will then hear from the Conservative Benches.

My Lords, the Statement says that the Government will propose that our free trade with the EU should continue as now. Do the Government fear that the Eurocrats will be arrogant enough to refuse this offer which, as I have mentioned before, would be much more in EU exporters’ collective interest than it would be in ours because, if we are all forced back to the WTO, they will pay us some £13 billion in extra tariffs and our exporters will pay them about £5 billion? Can the Government assure your Lordships that they will hold firm on this offer, enlisting, if necessary, the support of EU exporters? Going further, why should our free trade together not continue indefinitely? Would that not also be quite helpful with the Irish border problem?

I am afraid I do not agree with the noble Lord. The fact that we have got to where we are shows that there is willingness on both sides to work together to make sure that we have a good outcome for both the EU and the UK. I look forward and expect that we will continue the phase 2 negotiations, including around the details of the implementation period, in the constructive manner we have seen so far.

My Lords, the Statement starts and ends with references to the foreign and security relationship we hope to build with the European Union after we leave. The Council conclusions of the 28 member Governments, of which we remain, for the moment, one, talk about a new initiative in closer security co-operation among Europeans, which will presumably exclude the United Kingdom. Given that some members of the Conservative Party may be deeply unhappy at any special relationship with the European Union on foreign policy and security after we leave, would it not be a good idea for the Government to begin to set out publicly, for their own public as well as for those with whom they are negotiating, what sort of foreign policy and security relationship we wish to have? I also draw attention to the last sentence, which has some fine words on violent language and threats of violence. Given that the Daily Telegraph and the Daily Mail have led in using violent language against people who have been “traitorous” to the Conservative Party, as they put it, is the Prime Minister planning to call in the editors of those two newspapers by any chance?

I think the Prime Minister is quite clear in the Statement about the fact that we do not agree with or tolerate such language. In relation to defence, the noble Lord may have been referring to the launch of PESCO, which is an important initiative to encourage collaboration across the European defence industry and has the potential to drive up defence investment across Europe. Although we do not plan to join the PESCO framework, we want to keep open the option to participate at a project level, including after we have left the EU, so we were pleased with the Council conclusions that allow that. In terms of our future relationship, the noble Lord will be aware that we have published a future partnership paper on Foreign Policy, Defence and Development and indicated, for instance, our interest in future partnerships, including a capability collaboration through the European Defence Agency and the Commission’s European defence fund.

My Lords, I made it clear that the Conservative Benches were going to come first and then the Cross Benches.

Has my noble friend noticed the statement of the Italian Prime Minister, who believes that the outcome of the talks ought to be not a CETA-type agreement, not an off-shelf agreement, but one specifically designed for and tailored to Britain’s needs? Is that not extremely encouraging? Are not some of the comments we have heard from the Opposition completely inappropriate when we know that the shadow Chancellor wants to be outside the customs union, the shadow Home Secretary wants to be inside the internal market and the noble Lord, Lord Adonis, says that the whole point of their tactics is to reverse Brexit completely?

On my noble friend’s first point, which picks up on the point that my noble friend made earlier, we are indeed looking to negotiate a bespoke trade agreement. All these agreements are in fact bespoke to the countries involved in them. I also agree with the comments he made at the end of his remarks.

My Lords, the Minister might perhaps help us parse two very short words which relate to the time-limited stand-still period. The words are “as now”. Can she confirm that they cover trade in goods and services, including agricultural and fish products, the jurisdiction of the European Court of Justice and all other aspects of the single market?

As I have said, our objective is for access to each other’s markets to continue on current terms, based on the existing structure of EU rules and regulations. The framework will mean that we will start off under the CJEU and will be under it for part of the period. But the Prime Minister has always said that if we can agree provisions that will be part of the future relationship, such as a dispute resolution mechanism, we will aim to bring them forward at an earlier stage.

My Lords, I understand that quantum mechanics says that it is possible for an electron to be in two places at the same time. Does this explain the behaviour of the Benches opposite? In the other place, an amendment to allow us to remain in the single market and the customs union proposed by Ian Murray, who used to be the shadow spokesman on Scottish affairs, was whipped against by the Labour Party and defeated by 311 votes to 76. What are we to make of the Leader of the Opposition attacking the Government for being divided when they do not know which part of their anatomy differs from the other?

What is most important is that we are now moving into phase 2 of the negotiations, with a united Government looking for the best deal that we will achieve for the UK and the EU.

My Lords, to pick up on the point that my noble friend has just made about phase 2, last week Monsieur Barnier said that the treaty that is likely to emerge from the end of this process,

“will be accompanied by a political declaration … which will describe the framework for our future relationship. A political declaration. But it cannot be anything else. In technical, legal terms it simply is not possible to do anything else”.

Does my noble friend agree with what Monsieur Barnier says?

What I can do is read to my noble friend from the EU Council conclusions, which say:

“While an agreement on a future relationship can only be finalised and concluded once the United Kingdom has become a third country, the Union will be ready to engage in preliminary and preparatory discussions with the aim of identifying an overall understanding of the framework for the future relationship … Such an understanding should be elaborated in a political declaration accompanying and referred to in the Withdrawal Agreement”.

My Lords, meanwhile in the world as a whole, with all the challenges of climate change and the new political pressures that are at work, a gigantic migration problem is building up, which will make the challenges which we face at the moment seem small by comparison. In the midst of all our tactical preoccupations, what work is being done with our European allies to formulate a strategic policy towards how this issue of migration in the world is to be handled? How are we going to ensure that this is done effectively when we are deliberately moving to an arm’s-length relationship with those who share the burden in Europe?

We certainly are working closely with our European partners and are committed to playing our full part in tackling the shared challenges posed by the global migration crisis. As the Statement said, we are committed to maintaining a maritime presence in the Mediterranean. The Royal Navy has intercepted 172 smuggling boats and saved more than 12,000 lives since Operation Sophia began. We are continuing the deployment of the Border Force cutter to the central Mediterranean to support the search and rescue activities under Operation Triton. To date, cutters have rescued more than 13,000 migrants across the central Mediterranean and Aegean. We are taking our responsibilities extremely seriously and are working with the EU in terms of looking at where these migrants are coming from and trying to help stabilise states. We take this extremely seriously and will continue to work with the EU, the UN and international partners to make sure that we work together to tackle this problem, because together is the only way we will achieve it.

My Lords, in her Statement on 23 October, the Prime Minister referred to,

“a time-limited implementation period based on current terms”.—[Official Report, Commons, 23/10/17; col. 25.]

Of course, today she has said that if we Brexit in March 2019, we would not be members of the European Union after that. To pick up on the question asked by the noble Baroness, Lady Smith of Basildon, if we fast forward two years from now to the annual Fisheries Council to determine total allowable catches, will there be a British Minister at the table to defend British fishing interests? How does the noble Baroness see this working?

As the Prime Minister says, it will depend on the next phase of negotiations, but currently we expect the implementation period to be two years.

Tackling Financial Exclusion (Financial Exclusion Report)

Motion to Take Note

Moved by

That this House takes note of the Report from the Select Committee on Financial Exclusion Tackling Financial Exclusion: A country that works for everyone? (Session 2016-17, HL Paper 132).

My Lords, it is a pleasure and a privilege to lead this debate, as it was to chair the Lords Select Committee on Financial Exclusion, a committee proposed initially by my noble friend Lord Kirkwood. The committee published its report just before Easter with a raft of recommendations calling on the Government, the Financial Conduct Authority and the banks to give much greater priority to tackling financial exclusion and ensuring that vulnerable customers were getting a fairer deal. It has felt like a long wait for a government response to the report and for this debate, but I hope it has given all concerned a chance to think seriously about what needs to be done.

I place on record my thanks to my fellow committee members for all their hard work. I consider myself very fortunate to have worked with such a highly committed, engaged, constructive and knowledgeable group of Peers from all Benches. Our discussions were marked by a strong sense of social justice and shared endeavour. We were hugely assisted by all those who provided written and oral evidence—we had 101 submissions of written evidence and 52 witnesses giving oral evidence—and by the very high-quality advice that we received from Professor Karen Rowlingson of the University of Birmingham, who served as a specialist adviser to the committee.

We benefited greatly from two excellent visits, one to Coventry and one to Toynbee Hall. On both occasions we met individuals with first-hand experience of financial exclusion and a range of agencies that provide help and support in this field. I particularly thank the staff of Toynbee Hall, Coventry City Council and Coventry Citizens Advice, who made this possible. Of course none of this could have happened without the truly outstanding support that we receive from the committee secretariat. I want to mention by name our committee clerk, Matt Smith, our policy analyst, Nathan Lechler, and our committee assistant, James Thomas. We in this House are fortunate indeed to have such talented and committed staff who work so hard.

I am proud of the report that we produced. I pay particular tribute to those who produced the easy-read version, which I gather is now considered a model of its type. I was also very pleased by the reception that the report received from both the sector and the media. The extensive media coverage was entirely positive and there was no criticism of the report or any of its recommendations. That suggests that we tapped into a wellspring of support, and I place on record my thanks to Owen Williams, the head of press and media, for his support here.

So what exactly is financial exclusion and why does it matter? Simply put, it is when people, particularly the poorest, cannot get access to fairly priced basic financial services that most people—certainly in this Chamber—take for granted, and are forced to rely on extortionately priced and often substandard financial products. The committee felt that it was deeply ironic that, while the UK is considered a world leader in financial services, some 1.7 million people do not have a bank account, some 8 million people are experiencing problem debt and 40% of the working-age population has less than £100 in savings—that is, no buffer to help deal with any unexpected emergencies.

Uppermost in the committee’s thoughts was the unpalatable fact that the poor pay more, which is often called the poverty premium. Currently the poor pay more for a range of services, from heating their homes to accessing credit, contributing to a vicious circle that can drive people ever deeper into debt. The situation is made worse by the growing number of bank closures, with 53% of UK bank branches closing between 1989 and 2016, a far steeper decline than in many parts of Europe, and the growing number of people who say they are having real difficulty managing their personal finances daily as the cost of living rises while wages stagnate.

So the problem was clear to see. I shall outline briefly some of the report’s recommendations in four key areas and then comment on the Government’s response. I know other committee members will pick up on the other critical areas that I do not have time to cover, particularly financial education, welfare reform, debt advice and financial technology.

The first area I shall focus on is leadership from government and proactive regulation. The evidence that the Select Committee received made it abundantly clear that the lack of a strong lead from government and a coherent strategy to tackle financial exclusion had been at the heart of the problem. Witnesses, including from the Financial Inclusion Commission, consistently lamented the winding up of the Financial Inclusion Taskforce in 2011 as leading to a lack of central government leadership, co-ordination and momentum. Thus, the committee recommended that the Government should appoint a clearly designated Minister for financial inclusion, who should publish a government strategy addressing financial exclusion and make an annual progress report to Parliament, including reporting on high street bank closures and the take-up of basic bank accounts.

We felt that this emphasis needed to be matched by the Financial Conduct Authority, which, in recent years, has introduced a much-needed and successful cap on payday lending. This is why we recommended that the Government should expand the remit of the FCA to include a statutory duty to promote financial inclusion. We also recommended that the FCA be obliged to establish new rules requiring banks and other financial services providers to have a duty of care towards their customers. Taken together, we felt that these measures could transform the delivery of financial services for vulnerable customers.

The second area is financial exclusion and vulnerable groups. It became clear to us that some groups, particularly the elderly, those living with a disability and those suffering from mental health problems, were particularly ill served by the current system. We heard that one-third of people over the age of 80 had either never used a cash machine or preferred to avoid using one and that 93% of those over 80 did not use internet banking. For these people, the ever-increasing rate of closure of physical bank branches is a major cause for concern.

We recognised the two-way relationship between financial exclusion and mental health, and received some compelling evidence on what could be done about it. We recommended that the Government, the FCA and financial services sector should work together to develop and introduce a wider range of control options for those customers experiencing mental health problems—for example, allowing potentially vulnerable consumers voluntarily to opt in to features such as 24-hour delays before processing large transactions, bank accounts with partial third-party control or nudge-type notifications of changes in spending patterns.

It is more than 20 years since the Disability Discrimination Act was passed, introducing the concept of reasonable adjustment into UK law. Banks have had a long time to get it right when it comes to making reasonable adjustments to serve disabled customers. Sadly, we heard far too many examples of failure on the part of banks to tailor their services effectively and appropriately. These included repeatedly contacting deaf customers by telephone and sending written PIN numbers to blind customers instead of using Braille.

As a committee, we considered that to be totally unacceptable, and recommended that the Government, the FCA and the British Banking Association carry out a review of reasonable adjustment practices for disabled customers. I must say that I found the Government’s response particularly disappointing in this regard. I ask the Minister—indeed, I plead with him—to think again.

Thirdly, on access to financial services, in recent years, the number of unbanked people has started to increase again. Too often, we heard that banks were not being proactive in offering basic bank accounts to those customers who were suited to them, or that these accounts were not advertised or promoted properly. Some banks working hard in this area clearly felt that other banks were not pulling their weight. Thus, we recommended that the Government require banks to promote basic bank accounts effectively and take steps to ensure that the burden of providing such accounts, which are clearly loss-making to the banks, is shared more equally.

Barely a week seems to pass without further news of bank branches being closed, and now, also, of ATM closures. This trend is of real concern for those people and groups who rely on physical access to banks or prefer the reassurance of face-to-face communication and dealing directly with bank staff to online banking. The elderly and some of those living with disabilities are at high risk here: we were told that 42% of disabled people are not online, while 37% of retired people are not regular internet users.

Indeed, many of the letters I received immediately after the report was published were from older people or people in rural communities who felt simply abandoned by their bank and were asking why more collaborative measures could not be taken to ensure that there was at least one physical banking presence—perhaps located at a shop, a post office or a community centre—in each town. This would of course involve banks working together to ensure that there was at least one physical banking presence, perhaps located in a shop, post office or community centre, in each town. This would of course involve banks working together, but surely this should not be beyond the wit of man—or, indeed, woman. We were also struck by the sheer scale of the Post Office network which, at 11,600 branches, has more outlets than all the high street banks combined. What is more, the Post Office can offer banking services to 99% of UK current account customers. That is not well known, and we believe that the Government, banks and post offices need to do more to raise public awareness of these services. I was very pleased to have a very constructive meeting with the chief executive of the Post Office in the summer.

Fourthly, an area of particular concern to the committee was the high-cost credit market. In 2015, the FCA introduced new regulations to tackle some of the most egregious practices by placing a cap on both daily interest rates and total interest charges and fees for payday lenders, which were a marked success. But the committee felt strongly that these new rules were too limited in scope and should equally apply to other forms of high-cost credit. In particular, the committee called for urgent action to introduce new controls on rent-to-own products and unauthorised bank overdraft fees. In both instances, the committee received evidence of quite eye-wateringly high interest rates being charged to vulnerable people, forcing them further into financial difficulty. In some cases, it was nothing short of extortionate.

I am pleased that, since the report was published, the FCA, through its own review of high-cost credit, as well as maintaining the payday cap at its current level, is now looking at fundamental reform of unauthorised overdrafts and has the rent-to-own sector very clearly in its sights. I strongly commend the action taken by the FCA on 1 November to order BrightHouse, Britain’s biggest rent-to-own retailer, to repay £14.8 million to nearly 250,000 of its customers. It was extraordinary that there was no mention of this strong action, of which I thoroughly approve, in the Government’s response, which was published a week later. I also commend the stronger focus that the FCA has placed recently on consumer vulnerability and its occasional paper on the ageing population. I was extremely grateful for the very constructive meeting that I had with the chief executive in November.

I now wish to turn to the government response more generally. After a long wait, I cannot pretend that I was anything other than rather disappointed by the tone of the Government’s response. To me, it lacked a sense of urgency and ambition. It contained a longish list of things that the Government were doing anyway and failed to engage directly with a significant number of the issues raised and recommendations in the report. I have done a quick tally and, of the report’s 22 recommendations, four have been implemented, four partially implemented, and 14 not implemented. Perhaps I should be satisfied by that but, given the cross-party consensus achieved in the committee and favourable reception that the report received externally for being reasonable, insightful but largely uncontroversial, I had hoped that the Government would have taken the recommendations a bit more seriously.

I welcome, of course, the creation of a new DWP Minister with financial inclusion in the title, but I was slightly perplexed by how that Minister could take on the stronger leadership and co-ordination role that the Select Committee argued for, particularly when the government response makes it clear that the Treasury Select Committee will take the lead on co-ordination of government-wide policy in this area. Perhaps the Minister will be able to clarify on that point. That said, I look forward to meeting one or both of them, if they can spare the time to see me.

Secondly, I very much welcome the new financial inclusion policy forum, which will,

“enable ministers to take a strategic, cross-government approach on action to improve financial inclusion”.

Could the Minister please say when the body will first meet, how often it will meet, what its membership will be, how the voice of financially excluded people will be heard and whether its agenda and minutes will be published? Most crucially of all, will the policy forum be responsible for producing a cross-government strategy document and an annual report to Parliament, as we recommended?

Finally, I was disappointed that the two recommendations relating specifically to the remit and regulatory powers of the FCA were not greeted more enthusiastically. With the Government’s recent very welcome decision during the passage of the Financial Guidance and Claims Bill to include vulnerability within the stated objectives of the new single financial guidance body, would they consider rethinking whether it would not now make sense to include similar words specifically within the remit of the FCA to bring the two in line? That would be a most welcome step, as would introducing a duty of care, which would make a real difference to the support that vulnerable consumers receive from their banks, particularly, for example, those with cancer.

In conclusion, there is much to do to build a financial services system that works fairly for everyone and helps to tackle rather than exacerbate inequalities. On many occasions, this Government have said that they want a country and system that works for all, not just the well off. So do I, and despite the government response I still hope that the Government share our view that the current level of financial exclusion is unacceptable and our sense of urgency to do something about it. The victims of the current system are often the most vulnerable—the elderly, the poor and those living with a disability. At this time of good will, let us demonstrate in this debate and by the actions that we take that we truly care. I beg to move.

I pick up the point made by the noble Baroness about this time of goodwill. At this time of the year—Christmas, Hanukkah, Winter Veil or whatever one wants to call it—a lot of people try to help those who are excluded in society from all sorts of activities. So I congratulate the committee on the clarity of the in-depth analysis that it has carried out.

I do not know how many noble Lords were in the Chamber earlier when the noble Lord, Lord McFall, as Senior Deputy Speaker, talked about the need for much greater understanding of the work of the Select Committees. A lot of people stood up and said that that was absolutely right, and there needed to be more missioning—going out and telling people about the excellent work that the Select Committees do. I say “hear, hear” to that, and there are some satisfied nods around the Chamber from committee members. But I sometimes wonder whether a bit of missioning within your Lordships’ House might not also be a good idea from the Select Committee. On the speakers list there are 10 speakers who are members of the committee, who will doubtless tell us all what an excellent report they have contributed to—and only four as-it-were immigrant Back-Bench people who are not on the committee. So there is a lot to be said for that, just as there is a lot to be said for the vision of my right honourable friend the Prime Minister for a shared society, which I strongly support.

Having said all that, may I get in my retaliation first? It is always much easier to define than to solve—and, with respect, to find practical tools for change. I say that as someone who works in the financial world, in the City of London, as declared. Whenever there is a problem, whether it is financial exclusion or anything else, in your Lordships’ House two ideas always pop up—let us have a Minister for it, to stop it or extend it or change it, and, secondly, let us put better education about it in the national curriculum. Those are absolutely standard suggestions from most Select Committees about their proposals.

On the first, only last week there was a call for a new Minister for Loneliness in a report by a commission following the tragic death of the late Jo Cox, to deal with that sometimes devastating problem for too many people. And so on, up the headwaters of recent political times, to calls in the past under both parties to have Ministers for Children’s Play or whatever. I do not think that having a Minister designated to do stuff necessarily always sorts stuff out. I well remember the noble Lord, Lord Giddens, making a plea in your Lordships’ House for greater attention to happiness. I think that he may have called for a Minister for Happiness —and perhaps indeed he was the Minister for Happiness, or at least the tsar in charge of happiness. I cannot remember. But I do not think that it is an easy solution.

On the second point that always pops up—the need for better education—of course financial education is a good thing and it would be daft not to have it. But I think that there would be a collective groan in the staffrooms of our schools, which already have a difficult enough task in dealing with a crowded curriculum, if there was another ad hoc, sudden insertion into the work that they have to do. I do not think that jamming stuff into the curriculum solves anything very much.

I congratulate the committee on the depth of its analysis, and also on not calling for large sums of new money to be spent. That is a very important point: many problems can be solved without new budgetary extensions. People such as us, in positions of responsibility, have to recognise that we have a role—whether large or small—in improving financial inclusion. Her Majesty’s Government are, for sure, extremely important in this—but so are local authorities, NGOs, the charitable sector, in which my daughter works, churches and the rest, including local communities. Last Thursday, I was discussing this with someone with whom I work in the City and whose opinions I value. She told me of the problems facing her parents in Worcestershire who have a very long journey to a bank. They are fortunate, however, to have a sub-post office still in their village—but most sub-post offices cannot provide the sort of financial services that the excluded or those on the margins find so difficult to reach.

In our nearest market town, in the West Country, it is not to a sub-post office but to the local Crown post office that we turn. Three years ago there were three small bank branches: Lloyds, HSBC and NatWest. They have all gone, but the local post office has stepped into the breach, providing excellent banking services and foreign exchange facilities to trade in euros and dollars. When people go in to make a transaction it also has the commodity which is vital in all rural areas: the latest gossip.

Not so far away from us there has been a bit of a fight-back. Four banks in Glastonbury shut within a two-year period, but Nationwide was lured to go back. It is an exciting place to be for all sorts of reasons, but perhaps not for banking. The leader of the local campaigners who got Nationwide back—and well done to them—said:

“There are many customers, particularly the elderly and those on low incomes, who do not and often cannot bank online”.

Not every town is so lucky, nor big enough, like the village in Worcestershire where my colleague’s parents live. They cannot get financial help in their local sub-post office.

One Minister might be able to help in this area, particularly one in the Department for Business, Energy, and Industrial Strategy who has in her portfolio both small businesses and post offices. Can more be done with imagination and encouragement by central government to get more internet facilities to provide better banking-like services in these smaller sub-post offices? That would do so much to help with financial inclusion.

However, financial exclusion is not going to be solved by having more bank branches. It was there all those years ago in the golden age when we seemed to have bank branches everywhere. Why is that? Some geographers, cleverly mapping the characteristics, find some correlation with geographical exclusion founded on relative remoteness. People in some rural areas near us are not only without the luxury of a bus a day; they only get a bus chugging into the local town one day a week. If you overlay a map of that sort of isolation onto a map of the areas Ofcom has just identified as having an 80% failure to get 4G services, the correlation is there all over again.

It is particularly important that rural people are not forgotten in the issue of financial inclusion. They are more likely to be isolated and to suffer from financial exclusion. There are a number of ministries, and no end of interministerial and cabinet committees, as well as the Cabinet Office, which are full of talented young civil servants who can help to bring these different strands together. That is a better way forward than having a Minister devoted to the task—because, unless you have a budget and power, you cannot do much.

My Lords, it is a pleasure to follow the noble Lord, Lord Patten, and to participate in this debate. I offer my congratulations to the noble Baroness, Lady Tyler of Enfield, for her skilful chairing of the committee and to the formidable committee staff that she drew around her. They produced the comprehensive report before us today. If my copy of it appears a little dog-eared, it is because it became a useful reference document for our recent deliberations on the Financial Guidance and Claims Bill, now heading for the other place. That Bill responds very much to issues of financial exclusion, financial guidance and capability and advice services, as well as debt advice. It was significantly changed, and improved, on a cross-party basis during its passage through the Lords, so we can claim some authorship of its outturn.

Rather than being a measure which just stitches together three existing advice operations, TPAS, MAS, and Pension Wise—I will refer to it as SFGB—it has objectives to improve the ability of members of the public to make informed financial decisions, and to support the provision of information, guidance and advice. It has a consumer protection function, which includes the obligation of SFGB to pass consumer casework to the FCA where there is a suspicion of unprofessional conduct, harassment or misleading approaches. It also requires the monitoring of cold calling on consumer protection as a prelude to a ban. We know that most financial scams, particularly for pensions, start with a cold call, so this is very important.

Of particular significance in the debt space is the inclusion in the Bill of provisions which should lead to a debt respite scheme. Both the Government and ourselves had proposals on this as manifesto commitments at the last election. The purpose is to help individuals in debt and their creditors devise a realistic plan for the repayment of debt and offer protection from charges and enforcement action in the meantime. Given soaring levels of household debt, this should be introduced as soon as possible. We know that the rise of some types of debt can be strongly associated with changes in government legislation and this is not limited to universal credit. The localisation of the Social Fund, now local welfare assistance, was a matter on which our committee expressed particular concern. In its former guise, this provided a vital safety net, facilitating grants and interest-free loans to people on very low incomes who were living through particular financial pinch points. The development of diverse eligibility criteria, some with residence criteria—a problem for those fleeing domestic violence—has created a postcode lottery. The consequences are predictable: increased use of food banks; increased reliance on unaffordable short-term credit. Our report expressed concern about future funding for this area but beyond that went no further than recommending that government disseminate best practice. On reflection we might have done more.

Council tax support schemes have followed a similar pattern of being localised and having local authority funding cut, so more and more councils have had to restrict their schemes. Hence council tax arrears have moved up the debt league. Evidence suggests varying practice in collection arrangements, made worse by the demise of local debt advice. A select committee report highlighted consistent evidence about the negative impact of reforms to the social security system, especially the introduction of universal credit as a replacement for a bundle of other income-related benefits, together with the tightening of the conditionality and sanctions regime. Hardship and debt were being exacerbated in particular by the payment of universal credit monthly in arrears, by a waiting period for new claimants, by bundling rent support and by making this generally available to tenants.

Noble Lords will doubtless be aware that the Government have announced the abolition of waiting days, increased advances to 100% now repayable over 12 months, and introduced transitional payments for those previously receiving housing benefit. It was a committee recommendation that the seven-day waiting period be scrapped. This is, of course, to be welcomed but it does not solve the problem. Its year one cost of some £300 million should be seen in the context of billions of cuts past and ongoing to the social security system. We called in our report for greater flexibility around universal credit payments and a faster rollout of trusted partner arrangements.

The report also addresses issues arising from the application of sanctions, and evidence as to their effectiveness. We heard harrowing evidence about the contribution they make to financial exclusion, where individuals sanctioned look to all options to survive, including reducing payments for priority expenditure such as rent, gas and council tax. A number of witnesses drew our attention to their impact on vulnerable individuals, including those with mental health problems. Our report has not elicited any government response to justify the effectiveness of sanctions, which will doubtless continue to cause misery and hardship to hundreds of thousands of fellow citizens.

The report records that we have seen no comprehensive research on the cumulative impact of the Welfare Reform Act 2012, and what flowed from it, and recommended that the Government conduct a detailed comprehensive cumulative impact study on how changes to social security policy might have affected financial well-being and inclusion, and how they may have contributed to debt, arrears and growth of high-cost lending. The government response prays in aid the assessments produced at Budget time and the Improving Lives: Helping Workless Families recent publication, but this was part of the Government’s moving away from the use of income data—relative or absolute—and does not really meet the analysis the committee was seeking.

Financial exclusion is, as our report makes clear, multifaceted, but we heard views about its relationship with poverty and the poverty premium, of which we have just heard. That is the additional cost incurred by individuals who have to transact in the most expensive way—high-cost credit, pay-as-you-go mobile phones et cetera. If we look at these matters through the poverty lens, we should be alarmed at what is happening. After declines in poverty—child poverty—over 20 years, we now see it rising and the reasons are very clear: cuts in benefit, tax credit and universal credit, for those both in and out of work, inflation on the rise and employment now falling. There is much still coming down the track: freezing of working-age benefits, the two-child policy and more. As CPAG demonstrates, by 2020 we expect some £27 billion less on social security spending than a decade earlier. That is a difficult backdrop against which to combat financial exclusion and is a challenge to the Minister with his new responsibilities. However, I think this report should remain a significant contribution to that endeavour. The process has produced a wealth of information and experience from those whose daily lives involve operating at the sharp end.

My Lords, I rise very briefly on two counts. First, as a member, I must thank the noble Baroness, Lady Tyler, for chairing and guiding the Select Committee so excellently. Secondly, I want to underline what I see as three particularly important issues with which the committee grappled.

My first issue is the decline in the number of branch banks available in the United Kingdom. Since 1988, over half the branch banks have closed. For obvious reasons, bank closures have a greater effect in rural areas than elsewhere, but the recently announced axing of a large number of branches across the board will have an immediate and destructive effect on financial exclusion. The banks—here I must declare an interest as an ex-employee of Barclays—seem sometimes so submerged in their own problems that they forget that they are a service industry, and that online banking is not a substitute for the human factor. There is no proper substitute, especially for those with limited technical skills, for the helpful human voice, or, if possible, the human face, with whom to converse, to discuss difficulties and, if necessary, to cry for help.

Secondly, I mention the lack of financial education in schools. While in Scotland, Wales and Northern Ireland, financial exclusion has been in the curriculum for some time, in England there is still no requirement for primary schools to include financial education as part of their teaching. Furthermore, nearly two-thirds of state secondary schools, being non-maintained, are under no obligation at all to teach financial education. These omissions should surely be corrected as soon as possible.

Thirdly, I mention universal credit. Time and again, the committee was struck by the frustrations experienced by potential users of the system. I realise, of course, that recently some adjustments have been made which should improve matters, but the users of this scheme to whom I spoke were frequently frustrated by the difficulty, or even impossibility, of discussing their problems with a human being rather than a computer. Again I say, there is no substitute for human contact in matters financial. I very much hope that these and other suggestions made by the committee will be acted upon without undue delay, and that the many diverse organisations, including the Government, trying to bring about improvement are united and successful in their efforts.

My Lords, it was a pleasure to be a member of the Select Committee so excellently chaired by the noble Baroness, Lady Tyler of Enfield. I must also thank all the staff, advisers and clerks who enabled us to pursue such a positive route through the committee’s inquiry. Most of the 22 recommendations are still to be considered and taken on by the Government. What are the Minister’s thoughts on the 14 recommendations still to be covered in the government response?

I shall limit my comments to the three Ds of duty of care, data and digital and technology. It seemed pretty clear throughout our inquiry that duty of care would be an eminently good thing for all financial services and financial institutions to adopt. We received significant evidence on this, not least from Macmillan Cancer Support. Even if people consider a duty of care only for purely selfish reasons—given that one in two of us is likely to face a cancer diagnosis in our lives, there is a 50:50 chance that we will act just in our self-interest—obviously, we should go far beyond that. It makes sense for both customer and service provider to understand how this duty of care should work. I pay tribute to Macmillan Cancer Support for the brief it gave to the committee. I also pay tribute to those who discussed this point on the Financial Guidance and Claims Bill, which has just gone through the House. Macmillan Cancer Support clearly demonstrates how a modern, lean, effective charity should operate, not just in giving sensational care to people at some of the most delicate, painful times in their lives but in understanding the total life experience of people who receive a cancer diagnosis.

I tabled an amendment on duty of care to the Financial Guidance and Claims Bill in Committee and on Report. However, the Government were not minded to accept it. In the light of that, I ask the Minister: if nothing is to be done on this point until after Brexit, particularly from the FCA’s point of view, what do the Government intend to do in the interim to address this fundamental point of duty of care to all customers? This takes financial institutions back to the purpose for which they were established. That purpose was based on a relationship. We need to bring that into how financial services will operate in the future. We have an opportunity to do so through the data now available and what it is now possible to do with data. We should use it not just to enable policymakers and institutions to understand people’s predicament when they find themselves at the sharp end of financial exclusion and assist them, but use it in a predictive and granular way to enable individuals themselves to grip their own data and understand on a minute-by-minute, second-by-second basis, if they wish, how their actions impact on that data. That takes us to the digital opportunity. In this situation, finance technology—fintech—is all predicated on that data. What could that do in terms of the issues of the unbanked?

We know that if people are enabled to get online and have an online bank account, they can save £500 to £700 a year, which is not an insubstantial sum. There are significant products and businesses out there, such as MyCard, dopay and Pockit, to name but three involved in this space. Other noble Lords have already alluded to how the connection between financial and digital exclusion is key to understanding this. It is all well and good to have potential solutions online, but if people are not online, see no reason to be, and have understandable care and concern about going online, no solution will ever come from that, even though huge cost savings are to be made from those online solutions.

Financial literacy is incredibly important. On the point made by my noble friend Lord Patten, he is quite right that there should not be an inexorable dumping of more and more responsibilities on our fantastic teachers. However—I am prepared to get into a discussion—for financial literacy at all levels to go into the curriculum I would be prepared to look at what we could take out in a nightclub-style one-in, one-out approach. Without financial literacy, you can teach a heck of a lot to young people which will never have any positive impact because of the detrimental effects of finding yourself at the wrong end of financial exclusion.

As has already been mentioned, bank branches are gone. We need to consider what more can be done in the community. With the Open Banking initiative, there is the potential to have clusters of fintech businesses based in the community so that people cannot only interact online but can have that physical presence and, on the point made by the noble Lord, Lord Fellowes, they can meet people face-to-face to discuss financial matters. If the right encouragement is given and it is made possible for chatbots to be put in place, people may be able to have conversations with them which may be more comfortable, and it may be possible for more questions to be asked through that means than through more traditional approaches.

Fintech is not the totality of the solution but it contains many of the solutions. What is phenomenally encouraging—we see it through the Tech City initiative—is that so many of the young people who are founding fintech companies are doing so to address so many elements of financial exclusion. They do so not as charity, as CSR or as a “nice to have”, but because it is in their DNA and they can drive fantastic business models of these issues, which, all too often, traditional financial institutions have just been able to not engage with and ignore.

A potential golden thread runs through fintech, where cost can be taken out, customer experience and service can be put in and, crucially, financial inclusion can flow through that route. Probably the most pernicious of all elements in all our work on the committee and beyond is: how can it be that in the fifth-richest economy on the planet, those who all too often have the least are forced to pay the most for their financial services?

I spare a fourth D—a slight detour, which I must take in this discussion. It is impossible to consider these issues without taking some time to talk about gambling and the impact that that currently has on our community and society. Just look at the number of gambling institutions on high streets in lower socio-economic areas compared to the leafy suburbs. I ask the Minister a specific question: when will the Government take clear, definitive action on FOBTs? I know that we have a consultation, but with fixed-odds betting terminals you can lose £100 every 20 seconds—£300 in a minute. Spin number one: there goes the rent; spin number two: there goes your food; spin number three: there goes your hope.

That and more was the purpose of undertaking the Select Committee report on financial exclusion. It was a joy to serve alongside noble Lords and, as I say, to have the excellent chairmanship of the noble Baroness, Lady Tyler of Enfield. To conclude on a specific point, I encourage all fintechs to look at—as they already do—every possible way to get involved, to come up with innovative, cost-effective, empowering, enabling solutions to financial exclusion. Can the Minister ensure that the Government do everything in their power to enable that flourishing fintech sector to continue to boom, not just now but through and beyond Brexit?

My Lords, I join other colleagues in thanking our chair, the noble Baroness, Lady Tyler, for her consistent and enthusiastic chairmanship over many months. It was a pleasure to work with her and other members of the committee. We were also exceptionally well serviced by our clerks and special advisers, who were exceptional before, during and after the publication of our report.

When the noble Baroness referred in her introduction to the Government’s response, she was diplomatic. I am exceptionally disappointed by the Government’s response on a number of issues. I understand entirely and fully accept the point the noble Lord, Lord Patten, made; you cannot have a Minister for everything. However, given the statistics provided to the committee, which show that 40% of the population do not have £100 and 1.7 million do not have a bank account, and all the other statistics, it is not particularly unreasonable to have a person watching. We rural-proof policies and proof policies for a whole range of things, and I cannot see any reason why we do not look at this particular aspect. It is one of the most fundamental things in front of us.

I will refer to a few specific points which I raised with the committee. However, before I go on to that, the comments that have just been made on gambling need to be taken exceptionally seriously. During the committee’s deliberations, we were provided with evidence about advertising for gambling being shown at 2 or 3 am. We know from evidence provided to us that the companies have a clear mathematical process of identifying who is watching and what their vulnerabilities will be. I had an ad hoc conversation with a friend who knew somebody who worked in the industry, who said that they had it down to a fine art. They knew who was watching, at precisely what time, and what buttons they needed to press. It baffles me that we allow these people to have free rein. I am not in favour of a nanny state, but we control things on television and have a watershed, and we know that a lot of people who are watching at these ungodly hours may have mental health issues. All this evidence was provided to us, and it is time that the Government took this seriously.

Recommendation 21 deals with the question of where people’s rent is paid. I believe that, in theory, universal credit is a great thing. However, as we know, the implementation is not going terribly well. We have had some improvements over the last period, since the committee reported, but it is important that, if housing benefit is for rent—to keep a roof over people’s heads—it should be paid directly to the person who owns the property. What is the point? Are we saying, “We’ll make people learn and we’ll teach them to be responsible with their own money”? I get all that, but the reality is that a percentage of people are vulnerable and not responsible, and so we have to go through this whole process of appointing people to chase after them—a whole industry of people going around, banging on doors and pestering people for money. Why are we doing this? What is gained by any of it? The rent should be paid to the person to whom it is due and then it is done. We do not have to have all these bailiffs and heavies.

We also know that many people living on estates suffer from various addictions, which leads to the roof over their heads being taken away. People gather like vultures because they know the day and the hour when the money will be sent to a person and they are on the doorstep to collect it. Why are we doing this? It would be far simpler to pay the rent to the landlord, as we do in Northern Ireland, and then we would not have any of these issues.

Perhaps I may deal with one other thing, which I mention quite often, and that is credit unions. In Northern Ireland we have considerable experience of credit unions. The Government’s response to our recommendation on that is puzzling. We simply said:

“Government funding provided to the sector should take the form of repayable, long-term investment capital rather than grant funding for ongoing expenses”.

The Government’s response is that,

“the government does not intend to provide revenue support to credit unions”.

We do not want them to provide revenue support to credit unions; our recommendation is not to do that. The recommendation is to supply repayable long-term investment capital. It is a kind of Aunt Sally argument to say in response to a proposal that we have made, “We’re not going to do this and it’s against government policy”. We are not asking people to provide revenue support for credit unions—quite the reverse—but we believe that credit unions should be able to offer a greater array of products to people. People’s experience is that credit unions are responsible lenders.

I wish to make an overarching point in conclusion. With London allegedly being the financial capital of the world, I am baffled that we cannot produce products to minimise the poverty premium that people have to pay—and there are clear examples of that. Surely it makes sense for some time and effort to be expended by the brains in the square mile on seeing what can be done to encourage others to make it easier and less expensive for people on those levels of income to live. I am quite sure that if effort were put into this, it would be found that the brains are there to provide the products, without forcing or shaming people into doing so. That is why a duty of care has been referred to. We all have a duty of care to our staff, the NHS has a duty of care to its patients and education providers have a duty of care to their pupils. Why should the financial sector not have a duty of care to its customers?

Grenfell Tower and Building Safety

Statement

My Lords, with the permission of the House, I would like to repeat the Statement made by the Secretary of State, my right honourable friend Sajid Javid, in the House of Commons earlier today.

“With permission, Mr Speaker, I would like to update the House on the ongoing response to June’s tragic fire at Grenfell Tower and our wider review of building safety.

It is now six months since the disaster. Last week, a number of events were held to mark this sad milestone, including the national memorial service at St Paul’s. I had the privilege of attending the extremely moving service, alongside the Prime Minister, the Minister for Grenfell Victims and of course the right honourable Gentleman opposite, among others.

The scale and impact of this disaster are unprecedented in recent times, and I could not hope to cover all aspects of the response in one Statement, so today I will concentrate on areas where I have new information to share. However, I am very happy to take questions on any aspect of the tragedy and the response to it.

I will start with an issue that I know is particularly important to Members and honourable Members, as it is to me: finding new places to live for those who lost their homes. Responsibility for rehousing lies with the local authority, the Royal Borough of Kensington and Chelsea. However, I have been closely involved with the process to ensure that everyone is rehoused as quickly as possible, and my department has been providing the council with support to help bring that about.

The council has been tasked with finding places to live for 207 households from Grenfell Tower and Grenfell Walk. To date, 144 households—almost 70%—have accepted an offer of temporary or permanent accommodation. According to the latest figures from the council, 102 of those households have now moved in. For those who remain in other accommodation, the council has offered the opportunity to move into private rented accommodation while a permanent home is found. Some have taken up this offer; others have made it clear that they do not want to move twice—something I completely understand.

The council was undoubtedly slow off the mark in starting the rehousing process but, with its own change of leadership, the help of the Independent Recovery Taskforce, and pressure and support from the DCLG, consistent progress is now being made. But I am far from complacent. I have always been very clear that we should move at the pace of the families involved and that nobody should be rushed or pushed into making a decision about where to live. But to have so many families, including some children, still living in hotels and other emergency accommodation six months after the tragedy is simply not good enough.

The situation is undoubtedly complicated but I have been very clear with the council that I expect it to do whatever is necessary to help people into suitable homes as swiftly as possible. I am confident that the council is capable of doing that but, along with the task force, I will continue to monitor the situation and work with the council to ensure that it happens.

The issue of rehousing has an added poignancy with Christmas just around the corner. Whatever your faith, this is a time for family and friends, and that makes it a difficult time for anyone who has suffered a loss or trauma. Nothing anyone can do will make this a normal Christmas for the bereaved and the survivors, but we are doing all we can to offer extra support over the coming weeks.

A range of activities and events is being staged for local children, particularly those still living in hotels. Social spaces have been booked in four of the hotels where families are staying, so there is room for people to spend time together, and NHS outreach workers are visiting residents in the local area to offer specialist mental health support. This builds on the excellent work the NHS has already done on mental well-being. Specialists have screened almost 1,000 adults for signs of post-traumatic stress disorder. Four hundred and twenty-six are currently in treatment for PTSD, while a further 62 have completed their treatment. One hundred and ten children have also received or are receiving specialist help. The dedicated NHS Grenfell helpline remains available 24 hours a day, seven days a week.

Local organisations are also providing health and well-being support on the ground, including culturally sensitive support that reflects the diverse make-up of the borough. Last month’s Budget made available a further £28 million to pay for mental health and emotional support, a community space for those affected and investment in the Lancaster West estate over the next three years.

Of course, it is not only government that has been providing funds; in the aftermath of the tragedy, the British people responded with incredible generosity, donating more than £26 million to various charities. The majority of that money—more than three-quarters of it—has already been paid out to survivors and to the next of kin of those who died. Of the remaining £6 million, around £2 million is being held back for people who are entitled to a payment but have not yet claimed it and for some whose applications are still being processed. Payments for those who have not yet claimed will be looked after by the charities until the individuals are ready to engage. The remaining £4 million will go towards providing long-term support and community projects.

As people are rehoused and take the time to grieve, the distributing charities will work with them, identifying their changing needs and ensuring that money goes where it can best meet the needs of the community. The House can rest assured that every penny that was donated will be spent on the people it was intended for. The generosity of the British public demands no less.

Another issue where the views and wishes of the local community must be paramount is the future of Grenfell Tower itself. The tower is currently being wrapped in white sheeting—a process that will be completed early next year. This is not being done, as some have claimed, to make people forget about what happened; it is being done because many members of the community—people directly affected by the fire—have said that covering the tower will help them to begin the healing process.

I acknowledge the current anxieties about the long-term future of the site among those who have been most affected. I can categorically state that no decision has been taken about the long-term future of the site on which the tower sits. These decisions will not be led by me, the Government, this House or the Royal Borough of Kensington and Chelsea. It is the bereaved, the survivors and the wider community who will lead and be at the heart of the decision-making process. My colleague the Minister for Grenfell Victims is working directly with them to agree a set of written principles that will guide the way forward for the future of the site.

When decisions are taken, we want them to have the broadest possible support from those affected, particularly those who lost loved ones, and not just to follow the views of those with the loudest voices. The principles we are drawing up will help us to make sure that that happens and will include a firm commitment from the council that if the bereaved, survivors and the wider community do not want the site to be redeveloped for housing, the site will not be redeveloped for housing.

As well as dealing with the aftermath of the tragedy, we are determined to do everything possible to prevent such a disaster happening again. A crucial element of that is the public inquiry, which recently held its first procedural hearings under the chairmanship of Sir Martin Moore-Bick. I know that some members of the community are concerned about the inquiry’s remit, structure and personnel. Some have called for Sir Martin to be supported by an extended panel that reflects the diverse population of the tower. The decision on that rests with the Prime Minister. She gave a commitment to consider the composition of the panel once Sir Martin had determined what further expertise he needed, and she is now giving active consideration to the issue. Meanwhile, Sir Martin has said he is actively considering plans for a consultative panel of local people who could talk to and receive information from the inquiry. Such a panel has been established successfully by the inquiry into child sexual abuse as a way of closely involving victims and survivors in the work of the inquiry. Sir Martin has said that any decision on the establishment of such a panel for the Grenfell Tower inquiry will be taken in consultation with tower residents and bereaved families.

Whatever happens next, I can reassure the House that legal representatives of core participants will have access to relevant documents. They will be able to offer opening and closing statements at certain hearings and they will be able to suggest lines of questioning for witnesses. The needs of the community have been at the heart of the inquiry since it was first announced, and that is not going to change.

Learning lessons for the future will be a crucial part of Sir Martin Moore-Bick’s inquiry, but it is not the only piece of work looking at how building safety can be improved. Earlier this year, the Home Secretary and I asked Dame Judith Hackitt to carry out an independent review of building regulations and fire safety. The current system is complex and confusing, a situation that has developed over many years and under successive Governments. Today, Dame Judith has published her interim findings, which show that there is a need for significant reform. I can confirm that we have accepted all of Dame Judith’s recommendations for government. We agree with her call for a change in culture and a more effective system that will encourage people to do the right thing and hold to account those who try to cut corners. Everyone who is part of that system—including government—has an important role to play in delivering this change in culture and mindset. We fully support the direction of travel signalled in Dame Judith’s report.

Achieving cultural change will, inevitably, take time. But while Dame Judith explores these issues further she has also identified a number of areas where we can start making changes today. These include work on restructuring guidance and tightening restrictions on the use of desktop studies. On desktop studies, we will revise the approved documents on fire safety and commission work to produce a new British standard on when and how such assessments should be used. On guidance, we will work quickly with industry experts to complete work on clarifying the approved documents on fire safety. More widely, we will consider how the entire suite of guidance on compliance with building regulations could be restructured and reordered to make it more user-friendly. We will work with experts across the sector to explore how this can be done. Dame Judith recommends that consultation with fire and rescue services be carried out early in the design process and then acted on, and that fire safety information on a building should be handed over at the right moment. We will write to building control bodies to highlight these recommendations.

The Government will play their part in making the system work better and fixing the problems. I urge the construction industry, building control bodies, fire and rescue services, landlords and others to play their part, too. In January, Dame Judith will host a summit on building regulations and fire safety. It will form the springboard for the next phase of her review, and I encourage leaders from across the sector to take part and help design a better system.

While Dame Judith continues her vital work, we are continuing to support wider work to make existing buildings safer. In the past six months we have overseen a comprehensive set of fire safety tests on cladding components and systems. Fire and rescue services have visited and checked fire safety in every residential tower that has been identified as having cladding likely to constitute a fire hazard or which they consider a priority for other reasons. Across the country we have seen swift action taken to improve fire safety systems and to put in place interim measures where risks are identified. We have provided detailed advice to local authorities, housing associations and private landlords on how to ensure that their buildings are safe. DCLG’s expert panel has issued advice to building owners about carrying out the necessary work to address the fire risks of certain cladding systems. There is undoubtedly room for improvement in the way that the building regulations system works and is managed in the future. However, Dame Judith makes clear that her report should not be interpreted as meaning that buildings constructed under the existing system are unsafe. The system needs to be made stronger for the future, but the action taken since June is helping building owners make homes safer today.

Six months ago, 71 people lost their lives and hundreds more lost friends, loved ones, homes and possessions. Six months on, progress is being made. The situation is moving in the right direction but there is still a long, long way to go. As long as that is the case, I will not stop working with and fighting for the people who have suffered more than any of us could bear. They must not be forgotten and they will not be forgotten”.

My Lords, that concludes the Statement.

My Lords, I first draw the attention of the House to my register of interests as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.

Secondly, I thank the noble Lord, Lord Bourne of Aberystwyth, for repeating the Statement made earlier today by his right honourable friend the Secretary of State for Communities and Local Government.

Thirdly, as I have done on previous occasions, I pay tribute to all those involved on the night in question, from the fire brigade and other emergency services, the public sector staff from both local and national government who have been working with the survivors and the local community, to the voluntary sector and faith communities that are there today and have been there every day since that awful night. I thank them for all they have done and continue to do.

As I do every time I respond to a Statement on Grenfell, I want to point out that the offensive attacks on firefighters by Boris Johnson when he was Mayor of London are unfair and hurtful. I live in hope that one day he will apologise for his ill-thought-out words. He is not a man known for keeping quiet or hiding from the limelight, but strangely he is silent on this issue.

Last Thursday, six months on from the tragedy, I asked a Question expressing my concern that a significant number of people will spend Christmas and New Year in either hotels or temporary accommodation. Despite any caveats that people need to be given space to move on in their own time, it is disappointing that so few of the families have moved into permanent accommodation. I agree with the noble Lord’s comment that the council has undoubtedly been slow off the mark in starting the rehousing process. What specific action has the department taken to speed up this process, because at every stage since the tragedy the council has been slow off the mark? Can the noble Lord give me specific examples of the pressure and support from the department, to which he made reference in the Statement?

I have also raised the question of how the leadership of the authority is engaging with the opposition on the council. For example, is the leader of the opposition being properly briefed and invited to meetings? If the noble Lord is unable to answer that today, perhaps he will agree to write to me with details of the specific actions being taken in this respect.

The noble Lord made reference to the sums of money donated by the public and broke down how much has been allocated from these funds and what is being held back to allocate later. Can he update us on where we have got to with the allocation of the funds provided by the Government to the families concerned?

I note the noble Lord’s comments about the wrapping of the tower. There are mixed views on that locally. As he said, it is paramount that whatever happens to the site, it is led by the bereaved, the survivors and the local residents. I welcome his comments in that respect, although the actions and reputation of Kensington and Chelsea Council on community engagement are not as good as they should be. The local community will expect the Government to hold true to their words in that respect, and to take whatever action is necessary to ensure that Kensington and Chelsea Council does so as well.

In respect of the inquiry, I and noble Lords on these Benches give our full support to Sir Martin Moore-Bick. I hope that the Prime Minister will listen carefully and agree to any requests by Sir Martin to be supported by an extended panel. In addition, I welcome the suggestion of a consultative panel of local people. It is important that this inquiry is thorough and answers the questions that need to be answered, and that it has the confidence of the survivors and the local community. Looking back at other inquiries that have dealt with difficult issues, an extended panel can often help in that process. Lessons must be learned and be seen to be learned.

I am pleased that the Government have accepted all of Dame Judith Hackitt’s recommendations in full. That is an important first step, but it is only a first step along a very long road. In accepting these recommendations, will the Minister confirm that the Government accept that this will result in increased costs and that the Government will meet their fair share of these costs and not leave it to local government, business and others to fund any new safety measures or changes brought about by the revision of regulations and procedures?

Many in local government and elsewhere have been disappointed at the attitude shown by the Government since the fire towards the funding of replacement cladding. If the Government are truly signalling a sea-change in respect of their attitude and how we approach building regulation in regard to these matters, significant costs will be involved. Will the Minister update the House on how much they have paid out to local authorities in respect of works needed to make buildings safe since the fire at Grenfell Tower?

In conclusion, what we need to do can be expressed in the concluding sentences of page 10 of Dame Judith’s report summary:

“In summary, this is a call to action for an entire industry and those parts of government that oversee it. True and lasting change will require a universal shift in culture. The industry has shown this is possible in the way the health and safety of construction workers has seen a positive transformation in culture and practice over the last decade. This change needs to start now”.

If the Government are committed to that real change, they will have the full support of myself, these Benches, the whole House and the country. It is time to get on with the job.

My Lords, I remind noble Lords that I was a Minister in the Department for Communities and Local Government with responsibilities for building regulations between 2010 and 2012.

I thank the Minister for repeating the Statement, which is comprehensive and reflects the seriousness of the necessary response to the worst fire disaster in this country for 70 years. From this side, we reiterate our sympathy and support for the families of the victims and the wider local community, who were traumatised by the events that they had in fact predicted, but where no one would listen to their concerns. We have praise for their dignity, too, which was shown very clearly at the service at St Paul’s this weekend.

We also need to recognise, as did both the Minister and the noble Lord, Lord Kennedy, the valuable work done by local churches, mosques and community groups. They have worked tirelessly for the past six months supporting survivors and families, often when the authorities were missing or ineffective. We should extend our thanks to them for the help they have given and continue to give.

So it is all the more disappointing to find that things are, in fact, going at a snail’s pace in north Kensington, with families left stranded in hotels at Christmas. I look forward to the Minister’s response to the questions posed by the noble Lord, Lord Kennedy, in respect of that. We still have the grotesque, burnt hulk of Grenfell Tower dominating the area. A clear majority of residents believe that it should be wrapped and hidden from view. It is disappointing to me, and I am sure very dispiriting to them, that it is still not, even though the Minister himself in a previous Q&A said that it would be completed before the end of the year. He may be able to update us on the cause of the delay and what is being done to accelerate matters.

I strongly welcome the Hackitt review and the fact that the Government are accepting its recommendations. I will pick up on two or three of those recommendations and press the Minister somewhat on what that acceptance really means. One relates to having a nominated responsible person to certify compliance with building regulations on each project. That provision could be done quite simply by regulation as a result of modifications to the Building Act that were introduced in 2004 by my Private Member’s Bill. I look forward to hearing that that will happen very quickly indeed.

I also want to pick out the point that was made about approved documents. The report says that it is not just a question of getting the fire approved documents right, but that various approved documents for different parts of the building process are not well co-ordinated and there needs to be a holistic redrawing of the whole framework. I hope that the Minister will be able to say that that is exactly what he intends to do.

The third and important point that comes out of the Hackitt review is that all of this will impose what the Treasury would describe as burdens on industry. I therefore want to ask the Minister whether the Government are prepared to say that they will suspend the operation of their one-in, three-out rules in respect of this particular disaster and what needs to be done as far as the regulations are concerned.

One recommendation, which is still to be confirmed in the final report, says that a whole set of trades and professions should have a licensing system. The Federation of Master Builders has been pressing for that for a long time and others in the industry see it as essential. But the Treasury, again, will say that it is a burden. It will be perverse indeed if, in complying with one-in, three-out—or one-in, anything-out—in respect of this, there was a diminution or lessening of standards elsewhere to reduce burdens as they are seen in the Treasury. Will the Minister respond to that?

Finally, I am sure that the Minister recognises that, right across the country, residents are living in tower blocks that have had their cladding removed. They face a winter of worry, not just about fire risks and safety precautions, but because they are in flats that are more exposed to rain and are colder, and that are more costly to run because the cladding has been stripped off. When will the Minister’s department tell landlords what they can do that is safe and approved and will restore the standards that they need in those flats? Of course, linked to that, as the noble Lord, Lord Kennedy, said, we need to hear where the money is and when it will be available as well.

I welcome the Statement and the report and look forward to the Minister’s response.

I thank the noble Lords, Lord Kennedy and Lord Stunell, for their response and their general support for moving things forward. I will try to deal with the detailed points that they raised. First, I join with them in saying, as I have on previous occasions, that we owe a massive debt to members of the public sector, particularly the emergency services. We also owe a massive debt to charities, the faith sector and to the great British public, who have, as has been said, responded with incredible generosity to this dreadful tragedy.

In relation to rehousing, as I made clear in the Statement, we have felt that the local authority was slow off the mark. That said, it would be ungenerous to say that progress has not been made. There is still a massive amount to do: we must be clear about that. We cannot be complacent. But we are in the position now of having more houses than there are families needing to be rehoused, so the issue now is that not every family is happy with the house or property they have been offered. We have always said—and we have had support from other parties and others—that this is the right approach and that we should not be forcing people to move where they are not happy to go. We do not want to do that. There may be many understandable reasons why people will not want to move into a tower block or, possibly, even into third or fourth-floor accommodation. They may not want to be in the area concerned. Some people have changed their minds. There are many factors here. Progress is being made, but there is more to do. I readily accept that.

On the point raised by the noble Lord, Lord Kennedy, on charities, the distribution of charitable funds is a matter for the charities concerned. Obviously, we will provide scrutiny and guardianship to ensure the proper processes are being followed, as we always do. No doubt the final allocation will follow, but that is a matter for the charities, unless they seek help and guidance. That would then be given as a matter of due process.

Both noble Lords referred to the memorial event held here, in addition to the service at St Paul’s, and the views of survivors. Many survivors made the point about the site and how it should be developed. We have made clear—I think the Statement makes it clear again—that that is a matter for the survivors. They are in the driving seat on this. They may well seek advice and guidance from us, but they have a veto on that. The right honourable Member for, I think, Ruislip, who is the Minister for Grenfell survivors, is working with the community on the principles that will be applied, but, as we made clear, they are in the driving seat.

The noble Lord, Lord Kennedy, referred to Sir Martin Moore-Bick and offered his support and that of his party, for which we are very grateful. I think that is the position of the Liberal Democrats as well. Sir Martin is considering whether to have a consultative panel. That is a matter for him. It will no doubt be a matter that the Prime Minister will wish to take into account on whether she has somebody else sitting alongside Sir Martin Moore-Bick. It is a question of balancing those considerations.

The noble Lord then referred to—I think this was a matter on which the noble Lord, Lord Stunell, homed in—the interim report from Dame Judith Hackitt. Again, I thank both noble Lords for their support for this process. We thought it very important that we set this up alongside the inquiry. We have had a very detailed interim report, which we will want to respond to and look at in detail. As I said in the Statement, the Government accept all the recommendations directed to them. We will certainly be carrying those out. Above all, we will be putting safety first. That is something the British public, the people of Grenfell, obviously, the wider community, the Government and all noble Lords would expect us to do. Again, safety first applies in relation to regulation. There is nothing to stop us proceeding as necessary with any regulations and whatever is necessary coming from the interim report and, later, the full report, which we anticipate in the spring.

Both noble Lords raised issues about cladding. The noble Lord, Lord Kennedy, asked about the financial position, as did the noble Lord, Lord Stunell. We are in discussions with 26 local authorities that have sought help. We have asked for further information from 10, from memory; I will confirm these figures, but I think it is 10. We are having detailed discussions with two further—maybe two of 10. I will confirm that in writing to the noble Lord—I will leave a copy in the Library and copy it to other noble Lords who have participated in the debate—making it very clear that we will not let financial means stop what is necessary to move this forward. That is, I think, widely accepted.

Once again, we have received an excellent report from Dame Judith Hackitt. There are many facets to it, not just directed to government, although a lot of it was. We encourage all relevant parties to look at this excellent report, study it and respond in a positive way to it.

My Lords, there was an emphasis in the Statement on the involvement of Grenfell residents in future decision-making. As the noble Lord, Lord Stunell, pointed out, part of the problem lies in the fact that the residents were not listened to in the past when they raised concerns about problems with the building. I was at the memorial meeting here last week, where I got the sense that many felt they were still not being listened to by local officials. Thinking about lessons for the future, what are the Government going to do to ensure that residents of social housing are listened to?

I thank the noble Baroness, Lady Lister, for her question and for her attendance at the meeting. It was a very moving meeting indeed. As she said, there were understandably some raw feelings about the way residents had been dealt with. Looking to the future, in the aftermath of the Grenfell tragedy we have established there a victim support unit. Ministers are there on a regular basis—to be fair, so is the royal borough. We have responded very positively by ensuring the NHS is there to look to the health needs, not least the mental health needs, of the people there. On her wider point about ensuring that lessons are learned, they will be learned. We are looking to the future for a Green Paper on the social housing sector. We can expect some of these points on the obvious questions raised by the Grenfell tragedy to be taken up in it and some of the answers we have learned.

On lessons learned and building safety, is the policy of Her Majesty’s Government now that all refurbished, repaired or newly built high-rise buildings in the royal borough and elsewhere should always contain properly integrated sprinkling systems?

My noble friend raises an issue that obviously will be considered by the public inquiry. It is being considered by Dame Judith Hackitt, who has made some point about it in the interim report, although she stops short of recommending that they should be compulsory. The Government will look at this in the light of recommendations made and the wider question of the safety of high-rise buildings following the reports and reviews that are under way.

My Lords, I am a little concerned that we have not heard much about the relationship between this and the whole framework of the legal process. Given the “us and them” aspect of feelings in north Kensington, will the Minister give some thought to the fact that it has been reported that 25 legal teams are involved in all this? Do the Government have any locus in how the handling of all these legal processes will be treated by the public? If not, how will the Government be able to comment on them if they have no locus in this matter? We know that some of these inquiries take a lot longer than expected and there are some culpability questions involved, but if a note could be prepared on any of this it might be helpful. We do not want to be wise after the event.

My Lords, the noble Lord raises an interesting and fair point—that does seem a lot of legal teams. I accept that. Some of them are helping the Grenfell victims, which is something that the Government have ensured—that there is proper legal representation for the Grenfell victims and survivors. Noble Lords would accept that that is important. The inquiry has only just started. It will be far-reaching. It is right that it should be. It obviously has to follow due process. On the Government’s role, I have mentioned that the Prime Minister is looking at the way the inquiry should take proper account of local opinion. We will no doubt discuss that with Sir Martin Moore-Bick in the light of how he responds and what his thinking is on a consultative panel.

My Lords, I remind the House of my registered interests. In the interim report, Dame Judith Hackitt says that,

“I am aware that some building owners and landlords are waiting for direction from this review on what materials should be used to replace cladding that has been identified as inadequate. I would urge them not to wait but to consider what materials have already been identified and tested as safe”.

Given that the Government have accepted all the recommendations of the interim report, is it the case that all such works undertaken by all local housing authorities with high-rise blocks will be deemed by the Government to be essential works and therefore will be funded by them? There is a problem in that the Government have offered to pay for essential works, as I understand it, but not for additional works. As a consequence, a lot of bilateral discussions are going on with local housing authorities. Would it not be better for the Government to define what are essential works and what might be deemed additional works so that there can be a public debate about this? As of now, the interim report of Dame Judith Hackitt has indicated that people should get on with the job of making their buildings safe using materials which have been deemed, after testing, to be safe.