To ask Her Majesty’s Government whether there is any evidence that academies automatically perform better than local authority maintained schools, particularly those that are already categorised as high-performing.

My Lords, schools that have chosen to convert to academies—that is, those that are high-performing—are obtaining better results, improving their results and more likely to be rated good or outstanding by Ofsted. Secondary converter academies are performing seven percentage points above the national average and continue to improve. Primary converter academies improved by one percentage point in 2015, and those open for two years or more by four percentage points since either 2012 or their last results as an LA-maintained school.

My Lords, I thank the Minister for that reply. Academy status is appropriate for some schools, but there is simply no evidence that mere conversion in itself guarantees success, as the Education Select Committee reported last year. What counts is hard work and a clear plan for improvement, both of which can be achieved without conversion. The Government need to accept that they have failed to win the argument on mass academisation. They have, however, achieved a remarkable feat: since the publication of the White Paper we have seen the emergence of a broad alliance involving parents, head teachers, trade unions, local government leaders, both Labour and Conservative, and MPs, more of a few of whom are Conservatives—all implacably opposed to forced academisation. Can the Minister tell the House who, apart from existing academy chains, has come out in favour of the White Paper’s proposals?

A great many people have come out in favour of the White Paper’s proposals. I am glad the noble Lord got to a question eventually; I think I answered his original point in my first Answer. There has been lot of international research. The Sutton Trust has told us that sponsored academies are doing better at closing the gap. Ofsted has said that attainment in sponsored academies has increased over time, with the longest-standing academies having the strongest performance. The NFER has told us that the attainment gap between pupils eligible for FSM and those not is narrower in converter academies than in similar maintained schools.

Has the Minister seen the report of the National Audit Office and its serious criticisms of the accounts of the Department for Education in respect of academies, and the words of the head of the National Audit Office, who said:

“Providing Parliament with a clear view of academy trusts’ spending is a vital part of the Department for Education’s work—yet it is failing to do this”?

Should the Minister and his department not put their own house in order before they have a blanket development of new academies?

I have seen that report. The issue is purely technical, based on different year-ends for schools and for the department, which will not be an issue this year because of methodology. I also saw the Audit Commission’s 2014 report, which found 200 cases of fraud in local authority-maintained schools in the previous year. Given that I walked into the Department for Education in 2010 to find a department completely financially out of control after 13 years of Labour government, I do not take lessons from the party opposite.

My Lords, there has been considerable concern about poorly performing primary schools. How many have been taken over by academy sponsors and with what results?

There are 960 primary sponsored academies open as of April this year, many of which previously suffered from chronic underperformance. In 2015, the percentage of pupils in sponsored primary academies achieving the expected level in reading, writing and maths at the end of key stage 2 rose by four percentage points to 71%. Results in primary sponsored academies open for two years have improved on average by 10 percentage points since opening—more than double the improvement in local authority-maintained schools over the same period.

My Lords, I listened carefully to the noble Lord’s answer. I thought that the noble Lord, Lord Watson, asked how many organisations had come out in favour of every school being forced to become an academy. The Minister made some comments on academies in general but I am not sure he answered that question.

I do not think I did, and I do not think PR is actually my job.

Oh!

We make absolutely no apology for our belief in academies and multi-academy trusts, because of the substantial benefits of academy freedoms and working together in close families of schools. If noble Lords were to spend any time meeting the people who run academies or multi-academy trusts and saw the substantial benefits—for instance, for their staff and pupils—they would understand.

My Lords, will the Minister explain to the House when answering a direct question became a matter of PR? Will he answer the concern of local authority and church voluntary-aided schools in counties such as Lancashire? Will he say that no small primary schools will be closed on financial grounds in his programme of academisation?

I will give the noble Baroness an independent view from the chief inspector, who believes that every school should be an academy. As for local authorities, of course there are a lot of high-performing local authorities and we very much hope that people there will continue to be involved, by spinning out and setting up academy trusts. As I said in an Answer last week, no strong schools will close as a result of the policies in the White Paper. Indeed, we think that many rural schools will be much stronger working together in multi-academy trusts. There are very strict rules about the closure of small and rural schools, and I expect that all such considerations will continue in the future in relation to all rural schools.

My Lords, I have a slightly different angle on this Question. Where there is a playgroup that wishes to join a primary school that is an academy, because it wants to get that continuous stream of education through the playgroup, the primary school and into the secondary schools, what kind of help do the Government give to that playgroup?

We are now seeing quite a lot of primary academies opening nurseries. The issue of playgroups and children’s centres is one we are considering and I would be happy to discuss it further with the noble Baroness outside the House.

To ask Her Majesty’s Government whether they intend to introduce any safeguards as part of their reform of the local government pension scheme (LGPS) in order to ensure that British wealth funds conduct their investment strategies solely in the interest of their LGPS members.

My Lords, the 90 pension fund authorities in England and Wales will continue to be responsible for determining their own investment strategy and for making strategic asset allocation decisions. Those responsible for making investment decisions must take proper investment advice and comply with their legal duty to act in the best long-term interests of scheme beneficiaries.

My Lords, I thank the Minister for that Answer. However, does she understand that whatever the merits of the pooling and merging system between local authority funds, there is anxiety because of the way that the Government have designated them as British wealth assets, and a fear that they may be advised to move in directions which reflect the priorities of the Treasury rather than those of the members? In particular, why do she and the Government not accept the advice of the LGA and the Law Commission that this provision should be written specifically into the new regulations covering the combined schemes, particularly the reference to Article 18 of the IORP directive, which underlines the need to manage these schemes, and their investments, in the interests of their members and nobody else?

My Lords, the funds have a duty to manage the schemes for their scheme beneficiaries—that is their first duty. I understand why the noble Lord has concerns at the pool level. However, the strategic direction will be set at the funding level and carried out at the pool level.

My Lords, will the wealth funds have the opportunity to prioritise investment outside London, where it is much needed? Will she also comment on nation-wide representation on the governing boards of wealth funds?

My Lords, schemes should make decisions in the best interests of the beneficiaries, so wherever those decisions are best made is where those schemes should direct their strategies. As the noble Baroness will know, beneficiaries are now represented on those boards at local level. Because those boards represent the beneficiaries and set the strategic direction, the scheme beneficiaries are protected all the way along.

My Lords, the Norwegian sovereign wealth fund, which is worth £850 billion, clearly believes that it has a role in looking at such issues as the role of remuneration committees in enterprises. Does the noble Baroness agree that large wealth funds have a number of responsibilities in society?

I certainly agree with the noble Lord. In terms of pooling pension funds, we now have a huge opportunity in this country to do what other countries do so successfully, particularly Canada—namely, pool resources to invest in infrastructure.

My Lords, will my noble friend explain whether the proposed changes result from cost-saving measures to ensure proper investment or a response to our obligations under a European directive?

My noble friend raises an important point because pooling certainly has the potential to make the management of our pension funds more efficient. However, we also have to look at how we can maximise some of the returns for beneficiaries.

My Lords, can the Minister categorically deny that the Treasury will try to influence these decisions? That is the concern. What will be the Treasury’s role in investment strategy?

I can categorically say that the investment strategy will be made at the fund level, which is the local level. As far as I know, the Treasury has no will to start meddling in local decisions as regards directing at pool level. However, the Secretary of State may intervene—that was one of the concerns—where funds have been managed poorly.

To ask Her Majesty’s Government, in the light of the current and long-term crises in the governance of a number of sports, including allegations of corruption and doping, whether they intend to introduce legislation to establish standards by which sports governing bodies should conduct their affairs in order to restore public confidence in the fairness and efficacy of competition.

My Lords, Her Majesty’s Government have been concerned by recent sporting scandals. We are currently reviewing existing anti-doping legislation which will assess whether stronger criminal sanctions are necessary. The findings of the independent review into UK Anti-Doping’s processes, following recent Sunday Times allegations, will be considered as part of the process. Sports bodies must adhere to the highest standards of governance and the Government will introduce a new governance code for sport in the UK later this year.

My Lords, I thank the Minister for that Answer. As an avid Spurs supporter, I congratulate Leicester City on a quite remarkable achievement—

Hear, hear.

—not entirely through gritted teeth. I mean it. Every sports fan wants to know that the fight is not fixed; that the athletes are competing with one another and not with some chemistry lab; and that when you bid for international tournaments the decision will be taken not on the basis of bribery but on merit. Governing bodies have promised ethical codes, action and transparency for decades and the truth is that they have never delivered. They always say they will do it and in fact they never do. They have probably drunk in the last chance saloon more times than any of the rest of us. Will the Government draw the only realistic conclusion in the forthcoming proposed legislation and set out the ground rules for acceptable conduct in law? Will the sports governing bodies have their legitimacy affirmed only if they agree to follow these rules, which the rest of us are expected to?

My Lords, the noble Lord, Lord Triesman, is correct in so much of what he says. The level playing field is so important for all sports and competing at all levels—not just elite level but grass-roots level. The noble Lord refers to the review, which will take all these matters into account with regard to criminalisation before it reports. It will report only once it is ready and the job is done properly. The governance code is part of the sport strategy, which will look at match-fixing and anti-doping, for example, and will cover a wide range of matters.

My Lords, does my noble friend agree that muscles built up by taking drugs enhance performance for an indefinite period, and short-term bans on cheats are therefore not effective? We must move towards bans for life, which ought not to be inhibited by considerations of human rights law, employment law or whatever.

My Lords, my noble friend is right that cheating in sport is desperately unfair on everybody else who takes part. Under the existing legislation—the Misuse of Drugs Act and the Medicines Act—the maximum sentence is 14 years, including for those who supply the drugs. The new code, consistent with WADA, which came into force in January 2015, gives an automatic ban of four years to cheats and support staff. Of course, once somebody is found guilty, all funding stops.

My Lords, will the Government ensure that gambling cheating is brought up to the same level of intensity as doping and everything else? Will they also make sure that the athlete is made aware that if they take a bribe, they could be controlled for life and lose their livelihood?

Match-fixing is a problem that should be taken in the same context as athletes gaining an unfair advantage through performance-enhancing drugs. The sport strategy is looking at match-fixing as well as doping. We must also remember that my right honourable friend the Prime Minister is holding the Anti-Corruption Summit next week and sport will be on the agenda.

My Lords, I declare an interest as I am currently doing some work for the Minister for Sport on duty of care for sports participants. Recent cases of the use of performance-enhancing drugs have come to light because the athletes have disclosed what they are using, or there has been a fallout among the manufacturers. The testing seems to fall far behind the prohibited list. What support or protection can Her Majesty’s Government give to those who have vital information who want to blow the whistle and expose drugs cheats?

My Lords, the noble Baroness is quite right. Particularly given her experience of sports administration, one should listen very carefully to what she has to say. Sports governing bodies are taking all these aspects into account, and they must establish methods and systems so that whistleblowers can carry out their role.

Does the noble Earl agree that my noble friend Lord Triesman deserves an apology from the relevant authorities, because he was right when it was not politic to be right about corruption? What efforts will the Government make to ensure greater transparency when there are major decisions to be taken on the location of events?

My Lords, I think the noble Lord is referring to matters that happened just over a year ago, particularly in relation to FIFA. At that point, I said in this place that accountability and clarity in these sports bodies were of absolutely paramount importance.

My Lords, is it not possible to divorce the testers of this corruption entirely from the governing bodies, whether they are national governing bodies or bodies such as FIFA? Can the Government also suggest a way in which they could add resources to the governing bodies, which are extremely stretched at the moment in self-policing this major problem, in order to drive out this corruption and cheating?

My noble friend Lady Heyhoe Flint makes important points. Testing has to keep up with the activity of cheats in sport. Testing will be down to UKAD working in conjunction with the sporting bodies.

My Lords, may I come back to the question just asked, because is that not the root of the problem? We are absolutely clear that the casualties here are clean sportspeople, but the only people who can investigate the problem are funded by the sports governing bodies, which have a responsibility for rooting out the malfeasance in the first place. The Minister must come up with a better answer than that.

I am not 100% sure where the noble Lord is going, but the testing is carried out by UKAD, which has one of the best names in international sport. I know there have been questions as far as the Sunday Times is concerned, but we will have to wait for the review put forward by my right honourable friend the Secretary of State. UKAD has a very good name and performs a very good job but as far as testing is concerned, it also has to keep up with the different drugs these cheats take.

My Lords, sports men and women come from all parts of the United Kingdom; many of them proudly represent the United Kingdom. Would my noble friend the Minister think it helpful, within the proposed changes, to discuss with the devolved legislatures what contribution they might make to the process of improving regulation?

My Lords, I thank my noble friend for that question. I might need to write to her with a little more information but, as far as I am aware, UKAD will be in touch with all devolved bodies concerning its work.

My Lords, is the Minister aware that Andy Murray has suggested that sportspeople should consider publishing all the results of their tests? Can the Government offer any support on this?

My noble friend makes a very good point on publishing the results of drug tests. As he can probably guess, I do not have an answer in my folder so I will write to him.

To ask Her Majesty’s Government, in the light of the latest figures on deaths in custody and prison violence, what plans they have to improve prison safety in the short term.

My Lords, the Government recognise that our prisons need reform. There is much more to do to ensure that prisons are places of decency, hope and rehabilitation, and improving safety is fundamental. There is no single, simple solution to the increases in deaths and violence in prison, but we are taking action. This includes implementing the recommendations from the review of the process to support prisoners at risk of suicide and self-harm, and trialling the use of body-worn video cameras.

My Lords, my Question was quite specific. We commend the Government’s commitment to long-term prison reform, but last week’s figures demand immediate action to reduce prison violence. Homicides, assaults on prisoners and staff, suicide and self-harm are all up, by roughly a quarter overall—and that is over the previous dreadful year’s figures. We urgently need more staff, fewer prisoners, less of prisoners’ time spent locked in cells and an end to cell cramming. What action will the Government take now?

The noble Lord will know, because his party was in government for five of the last six years, that what happens in prisons represents a real challenge for any Government. However, I can tell him that prison officers have increased in number by 440 this year. Further to that increase, we are continuing our drive for more prison officers; the training is improving—going from six to 10 weeks; we are cracking down on psychoactive substances and their importation into prison; and we are acting through a number of different initiatives to identify particular risk points for violence. We are doing everything we can to tackle these very real problems.

My Lords, given the shocking revelations about the use of synthetic cannabis by prisoners, which the Chief Inspector of Prisons described as having a “devastating impact” on prisons, including 19 deaths between 2012 and 2014, when will the Government recognise the need to reduce the prison population substantially and to increase prison staffing substantially?

The prison population is of course a feature of the sentences passed by judges. We are as anxious as anyone else to reduce that prison population in a way that is consistent with the safety of the population and that respects the sentences that have been passed. I have already answered the question about increasing prison staff. As to psychoactive substances, we are world leaders in what we are doing to track the ingestion of these substances. We are trying a test to detect them in 34 different prisons. We hope, when that is proved successful, to roll it out through the prison estate, so that we have an offence and a test which should get this under control.

My Lords, what is the Government’s policy in relation to terminally-ill prisoners and the delegated authority of the governor, particularly for remand prisoners, who are innocent until proven guilty? If they are terminally ill, they risk dying in the prison sick bay rather than spending their last days and weeks at home prior to a trial.

All prisons, whether remand prisons or others, should have in place appropriate procedures for supporting prisoners in that condition. There should be appropriate arrangements for palliative care. Prisoners should have contact with their families and they should be advised, where necessary, of the possibility of compassionate release—either permanent release or release for particular events. This is a matter of importance and I will be sure to convey the noble Baroness’s concern.

My Lords, would it not be a suitable idea to ensure that any young person coming into custody has a single officer in the Prison Service responsible for his or her welfare? This was a very important and useful proposal, and I gather the Government have not yet accepted it.

I think my noble and learned friend refers to one of the recommendations from the Harris review, which concerned suicide and self-harm by those aged between 18 and 24. The Government have not rejected this as a proposal. They understand the necessity of continuity of accountability, but are not yet convinced that that can be best represented by a single person. However, what lies behind the recommendation is of course important and should be reflected in the Government’s policy.

My Lords, given the shocking 27% rise in suicides in prisons in the last year, what can the Minister tell us about the provision of psychiatric and psychotherapeutic care for vulnerable prisoners?

The Government are well aware of the profound difficulties for prisoners with various forms of mental illness. I think NICE has estimated that 90% of prisoners have some form of mental illness. It is a matter for NHS England to provide the appropriate facilities, but all prisons should make sure that these are available so far as possible. As to the question of assessment when prisoners arrive, NOMS has reviewed its assessment process to ensure that those at risk are properly assessed and appropriate steps are taken to try to deal with the risks that they represent.

My Lords, I am grateful to the Minister for his reference to the review that I led, although I must say as the review’s author that the Government’s response read like a rejection of its central recommendation. The Minister talked about the welcome increase of 440, I think, prison officers. What are the projections for numbers, because 440 means that at any one time there may be one extra prison officer supervising 600 or more prisoners? Given that at the moment prisoners cannot be guaranteed an escort to take them to their psychiatric appointments within the prison and there is no guarantee that planned activities will take place because of staff shortages, surely the Government need to do better than 440.

As to the noble Lord’s first point, the Government accepted 62 of the 108 recommendations, and a further 12 are being considered alongside the reforms. Those that they did not accept were very useful and are part of the Government’s forward thinking. As to the question of staff, we are continuing our drive to attract more prison officers. We accepted in full the Prison Service Pay Review Body recommendation, which we hope will be an encouragement, although attracting prison officers to work in the south-east is difficult because of the challenges of accommodation. There is real commitment by a number of people to join the Prison Service; they have our admiration, and we hope that we can attract more to do this important work.

My Lords, does my noble friend accept that out-of-cell activity is one of the most important ways to enhance morale among prisoners and reduce stress, which itself leads to violence?

My noble friend is quite right about that. He may well have read the observations of the Secretary of State and the Prime Minister about the importance of out-of-cell activity. We hope that that will increase; it is very much part of our long-term plan to enable prisoners to have purposeful activities, which will help in the rehabilitation process.

That the draft Regulations laid before the House on 7 March be approved. Considered in Grand Committee on 27 April.

That the draft Order laid before the House on 11 March be approved. Considered in Grand Committee on 27 April.

That this House do agree with the Commons in their Amendments 1 to 6.

My Lords, I beg to move that this House do agree with the Commons in their Amendments 1 to 6. In moving them, I shall speak also to Amendment 12.

In the other place, the Government made small changes to the provisions relating to the National Audit Office’s powers to carry out value-for-money studies of the Bank. As we have discussed in previous debates, these clauses deliver an important increase in the accountability of the Bank and its operations.

The NAO’s new powers are subject to a bespoke policy carve-out, designed to protect the independence of the Bank’s policy decisions. The Government have made two small but important technical changes to ensure that the NAO’s new powers are applied consistently across all areas of the Bank. These changes have been agreed by both the NAO and the Bank.

The original drafting of the Bill did not give the NAO the power to carry out value-for-money reviews of Bank subsidiaries unless they were indemnified by the Government. This was not the Government’s policy intention.

The first change ensures that the NAO is able to carry out value-for-money studies, not only of the Bank itself, but also of all the Bank’s subsidiaries, whether or not they are indemnified by the Government. The amended clauses will also allow the NAO to carry out value-for-money studies of any other company in which the Bank has an interest, but only if that company is indemnified by the Government.

The second change ensures that the policy carve-out applies consistently across all areas of the Bank. Under the previous drafting, the NAO’s powers to review the Bank’s indemnified subsidiaries and other companies came from the National Audit Act 1983. That means that its review of these companies would not be covered by the policy carve-out. The Government have amended the Bill to address this inconsistency.

On Amendment 12, the Government also made a small amendment to the clauses in the Bill relating to the Monetary Policy Committee. The Bill reduces the minimum frequency of MPC meetings from monthly meetings to “at least 8” meetings in every calendar year. The Warsh review assessed that this new timetable,

“strikes the balance between timeliness and probity”,

and brings the MPC into line with other leading central banks, including the US Federal Reserve and the European Central Bank. The amendment made in the other place adjusts the reporting requirements of the MPC to match the new meeting timetable. At the moment, it is required to submit a monthly report and so, without this change, the committee would be obliged to produce reports even when it has not had meetings.

I hope that noble Lords will agree that these are sensible changes, and I commend the amendments to the House.

My Lords, I had not realised until now that I am a wild enthusiast for a bespoke policy carve-out. The amendments reflect the considerable extended debates that we have had previously in your Lordships’ House, and I am very glad that they are now effectively implemented by the amendments that we have in front of us. There was a real problem with the relationship between the National Audit Office and the Bank of England. It is very fortunate that that seems to have been resolved now in a way that is satisfactory to both sides.

In a former incarnation, I was much involved in extending powers of the National Audit Office so that it did not merely act as an auditor but could look into the economy, efficiency and effectiveness of the bodies that it was investigating. I certainly think that there is a strong case for it including the Bank of England in its remit. To clarify one point on this, there are some aspects of the Bank’s operation that really need to be looked at. The present Governor of the Bank of England has taken to issuing forward guidance on interest rates, which I must say has not been an enormous success. Anyone who has followed that advice will almost certainly have lost money, depending on the precise timing. I think that he should consider very carefully whether it is an appropriate approach for the Bank to take—and perhaps the National Audit Office should do so, too.

I am not entirely clear what is covered by the expression “Bank company”. In particular, does it include the body—I have forgotten its name for a second—responsible for managing the enormous quantity of gilts purchased as a result of the quantitative easing operation? Will the National Audit Office have the power to inquire into how that very substantive—indeed, enormous—quantity of gilts is managed?

Overall, however, this is a very welcome change—and I am particularly glad that the Treasury is proposing to finance the operation. As it pointed out in the notes that come with the Bill, it should increase the likelihood of a value-for-money study being undertaken relative to the Bank of England. This change reflects the work that your Lordships did at earlier stages, and is very much to be welcomed.

My Lords, we have come a considerable distance from what was in the original draft of the Bill that came before us on the role of the National Audit Office. Quite rightly, the Government have responded to the very strong opinion of this House that the proposals in the Bill were far from satisfactory, and we are grateful to them for the extent to which they have moved on these issues. This House played a significant role in identifying the real difficulties in their original Bill for the National Audit Office being remotely able to carry out its proper duty in assessing whether on all occasions the Bank of England was providing value for money.

The noble Lord, Lord Higgins, has moved across an important boundary in indicating that the NAO ought also to look at issues of policy regarding the Bank, which we know the Bank is resistant to. The Government still maintain that position, although we sought to press that here and my colleagues in the Commons were interested in the issue as well, not least if issues cropped up under freedom of information queries, where the role of the NAO in relation to the Bank would inevitably be limited under the proposal.

Nevertheless, the Government have moved a considerable distance on this matter. We are pleased to say that although not all our proposals, here and in the other place, were accepted by the Government, we nevertheless feel that significant progress has been made in that the NAO has been able to draw up with the Bank of England a memorandum of understanding on how these issues are to be tackled in future. We appreciate the fact that the Government have moved a considerable way from their original proposals to a much more satisfactory position, although I will listen with great interest to the Minister’s response to the noble Lord, Lord Higgins.

My Lords, I am grateful to my noble friend Lord Higgins and the noble Lord, Lord Davies, for their comments and for their support for these amendments. My noble friend’s views on the governor’s role in giving forward views are well known; he has expressed them before in debate on the Bill. We have listened to his views but they are not specifically a part of this Bill. On the question of whether “Bank company” includes the asset purchase facility and therefore allows the NAO to make value-for-money reviews, the answer is yes. Amendment 3 is the amendment that deals with that.

I am glad that the noble Lord, Lord Davies, has acknowledged that we have been in listening mode and that we have moved. We are always happy to listen to sensible suggestions, and I am grateful for his acknowledgement of that.

Moved by

That this House do agree with the Commons in their Amendment 7.

My Lords, I beg to move that this House do agree with the Commons in their Amendment 7—and on this, too, we have been in listening mode.

This amendment recognises the important role played by the Treasury Select Committee in its scrutiny of the Financial Conduct Authority and appointments to its top job. Through the committee’s programme of pre-commencement hearings it questions appointees to several posts before they start work. After appointees have started, as your Lordships will know, they appear regularly before the committee. The Government welcome this scrutiny of appointees.

Our amendment therefore ensures that the committee always has the chance to scrutinise a newly appointed chief executive of the Financial Conduct Authority before they start work. It provides that no one who is appointed as CEO of the FCA can start work until they have appeared before the TSC or three months have passed. This gives the TSC time to call them in, and once it has questioned the appointee in relation to the appointment, he or she can get to work. There is an exception to this if the appointment of a chief executive is made on an acting basis pending a further appointment; for example, where an appointment must be made urgently in response to a sudden vacancy. However, to appoint a permanent CEO, the Government must give the TSC the chance to hold a hearing.

As your Lordships will be aware, my right honourable friend the Chancellor and the chair of the Treasury Select Committee have reached an agreement that further reinforces the committee’s scrutiny role. This is set out in a letter from the Chancellor to the chair of the TSC, which has been published on the TSC’s website. It reads as follows:

“During the passage of the Bank of England and Financial Services Bill, we have considered the role of the Treasury Select Committee … in scrutinising the appointment of the Chief Executive of the Financial Conduct Authority … This scrutiny is important and welcome. I will therefore ensure that appointments to the Chief Executive of the FCA are made in such a way to ensure the TSC is able to hold a hearing, after the appointment is announced but before it is formalised. Should the TSC recommend in its report that the appointment be put as a motion to the whole House, the government will make time for this motion and respect the decision of the House. Additionally, I will seek, in a future Bill, to make a change to the legislation governing appointments to the FCA CEO to make the appointee subject to a fixed, renewable 5-year term. This would not apply to Andrew Bailey, who I recently announced as the new head of the FCA, but would first apply to his successor. I believe that these changes will reinforce the Treasury Committee’s important scrutiny role”.

This commitment, combined with this amendment, which ensures that the Treasury Committee always has the opportunity to hold a hearing with an appointee, serves as a strong recognition of the committee’s vital role in scrutinising the FCA and its CEO. I beg to move.

My Lords, we support this amendment, but more precisely, we support this amendment with the commitments made in the Chancellor’s letter to the chair of the Treasury Select Committee. We are glad to see moves to buttress the independence of the FCA, and we think the amendment and the commitments will help do that. It is true that the FCA does need some help. In particular, it needs help in ending what is, or appears to be, interference by the Executive.

Recent times have not been happy. There was the early announcement of the non-renewal of Martin Wheatley’s contract; the Chancellor’s public announcement that Tracey McDermott was withdrawing her CEO application, before she had had a chance to tell her own people; and, then, the appointment of Andrew Bailey as CEO without benefit of a proper interview panel. I will not even mention that the search for the hard-to-find Mr Bailey cost £280,000.

To restore belief in its independence and its self-confidence and morale, the FCA needs to have a robustly and operationally independent CEO. We hope that this amendment and the Chancellor’s commitments will make that happen. This amendment and those commitments are of course the result—as the Minister has explained—of negotiations with Mr Tyrie, the chair of the Commons Treasury Select Committee. We would have preferred Mr Tyrie’s original amendment, which simply gave the Treasury Select Committee the power to approve, or not to approve, the appointment of the CEO of the FCA.

The government amendment, of course, does not go nearly that far. It simply says that the already appointed—although, I hope, not contractually bound—CEO must appear before the TSC before taking up his office. By itself, this is pretty feeble stuff. In fact, the important changes are not in this Bill at all; they are contained in the letter from the Chancellor to the chair of the TSC. The letter makes two commitments, as the Minister has explained. The first is that the Chancellor will,

“ensure that appointments to the Chief Executive of the FCA are made in such a way to ensure the TSC is able to hold a hearing, after the appointment is announced but before it is formalised. Should the TSC”,

as the Minister has said,

“recommend in its report that the appointment be put as a motion to the whole House, the government will make time for this motion and respect the decision of the House”.

Secondly, the Chancellor,

“will seek, in a future Bill, to make a change to the legislation governing appointments to the FCA CEO to make the appointee subject to a fixed, renewable 5-year term”.

This is all very cumbersome, and one must hope that the prospect of having your merits gently and tactfully debated in the Commons will not put applicants off. However, it is an improvement on the current situation.

There are some questions, though, and I would be grateful if the Minister could respond. Why are these two commitments not on the face of the Bill? Can the Minister confirm that the Chancellor’s commitment to ensure government time for a Treasury Select Committee Motion in the Commons is not binding on him or, more importantly, on his successors? Can the Minister say why the Chancellor will put the fixed term for the CEO into a future Bill but not the Commons vote on a Treasury Select Committee Motion? Will the Minister agree to consider incorporating both these elements into a future Bill? Finally, can the Minister assure us that any future selection process for the CEO of the FCA will involve the proper panel interviews, or at least something more closely resembling due process?

We believe that we need the protections and safeguards in this amendment and in the Chancellor’s letter. We believe that Andrew Bailey is a good choice as CEO and we wish him every success. We believe that both Mr Bailey and the FCA will benefit from less interference from the Executive and we support the amendment.

My Lords, as a former chair of the Liaison Committee in the House of Commons, which co-ordinates the work of the Select Committee system, as well as having been chairman of the Treasury and Civil Service Select Committee, I very much welcome the proposals put forward by the Government. Of course, there are various qualifications, which have just been mentioned, but I believe that this is a significant step forward and that it will improve the way in which the appointments system works within overall government. Therefore, I think that this is an excellent amendment and I heartily support it.

My Lords, as I understand it, the proposed arrangements effectively give the Treasury Select Committee a sort of negative veto after the event. Why could this not be more straightforward, with senior appointments such as the head of the FCA requiring the approval of the Treasury Select Committee up front?

My Lords, perhaps I may pick up on the point made by the noble Lord, Lord Flight. The FCA is one regulator. We understand that there is great pressure to move on this issue now because the FCA had lost so much confidence and so many people have questioned whether it is genuinely an independent regulator. However, the PRA, turning into the PRC, is an equal, if not more critical, regulator of our banking system, and of course appointments to the Bank of England—particularly that of governor—are also crucial. Therefore, can the Government tell us why they have not broadened out this change in approach, which is surely just a modernisation and a recognition of the significant interest that Parliament and the country have in these appointments?

My Lords, after those contributions I can keep my own fairly short. However, like the noble Baroness, Lady Kramer, I would have thought that this change would have applied in the whole approach of this Government and would have been taken into account when the Bill was drafted. Not only have the Government had strong representations from the Official Opposition and the Liberal party—we debated this matter very vigorously in this House—but it is clear that the Treasury Select Committee had very strong views on this. Ministers are all too well aware of the fact that the Treasury Select Committee contains members of all parties, several of whom enjoy very high reputations indeed—not just the chairman, although he too deserves his high reputation. How is it, then, that the Government should have thought that they could ignore the proper position of the Select Committee in relation to this appointment?

Of course we welcome the sinner who repenteth, and the Minister, I have no doubt, will indicate in a moment how carefully he has considered all issues. But it does somewhat surprise me that it needed such a weight of parliamentary opinion, to say nothing of opinion from outside too, before the Government recognised that they could not possibly put forward this appointment without there being a substantial degree of parliamentary scrutiny.

My Lords, I am delighted to hear the overall approval and support for the principles and thrust behind this amendment. Let me begin with the points that the noble Lord, Lord Sharkey, made. He spoke of interference by the Executive, a point he has made before. I will not rehearse the arguments again that the Government made in response to that, but we refuted many of those at the time. In response to the point that this should be made statutory, I simply point out that the commitments we have made have been affirmed by the Chancellor in writing, as I said, and by Ministers in both Houses. As the chair of the Treasury Select Committee himself points out in his letter to the Chancellor, there are several different means, both statutory and, crucially, non-statutory, for bolstering Select Committee scrutiny of appointments. Indeed, non-statutory provisions are the norm. The Cabinet Office and the Liaison Committee keep a list of some 50 appointments subject to pre-appointment hearings with varying arrangements, and the vast majority of those are by agreement.

Moving on, the noble Lord asked when we will bring forward the changes to length of term to make it fixed for five years. We are seeking the earliest opportunity, and the House authorities confirmed that it was not in scope for this stage of the Bill. That is why it is not in this Bill.

My noble friend Lord Flight and the noble Baroness, Lady Kramer, also made a point that I know others have made and which has rumbled around for a long time: whether or not an arrangement such as this should be made for other appointments in government. I know that there is a divergence of views on whether this should be done. The Government have previously set out their concerns about appointments to these posts, such as the ones that have been cited, and will address these in fuller detail in their response to the Treasury Select Committee’s report, which will be published in due course.

As well as looking forward to that response, it is worth reminding your Lordships just how we got here—this picks up on the point that the noble Lord, Lord Davies, just made. We are indeed responding to points raised during the passage of this Bill specifically concerning the appointment of the chief executive of the FCA. That is why the Government’s amendment and the agreement reached between the Chancellor and the chair of the Treasury Select Committee are focused on this particular appointment. I would further argue that this amendment and this agreement sit within the context of a Bill that significantly strengthens the governance, transparency and accountability of the Bank of England. This includes enhancing the accountability of the Bank to Parliament by making the whole Bank subject, for the first time, to NAO value-for-money reviews. I fully understand that the points made by the noble Baroness, Lady Kramer, and my noble friend Lord Flight will continue to rumble on. I commend the amendment to the House.

That this House do agree with the Commons in their Amendment 8.

My Lords, this amendment gives the Treasury a power to provide financial assistance to bodies for the purpose of taking action against illegal money lending. It also gives the FCA an obligation to raise a levy, which will apply to consumer credit firms, in order to fund this financial assistance.

Loan sharks prey on some of the most vulnerable people in society, cause untold misery to their victims and have a damaging impact on the communities in which they operate. As well as lending money illegally at high levels of interest without FCA authorisation, loan sharks frequently use blackmail, as well as violence, to intimidate their victims into repaying legally unenforceable debts.

Loan sharks are currently investigated and prosecuted by the England and Wales illegal money lending teams and the Scottish Illegal Money Lending Unit. The cost of the teams is around £4.7 million. While the FCA will consult on precisely how the levy will be apportioned and collected in its annual fees consultation, the cost of the new levy to individual firms in the £200 billion consumer credit market is anticipated to be small.

It is absolutely right that industry meets the modest costs of funding the teams—all participants in the consumer credit market benefit from their enforcement work. The teams ensure that the consumer credit market remains legitimate and credible by keeping illegal money lenders out of it. The amendment will ensure that the funding that the illegal money lending teams need to continue their crucial work is put on a sustainable, long-term footing. I beg to move.

My Lords, I declare my interest as chair of the National Trading Standards board and welcome this government amendment to put the funding of the illegal money lending teams on a stable footing. As the Minister said, the teams do an enormous amount of extremely important and valuable work. A recent prosecution dealt with an individual who was charging those unfortunates whom he was offering allegedly to help interest rates of 400,000% per annum. Figures I have for England and Wales show that the work of the illegal money lending teams has led to the writing-off of debts in excess of £55 million. So the work is value for money and extremely important. It is quite right that the funding of these teams should now be put on a long-term, sustainable footing and it is entirely proper that the legitimate part of the lending industry should make sure that those who operate illegally and prey on people who are in a state of considerable distress are dealt with appropriately.

My Lords, this is a very good amendment and we support it. Until now, funding for action against illegal money lending has come mostly from BIS with occasional help from the Treasury reserve. As Harriet Baldwin noted in the Commons committee, this funding was constantly being questioned in spending reviews and she rightly saw the need to protect it from the depredations of Chief Secretaries. This amendment does that by changing the funding mechanism to a levy on consumer credit firms. These firms benefit from being within a robustly enforced perimeter and we welcome this change. We welcome the move to provide sustainable and stable funding for the fight against illegal money lending.

My Lords, while we support the amendment, my colleagues in the other place made a strong argument which I want to rehearse now. Of course, we agree that it is right that there should be stable funding for operations against money lenders who take advantage of their position, but, as my noble friend Lord Harris indicated, loan sharks at their worst can levy the most extortionate charges on the people who come within their purview. We would have preferred a levy not on the industry but from general taxation, because our anxiety is that those at the bottom end of the market, who have the most ruthless operational relationship with the public, will pass on these costs by taking even more money from those who are vulnerable to them. We accept the amendment and of course will not contest it, but we would rather the levy came out of general taxation than being an impost, which we know some in the industry will pass on to others.

My Lords, I again thank noble Lords for their support in principle for much of this amendment; in particular, I thank the noble Lord, Lord Harris, for his comments given his experience in this area.

Clearly, we disagree with what the noble Lord, Lord Davies, said about why this is not being funded by taxation. As I said in my opening remarks, the current cost of the enforcement regime is around £4.7 million. Consequently, the costs to individual firms in the £200 billion consumer credit market is anticipated to be small. Therefore, it is unlikely that they will be passed on down the chain. With that in mind, I hope the amendment will be agreed.

That this House do agree with the Commons in their Amendment 9.

My Lords, the amendment addresses the important question of how the banks are treating politically exposed persons, or PEPs, in the light of new global standards for anti-money-laundering and counterterrorist financing. I know that this issue has interested many noble Lords, directly and in respect of their families and close associates. I can tell the House that the Government share those concerns, which is why we have accepted this amendment to the Bill.

The Government intend to implement new money-laundering regulations by June 2017 at the latest. We will consult on the new regulations later this year. Organised crime, international corruption and terrorism cross national borders, so co-ordinating with our neighbours and Governments around the world is vital. We do this through the Financial Action Task Force, which revised its global minimum standards in 2012. At the same time as being robust, the UK’s anti-money-laundering and counterterrorist financing regime must be proportionate if it is to be effective and command public support. Resources must be focused on higher-risk areas and individuals, in line with accepted practice.

The Government have always encouraged banks to take a sensible and proportionate approach to this issue. They should apply appropriate “know your customer” measures that are tailored to reflect the risk posed by individual customers. I believe that several Members of this House and the other place have experienced difficulties with their bank accounts. No one should have their banking facilities refused simply because they have been identified as a PEP.

In addition to its focus on proportionality, the amendment addresses guidance on PEPs and the handling of certain PEP complaints. The Government will consult later this year on new money-laundering regulations and we will ask specific questions about the provision of guidance and the adjudication process. We will fully consider the letters that noble Lords have already sent to us on this topic when preparing our response to the consultation.

The Government’s anti-money laundering and counterterrorist financing regime is making the UK a more hostile environment for illicit finance. The amendment will ensure that a strong message is sent out about applying the rules in a proportionate and sensible manner and I commend it to the House. I beg to move.

My Lords, as the Minister said, this House has frequently discussed the problems with the banks’ treatment of customers under their interpretation of the EU PEP rules. Each time we have done so, it has been quite clear that there are plenty of examples of banks frequently acting aggressively and disproportionately. It is quite clear that by unreasonably closing accounts, or threatening to, they cause real distress and the Government agree, as the Minister said, that the banks are ultimately at fault. In response to an Oral Question from my noble friend Lord Clement-Jones on 14 October 2014, the Minister, the noble Lord, Lord Deighton, said:

“I absolutely accept the criticisms that are made where banks behave disproportionately. It happens too often and we should work with them to fix that”.—[Official Report, 14/10/14; col. 115.]

It clearly has not been fixed and is probably getting worse as the banks anticipate the new EU directive.

Discussing this amendment on Report in the Commons on 19 April, Harriet Baldwin said that,

“if the transposition of the EU directive into domestic legislation is mishandled, a wide range of other people could be affected. It could adversely affect tens of thousands of people, including civil servants, city workers and even, as has been described, the families of armed forces officers serving our country abroad”.—[Official Report, Commons, 19/4/16; col. 853.]

The Minister was right to warn of this possibility.

On Sunday, the Sunday Times ran a large and prominent article on the case of Alan Charlton. Mr Charlton retired from the FCO three years ago after 35 years’ service. He is our former ambassador to Brazil. His bank threatened to shut down his account as part of what the paper describes as the bank’s “crack-down” on PEPs. It is a little ironic that the bank in question is HSBC, so recently fined $1.9 billion for being what the US Senate described as,

“a conduit for drug kingpins and rogue nations”.

It is a case of closing the wrong stable door.

My Lords, I welcome the amendment but the issue of PEPs is by no means solved and there is still a lot of nonsense happening. The last ruling by the noble Lord, Lord Deighton, was, interestingly, that PEPs were politicians in countries outside the UK and not within it; that came as a great shock to all of us. The EU rules make it clear that that is not the case and that PEPs are to be treated as domestic. In theory, that includes all Members of this House and the House of Commons and many others. That is completely ridiculous. The bottom line is whether people have the power to engage in corruption. I suggest that Members of this House, or in the Commons, do not have the power to engage in corruption unless they are a Minister.

Banks are criticised, but operating a bank account for a PEP is a complete loss leader, because banks are obliged to always check the source of funds and question any payment into the account. This is completely ridiculous unless you are dealing with people who are potentially corrupt. Where is all this coming from? It is the FCA that is giving out very strict guidelines to banks on how the PEP rules should be implemented. As I understand it, those guidelines are, at the moment, contrary to the Government’s own arrangements and I fear they may remain too demanding in future.

My Lords, the kind of language the Government may use in dealing with this in legislation may be limited, but I am very glad that they are taking action. Will they take on board, when talking with allies in other countries, the importance of how the concept of the PEP is handled? I am in the appalling situation of finding that my husband’s relatives in the United States have been challenged on opening accounts because they are related to me. How that relationship was disclosed, I find extraordinary. There must have been an awful lot of trawling through genealogical tables, or else someone is reading my emails. There is a serious issue about how this spreads to the families of Members of this House, of Members of the other place and of others who may rightly be regarded as politically exposed. Their relatives at many distances removed surely cannot be caught in that trap.

My Lords, I, too, have some sympathy with the concern about PEPs. My bank managed to be very surprised that my son had repaid a debt. There is no question that banks have overreacted in this area. In general, banks seem to overreact to regulation. They do not seem properly to understand proportionality at individual level. It reminds one that one does not have a right to a bank account, and suddenly one realises that one would be a non-person without one. So it is right that we look for some protection for politically exposed persons—who could be in a very widespread group.

However, one must not lose sight of the fact that the Panama papers revealed just how widespread money laundering is and how much of it happens among politically exposed persons. As far as I know, no politically exposed person has been revealed in the UK, but in the wider world money laundering is a fact and it feeds terrorism and corruption.

We welcome this amendment as an effort to produce proper proportionality on this subject, but the balance must be maintained—and, just as we must be concerned about PEPs, we must be concerned about potential crime and the maintenance of public confidence in officials.

My Lords, I am grateful to noble Lords who have replied. There seems to be unanimity that this is a serious issue that needs addressing and at least a partial acknowledgement that this is a start. We have accepted this amendment because we acknowledge that there needs to be a sensible approach to this problem.

The noble Lord, Lord Sharkey, mentioned that guidance exists already. In many of my replies to noble Lords, I am going to fall back on the fact that, having begun the process with this amendment, a lot will depend on the consultation about the regulations that we will bring in before 2017. I urge noble Lords to take part in that consultation so that all the points that have been made today and the concerns that people have heard about can be brought into that consultation so that we can get a sensible set of regulations, which this House will be able to look at, in place before 2017.

The noble Lord, Lord Sharkey, mentioned penalties. Again, the degree of penalties will obviously be part of the consultation and will be included in the regulations when they come in due course.

Can my noble friend confirm to the House that the consultation will not be a three-week consultation issued in the middle of the long Summer Recess?

The consultation will be conducted under the Cabinet Office rules for consultations—so it will be more than three weeks. I cannot today tell noble Lords when it is going to start. The Treasury accepts that this is an important issue and has accepted the amendment. It wants people to contribute to the consultation—so, although I cannot give an exact date for when it will start, it will be a proper consultation.

My noble friend says that he is not in a position to indicate when the consultation shall start—but we are in May 2016, nearly half way through the year. That suggests that, if we are not very careful, it will be the back end of 2017 before anything happens. The noble Baroness, Lady Kramer, raised a particular family issue; and the noble Lord, Lord Wright, who is not in his place, raised one last year, if not the year before, relating to one son in Singapore and another in the USA. This is not a matter that we can just put into the long grass. I know that my noble friend is not doing that, but it is getting very near the outfield. I suggest that he should come back to the House and tell us exactly when the consultation will start and when we will get some substantive recommendations out of it.

I can reassure my noble friend, because the date that the regulations have to be brought in is June 2017, so the consultation will take place in the second half of this year. It will be implemented before June 2017. I think that that is pretty clear and there is no question of it being put into the long grass. I have subsequently learned that the consultation will be 12 weeks and it will be after July—so I hope that my noble friend will be reassured by that.

My noble friend Lord Flight basically implied that any enhanced due diligence for all Peers, MPs and MEPs would be ridiculous. The directive and the Financial Action Task Force do not agree. They think that anyone who is an MP should have some form of enhanced due diligence. Of course, there is a huge range that can take place within enhanced due diligence. The point of the amendment and the regulations will be to make sure that there is a true difference. A Back-Bench Peer who may not have the position to influence corrupt acts—although every Peer and MP has access to people, so they are not exactly like every citizen—will have some form of enhanced due diligence, but it should be proportionate. The way that this will be done will ensure that.

The banks are in absolutely no doubt about the Government’s view on this. The Chancellor has personally written to the heads of the large banks, and the Economic Secretary to the Treasury has written to colleagues. Every bank now has a contact person with whom Peers, MPs and MEPs can get in touch if they feel that the enhanced due diligence is too great.

Before my noble friend comes to his peroration, perhaps I could ask this. All this consultation is taking place against the background of an impending referendum on whether we remain a member of the European Union. Am I wrong in thinking that all this depends on European directives, and that if the vote were to go in favour of our leaving the European Union we would have to look at the whole thing again?

Even if that took place, we would be a member of the European Union for at least two years under the arrangements. But this is based on our staying in; if we did not, we would have to look at a great many things in addition to anti-money laundering procedures—and I am not sure that this would even be top of the list.

I am sorry to hear about the problems that the noble Baroness, Lady Kramer, has had with her family—but, as I said, the proportional nature of the enhanced due diligence for politically exposed people will be taken account of. The amendment is a good start and I commend it to the House.

That this House do agree with the Commons in their Amendment 10.

My Lords, Commons Amendment 10 places a duty on the Financial Conduct Authority to cap early exit charges that act as a deterrent to people accessing their pensions early under the new pension freedoms. The Government took the step of introducing this amendment in Committee in the Commons following detailed evidence-gathering exercises that showed the extent of consumer detriment caused by early exit charges and the imperative to act quickly in order to limit this.

Evidence from the FCA found that there is a small but significant cohort of people in contract-based pension schemes for whom early exit charges were posing a real barrier to accessing the freedoms. The FCA found that some 670,000 people over 55 in such schemes face an early exit charge, and for 66,000—almost one in 10—this charge would exceed 10% of the value of their pension pot. In some cases these charges would be high enough to make it uneconomic for an individual to access their pension flexibly, while in others, the presence of an early exit charge may have acted to discourage individuals from accessing their pension when it could have been the best thing to do in their circumstances.

It is therefore clear that the Government’s objective of ensuring that everyone who is eligible can access their pension savings flexibly is not being met and that action is needed to ensure that all consumers are able to make use of the freedoms. In order to ensure that the cap benefits current consumers who are eligible to use the freedoms now, subsection (4) of this clause provides that any cap will apply equally in relation to existing arrangements, as well as those entered into in the future. The decision to introduce a measure which will have retrospective effect in this way is not one that the Government have taken lightly; we recognise industry concerns about the way this cap will affect existing contractual agreements.

However, the Government’s view is that this action is warranted to ensure that individuals are not deterred from accessing their pension flexibly because of contractual terms they entered into long before the freedoms were introduced. These people would not have been in a position to make an informed decision about potential early exit charges when they signed up. Even some pension providers have conceded that industry practices have moved on and that the introduction of the pension freedoms means that these charges pose a much more significant barrier now than when they were agreed.

To be clear, this measure is about ensuring that consumers are adequately protected against early exit charges being imposed at a level so high as to deter them from accessing their pension early under the pension freedoms. This clause is not about determining the fairness of these, or other existing contractual terms and conditions more generally. That is a separate, wider issue which this Government have recently addressed in the Consumer Rights Act 2015, legislation which the FCA has the power to enforce against the firms it regulates.

It is important to consider the nature of the contractual terms affected through this measure. The Economic Secretary made it clear when introducing this clause in the other place that terms providing for market value reductions should not be subject to the cap on early exit charges. Subsection (8) of this clause gives the Treasury a power to introduce secondary legislation to provide for this exclusion to the FCA’s duty. FCA rules already place rules on how firms may apply a market value reduction, and the cap on early exit charges will not add to or modify these rules. Furthermore, in order to ensure that the level of any cap is fairly set, the FCA will determine the precise level of the cap, following further public consultation and cost-benefit analysis. The FCA will be setting out its next steps in this process shortly, with a view to implementing this cap before the end of March 2017.

This clause gives the FCA the flexibility to apply different rules to different classes or descriptions of charges if it finds that the evidence demands this, but the Government’s expectation is that any FCA cap or prohibition will apply equally for all those consumers accessing their pension aged 55 and above, up to their expected retirement date, rather than being set at different levels for different age groups. Although data collected by the Pensions Regulator suggest that early exit charges are less prevalent in trust-based pension schemes, we will also act to ensure that all members, regardless of scheme, are protected from excessive early exit charges, and the DWP and the Pensions Regulator will work alongside the FCA as they develop the design and level of the cap for contract-based pension schemes to ensure that this is possible.

The pension freedoms have given consumers much greater freedom of choice in the financial decisions they make at retirement. Commons Amendment 10 will provide important protections to consumers in contract-based pension schemes, ensuring that they are not deterred from using the pensions freedoms by excessive early exit charges. I beg to move.

My Lords, I take this opportunity to thank the Minister for meeting my noble friend Lord McKenzie and me to discuss this amendment in detail. I am most grateful for that. As has been said, the amendment places a new duty on the FCA to make rules to prohibit or cap early exit charges that act as a deterrent to people accessing their savings under the new freedoms. This amendment is particularly interesting for two reasons. Unusually, it introduces legislation with retrospective effect on existing contracts and a new deterrent regime in addition to the existing fairness regime in financial conduct regulation—in effect, charges must not be at a level that deters people from accessing their savings.

The Government believe the legislation needs retrospective effect because of the need to protect existing and future consumers, and—more interestingly, when one reads the detail of their proposals—that fairness should not be determined solely by reference to whether or not it was fair to include a term in a pension contract a decade or decades ago, but that it has to be looked at against how unfair contracts legislation has evolved since those contracts were entered into, and through the new lens of the recent pension freedom reforms, all of which arguments I agree with. But given that the Government have taken the decision through this amendment to enable retrospective changes to existing pension contracts and recovery of amounts paid or payment of compensation for charges made in contravention of the new FCA rules coming into force in March 2017, and that the pension freedoms, which provide the new lens for looking at fairness, were introduced in April 2015, I cannot understand why the consumer protection in the new FCA duty does not apply with effect from April 2015. Why is it necessary to wait until March 2017 when the FCA rules are implemented—a full two years after the pension freedoms were introduced—before consumers are protected by the provisions on fair access to savings?

The Minister advised in his letter of 16 March that the Government are introducing this amendment,

“in light of detailed evidence gathering, and an imperative to act quickly in order to limit the extent of consumer detriment caused by early exit charges”.

The Government’s main defence for this two-year gap from April 2015 to March 2017 in protecting consumers is that savers who access savings between these two dates from a scheme whose early exit charges are considered excessive under FCA rules to be implemented in March 2017 cannot have been deterred by those charges and presumably are therefore not in need of retrospective protection. That argument simply does not sit comfortably with the Government’s view that some people are being denied fair access to their savings. It suggests that the new deterrent regime trumps fairness—in effect, if a person accessed their savings they have not been deterred, ergo the early access terms are fair.

There are many reasons why people may access their pension savings during that two-year gap, even though the charges may be excessive. There may be ill health or other compelling personal circumstances that override the deterrent effect. People may not be aware of, or understand, the excessive early exit charges, so do not make their decision on an informed basis. The FCA data reveal that 78% of affected consumers rated their pension provider’s explanation of the exit charge and its level as poor.

In his letter of 16 March, the Minister comments:

“In order to ensure that the provision benefits current consumers who are eligible to use the pension freedoms now … this clause provides that any prohibition or cap imposed by FCA rules applies equally in relation to existing pension contracts, as well as those entered into in future”.

In the light of that statement, it is most unfortunate that the amendment excludes from the protection consumers accessing their savings between April 2015 and March 2017, even though in other circumstances it allows for a retrospective effect.

My Lords, I echo the objections just raised by the noble Baroness, Lady Drake. It is quite inexplicable that “retrospective” does not mean that the new regime will be recalculated from the date that people were able to access their pension pots. It seems equally unfair for people to have paid an inappropriate exit fee a year ago as it is for them to pay an inappropriate exit fee a year from now. Has the Minister considered how this will tend to inhibit decision-making by families until the new regulations are revealed? Instead of making the best decision for the family, there will be great pressure to delay that decision until the rules are clearer and, presumably, the exit fees are removed.

The amount of money involved in this process cannot be substantial but to the individual family that has been impacted, it is certainly significant. I really do not understand the Government’s thinking on this issue.

My Lords, I thank the Minister for his early warning of this amendment, for facilitating the meeting with officials and for addressing at that meeting some of the incisive and expert questions posed by my noble friend Lady Drake. As we have heard, the new clause places a requirement on the FCA to make rules to prohibit or cap certain early exit charges in regulated schemes which act as a deterrent to people accessing their pensions under the new pension freedoms. So far as it goes, this should be supported.

As the Minister’s letter of 16 March sets out,

“after the reforms took effect last April, it has become increasingly clear that early exit charges were preventing some people from accessing their pension flexibly under the freedoms”.

This was substantiated by the government consultation and evidence-gathering by the FCA and the Pensions Regulator. This process identified a number of weaknesses in the application of the freedoms policy: not just the early exit charges but a lack of clarity in the process for transferring pension savings and uncertainty around the need for financial advice when making transfers involving safeguarded benefits.

Although early exit charges are not an issue for the majority of those eligible to access freedoms, the Government have concluded that significant numbers of eligible individuals face charges which in absolute or relative terms present a “real barrier” to early access. This begs the obvious question of why this matter was not addressed as a fundamental component of the design of pensions flexibility in the first place. Why has it seemingly come as such a surprise to the Government that these early exit charges exist and could act as a deterrent? This is symptomatic of the rushed nature of the introduction of this policy more generally, which lacked the consultation and consensus-building that have typically characterised good pensions policy development.

It might be argued that before the introduction of the FCA cap—to be in place before the end of March 2017, as we have heard—there has been no detriment because by definition exit fees could not have been a deterrent to the 400,000 times that pension pots have been accessed to date. But it seems that exit fees could be a deterrent, making it less likely, weighed against other factors, that someone would access their pension pot, without these fees being an absolute bar. That is why, as my noble friend has argued, we consider that any capping should be applied not only to existing as well as new contracts but to pensions accessed from the start of the pension freedoms regime in 2015, a point supported by the noble Baroness, Lady Kramer.

My Lords, I thank noble Lords who have spoken in this debate. Let me pick up on the final point which was just made by the noble Lord, Lord McKenzie. I heed what he says about getting access to this amendment sooner but I would somewhat refute what he says about the rushed nature of the entire policy. When this problem was first identified the Government took immediate action to address it by embarking, as I have mentioned, on the FCA evidence-gathering exercise. However, I thank in particular the noble Lord and the noble Baroness, Lady Drake, for the time that they have spent discussing this clause and amendment with me. I have already committed to write to them shortly to address a number of the very forensic and detailed points that were made to me last week. I will do that as soon as I possibly can.

A number of your Lordships including the noble Baroness, Lady Kramer, raised a valid question about why we are not backdating this measure to 2015, when the pension freedoms came into effect, and not requiring providers to pay back the early exit charges which they received from customers in the period between April 2015 and when the cap comes into effect. I would make two points on this, as already outlined in my remarks. First, the purpose of this measure is not to require the FCA to assess the fairness of the contractual terms of historic pensions. The intent of the measure is to ensure that early exit charges are not imposed at an inappropriate level which deters consumers from accessing their pension early under the pension freedoms. Clearly, those who have decided, or will decide, to access their pension despite an early exit charge have not, or will not, have been deterred by the existence of such a charge.

Secondly, I accept the observation that, once in effect, this cap will obviously benefit some consumers who would not have been deterred by the early exit charge in their contract. However, the Government believe that it is an ordinary consequence of introducing a new measure of this sort that those—in this case, consumers—who take an action before the law comes into force do not benefit from the new law. Moreover, it is right that the Government do not rush to make legislation which has any sort of retrospective effect but that they do so only when there is clear and compelling evidence that it is in the public interest, and then make that retrospection as minimal as possible to ensure that the action is proportionate. That is what I and the Government believe that this clause achieves. It is proportionate and focused on those who greatly need it, and that is why I commend it to the House.

Before the Minister finishes, if I may, the defence is given that this is not a fairness regime but a deterrent regime and that there is therefore no evidence of deterrence and no need to make it retrospective. But on the FCA’s own evidence, the knowledge and understanding of these charges is quite poor. It is difficult to be deterred if you do not know that you are being exposed to excessive exit charges. People will not know that they are being exposed to them until the FCA has done its business, which will be by March 2017. It seems a little unfair. At the very least, perhaps the Government should be taking steps to ensure that companies and other agencies make consumers aware that if they wait until March next year, they may get a better deal.

The noble Baroness, as so often, makes a very valid point. This is precisely what the consultation sets out to address. It aims to ensure not just that consumers are properly protected but that they make informed and proper decisions. I will write to the noble Baroness to make these points in more detail.

That this House do agree with the Commons in their Amendment 11.

That this House do agree with the Commons in their Amendment 12.

My Lords, with the leave of the House, I shall repeat a Statement made a short while ago in another place by my honourable friend Tobias Ellwood.

“The Syrian conflict has entered its sixth year. As a result of Assad’s brutality and the terror of Daesh, half the population have been displaced and more than 13 million people are in need of humanitarian aid. The UN special envoy, Staffan de Mistura, estimates that as many as 400,000 people may have been killed as a direct result of the conflict.

Our long-term goal is for Syria to become a stable, peaceful state with an inclusive Government capable of protecting their people from Daesh and other extremists. Only when that happens can stability be returned to the region, which is necessary to stem the flow of people fleeing Syria and seeking refuge in Europe.

We have been working hard to find a political solution to the conflict. There have been three rounds of UN-facilitated peace negotiations in Geneva this year: in February, March and April. The latest round concluded on 27 April without significant progress on the vital issue of political transition. We have always been clear that negotiations will make progress only if the cessation of hostilities is respected, full humanitarian access is granted and both sides are prepared to discuss political transition.

The escalating violence over the last two weeks, especially around Aleppo, has been an appalling breach of the cessation of hostilities agreement. On 27 April, Al Quds Hospital in Aleppo city was bombed, killing civilians, including two doctors, and destroying vital equipment. More than a dozen hospitals in Aleppo city had already been closed because of air strikes, leaving only a few operating. The humanitarian situation there is desperate. According to human rights monitors, at least 253 civilians—including 49 children—have been killed in the city in the last fortnight alone.

At midnight on Friday, following international diplomatic efforts between the US and Russia, a renewed cessation came into effect in Latakia and eastern Ghouta in Damascus. We understand that this has reduced some of the violence in Latakia but remains shaky in eastern Ghouta. The situation in Aleppo remains very fluid. The Assad regime continues to threaten a major offensive on the city. There were some reports of a cessation of attacks overnight, but we have received reports indicating that violence has continued this morning. We need swift action to stop the fighting. My right honourable friend the Foreign Secretary is speaking to Secretary Kerry today to discuss how we can preserve the cessation.

We look to Russia, with its unique influence over the regime, to ensure that the cessation of hostilities does not break down. It has set itself up as the protector of the Assad regime and it must now put real pressure on it to end these attacks. This is crucial if peace negotiations are to be resumed in Geneva. Those negotiations must deliver a political transition away from Assad to a legitimate Government who can support the needs and aspirations of all Syrians and put an end to the suffering of the Syrian people.

We also need to inject further momentum into political talks. We therefore support the UN envoy’s call for a ministerial meeting of the International Syria Support Group to facilitate a return to a process leading to a political transition in Syria. We hope that this can take place in the coming weeks. The UK is working strenuously to make that happen and we will continue to do so”.

My Lords, I thank the Minister for repeating the Statement. The dreadful and appalling attacks and the scenes that we have seen in Aleppo appear to be a deliberate attempt to jeopardise the ceasefire and undermine the peace talks. As recognised by the Geneva Conventions, there is never any justification for attacking hospitals. I hope that the noble Baroness will assure the House that the UK is taking all steps, including gathering evidence, to ensure that those responsible will be held to account in future. As a member of the Syria support group, as she highlighted, Britain has a crucial role to play in the peace talks. US Secretary John Kerry yesterday met the Foreign Minister of Saudi Arabia, along with the UN special envoy, who agreed to make maximum efforts with the opposition to make certain that they are ready and prepared to go back to the table the minute a cessation is in place.

What steps are the UK Government taking to work with Saudi Arabia and other allies to encourage the Syrian opposition to recommit to the peace process and to ensure that all component groups of the coalition recognise the ceasefire agreements when they are in force? Finally, what progress is being made to ensure that humanitarian access is at the heart of any new ceasefire agreement?

My Lords, I give full assurance that we see it as our duty and that of our allies to ensure that evidence is gathered to ensure that perpetrators of breaches of international law and international humanitarian law are held to account. The UK is doing that specifically through projects which we support where very brave people are collecting and preserving information, and I applaud their personal courage in so doing.

The noble Lord is right: it is critical that we ensure that we work with our allies across the International Syria Support Group and generally to recommit to the political process, to ensure that it is taken forward. In particular, he mentions work to persuade the opposition to the regime in Syria to recommit to that process. We shall continue to do that, but I note that it is very difficult for them to recommit to that political process while the Assad regime—and, it appears from reports, the Russians—are showing that they have no care for the process of cessation of hostilities in Aleppo. If reports are correct that Russia itself is involved in bombing hospitals, the noble Lord is right to say that in no circumstances is there justification for the bombing of civilians.

Finally, with regard to humanitarian access, we give our full support to regaining it. For example, the regime is blocking access to humanitarian aid even to places such as Darayya, a few kilometres from Damascus and the UN. Road access is easy there; the UN could make it happen; the regime stops it.

My Lords, it is difficult to imagine the effect of the kind of barbarity that the noble Baroness just described on a civilian population. It must be recognised that John Kerry, the Secretary of State, has strained every sinew to try to reach, if not an amicable, at least a temporarily stable solution. Does not all this give the lie to any suggestion—which apparently continues to be Russian policy—that somehow Mr Assad could be part of any kind of continuing Government in Syria?

My Lords, the Russians clearly have some influence on Assad; I want them to use it in a way that can ensure that the Syrian people have the hope of having a transitional process to peace. Assad continues to attack the very people for whom he should have a care. It is the case that brutality occurs at every turn, every day. I met those doctors and nurses who are treating people in hospitals in Syria, who have come out of Assad’s detention centre, having suffered the most appalling and barbaric torture, and I recall their words. They trained to be doctors, but they are faced with seeing every day the horrific results of what Assad commits on his own people.

My Lords, in seeking to persuade the Russians to change their attitude, has anyone confronted the Russian Ministers with the bald fact that their actions and Russian airstrikes have slaughtered a paediatrician and children in a children’s hospital in the latest attack in Aleppo? Have those facts been put to them at the level of trying to make the Russian people and Government understand that they are tarnishing themselves by pursuing these actions? Could the Minister say anything about reports that President Bashar al-Assad is actually colluding with Daesh in various ways, over oil supplies and other arrangements, in attacking Aleppo with Russian support? Finally, could she convey somehow to the Russian people that they are a very great people—that they have understandable problems and have suffered greatly in the past—but that their leadership now is taking on powers such that many people are coming to question whether Russia is a serious contributor to the society of nations or whether the leadership has gone completely mad?

My Lords, I understand, with regard to presenting to Russia the facts of the impact of its support and direct action in Syria, that that information has been transmitted. Staffan de Mistura is travelling, or has travelled today, to Russia to speak to Foreign Minister Lavrov, and I have no doubt that he will lay out those facts. We are concerned by patterns of co-ordination between the Syrian regime, Russian air forces, and indeed by some of the Syrian Kurdish forces, in their direct conflicts with elements of the moderate armed opposition. My noble friend is right to raise those concerns. It is important that the regime and Russia recognise that, in playing a part on the international stage to bring peace to Syria, it does not then kill the peace off at the start.

My Lords, has the Minister had the chance to consider not just the appalling and shocking attacks on the hospitals and the killing of the last paediatrician in Aleppo but the specific targeting and revenge attacks on minority communities in Aleppo—particularly the attack on 26 April, which I mentioned in a Parliamentary Question that I tabled to her last week, where again several children were killed in an attack on the Syrian Christian quarter there? Has she had a chance to consider also the resolution of the Australian House of Representatives at the end of last week, joining the American House of Representatives, the British House of Commons, the European Parliament and the Parliamentary Assembly of the Council of Europe, in declaring these events to be a genocide, joining her ministerial colleague, Tobias Ellwood, who has said precisely the same thing? Would she consider arranging a meeting with the Foreign Secretary, Members of your Lordships’ House and Members in another place, who would like to see the judicial review of these events brought right up the agenda in the way that the noble Lord, Lord Collins, indicated in his intervention, so that those responsible for these events will be brought to justice?

My Lords, wanting to bring people to justice is, of course, a long-term commitment, not achieved by short-term statements. It is important that the noble Lord has raised today the issue of the targeting of groups within Syria and, particularly, Aleppo. I have looked at that. Indeed, in the past I have discussed with groups collecting information about the atrocities exactly what it means to individuals who are under attack—particularly the White Helmets, who make such a valuable effort in retrieving people from the rubble and who, while they do so, find themselves barrel bombed by Assad for trying to save lives.

This Government share the House of Commons’ condemnation of Daesh atrocities against minorities and the majority Muslim population in Iraq and Syria. That is why we mandated the UN Human Rights Council to investigate Daesh in 2014, and why we are doing everything we can to gather evidence for use by judicial bodies.

The noble Lord referred to the personal view put forward by my honourable friend Tobias Ellwood. Some people are announcing that there has been genocide but, while the Government agree that there may be a strong case, our view remains that the courts are best placed to judge criminal matters. That is why we are committed to working with our partners in the international community to gather that evidence in order to get that judicial decision as a possibility—to provide an opportunity for the judiciary to make the decision that is rightfully theirs to make.

That this House do agree with the Commons in their Amendments 2A and 2B.

My Lords, it is a pleasure to return to the Trade Union Bill, which I believe was much improved as a result of the expertise and attention to detail shown in this House. We have three groups before us today, on electronic balloting, trade union political fund opt-in and facility time, following changes made in the other place to the amendments made after votes here in the Lords.

We all agree that trade unions have an important role to play in the workplace. That includes helping to resolve workplace disputes without strikes, improving health and safety and encouraging skills development. We have already secured agreement in both Houses to the key aspects of this legislation, including ballot thresholds and mandates, reform of picketing and the Certification Officer. Following further discussions and debate in the other place, we are here today to consider the final elements of the Bill.

I turn first to electronic balloting. We have always been open to the principle but we have reservations, which I described in detail on Report, about its safety and security. I appreciate that some do not share my concerns and are satisfied that these issues can be easily resolved. That is why the noble Lord, Lord Kerslake, with widespread support across the House, proposed that an independent review be commissioned, after which e-balloting would be introduced. There have of course already been a number of reviews such as those by Electoral Reform Services, Webroots Democracy and the Speaker’s Commission on Digital Democracy. These have made encouraging comments about a move to electronic ballots but none has provided assurance on managing the risks. That is why we can see the merit in looking at the issues further and will be commissioning an independent review to do so.

The review will enable us to take a properly informed decision based on an assessment of the latest technology, made specifically in the context of electronic voting for industrial action ballots. It will take us closer to resolving the question of how both security and confidentiality can be preserved. This is important because it should enable us to get to the very heart of the matter. I am pleased that the Government have now agreed to accept your Lordships’ amendment for an independent review of e-balloting, with one important change: to replace the requirement to,

“consider the report and publish and lay before each House … a strategy for the rollout of secure electronic balloting”,

following the review, with a requirement for the Government to publish our response to the review. There is a simple and important reason for that change. We believe that the wording voted on in this House would prejudge the outcome of the review and irrevocably commit the Secretary of State to press ahead irrespective of the review’s findings. However, we have listened carefully to the strength of feeling in both Houses. We can see the merits of electronic voting being made available for industrial action ballots once the problems are addressed, and this review will enable us to make crucial progress. We already have the powers to introduce such ballots in Section 54 of the Employment Relations Act 2004.

The amendment before your Lordships today, supported by the other place, reflects the Government’s acceptance of the principle of electronic balloting while ensuring that we proceed prudently and on the basis of evidence. I beg to move.

My Lords, I thank the Minister; I appreciate that the Government have moved substantially on this issue since we last debated it. I will try to encourage her to be a little more positive, because the fact is that the Government have publicly declared in favour of a review, which is important. It is important that she reassure the House that all interested parties will be publicly consulted in that review and will have the opportunity to put their case and the evidence in an open and transparent way. I hope this will include not only balloting agencies but the trade unions themselves and the TUC, which obviously have a wealth of experience. It may even be an opportunity for the Conservative Party to explain how well it gets on with electronic balloting, which it has used in the past. I therefore hope that the Minister will be able to give that commitment that evidence will be taken across the board.

I also noted the comments by Nick Boles in the other place about the pilots running as part of the review. I hope the Minister will be able to give the independent review a freer hand that will enable it to say, “Well, yes, we have evidence, but we want to test it”. That is important, because whatever the review’s conclusions, it matters that people have confidence in it. That is why all noble Lords were committed to the idea of a trial or pilots—to ensure that the review could assess its effectiveness.

Of course, no balloting process is completely secure, as we know from our own parliamentary system. However, I am fairly confident that the balloting agencies will be able to ensure that there is a strong case. We must not forget the reasons for this. It is about ensuring democracy, and if the Government are genuinely concerned about the rate of participation in elections—or, primarily, in industrial action ballots, where the thresholds have been put in place—it is their duty to ensure that all measures are taken to maximise this. Views were expressed across the House that this independent review should take place as speedily as possible and that the Government should consider fully its conclusions. I note what the Minister says but I hope that once that review is published, the Government will give proper consideration to its conclusions.

My Lords—

My Lords, the noble Lord, Lord Kerslake, was not in the Chamber until well after the Minister had started speaking. I do not know whether the House feels that he should be allowed to speak.

My Lords, can my noble friend say whether I am right in thinking that there has been some change in the order of business? I was under the impression that there would now be an Urgent Question on health. I myself arrived late in the Chamber, and that ought to be taken into account.

In the circumstances, it would be right to hear the noble Lord, Lord Kerslake.

I am very grateful to the House for giving me the opportunity to speak. I was going to convey my apologies for lateness for the exact reason given by the noble Lord, Lord King—I had a different understanding of the timetable. All I can say is that I am learning fast.

I wholeheartedly welcome the movement on electronic balloting, and the Minister will know how passionately I feel about this. The fact is that it is both a secure and effective system for testing the opinion of different groups. It has been used on many occasions by many organisations for very important votes, and I believe passionately that it should be made available to the unions, particularly where we have set thresholds that must be met before they can take industrial action.

My Lords, I agree with what the noble Lord, Lord Kerslake, has just said. The Minister has repeated today that the Government are not opposed to electronic balloting in principle; they are concerned about the technicalities. I therefore hope that the Minister can tell the House that, if the independent review produces a positive response on the technicalities and the detail, the Government will be eager to implement the findings.

My Lords, I thank the Minister, as I do Mr Nick Boles for the very constructive part he played in another place. I just ask my noble friend to say something about the timescale.

My Lords, perhaps I may add to the comments of the noble Lord, Lord Kerslake, but, first, I also add my apologies for not being here when the Minister made her contribution. However, I think that some of us are entitled to an apology from whoever set out the business for today, as it has been taken in an order different from what we were previously advised.

I obviously apologise if my noble friend has already covered this matter clearly but I was very struck by the statement from the Minister, Mr Nick Boles, in response to a contribution from Mr David Davis, who has taken a keen interest in this matter. Mr Davis asked what assurance could be given about the outcome of a positive review. The Minister replied:

“I have made it clear that we have no objection in principle to e-balloting. If the research suggests that it is safe to embrace, we will proceed with it”.—[Official Report, Commons, 27/4/16; col. 1476.]

Interestingly, there was then considerable discussion about the Minister’s career prospects—whether it meant anything or whether it was merely the reflection of a Minister who was here today and gone tomorrow. He made it quite clear that he had made that statement on behalf of the Government and, regardless of who succeeded him, it was the Government’s position. It is to the Government’s credit that they recognise the validity of this argument. It is sensible to have a review and if it is positive, obviously there will be benefits in introducing it.

My Lords, I, too, must apologise for being a little late. I was brought up on the good trade union tradition that an agreement on procedure is an agreement, although clearly it was not this afternoon.

I want to add a couple of comments to the important speeches that we have already heard—particularly those from the Cross Benches—and to what the noble Lord, Lord King, said. We are seeking three things. The first is that the unions should be consulted as part of this review. Secondly, we would like to see some form of pilot as part of the review, bearing in mind that the Electoral Reform Services has conducted in the past year 2,000 polls and covered 1 million votes. There is a lot of experience out there, so this review does not actually need a lot of time. Therefore, our third requirement is that there should be some form of deadline. We are concerned that this will be heading for the long grass otherwise. The whole concept of electronic balloting is very important to the future of trade union democracy, not only for ballots for industrial action, but ballots for union leadership. Postal ballots were seen 20 or 30 years ago as essential reform, but now that turnouts in postal ballots are disappointingly low, we have to look at alternative methods of making such ballots more representative. Electronic balloting, as we have discussed in this Chamber, is now the next important reform. I hope the Government will exercise this review quickly and expediently and get a positive response.

My Lords, I believe that we have made significant progress today, despite the confusion over the timing of the Statement. The review will help to assess the rigour of the latest technology and address concerns about security, confidentiality and intimidation. It will allow us to consider again the case for e-balloting and ensure that we are making the right decision about whether to allow this method for conducting trade union ballots. I note what the noble Lord, Lord Collins, said about the value of increasing participation through e-balloting and the points made by the noble Lords, Lord Kerslake and Lord Pannick, about its value.

Let me first address the point raised by the noble Lord, Lord Stoneham, about pilot schemes. Pilots are always a good thing, and it is a pity they are not deployed more generally in public policy. How and when you use them in this area is not something that can be decided today. However, we have specifically mentioned them in the Bill and I appreciate from exchanges that we have had, including with the noble Lord, Lord Mendelsohn, that they are important.

I note the point made by the noble Lord, Lord Collins, about involving interested parties in the review, and in particular trade unions and the Trades Union Congress. This will of course be an independent review, and it will be for the chair to determine how best to conduct it. However, to my mind, it would make sense to involve trade unions, and indeed other relevant experts, and I am sure that he or she will come to the same view. Union input is very important, and in deciding how to set up the review we obviously need to avoid conflicts of interest.

My noble friend Lord King rightly quoted my honourable friend Nick Boles, who has done so much to progress this legislation, and the Government’s intentions, as set out recently. I cannot really add to that, but a number of noble Lords have asked about timing. I am pleased to provide reassurance that the review will be acted upon in due course and without delay.

My Lords, I am most grateful to my noble friend the Minister. We did of course have extensive debates about the merits of this at an earlier stage of the Bill. Could she tell the House when and why the Government changed their mind on this matter?

My Lords, we discussed e-balloting in this House in Committee and at Report. There was a very widespread view that we should try to find a way forward on e-balloting. It is fair to say that we have been working since then to try to do just that. The Bill went back to the other place with amendments made by this House, most of which were accepted, and it was decided by the Government that we should bring forward a review of e-balloting in exactly the form that I have described today. I welcome that and welcome the progress that that has meant we are able to make on this Bill.

I shall not delay your Lordships long on this issue. I am very interested in all aspects of the advance of digitalisation—my friends know that—so I look forward to seeing the results of the review of e-balloting that we are agreeing today.

Could my noble friend please answer the question that I asked about timescale? She used the expression “in due course” et cetera, but it would be helpful to know when this review will commence, how long it will last and when we will therefore be in a position to draw conclusions from it.

I can repeat that we will act in due course and without delay. Those words were advised. Of course, I am not able to answer in detail on the exact timetable today, but I hope that noble Lords will feel that the direction of travel is right and that this amendment, which builds largely on the amendment passed in this House, is what we need and will agree that we should proceed with it.

That this House do not insist on its Amendments 7 and 8 and do agree with the Commons in their Amendments 7A, 7B, 7C, 7D, 7E and 7F.

My Lords, we have debated at length the principle of how union members exercise their choice to opt either in or out of a political fund. I am particularly grateful to the noble Lord, Lord Burns, and the wider Select Committee for their deliberations on this complex issue. They were both careful and wise, and extraordinarily rapid because of what looked like an impossible five-week deadline.

I extend thanks in particular to my noble friends Lord Sherbourne, Lord De Mauley, Lord Robathan and Lord Callanan, who gave up their time to help the committee find a way forward on these very important matters and ensure that the principle of union members having a transparent and active choice to opt in was supported.

The Government have given careful consideration to the recommendations of the Select Committee and to the amendment tabled by the noble Lord, Lord Burns, which followed the majority view that opt-in should apply only to new members. We tabled an amendment in the other place, but concerns were expressed by a number of colleagues from both Benches in both Houses.

It was important to progress matters and get this Bill through the House and on to the statute book, and the Government subsequently tabled a new amendment, now before your Lordships following its acceptance by the other place, which like the original amendment of the noble Lord, Lord Burns, reflects the recommendations of the Select Committee on opting in.

The amendment corrects some legally defective drafting and, instead of the Certification Officer being required to issue a code of practice, places a statutory obligation directly on unions to provide an annual reminder to those new members who have opted in to the political fund. It is not usual for the Certification Officer to be involved with communications between unions and their members, and it provides more certainty to have this requirement in the Bill.

In the interests of finalising this important Bill for Royal Assent, I hope that noble Lords will support the amendment. I beg to move.

My Lords, I am delighted to be able to thank the Minister for her statement and the amendments, and I hope that this will be the end of what has been the controversial issue of trade union political funds. As the Minister said, today’s proposals leave intact the substance of the amendment which was passed so comprehensively by your Lordships’ House. Noble Lords will recall that the amendment was designed to put into legislation the majority recommendations of the Select Committee on Trade Union Political Funds and Political Party Funding, which I had the honour to chair. I remind noble Lords that most of the recommendations reflected the unanimous view of the committee, although there was a difference of opinion about the treatment of existing members of unions with political funds.

In essence, after a transitional period of at least 12 months, all new members will be required to pay into political funds only if they have actively opted in. They will be reminded annually of their right to opt out. Opting in or out will be allowed electronically, there will be no renewal requirement every five years, and the requirement to opt in will not apply to existing members.

In the noble Lord’s discussions with the Government about his amendment, at what stage was he told that the Government had changed their position? Was there a stage before that?

Mr Nick Boles explained to the other place one day last week that he and I met last Monday evening and had a discussion. He put a proposal to me that I thought was rather unsatisfactory and fell somewhat short not only of the majority recommendation of the Select Committee but of the minority view. I explained that from my perspective it did not go far enough and that there would have to be further stages between the two Houses. Then I was subsequently told on Tuesday evening, the following day, that the revised proposal was being set down.

My Lords, I rise with some disappointment to speak on these amendments, but I start by paying tribute to my noble friend Lady Neville-Rolfe because throughout she has been exemplary in her courtesy and assistance. I know from past experience that sometimes as a Minister you hold to a line and then suddenly a hole appears in front of you into which you drop. I fear that she may be feeling slightly like that, and our honourable friend Mr Boles may feel the same.

I am disappointed not because this is a grand old Duke of York moment, although in the committee we were indeed marched up to the top of the hill, but because this is the wrong decision. The Bill that came to the House of Lords was frankly not a good Bill. There were three issues that I particularly seized on. One was electronic balloting and the unnecessary bureaucracy involved in the Bill—the need to write to people and people only being able to communicate by writing, which was nonsensical. The second was that there was just not enough time to do it in a matter of months. Any large organisation needs time to contact all its members. I am glad to see that, as a result of our deliberations, there will now be a 12-month window for transition. The third reason was that having to review the decision every five years was punitive, as the noble Lord, Lord Burns, who ably chaired the committee, has described it. Others in this Chamber will know better than me, but I wonder whether the Bill was stitched together by some special adviser who was being paid too much; some teenage scribbler who should, perhaps, have been given greater and wiser direction.

There were two reasons for my disappointment. First, this was a commitment in our manifesto, which specifically said that we would,

“ensure trade unions use a transparent opt-in process for union subscriptions”,

and not just for new members. The second reason is the very important issue of principle. If the principle is that people should opt in, rather than out, then that principle is right—would any noble Lord like to disagree with that? As we heard in our committee, presumed consent is no longer acceptable in financial services. In our earlier discussions on the Bank of England and Financial Services Bill, the Opposition were speaking ably and rightly about consumer protection. Why should trade unionists not have the same consumer protection as anybody else and not have to opt in rather than out?

These two reasons leave me gravely disappointed. I am sure it is not the case, but there is a hint that a deal may have been cut behind closed doors, which does not reflect well on this Government. They should have stuck by their principles and by the principle which I have mentioned. Politicians are much criticised for not keeping their promises and for inconsistency. By allowing these amendments to go forward, the Government have not kept their manifesto promise and have been inconsistent, and it pains me to say that.

My Lords, I too served on the Select Committee so ably led by the noble Lord, Lord Burns, and I am delighted to follow on from—and endorse—what he has said this afternoon. As one of the co-signatories, from every part of the House, for his amendment on Report, I warmly welcome what the Government have now decided to do. They have, albeit at the very last minute, recognised the validity of what the Select Committee recommended and the very strong support for it in all parts of this House. I note again that the Minister herself has referred to the committee as “careful” and “wise”. I take comfort from that description. I am not sure that she would have said it earlier on, but she has said it now.

It is also very gratifying that, when its work was being examined in the other place last Wednesday, there were also very considerable tributes to the noble Lord, Lord Burns, and the rest of the Select Committee. There was unanimous praise and support from Members on all sides. Not only the Minister, Nick Boles, but representatives of the opposition parties paid tribute to the work that was done at—as has been acknowledged—considerable speed and were united in expressing agreement with our broad conclusions. As the original proposer of this way to achieve some non-partisan, cross-party, independent scrutiny of this highly controversial part of the Bill, I took particular pleasure from that endorsement as I listened to the Commons debate. MPs on all sides made reference to the Select Committee’s wider recommendations, to which the noble Lord, Lord Burns, has referred, on the question of party funding reform. In paragraph 131, the committee quoted the double promise in the 2015 Conservative manifesto:

“In the next Parliament, we will legislate to ensure trade unions use a transparent opt-in process for subscriptions to political parties”.

And, it goes on, immediately:

“We will continue to seek agreement on a comprehensive package of party funding reform”.

I note what the noble Lord, Lord Robathan, said about manifesto promises, and I hope he endorses that promise with equal sincerity and strength.

In paragraph 138 of the report, the committee recommended to the House and the Government that:

“Whether or not clause 10 is enacted, in whatever form, the political parties should live up to their manifesto commitments and make a renewed and urgent effort to seek a comprehensive agreement on party funding reform. We urge the Government to take a decisive lead and convene talks itself, rather than waiting for them to emerge”.

This is where this business is now unfinished and where we must expect further explicit announcements from Ministers. Ministers simply cannot pretend that this issue is unimportant. That firm recommendation was supported unanimously in the Select Committee with forthright endorsement by all four Conservative members.

Members on all sides of your Lordships’ House have joined the Select Committee in highlighting public concern about the dominance of big money in British politics. The Select Committee took a lot of evidence on that point. Who can say that the public are wrong to be suspicious of favoured access, favoured influence and favoured patronage? It is often said, “He who pays the piper calls the tune”. Only this weekend, we have had a vivid reminder of how damaging to public confidence in our democracy this can be. The Conservative Party’s determination to inflame people’s fear, hatred and greed in the London mayoral election has been all too obvious. Powerful financial interests are clearly scared. I noticed in particular the comment of the noble Baroness, Lady Warsi, who rightly asked whether this disgraceful campaign really represents the true motives of the candidate. Whether or not it does, she was brave and right to call her party out on this deplorable campaign.

If our politics are to become more palatable to her and to the public, removing big money is an essential prerequisite. The changes we are making to the Bill this afternoon provide an opportunity to do just that if the Government will, as the committee unanimously recommended, once again institute serious cross-party talks and bring a Bill back to Parliament. There is a huge body of work on this essential element of reform, and it is now for the parties to live up to their promises about implementing a fair package. If Ministers today cannot give a complete and authoritative response to this crucial part of the Select Committee’s report, the House will surely expect to be told who will respond and when.

My Lords, I join my noble friend Lord Robathan in expressing my disappointment at the Government’s concessions on this amendment because the principle of opt-in was at the core of the Bill. We had robust discussions in the committee chaired by the noble Lord, Lord Burns, and I am grateful to the Minister for mentioning that in her opening speech, but all four of the Conservative members of that committee were very keen to make sure that existing members were included as part of the opt-in process, not least because this is a manifesto commitment. It was a badly worded manifesto commitment but, as Ministers in this House and in the other place have made clear, it was a firm manifesto commitment on which they were not going to compromise, right up until last week.

I served in the European Parliament for 15 years, and I expected Ministers to compromise to a certain degree on this. In the European Parliament, compromise is the spirit of the day as there are many parties from many different countries. I have spent many a happy, and sometimes not so happy, hour negotiating until the small hours of the morning on various Bills and other legislation. Of course you have to give ground, and I was perfectly prepared to see the Government give ground on the transition period and the length of the transitional measures. That was to be expected, but to see the whole thing junked completely is extremely disappointing because it still leaves millions of workers in this country contributing to political parties and political causes about which they have never been asked or consulted. That is the principle that we should be upholding.

My concern is not so much that the Government have climbed down on this. I am disappointed, but I could have accepted that as part of the normal parliamentary discourse. My bigger concern is the reason for the Government’s climb-down. I do not necessarily believe everything that I read in the media, but if media reports are to be believed the reason for this climb-down is part of a deal with the trade unions for financial and political support for the remain campaign in the EU referendum. I do not know whether that is true, but if it is it is disappointing and regrettable. We are well used to the party opposite doing deals with the trade unions on legislative changes in return for political donations. I really hope that the Government are not doing the same in this instance. It is another demonstration, if one were needed, of the hideous power of the EU to subvert our democratic process.

My Lords, I had not intended to participate in the debate. I thought that it was going to go through smoothly and that a rather unfortunate period of legislation would have passed relatively quietly before the end of this parliamentary session. However, my former colleagues on the Select Committee have provoked me to intervene.

As the Minister pointed out, this is a compromise. All compromises are, by their nature, difficult for the parties. It is clear from the contributions of the noble Lords, Lord Robathan and Lord Callanan, that it is difficult for the hawks in the Conservative Party, who landed us with this proposition in the first place—but it is also difficult for the trade unions. There is more administration and considerable cost involved in this, and it is a difficult situation in the long run. But it is also a difficult compromise for the body politic because of the issue that the noble Lord, Lord Tyler—one of my other colleagues on the Select Committee—put forward.

I remind the House that we have spent hours on the issue of how trade unions deal with political contributions, but other organisations and extremely rich individuals make contributions. None of those organisations is required, like the Bill still requires trade unions, to have a separate political fund in the first place; to report precisely on how it uses and expends its political money; to give each of its members the possibility of an opt-out; and now to require future members to opt in rather than to opt out. In no other organisation in this land are those restraints put on political expenditure or involvement.

As was revealed in the Select Committee report, on the basis of figures given to us by the Electoral Commission, in the five years to 2015 the trade unions gave £64 million, the vast majority of it to the Labour Party. However, other organisations in this land gave £80 million—to, admittedly, a variety of parties, but predominantly and overwhelmingly to the Conservative Party. Yet none of those organisations was affected by previous legislation requiring separate political funds or opting out, or by new legislation requiring more detailed controls and more detailed reporting.

This relates to the points that the noble Lord, Lord Tyler, raised. If we are to come up with a democratic balance that is acceptable for a long-running constitutional settlement of this issue, we have to look at political funding in the round. As he said, the drafters of the Conservative Party manifesto recognised that and made a commitment that way. That has conveniently been dropped. Whatever the motivation for the compromise here—I do not particularly wish to go into that; it is possibly a matter for private grief within the Conservative Party—there is no reason now for the Conservative Government not to open those talks on political funding in the long run by organisations, individuals and the political parties themselves. That way we may get a balance in political funding that accords with democratic principles and is acceptable to the majority of the people. Without that, and despite this compromise, which I support, we will still have a seriously unbalanced situation once the Bill passes.

My Lords, I think we have to reflect, briefly, upon what has happened. We had a Motion, carried by a large majority, that the Select Committee should be established. I did not support it. I explained during the debate that I felt that the Bill was seriously impaired and that there was much unfairness in it, but I questioned whether a committee could, in the very short timescale that my noble friend Lady Neville-Rolfe has referred to today, produce a really good, definitive report. Thanks to the hard work of colleagues from all parts of the House and expert chairmanship, to which they all testified, by the noble Lord, Lord Burns, the deadline was met and a report was produced. It was signed up to by all the members of the committee—although, in the final, conclusive paragraph, there was, it was explained, a divergence of opinion.

The noble Lord, Lord Burns, decided to encapsulate that recommendation in the amendment which he moved on Report in your Lordships’ House. He moved the amendment with great skill and was supported by Members from other political parties as well as Members on the Cross Benches. My noble friend Lord Balfe and I voted enthusiastically for him. The names of a number of leading members of the Conservative Party will not be found in the Division list—I went through it carefully—because they felt that they could not oppose the amendment of the noble Lord, Lord Burns. It was carried by a large majority. The noble Lord, Lord Burns, explained that when he came to the negotiations at the beginning of last week, what was on offer not only did not meet his amendment but did not even meet the amendment to which my Conservative friends had signed up—in paragraph B, I think it was—so further negotiations were held.

What happened was very simply this. The parliamentary Session is coming to an end. The State Opening of Parliament has already been designated for 18 May—a fortnight tomorrow. So what was to happen? My noble friend Lady Neville-Rolfe and Mr Boles in another place decided that half a loaf was indeed better than no bread: that it would be far better to have a Bill that had widespread support—albeit that some of it is reluctant support. I myself do not think that this is the greatest Bill that the Government have placed before this House. Nevertheless, it is now, as far as one-nation Conservatives are concerned, a fairer, more decent and more equitable Bill, and one that has within it some recognition of the underlying dichotomy of party funding, because the Bill in its original state—and I used the words “unfairness” and “choice” many times in contributing to earlier debates—whether by accident or design, was penalising one of the great parties of state and not the others.

I believe that it is important that the second recommendation in the manifesto, which has already been alluded to two or three times in this debate, should be followed up. I hope that there will be something in the Queen’s Speech about it, because I do not like the way in which party politics is funded in this country—and I know that that view is widely shared in all parts of your Lordships’ House and in all parts of the country. But what we now have is a Bill that can go on to the statute book and which honours a number of the important pledges in last year’s manifesto. I accept that a manifesto Bill is different from another sort of Bill. Therefore, we have something in which the Government can take a degree of quiet satisfaction—and those of us who were concerned about the underlying unfairness of the original Bill can also feel that it has been improved.

I was only too glad to put my name—alongside that of my noble friend Lord Balfe—to the amendment of the noble Lord, Lord Burns. The noble Lord, Lord Tyler, also signed it. Your Lordships’ House gave that a very large majority, as I said. So the Government’s choice was a very simple one: should they go along with the will of your Lordships’ House as expressed in the Division Lobbies or should they invite further defeat, which could have jeopardised every particular of the Bill?

I think that the Government have made a wise, moderate and sensible decision. I pay unreserved tribute to the unfailing courtesy and diligence of my noble friend Lady Neville-Rolfe and to Mr Boles in another place. I hope that we can now move on. Last week, when we had the Third Reading, I said I hoped that the spirit of euphoria was not premature. I hope that it will not prove to have been premature and that we can now accept what is before us and get something on the statute book that is much more acceptable to those who have genuine concerns.

My Lords, we in this House often complain that the other place has ignored our views. It is unusual, and perhaps regrettable, that some noble Lords complained today that the other place listened attentively to the views of the committee of the noble Lord, Lord Burns, and to the vote in this House, which was supported all around the House, as the noble Lord, Lord Cormack, said, including on the government Benches. I do not know whether there was a deal, but whether or not there was, an act of political wisdom has occurred and we should welcome it.

My Lords, I thank my noble friend not just for tabling this Motion, which I very much support, but for the way in which she has patiently conducted proceedings on the Bill and dealt with sometimes unhelpful contributions from people such as myself.

My concerns about the Bill were in relation to check-off and the proposals to change to an opting-in arrangement, which were coupled with an announcement by the Chancellor to cut Short money. It seemed to me that the Government were abusing their power in order to damage the funding of the Official Opposition. That is why I was opposed to these particular provisions of the Bill. I had a difficulty because there was a manifesto commitment in respect of the opt-in, opt-out proposals. However, as the noble Lord, Lord Tyler, and others have pointed out, that manifesto commitment was to look at the question of opting in and opting out in the context of overall party funding. I think it is wrong for a Government to use their power to dis their opponents or in a way which leaves open to question whether or not they are acting in the interests of the country as a whole or in the interests of a party. For years and years, I have made speeches attacking the Labour Party and suggesting that its dependence on trade union funds meant that policy could potentially be up for sale. Having listened patiently to the very persuasive arguments put forward by my noble friend to indicate why a change of policy should not be agreed, it was with some dismay that I heard suddenly—I believe I am not the only person who heard suddenly; I think some Front Bench people heard suddenly—that the Government’s position had changed completely.

My noble friend was a distinguished Cabinet Minister back in the 1990s. Is he not being unduly cynical? Surely he cannot believe that the Government would come up with a shoddy deal such as this.

I am tempted to be sanctimonious about this. What I found most risible about the Government’s explanation for their somersault was when Nick Boles, when asked why he had changed his mind, said:

“I urge my hon. Friend to look at the people who spoke in the debate and voted, or very assertively chose not to vote, in support of the Government’s position. They included not just Lord Cormack and Lord Balfe but Lord Forsyth, who supports the same campaign on the European Union that my hon. Friend has supported”.—[Official Report, Commons, 28/4/16; col. 1545.]

I really do resent being cited in support of a very shoddy deal. Later he said—contrary to what my noble friend has been saying—that he did not want to listen to the arguments at all. He said:

“I did not want to listen at all. I am afraid I simply acknowledged that, faced by an array of forces—it is not just led by the noble Lord Burns, but includes most of the Cross Benchers, all the Liberal Democrats, all the members of Labour party and very influential Conservative peers, such as Lord Forsyth, Lord Deben, Lord Balfe and Lord Cormack—neophytes in this game like me perhaps need to concede defeat”.—[Official Report, Commons, 28/4/16; col. 1549.]

This is something I shall quote on many future occasions.

My Lords, I think my noble friend Lord Forsyth has unravelled a puzzle. I, too, am disappointed by what has happened. I assumed that when the Conservative Party put in its manifesto the commitment to move from opt-out to opt-in, it thought it was the right thing to do. When it appeared in the Bill, I thought it was the right thing to do. I thought the party thought it was the right policy, and I think it was the right policy.

I have heard the word “compromise” used today. The noble Lord, Lord Whitty, used it several times. I understand that we are at the end of the Session. I understand the need for compromise, concession and deals. But this is none of these things. This is the abandonment of a Conservative manifesto pledge, and we should say that. I notice that my honourable friend in the other place, Mr Nick Boles, turned what was a manifesto commitment into what he called a suggestion in the manifesto. It was not a suggestion; it was a promise. When we debated this last time, my noble friend the Minister said it was right for Governments to honour their commitments.

Of course I accept the decision of the other place. My noble friend Lord Forsyth has given his explanation of why this manifesto commitment was abandoned. I say only that junior Ministers in this Government, who are extremely able and good, often have a very hard task.

My Lords, I will not speak for long because we have discussed this at length. I think we have all reached agreement as to why, as my noble friend Lord Sherbourne said, we are going from opt-out to opt-in. We have been through some people’s perception that there has been legislation in the past that has affected political disclosure, if not donations, and have discussed PPERA. But we have now reached a point where we have something before us. This time, unlike on previous occasions, I find myself agreeing with the noble Lord, Lord Cormack, on where we are.

I am grateful to the noble Lord, Lord Forsyth, for crystallising my mind: clearly I am not an influential Conservative Peer because my suggestions have not been adopted.

My noble friend is extremely influential. It was Mr Boles who did not think to include him.

I am grateful for that clarification. The noble Lord, Lord Robathan, has explained how Ministers approach these problems. Sadly, again, I have never had the honour of being a Minister. That is most unlikely. I come from more of a business background and in business when one wants to get things done invariably there has to be an element of compromise. Like the rest of the House, I congratulate the noble Lord, Lord Burns, on achieving a compromise. How and why it was achieved we will perhaps never know but it has been achieved. We will end up with an opt-in. It will take longer than other people thought appropriate but it will happen. The suggestion of the noble Lord, Lord Burns, of the publication of the opt-in levels achieved is excellent and to be welcomed. On all those grounds, I welcome these amendments.

My Lords, I think we are in for a pretty bad couple of months, in which conspiracy theories will abound and suspicions of motives will arise in every possible circumstance as we approach an interesting referendum. I notice the good humour in the Chamber today. I think that if these amendments had not been tabled, there might be a very different atmosphere indeed. I agree very much with what my noble friend Lord Forsyth and the noble Lord, Lord Cormack, have said.

Democratic power has to be used with discretion and responsibility. The noble Lord, Lord Whitty, referred to this, and I agree with aspects of what he said. I was worried about the way that the Bill, as originally drafted, was going to go. Whatever discussions there were in government and in another place when the amendments came forward and were considered, I hope that there was a bit of historical memory in them—I think that there was—because we have been here before.

I was there in 1984, when it was proposed that we would do something about opting-in. I do not think that I am breaking a great confidence if I tell the House that the noble Lord, Lord Jopling, who was then the Chief Whip, had an interesting discussion with the Labour Chief Whip of that time, Michael Cox, who some may remember. They were arranging the business, as Chief Whips do, in those awful usual channels. There was agreement and compromise at that time in the Session. Then the issue came up about opting in—and the message was delivered quite simply and clearly: “If you do that, there will be war”. That was because it is an essential problem of political funding, with which all parties have problems, that the trade union contribution is massively important to the Labour Party. A sudden change in that would have significantly affected the balance and would have seemed, to many eyes, to have been a pretty unfair action and maybe an abuse of majority political power at that time.

It was against that background that such a proposal was put forward. When we considered it in the Bill that became the Trade Union Act 1984, Mr Len Murray came to see me for the trade unions and we discussed the issue. He had previously had discussions with my predecessor and noble friend Lord Tebbit, who one could not call a soft touch on these matters. But my noble friend made it clear that if the Trades Union Congress wished to put forward alternative proposals, he would be prepared to consider them. It fell to my lot to consider those proposals. We agreed that we would not proceed with the opting-in proposals, on the strict understanding that actions would be taken by the TUC and all affiliated unions at that time. That is why I agree very much with the last comment of the noble Lord, Lord Burns, because we are where we are now. I support the actions in respect of new members coming in. That is an important step forward which did not exist before. We were not able to arrange it or go forward on it in my time; maybe we should have done.

I would like to read part of the statement that Len Murray—Lord Murray, as he was subsequently—gave when he came to see me and exchanged correspondence. He gave me a copy of the statement of guidance to the trade unions. It said:

“Following discussions between the TUC and the Secretary of State for Employment, the General Council have prepared the following Statement of Guidance on good trade union practice in respect of political fund arrangements and related matters for use by affiliated unions. Unions are asked to review their existing procedures as soon as possible to ensure that this guidance is acted upon”.

That guidance was satisfactory to me and to the Government because it made it clear that every affiliated union had given an undertaking that it would make sure that all its members were properly informed of what their rights were in these matters. The guidance ended with the statement:

“It is particularly important that unions’ procedures avoid the possibility of members being unaware of their rights in relation to the political fund or being unable to exercise them freely”.

On that understanding and on behalf of the Government, I agreed not to proceed with introducing changes to the situation on opting-out or opting-in.

The disappointment for me in the discussions on this Bill is to discover that only a very small number of the unions which were affiliated to the TUC ensured that the undertaking given to me on behalf of them all was actually carried out.

My Lords—

If I may just finish this point, I will then give way to the noble Lord. What I want to know is: has the TUC now repudiated that understanding or is it agreeing that it stands? In the light of the amendment which the Government have agreed to, which deals with new members, will the position of existing members be exactly as encouraged by the noble Lord, Lord Burns? Will it ensure that the undertakings given to me are honoured and that people are aware of that undertaking?

My former noble friend Lord Murray of Epping Forest was a man of great integrity. One of his straplines or catchphrases was, “We always deliver what we say we will deliver”. That was true of prices and incomes policy through the 1960s and 1970s. I challenge anybody to contest that point. It was not that there were no difficulties but, when we said that we had agreed something, we delivered. That was the first thing which Len Murray always said.

On this matter, my noble friend Lord Monks pointed out something that has never been refuted. He drew attention to this matter and the fact that there had been no complaint on it until it was suddenly dragged up in this House in relation to the Bill. If the Government had had evidence of this matter along these lines, the first thing that they should have done was to get in touch with the TUC and say that they were concerned about it. Did they get in touch with the TUC? No, they did not. I think that there are some crocodile tears here from the noble Lord, Lord King, who does not normally go in for such point-scoring. I ask him to be a bit more careful about the implications of what he says about the TUC’s actions on this matter.

I make it clear straightaway that I had the greatest respect for Lord Murray—Len Murray, as he was—and had extremely good relations with him. But I am grateful to the noble Lord, Lord Lea, for making the point that this should be honoured. If there is evidence that it has not been honoured, it will obviously be a concern for responsible people in the TUC to see that it is. As I understand it, the noble Lord is saying that in no sense has it been repudiated or has the TUC withdrawn that undertaking. My point today is simply about the giving of that undertaking. I agree with the noble Lord that the observance of it and the checking as to whether it was being followed seem to have been pretty slack. It is helpful this has been brought to the attention of us all and I hope that it can now be followed through.

My Lords, I am grateful to the noble Lord, Lord King, for his history lesson but, with great respect to him, I do not think it very relevant or apposite in considering this amendment. I really do not know where the House is going to on this. The noble Lord, Lord Forsyth, says that he agrees with it but then complains about the way in which it was done. I think that the noble Lord, Lord King, agrees with it but because of something that happened in 1984 he is not very happy with it. The Conservative Members who were actually on the committee disagreed with it—understandably, perhaps—because their view, which they expressed vigorously on the committee, was not upheld by this House and has not been upheld by the House of Commons. There is a certain amount of dispute on both sides but this really is a sensible compromise.

As an old Fabian, when I looked at this amendment and the difficulties that it is designed to deal with, the phrase which came to my mind was that of Beatrice Webb. She talked about the inevitability of gradualness. It seems to me that once you have established the principle that opting in is right for new members, the “inevitability of gradualness” principle will take over and, in due course, you will have a comprehensive opt-in. I suspect that it will be much sooner than a lot of people think. This is a sensible compromise and, for heaven’s sake, let us accept it.

The point that has been left out is the second half of what the noble Lord, Lord Burns, said, which was about opting in for new members but attention to right and proper communication with existing members.

That is in the amendment. Of course there should be proper respect. Trade unions are being placed under an obligation to tell their members once a year. What more does the noble Lord want?

Come on, get on with it.

My Lords, never has my appearance been so welcome. Government Amendments 7A to 7F mark significant movement from the original provisions in the Bill. I associate myself with the masterly summary, as presented by the noble Lord, Lord Burns, of how these amendments meet the requirements of the amendments passed in this House, and are consistent with the requirements of the manifesto but with the removal of the most egregious and deficient elements. These changes are a result of hard work carried out by the members of the Select Committee, led ably by the noble Lord, Lord Burns. The committee’s recommendations on opting in received cross-party support and support from the Benches of no party. I thank the Select Committee members and the noble Lord, Lord Burns, again for their efforts, which have contributed to the progress we see today.

The debates that we have had in this House on Second Reading, in Committee and on Report, as well as the establishment of the Select Committee and the debate on that committee, demonstrated the very wide agreement that these provisions needed some change. The Select Committee has achieved that job very capably. Indeed, both the debate today and its tone demonstrate how this House has done a great service to everyone in ensuring that these measures were brought forward.

I also note that a great majority in the House was in favour of such a provision. That is an important distinction in many debates that take place, but this one had such a broad consensus that it really was a full expression of the whole House. I thank the Ministers—the noble Baroness, Lady Neville-Rolfe, the noble Lord, Lord Bridges, the noble Earl, Lord Courtown, and Mr Boles in another place—for the way that they considered, engaged with and were very open to the discussion and debates that we had.

I have one particular observation in relation to the process. The Select Committee report was extremely impressive, and introduced elements which added to the debates of this House and another place. Indeed, it identified some of the deficiencies in the original impact assessment. In particular, the use of behavioural economics and behavioural psychology to try to understand what the likely consequences of such a provision would be was extremely useful. I hope that the Minister will consider using that sort of insight much more widely in impact assessments, so that we can properly judge what the consequences of measures are likely to be.

It will come as no surprise that we on these Benches thought the Bill should not have contained any of these measures in the first place. However, we recognise that the Government’s new proposals are a substantial improvement from where we were just a few weeks ago. We hope that the other issues raised by the Select Committee, including the issue around cross-party talks and party funding reform, are not ignored and are taken up swiftly, and that we can move beyond using democratic power for narrow party advantage, which usually comes with terrible unintended consequences, and build a stronger political system with greater participation and confidence.

My Lords, I recognise the emotions that this Motion has elicited, and that opinions are divided, but take the opportunity to thank noble Lords from all sides of the House for the support that they have given me personally. It is a pleasure, sitting on the Front Bench, that occasionally you get support from all sides, including today from disappointed friends such as my noble friend Lord Robathan. I hope we have found a balance that allows us to move forward, as we have managed elsewhere on this contentious Bill. In particular, I am glad that when an individual joins a union they will have to be made aware of any political fund and give their consent to paying into it. When we did our research, which we shared with the committee, we were shocked, as my noble friend Lord King said, at how untransparent some unions were on the possibility of opt-out.

The Bill has been amended to reflect the Select Committee’s recommendations on opting in. The amendment in this place was, as has been said, carried by a majority. My noble friend Lord Cormack mentioned this, but the majority against the Government was 148—320 to 172—so I would say in response to my noble friend Lord Forsyth that I was not very persuasive. Our manifesto undertook to ensure that trade unions use a transparent opt-in process for union subscriptions. My honourable friend Nick Boles made it clear in the other place last week that the revised provision meets that commitment. I have nothing to add to what he said about the suggestion that these final changes reflect wider considerations. As far as I am concerned, we are adopting the proposals of the Select Committee. We have listened to common sense, including the comments made by my noble friend Lord Forsyth in January about how the opt-out would be unfair to the Labour Party, and the current clause meets our manifesto commitment.

My noble friend Lord Leigh and, on the other Benches, the noble Lord, Lord Richard, emphasised the point about compromise. In future, all new trade union members will have to make a transparent and active choice to contribute to the political fund through an opt-in. Over time, with membership churn and evolution, opt-in will become the norm. On a point of detail, I acknowledge that the spirit of the Select Committee’s recommendation was to extend annual reminders to all members, and we have not gone as far as we might have done in that respect. The statutory requirement in the Bill extends to new members only, but I expect and hope that unions will communicate with all their members at the same time. I agree with the noble Lord, Lord Burns, that the best way forward is to provide guidance on best practice and to encourage unions to ensure that their annual communications on rights to opt in and opt out are sent to all members.

I am always glad to hear from my noble friend Lord King. He has helped me through some very difficult moments on the Bill. Of course, the King-Murray agreement is still in place for existing contributors to political funds, and the TUC has issued guidance to all unions. This should mean that all unions will remind those currently contributing to political funds that they have a choice about contributing to the union’s political fund. I do not know what the TUC reply would be, but the guidance about good practice proposed by the noble Lord, Lord Burns, should obviously help to address the issue.

I hope that noble Lords will recognise the co-operation we have had on the Bill across the House and how accommodating the Government have been in responding to the Select Committee’s recommendations on opt-in. I hope this will be remembered should future Governments turn their minds to matters of party-political funding.

The noble Lords, Lord Tyler and Lord Whitty, raised the wider issue of party-political funding. The Government have a separate manifesto commitment relating to such funding, and we remain open to constructive debate and dialogue on how we can further strengthen confidence in our democratic process and increase transparency and accountability. However, this Bill is about trade union reform, and party funding is not in scope. I must therefore return the debate to the issues of this Bill.

Wherever noble Lords stand on trade union reform, I hope that they will recognise that the principle of the Select Committee’s recommendations has been taken on board. We are nearly at the end of the Bill process and approaching the end of the parliamentary Session with a number of Bills still outstanding, and I hope the House will feel able to bring this particular issue to a conclusion today.

That this House do not insist on its Amendment 17, to which the Commons have disagreed, and do agree with the Commons in their Amendments 17A, 17B and 17C to the words restored to the Bill by that disagreement.

My Lords, there has been much debate over the Government’s wish to have a reserve power to place a cap on facility time. The Government have listened to that debate and, as I said last week, the amendments before your Lordships today reflect a number of points made in this House.

First, the amendments set out that the cap will not be exercised until three years have elapsed after transparency regulations come into force. Secondly, they ensure that, where there is cause for concern about levels of facility time, public sector employers will be put on notice and given at least a year from the date of such notice to make progress before a cap can be applied. Thirdly, they guarantee that the employer will have the opportunity to set out the reasons for their levels of facility time. Fourthly, they set out clear criteria that the Minister must have regard to when considering the exercise of the power. Fifthly, they provide employers with an opportunity to take action to meet the Minister’s concerns and to evidence it via their data. If there is insufficient progress, the Minister will then be at liberty to exercise the reserve power and make regulations to cap facility time for that employer or those employers.

These safeguards provide a high degree of comfort about the circumstances that must arise before the reserve power could be contemplated. They underline that this is very much a reserve power to be used in exceptional circumstances—only where valid concerns have been raised and inadequately addressed over a long period. I remind your Lordships that this measure would be exercised under the affirmative procedure.

I urge your Lordships to see these amendments as a reasonable, practical and balanced means of addressing concerns while enabling the Government to meet their objective. I beg to move.

My Lords, I first declare my interest as president of the Local Government Association. Your Lordships will be aware that I moved an amendment to delete Clause 13 from the Bill. I did so because I was concerned about the extensive powers it gave to the Secretary of State for what, as far as I could see, was little justification. That is why I argued that this provision is necessary: so that the transparency provisions of Clause 12 will control expenditure and make visible the amount that public bodies spend.

My sense is still that there is no convincing case for why the clause is needed, but I acknowledge the considerable distance the Government have gone by introducing safeguards that will protect public bodies from arbitrary power in this situation. I absolutely welcome that movement, which reflects well on the Government and Ministers.

I hope that this is a reserve power that we never see used. I hope that the rational decisions of public bodies and the process that will now be put in place will ensure that we never need to impose this reserve power. I recognise that there are now proper safeguards, and I welcome that change.

I want to make just one brief point. We, too, welcome the amendment and the compromise which the Government are showing. However, having got rid of quite a lot of the powers, we are still left with a hell of a lot of bureaucracy—for no good purpose, as the noble Lord, Lord Kerslake, was suggesting. It is now a very complicated procedure and one wonders whether this will disappear into the long grass and be quietly forgotten. It would have been much better to have a one-off review to see what the problem is and deal with it through the management of the public sector, rather than setting up this ridiculous bureaucracy for no good purpose.

My Lords, I thank the Minister for his clarity and brevity—after the previous debate—in introducing the amendment. I also thank him for taking the time to meet me and colleagues to discuss the possible introduction of a cap on facility time. He knows that we have serious concerns, which we retain, about the principle, and that we have even greater concerns about how it might work. How and when would a Minister decide that the amount of time taken needed to be restricted, and on what grounds? Would it be contrary to the desire of the relevant employer?

We raised the example of organisations going through contraction, restructuring, relocation or even growth, where more negotiating time with union reps is always needed. There is also the example of industries with particular safety issues or health issues—we discussed the health service—where safety reps might be needed more than average, thereby pushing up the overall amount of facility time recorded.

On the phrase,

“any other matters that the Minister thinks relevant”,

it would be helpful to hear from the Minister what sort of things he deems might be relevant. However, that is the only remaining issue, because the others we raised have been met by the safeguards he has just listed. They will spell out that particular instances can be given and that the employer will have time to give reasons.

The remaining issue is therefore one we discussed under the previous clause: whether charities might be caught by this provision. I acknowledge the discussions we have had and those that will now take place with the organisations likely to be affected, including with representatives of charities. We also recognise that we will be able to debate this further when the relevant regulations are brought forward.

These amendments show that the Government have clearly heard our original concerns. They have produced a schema which allows the relevant comparative data to be used and judged alongside similar industries and organisations, and which allows time for consultation with the employer, giving them the opportunity to explain the management practice that requires so much union reps’ time to do their work. We still concur with the view of the noble Lord, Lord Kerslake, that this is an unnecessary measure and would prefer the cap to be dead and buried. However, having recognised that we were not going to win that one, we acknowledge the change that the amendments have made and are happy to support them.

I thank the noble Baroness, the noble Lord, Lord Kerslake, and the noble Lord, Lord Stoneham, for their comments. Where there was discord, we have brought a bit more harmony, at least, on this point. There is clearly disagreement on the need for such a measure, but I would argue that that is precisely why we need the data. What the data will show will determine whether the reserve power needs to be exercised in exceptional circumstances. I very much hope that the assurances I have given today address a number of the concerns expressed by the noble Lord, Lord Kerslake, and others.

On the point made by the noble Lord, Lord Stoneham, about bureaucracy, I simply repeat that a considerable section of the public sector already considers publishing information on facility time to be best practice. I highlighted what is published in the local government transparency code and what the Department for Education recommends that all schools publish. His point about bureaucracy—ensuring that it is kept to a minimum—is of course one that every Government wish to heed.

The noble Baroness, Lady Hayter, raised the question of other issues that are deemed to be relevant. In essence, they must be relevant without being capable of being specified now, because that will be set out in the evidence given when the Government bring in regulations—which, as I said, would be debated by both Houses of Parliament.

With that, I am once again grateful to the noble Baroness, Lady Hayter, and the noble Lord, Lord Mendelsohn, for their constructive comments and the conversations we have had. I beg to move.

Before the Minister sits down, I intervene briefly to repeat the thanks already expressed by other Peers in the debate on these amendments today and on the previous occasion when the Bill was being considered. We give our thanks to the Government, to the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Bridges, particularly for their very helpful adjustments and changes in response to the earlier debates. It was an outstanding example of how the House of Lords can be genuinely useful to the British public in improving controversial legislation. We are grateful for that progress.

My Lords, last week at Third Reading I thanked at some length all those who have worked so hard and debated so eloquently throughout the passage of this Bill. I am glad to be able to thank today my noble friend Lord Bridges, and the noble Lords, Lord Mendelsohn and Lord Burns, as they are actually in the Chamber. It has been a small marathon of a Bill and I am delighted that it can now go forward for Royal Assent.

My Lords, with permission I shall repeat as a Statement the Answer given to an Urgent Question in another place by my right honourable friend the Minister of State for Community and Social Care on Southern Health NHS Foundation Trust. The Statement is as follows:

“The whole House was profoundly shocked by the Mazars report into the failings at Southern Health NHS Foundation Trust following the tragic death of Connor Sparrowhawk in July 2013. The first duty to patients and their loved ones is to keep them safe. This applies to all of us with a role to play in the NHS, from the front line to this House; and the Government are therefore clear that we must learn the lessons of this report for the NHS as a whole. We must ensure that the trust itself continues to be scrutinised and supported to make rapid improvements in care. If that means intervention from the regulators, they will not hesitate to take the necessary action, and we will not hesitate to back them.

Last week’s CQC report followed a focused inspection announced by the Secretary of State in December 2015. The report from the CQC set out a number of concerns, including: a lack of robust governance arrangements to investigate incidents; a lack of effective arrangements to identify, record or respond to concerns about patient safety; and a need for immediate action to address safety issues in the trust environment. The report also found that the senior management and board agendas were not driven by the need to address these issues.

I would like to set out for the House the action that NHS Improvement has taken in recent months to address the issues at the trust. NHS Improvement has been working closely with the CQC and the trust over recent months. On 24 March, NHS Improvement, which was operating as Monitor at the time, appointed an improvement director to the trust. On 14 April, following a CQC warning notice on 6 April, NHSI placed an additional condition on the trust’s licence, asking it to make urgent patient safety improvements to address the issues found by the CQC. This condition gave NHS Improvement the power to make management changes at the trust if it does not make progress on fixing the concerns raised.

On 29 April, following the resignation of the trust chair, Mike Petter, NHS Improvement announced its intention to appoint Tim Smart as the chair of the trust. As chair, Mr Smart will have responsibility for looking at the adequacy of the trust’s leadership. Given the centrality of issues of governance to the CQC’s report, I welcome the action taken by NHS Improvement. The direct appointment of a new chair by a regulator is a relatively rare step, and reflects the seriousness of the issues at the trust.

NHS Improvement will continue to monitor the situation closely in the coming weeks and months. I understand that the CQC is considering the trust’s response to its warning notice and the risks it highlighted before deciding whether to take any further enforcement action. The notice required significant improvements by 27 April. NHS Improvement is working closely with CQC and the trust, and there are monthly progress meetings between NHS Improvement and the trust.

In addition to the action we are taking on Southern Health, it is vital that we learn the wider lessons for the NHS as a whole. First, I hope the whole House can agree that it is right that we have robust, expert-led inspection from an independent CQC that provides an objective view about issues of safety and leadership, and that this is backed with action from NHS Improvement when that is required. Only by facing problems in care can we hope to solve them.

Secondly, it is vital that we ensure that we take the issue of avoidable mortality as seriously for people with learning disabilities and mental health problems as we do for other members of our society. To that end, the learning disability mortality review programme has been put in place by NHS England to ensure there is a continual cycle of learning about the causes of premature mortality in people with learning disability. In addition, the CQC will be leading a review of how all deaths are investigated, including those of people with learning disabilities or mental health needs. There can be no question that the CQC report makes for disturbing reading, and that it demands action at local and national levels. We owe our most vulnerable people care that is safe and secure, and I am determined that we do all we can to learn the lessons and make the necessary improvements in the weeks and months to come”.

My Lords, that concludes the Statement.

My Lords, I thank the Minister for reading the response to the UQ on the CQC’s serious concerns about the safety of mental health and learning disability patients at Southern Health Trust. The whole House is deeply shocked by the inadequate and completely ineffective response to the Mazars review’s findings, following the tragic death of Connor Sparrowhawk over two years ago. The CQC’s stark assessment that serious risk to patients in ensuring their safety was still not driving the senior management or board agenda beggars belief in the light of the Mazars review and the CQC’s repeated concerns and warning notices. There are still no robust governance arrangements in place to investigate incidents and there is still a lack of effective arrangements to identify, record or respond to concerns about patient safety raised by patients, their carers, staff and the CQC. A particular concern is the continuing failure to act over important specific safety concerns about ligature risks in acute inpatient mental health and learning disabilities services and, given the terrible cause of Connor’s death, the board’s failure to give urgency to approval of the specific protocol for safe bathing and showering of people with epilepsy. Can the Minister assure the House that these will receive urgent attention by the new chair in his task of building new leadership and direction for the board and in an urgent programme of action for the trust?

Patients and their families need to see robust, urgent action and real accountability. When the Secretary of State responded to December’s UQ on Southern Health, he rightly said that, more than anything, people will,

“want to know that the NHS learns from … tragedies”,—[Official Report, Commons, 10/12/15; col. 1141.]

such as these. That clearly has not happened, so I ask the Minister what guarantees he can give to current patients and their families in the care of Southern Health that they are safe. Where is the accountability, culpability and responsibility? Can the Minister tell the House about the content and timescale of the review of the adequacies of the trust’s leadership that the new chair has been tasked with undertaking? Finally, will he listen to the heartfelt pleas of victims’ families, campaigners and all those who are demanding a full public inquiry into Southern Health and into the broader failure in adequately investigating preventable deaths?

My Lords, I, too, thank the Minister for repeating the Statement. The original Mazars report highlighted two profoundly shocking issues: the tragic and preventable death of Connor Sparrowhawk and the fact that too many unexpected deaths among those of learning disabilities and older people with mental health problems were even being investigated. Why did a full three months elapse after the Mazars report was published—and, indeed, only after a BBC investigation covered it—before Monitor finally appointed an improvement director to go in to work with the trust on urgently needed improvement? Why the delay?

Secondly, despite a series of national reports—we have just heard about the CQC report—warning notices, monitoring and progress meetings, all referred to in the Statement, nothing has been said about the precise changes that have happened or improvements that have taken place in Southern Health Trust. When can we hope to hear about specific and tangible improvements to the care provided by Southern Health Trust to some very vulnerable people?

Thirdly, it is crystal clear that new leadership needs to be in place if the trust is to retain any credibility, particularly among the people and families who use its services. Why have there been different responses to Mid Staffs and Southern Health? Both are about the neglect and death of vulnerable people in NHS care. There have been serious consequences for those in leadership positions in Mid Staffs, but not so at Southern Health. What does that say about the value placed on the lives of people with learning disabilities and older people with mental health problems?

My Lords, a number of serious questions have been asked. I shall make a personal observation. This trust is the result of the merger of three trusts: a mental health care trust, a community trust and a learning disabilities trust, three very complex businesses being brought together as one. They have 250 separate locations with over 1 million patient contacts every year. The risk inherent in that kind of business at this time is huge. In putting in a governance structure, we have to be very careful that we do not just draw up such structures in a boardroom or come up with strategies that cannot be implemented.

In the report, I was very struck by the fact that now there is almost a tick-box approach to the duty of candour; you tick the box to say that you have done it. Culture is usually important in this. What is the culture in the trust? That is one of the big issues that the CQC report is trying to get at. In response to the question of whether we can give guarantees about patient safety: this is inherently a very risky activity. Putting in strong governance structures is very important, but much will depend on the culture within the trust.

I turn to some of the particular points. I, too, was struck by the fact that there were still problems with ligature points in some of the facilities, as had been pointed out by the CQC some time ago. I was struck by the fact that the epilepsy protocol for those being bathed or showered had not yet been approved two and half years after Connor Sparrowhawk’s death. Clearly, there were very significant problems at the trust. On the question of where accountability and responsibility lie, the chairman has resigned. The principal job over the next three or so months will be assessing the capability of the executive management. That seems the right way to approach this.

It is always tempting to call for a public inquiry; I understand that temptation. We have an independent regulator, the CQC. The inspection team was led by mental health professionals and is fully transparent. We now have to give the trust the chance to respond to the CQC’s report and watch for serious improvements.

The noble Baroness asks if there have been any improvements. There are some illustrations and examples in the CQC report of where there have been some improvements, but putting in a new governance structure, changing the whole culture about raising concerns about those kinds of issues, will not happen overnight. Of course, I appreciate that for Connor Sparrowhawk’s family this happened two and a half years ago, and one must never lose sight of that.

A question was asked about NHS Improvement. It put in an improvement director. These people do not grow on trees. If we are honest about the NHS, we are very short of highly qualified and highly skilled senior management, and it sometimes takes time to find the right people.

My Lords, the history of people with learning disabilities and mental health problems and the institutions in which they live goes back a long way. Many appalling situations have taken place, and I do not want to belittle this deplorable situation. However, did the report also identify areas of very good-quality care and professional standards? The danger is that vilifying an institution—and even going on to a public inquiry, which prolongs the agony even further—does not give it the opportunity to build on its strengths and provide the quality of care that the hundreds of people working there wish to provide and wish to be proud of doing.

I am grateful to my noble friend for those comments. There are many examples in the CQC report of good care. In one of the domains that the CQC inspects, which is caring, it is clear that the vast majority of people who work for Southern Health are deeply caring, committed people. We have to be careful. I am afraid it is a question of the curate’s egg; the report is good in parts. I go back to what I said originally: an organisation this big is incredibly difficult to manage. That is one of the learnings that we need to take from this. The temptation to merge organisations to get centralised cost reduction, or whatever, is very tempting but leads to serious issues around governance.

My Lords, where does Healthwatch come in? Should there not be far more openness and participation by the public to stop such things from happening? It is all very well having management, but one wants caring people from the community who will speak out on behalf of these people.

My Lords, this goes back to the culture of the trust. It is important that members of the public or Healthwatch have a right to go in and visit facilities, and that they are welcomed there, but that they do not go native at the same time—that they are truly independent, looking at it from the patients’ perspective. Healthwatch has an important part to play, and the relationship that it has locally with the CQC inspection team is very important.

My Lords, I am slightly perplexed. Why is it that, once again, it is only because an Urgent Question was tabled and agreed by the Speaker that Parliament knows all the details and is able to hold the Government to account? If, as the Minister says, the Government are so concerned about it, why did they not volunteer a Statement?