Grand Committee
(12 years, 7 months ago)
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Arrangement of Business
(12 years, 7 months ago)
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The Deputy Chairman of Committees (Lord Haskel)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will stand adjourned for 10 minutes as soon as the Division Bells are rung. It might also be helpful if I tell noble Lords that the microphones work automatically. There is no need to turn them on and off.
Welfare Reform Bill
(12 years, 7 months ago)
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Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, Amendment 2 seeks to attach a clear but succinct purpose to the universal credit; that is,
“to support work for those who can and provide security for those who cannot”.
Much of the focus of our discussion about the universal credit is on the former, helping people into work and closer to the labour market, but there is an obligation also to help those individuals and families for whom work is, for one reason or another, not currently reasonably practicable. We subscribe to the view of the importance of work in helping people out of poverty, in the development of their self-esteem and, as per Waddell and Burton, as being generally good for their health. This has the potential to translate at the macro level to the prospect of lower benefit costs, higher taxes and national insurance and, other things being equal, higher growth. That approach characterised the reforms, which I will call welfare reforms notwithstanding our discussion last Tuesday, of the previous Government and this Bill is a significant development of that trend. Of course, the Minister has been present in both of them.
Contrary to popular belief, it might be contended that receiving financial support from the state when unemployed and unable to work is harder now than at any time for 60 years—that is certainly the view of the Child Poverty Action Group—because the eligibility criteria for benefits have been heightened, benefits are more conditional on actively seeking work and there are tougher sanctions for non-compliance. Some of this happened on our watch as a Government and universal credit provisions go further and, in some respects, too far. We will discuss this when dealing with later clauses, but we support the concept of good and clear work incentives. We also support the requirement for those who can work to meet their obligations. There are some who need to rely on benefits and who do not lack the motivation to work, who see the benefits of work even with existing incentives. As we go through the Bill, we will seek to test that the new universal credit works for them also. These include those with caring responsibilities and health conditions, but also those who simply cannot get a job, be they from Bombardier, BAE systems, or, indeed, anywhere else.
It is worth reminding ourselves of what has gone before. If we look at the recent history of welfare reform, the Welfare Reform Act 2007 introduced the employment and support allowance and the personal capability test; the report of the noble Lord, Lord Freud, focused on the large-scale marketisation of employment services; in 2008 we saw the employment and support allowance introduced; we saw lone parents move off income support and onto jobseeker’s allowance and flexible New Deal pilots introduced to replace the New Deal 18-24 and New Deal 25+. The Welfare Reform Act 2009 established a structure for the future abolition of income support, the progression to work conditions for lone parents and partners of unemployed people, and the extension of work-related activity for employment and support allowance recipients. So hitherto an increasingly active regime has been developed. As I say, we support the concept of good and clear work incentives. We also support requirements for people to meet their obligations.
Of course, the “work first” approach is not the only model of support that countries have adopted. The “human capital development” approach would be claimed by some to be a more effective approach. The Minister often talks about universal credit as engendering a cultural change in attitudes towards work, and that is fine, but he will be aware that in some countries benefit conditionality is also being used to leverage non-employment related outcomes, such as health outcomes and child welfare outcomes. This happens in the US and Australia in particular. I understand that the Secretary of State has recently been on a trip down under. We see speculation in the press that Ministers are turning their minds to benefit sanctions, as the noble Lord, Lord Kirkwood, said on Tuesday, to address a range of other problems. Can we have some clarity on this today, and will the Minister confirm that there are no plans or intent to follow the Australian path and use conditionality for anything other than employment-related outcomes?
It would be extremely helpful when Ministers, including the Prime Minister, are discussing changes to conditionality that they do so in a measured way to avoid creating the impression that everyone on benefits is seeking to avoid work. In his speech to the Conservative Party conference, the Prime Minister said:
“For years you’ve been conned by governments. To keep the unemployment figures down, they’ve parked as many people as possible on the sick. Two and a half million, to be exact. Not officially unemployed, but claiming welfare, no questions asked”.
Nobody who has any knowledge of the benefits system could reasonably accept that as a fair representation of the situation in recent years. When we left Committee on Tuesday last week, there was a headline in the Evening Standard saying that people would have to travel for up to 90 minutes to take up work. Can the Minister say how conditionality is to be amended in this way? If everyone is to be better off in work, will this be before or after travel costs?
Of course, the universal credit is being developed in a period of rising unemployment. I do not propose to open the wider challenge to the Government on their growth strategy this afternoon, although we may drift into that, but we should use this opportunity to seek to understand how the “work first” approach of universal credit is being complemented by the work programme—the “black box approach”, which I believe is entirely appropriate.
Perhaps the Minister would take this opportunity to update us on the programme, particularly as we understand that providers are being sworn to secrecy about how it is all going. In the interests of transparency, perhaps the Minister could tell us directly how many individuals have been referred to the work programme to date, clarifying which of the eight categories they fall into. Can he also tell us a little about how the WCA and the role of Atos Healthcare are feeding into all of this? We are aware of the improvements to the WCA and Professor Harrington’s ongoing work. However, is it right that individuals are being referred to the work programme if the prognosis is that they will be fit for work in three months? Are we comfortable that the precision of “fit to work” within three months, six months or any other time period is within the competency of those making the assessment?
If this benefit is to work, it must work for all—this is very important. It must be free from stigma, and it must work in a fair yet firm way. I beg to move.
Baroness Wilkins
My Lords, I support the amendment, especially to say that it should benefit everybody. The simplification of benefits and plans to taper income to ensure disabled people who can work retain more of their income has been welcomed. However, there is very deep concern in the disability community that while some disabled people will gain under the universal credit, many will be made considerably worse off. In its current form, the Bill will dramatically increase disability poverty and leave many thousands of families lacking essential support.
At the moment, a disabled person receiving middle-rate disability living allowance who is found fit for work is eligible for the severe disability premium of £55 a week, whether they are working or not and if they live alone and do not have a carer. They may also be eligible in some circumstances for the disability premium of £29 per week as a single person and £41 per week for a couple, as well as the disability element of working tax credit, which is about £50 per week if they work for at least 16 hours per week. It is not unusual for someone to be eligible for middle-rate care, but to be found fit for work. For instance, it would apply to me because I can self-propel my manual wheelchair for 50 metres. Similarly, someone who is severely visually impaired from birth is quite likely to receive middle-rate care, but be found fit for work.
However, under the universal credit, the gateway for extra support for disability will not be through DLA—or in future PIP—it will be through the work capability assessment conducted by Atos for the employment and support allowance. Under the universal credit system, unless a disabled person is put in the work-related activity group or the support group, they will get no more extra help than someone who is not disabled. These people are still disabled. They still face all the extra costs of disability not met by DLA; for instance, the need for extra help with housework, extra heating, extra laundry, help with the garden if they are lucky enough to have one. We also know that disabled people are more likely to have lower earning power and to be unable to work full-time. Let us face it, in the current economic climate, few employers are going to choose to employ disabled people over the non-disabled, and yet those people are going to lose any extra help because the universal credit will be based on the extremely flawed Atos assessment.
Noble Lords will no doubt have been inundated with e-mails and letters about this as I have, demonstrating that Atos is routinely failing to identify disabled people’s needs. I am sure the Minister will remember from his visit last week to Hammersmith and Fulham Action on Disability a young woman with mental health difficulties. She had spent six years struggling to find help. She finally managed to get therapy about six months ago, and has been progressing well when she innocently attended her Atos assessment, not realising what she was up against. Atos found her fit for work. All her benefits were stopped as of last Friday and her mental state has been set back by months. She is now in debt for the first time and she is distraught.
I know the Minister is very concerned about disabled people’s fears. As he said on Second Reading:
“The most disturbing thing that I heard today was the concerns of many noble Lords about the anxiety of disabled people”. [Official Report, 13/09/11; col. 737.]
The noble Baronesses, Lady Murphy and Lady Gale, talked about how people were terrified or petrified, and that worries me more than anything I have heard. However, those fears are very justified unless this Bill is amended. I know we will come back to this many times during the course of the Committee, but will the Minister say what steps he is taking to ensure that disabled people’s fears are met? Is he considering the proposals by the Disability Benefits Consortium, for instance, to retain the severe disability premium? Does he recognise that the universal credit risks oversimplifying needs by providing for only one disregard which ignores some disabled people’s multiple levels of disadvantage? I hope he will reconsider.
Baroness Campbell of Surbiton
My Lords, I would also like to support Lord MacKenzie’s amendment and add something to this particular area. Can I ask the Minister to reflect on what happens when a disability assessment process, or an assessment process regarding a disabled person, is not properly developed and constructed in co-production with those who understand in detail what it is to live as a disabled person; that is, disabled people themselves? I know I am getting a bit of a reputation for banging on about involving disabled people in the issues that concern us. However, I understand from the disability charities and NGOs that I have consulted, as well as from the countless disabled individuals who have written to me over the past few months, that the universal credit assessment process, with particular reference to the work capability assessment process, is still deeply flawed due partly to disabled people’s lack of involvement.
This morning, I telephoned the chief executive of the Royal Association for Disability Rights, Liz Sayce. Many of you will know her because recently she conducted the Government’s disability employment support services review. She is very assiduous and capable. With a worrying example, she demonstrated where we are in danger of going wrong with one of the universal credit assessment processes, the work capability assessment. She told me about a woman who lives in the north-west and has end-stage multiple sclerosis. She can now move only one eyelid and murmur inaudible words. She was telephoned at home by Atos. They told her husband that she needed to attend a work capability assessment. When he explained that this was not possible, they said that they must speak to her on the telephone and read out a statement. When her husband explained that she could not speak, they asked him to hold the telephone so that they could read it out to her, so he put the speaker phone on. They said:
“This assessment is necessary and mandatory. If it does not go ahead, there will be consequences”.
The woman, of course, found this very distressing and scary. They continued, refusing to take into consideration that the woman was not able to be interviewed. They were working from a script in which there is no flexibility and no requirement on assessors to apply themselves to real-life situations or to take a different approach to different disabilities or health conditions.
This example, and I know that there are others, shows that the Government must develop a different approach to the universal credit assessment process. I know Professor Harrington has attempted to make this happen in his work; I have met him myself. He listens and he is a good man. He tries to understand and this is reflected in some of his recommendations, but the whole process has not been intelligently and systematically co-produced in any substantive way with disabled people and disabled experts. We have done it. It was and is being done through the Government’s Right to Control programme. Can we not do the same with this? The assessment process must not be driven by a script. It must allow for sensitivity and assessor judgment—personal judgment—as to when it is appropriate to change their behaviour and respond to a disabled person’s condition and situation. Can the Minister assure us that a more co-productive and intelligent approach to all the assessment processes for universal credit will happen, and happen more effectively?
Baroness Hollis of Heigham
My Lords, I shall speak very briefly in support of my noble friend’s amendment for two reasons. First, I was rather appalled by statements from the Prime Minister that the Government were for the first time tackling the issue of people who should be, but currently were not, in work. Really, that comes into the category of Boris-type statements, which are an imaginative reconstruction of events that did not occur. All parties—I am sure that I also speak for the Cross Benches on this—agree that we want to seek to help people into work, and we have been doing it.
When we came into Government in 1997, we had found that, particularly during the 1980s, thousands of people with some mild disability had been moved off unemployment benefit into what was then invalidity benefit, the precursor for incapacity benefit, in order to massage the unemployment figures. On behalf of the previous Government I took Bills to your Lordships’ House that brought in proposals for the New Deal for all sorts of claimant groups. It was never a problem, as it had never been a problem of trying to help the unemployed into work. They are always anxious and keen to do so. The problem has always been those who, for too long, have been economically inactive and marginalised from the labour market.
It is for that reason that I and my noble friend Lord McKenzie continued to follow these policies when he came into the department: to ensure that new deals into work for disabled people, lone parents and for the over-50s were brought in to help people who for some time had been at some distance from the labour market. I am delighted that, insofar as the decent supportive activity of the previous Government may be pursued by the current Administration, we should welcome it. Some horror stories are now coming through about Atos, and we should be joining our disabled colleagues in protesting about that deforming of what should be a decent policy.
Secondly, my noble friend’s amendment says that it is about supporting work for those who can provide security for those who cannot. I would like to spend a second to almost verbally amend it. Help into work those who can, provide security for those who cannot and support those who care; because those who care are left out of the equation. I do not doubt that the Minister’s intentions are as decent as those of any Member around the table in the Committee. However, one of our concerns is that of the 6 million carers, about 400,000 to 500,000 receive carers allowance, which is a passported benefit from what is currently the disability living allowance based on hours worked and the level of care needed.
We are still awaiting what will happen to PIP and the number of disabled people currently on DLA who will receive the higher or lower element of PIP and whether the carers benefit will be passported from the higher rate or from both rates. Until that happens, not just disabled people, but thousands of carers are worried, anxious and distraught that they may lose the carer’s benefit that they currently enjoy. I know that the Minister is engaged with this issue and I am not pretending it is a simple one, but I would be very grateful if he would, acknowledge first, the work done by the previous Administration in bringing those who are economically inactive back into the labour market, and secondly, that we all share a concern for the position of carers and if he could give us some idea as to when we will know what their situation is.
Lord Wigley
My Lords, I will intervene briefly on this. I support very much the direction we are taking. However, I am not quite sure that I fully understand the words “to support work”, as there is more than one interpretation of this. There is clearly the question of supporting people, particularly disabled people, in a way that makes it practicable for them to work. However, there is another question: that of supporting the availability of work. As we heard a moment ago, that is the challenge in many areas, particularly the old industrial areas. It is true in parts of Wales, northern England, Scotland and Northern Ireland, where there has historically been a greater labour reserve because people are encouraged not to be registered for work. Of course, there have also been the problems of industrial disease and accidents which have led to a large body of people who would need a considerable amount of support to be in work.
As it happens, many of those areas are the very areas where there is a lack of work opportunities. We heard a Minister going to Merthyr Tydfil a few months ago and telling people to get on their bikes. That will not actually solve the problem. We are talking of catchment areas with perhaps 30 or 40 people chasing every available job. Side by side with encouraging people and giving them the financial or other support that is necessary to enable them to work, therefore, there is the question of making jobs available within a reasonable distance for those people. If we do not do that, the whole thing becomes a rather superficial exercise. I do not quite see how the Government are going to match that up: in order for this legislation to deliver what they want, there must be those opportunities.
It strikes me that there are three factors that need to come together to provide job opportunities. The first is the employer. Secondly, there is the person looking for work, who may need help, particularly if he or she is disabled. Thirdly, there is the state. The circumstances of employers will vary considerably from area to area. In an area where there is lower unemployment, the employer may take on people and give a chance to people with disabilities or difficulties who might not be taken on elsewhere. Therefore, I put it to the Minister that this raises the question of whether the Government’s policy is going to be uniform throughout all areas, or whether there will be a flexibility that enables the Government to give greater help to encourage employers to take on people in areas where there are high levels of unemployment, where they might not otherwise be inclined to do so if the potential employee has challenges that might influence, or be perceived to influence, the way in which he or she undertakes their work. In other words, a lot of questions arise in this context—perhaps not directly from the amendment, but from associated matters.
Lord Beecham
Does the noble Lord agree that one factor that might influence the situation is the question of travel—not in the sense that my noble friend Lady Hollis mentioned, but as a result of the impact of housing benefit changes? These might well lead to people moving away from where they are currently living, and where they might work, to much further afield, particularly in London. Would that be a consideration that needs to be taken into account?
Lord Wigley
Yes. That was a point I made on our previous day in Committee: there will be an attack on labour mobility. That clearly is not the Government’s intention, as their hope is that mobility can be encouraged. However, the interplay of housing benefit can have a direct bearing on that, and may undermine some of the objectives that they quite rightly have in mind. Practical questions like this have to come together with the safety net of social security provision provided by the state.
Lord Newton of Braintree
My Lords, I shall chip in briefly. First, I apologise that I was a little late and did not hear all the remarks of the noble Lord, Lord McKenzie. My lateness has something to do with the fact that I am myself a little bit disabled—in fact, I should probably declare an interest in the matter. That leads me to say that I hope it may be understood if occasionally I seek to intervene from a sedentary position in order to avoid the considerable effort of standing up.
I do not intend to follow the noble Baronesses—not because I do not have sympathy with what they are saying, but because I suspect that we shall have considerable opportunities to return to this matter in a more specific way later in the Bill. I do not agree with the remarks of the noble Baroness, Lady Hollis, about the Prime Minister—I had better make that clear, just to show that I am occasionally a loyalist—and I do not go along with her remarks about the Administration in which I was Secretary of State for Social Security. The notion that I was trying to encourage people on to invalidity benefit in order to massage the figures does not correspond with my recollection—or, I suspect, with that of the noble Lord, Lord Kirkwood. However, on the more positive side, I agree with the point about carers in general, which we need to bear in mind throughout these proceedings—although I would have taken it to be embraced by the second half of the noble Lord’s amendment.
As for the amendment itself, I rather doubt that it is going anywhere, because there seems to be a division even on the opposition Front Bench about what its terms should be. It was being rewritten as we went along. It may be that the Minister will feel that its wording is not perfect. I hope that we will not be told that it is not necessary because that is what the Government are going to do anyway. If that is the case, they might as well please us by writing something in that says what they are trying to do.
Baroness Hollis of Heigham
Just as a correction, there is no division on the opposition Front Bench. That is absurd. This is an addendum to a very well thought out amendment.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, Amendment 2 would define the purposes of universal credit as,
“to support work for those who can and provide security for those who cannot”.
In Tuesday’s debate on Amendment 1, several noble Lords stressed the importance of language and risk. I am not sure that a definition that divides the caseload between people who can and cannot work is particularly helpful in that respect. However, it clearly is the purpose of universal credit to support people in or out of work, provide security and remove risk.
With regard to supporting people into work, I hope that it is already clear that work is at the centre of the new benefit. In designing universal credit our clear aim is to make work pay. In Tuesday’s debate I referred to the significant improvements that we expect, overall, in terms of participation tax rates, marginal deduction rates and levels of worklessness. Key to this is the single taper, which will ensure that claimants see the benefit of every extra hour worked. We will debate the level of the taper in a later session. For now, I hope your Lordships will agree that the principle of replacing the current tangle of overlapping tapers is the right one and a major step forward.
Other key elements of the work focus of universal credit are the work-related requirements set out in the Bill, the work programme and support for childcare. I said on Tuesday that I hope soon—very soon, in fact—to be able to give more details about the childcare element of universal credit. This is clearly an essential part of supporting parents in work.
Baroness Hollis of Heigham
My Lords, if “soon” is around a week, is “very soon” around a day? An hour?
Lord Freud
“Soon”, you can measure in weeks; “very soon”, you can measure in days. Well, let us say that noble Lords in this Committee can.
To pick up the point made by the noble Lord, Lord McKenzie, on the application of conditionality; in the Bill conditionality is linked only to employment outcomes, but any responsible Government will always want to look at options for achieving other outcomes for individuals, taxpayers and society as a whole. Indeed, I remind the noble Lord that the previous Government tried sanctions as a way to improve compliance with community sentences.
On the related point of the noble Baroness, Lady Hollis, on IB and ESA numbers, I need to point out that the numbers were pretty much the same in 2008 and 1997. I welcome her focus on reducing inactivity. That is exactly the right thing. One can get pretty historical going over who is to blame or who is not to blame. This is the situation we are in and I do not think that any Peer in this Room would disagree with the proposition that we now have a benefits system that traps people in inactivity through its structure, and certainly one that does not apply substantial help to people to get out of that trap. She asked me to acknowledge the continuity between the two Governments, and I am pleased to do that. I can absolutely confirm that the design of the work programme, for instance, is very much based on the fact that the employment zones pilot initiated by the previous Government was clearly the most successful pilot. We picked that up, effectively, in the work programme and made it a national programme.
While the aim is clearly to help as many people into work as we can, universal credit will also provide for those who cannot work. We have ensured that it is specified in the Bill that a number of groups will receive unconditional support without having to meet any labour market requirements. This will include those assessed as having limited capability for work and work-related activity; claimants with regular and substantial caring responsibilities; and lone parents or nominated carers with a child under the age of one.
In terms of benefit payments, the structure of the benefit is similar to existing provision for people who are out of work. We have announced changes where we believe change is needed, and the Committee will be looking closely at specific points, such as disability support, housing benefit and the household benefit cap, when we reach the appropriate clauses.
It is important to be clear from the outset that universal credit is overwhelmingly not about taking money away from people who are out of work. That much is very clear from the impact assessment, which shows that the majority of losers are people in work, many of whom have higher earnings. As I said on Tuesday, I hope that an updated impact assessment will be available soon, but the fact is that most workless people are not losers and the overall impact of the reform is progressive.
I shall here refer to the important matter raised in particular by the noble Baronesses, Lady Campbell and Lady Wilkins, of the work capability assessment. We continue to work with Professor Harrington to ensure that that assessment works effectively. Clearly, he is involving disability groups in that development in a very proactive way. I obviously know the concerns of disability organisations in this area and I will aim to explain that in much more detail when we get to Clause 12, if that would be acceptable to noble Lords. It is also slightly misleading to talk about losers when we have a package of transitional protection to ensure that there are no cash losers as a direct result of the migration to universal credit, where circumstances remain the same. I understand that noble Lords are concerned that any claimants should be worse off under universal credit, but the fact is that we cannot simplify the system while retaining each and every element of all the existing benefits. That would be simply unaffordable.
If I can touch on the introduction of the PIP on carers, which was raised by the noble Baroness, Lady Hollis, and my noble friend Lord Newton—
Baroness Wilkins
Does the Minister not accept that some disabled people in work are going to be significant losers as a result of the universal credit? They will be deprived of what they currently get—the £55 a week severe disability premium. That is why the organisations are so concerned. While there may be transitional arrangements, what about the people who come after the transition? The transition is only for now.
Lord Freud
As we restructure the benefits, the out-of-work benefits remain essentially the same. We are making some changes to simplify those, which we will come to in some detail, but rather than taking one aspect I would like to deal with the whole of this at the right time and take it through. I take the point and I will go through it in great detail when we come to the adjustments in the structure of disability benefits. I think it will become a bit random if I just deal with that now. I hope the noble Baroness will forgive me. I am not dodging it; I just want to put it in the proper context.
I want to pick up the point about the entitlement for carers related to PIP and how that will work. Today, all I can say is that we are looking at this issue very carefully. Again, I propose to discuss this in great detail when we get to Clause 75. It is a most important issue in this legislation.
We cannot afford not to simplify, as there is clear evidence that complexity within the existing system is acting as a barrier to work. It is also, interestingly, a barrier to take–up—again the impact assessment shows the clear gains for thousands of individuals that we expect from increased take-up. The analysis of the existing impact assessment shows that two-thirds of the reduction in poverty that we are looking at is a result of take-up rather than the structure of the Bill. We are not expecting that effect to change significantly when we have the new impact assessment soon.
In our proposals for a simpler benefit we think we have got the balance right between promoting work and providing security. I understand that noble Lords may disagree with us on specific issues, but I hope they will accept that the overall purpose is not in doubt. On that basis I would urge the noble Lord, Lord McKenzie, and the noble Baroness, Lady Hayter, to withdraw their amendment.
Lord McKenzie of Luton
I thank the Minister for that detailed reply. Of course I will be withdrawing the amendment. I thank all noble Lords who have spoken in favour of it and even the noble Lord, Lord Newton, for occasionally being a loyalist. It would be helpful if he did not do it too often on my amendments. We will return in some detail to a lot of the issues that the amendment touches on over the weeks, if not months, ahead. I also accept that the precise wording of the amendment could be subject to challenge. If someone wants to offer an alternative, I am happy with that. It is an attempt to put something in which is trying to be indicative of what the universal credit is about, with the focus not only on work but also on support for those who are not opposed to moving closer to the labour market and, as the noble Lord, Lord Wigley, pointed out, for those who are very keen to get back into the labour market, but for whom there are no jobs.
A common feature of many noble Lords who contributed to the debate is about the WCA and concerns over how it is being used in the universal credit for access to the disability additions. I also raise the point about how I understand that it is being used in relation to the work programme. If there are concerns about how Atos is making assessments on whether somebody is fit for work, in the work-related activity group or the support group and is struggling to do that on a basis that people find acceptable, then the added precision that apparently it is being asked to provide about whether that person is going to be fit for work in three months or six months, which drives how some of them will enter the work programme, seems to me another dimension to what it is being asked to do and therefore somewhat worrying.
When we had a briefing from officials, I asked whether any of the appeals that had taken place were around that prognosis rather than the designation that was temporarily being visited on somebody. I am not quite sure what the answer to that is. If the work programme is a key part of helping people into work, which we agree is the intention of universal credit, how Atos or the work capability assessment features in that is of some importance. The noble Baroness, Lady Campbell, raised the concern that the current assessment processes have not been co-produced. We share some of the thinking about how the WCA has been developed. It was introduced under our legislation. A lot of effort went into focusing on it, just like the effort that is going into the assessment of DLA and PIP. But when it came to the practice of it, it turned out to be quite different. I accept that it is an evolving situation, but one can understand the fear that has been expressed today and how it represents the views of disabled people more generally about how this is featuring and working in the universal credit.
The Minister did not respond to the questions around the work programme. Would he like to do that now and give us an update on how it is progressing? That is particularly important at this juncture. The previous programmes we have talked about—my noble friend Lady Hollis mentioned some of their origins—by and large were developed in an economically vibrant situation where unemployment was reducing. We are not in that environment now.
Lord Freud
I can tell noble Lords that, regrettably, at this stage it is very early days. The noble Lord will be aware that it was launched on 10 June. I do not have any meaningful data to supply him. I am not sure when I will have some, but when I do, I will let the Committee know.
Lord McKenzie of Luton
Might I ask the Minister to use his best endeavours to see that we get that data soon?
Lord McKenzie of Luton
Perhaps I can press on one or two other matters. I was interested in the noble Lord’s response about conditionality being associated with work-related activity. I accept the assurance that in respect of this Bill, that is what the focus is, but am I right in getting the hint that there may be some wider plans following this Bill where that conditionality might be applied more generally, not just in a work-related context? Perhaps the Minister would like to say something more about that.
Lord Freud
I have no information on any plans in that area at present. This Bill is about conditionality for employment purposes, and I have no information on any other such plans.
Lord McKenzie of Luton
Perhaps the Minister will let us have some information as soon as it is available to him. We are going to return to many of these issues in our further deliberations on this Bill.
The issue of travel costs has been released. Perhaps the Minister might reflect on the assertion that people should now be prepared to routinely travel an hour and a half each way to take up possibly low-paid work and how that fits with someone being better off in work if the costs of that travel are not covered or dealt with in some way.
We also had a bit of an historical debate about what various Governments did. My noble friend Lady Hollis was very clear about what happened on our watch, and as I said, the Minister was involved in some of that. I accept the assertion of the noble Lord, Lord Newton, that under his watch he did not just sit there and let the number of people on incapacity benefit accumulate. On that basis we should be in agreement that the Prime Minister’s statement was wholly misleading. It is a political point, and noble Lords may think it is a cheap political point, but it matters when the most senior politician in the land is happy to use language and examples that are simply not true. The impact of this is to stigmatise people on benefits, and we should be deeply worried about that.
Lord Freud
Let me just make it absolutely clear what the Prime Minister was saying in the slightly more technical language that we understand in this Committee. The Prime Minister was making the point that we had created a series of inactive benefits onto which people were put and then left without any route back into the workplace. That was a dereliction of duty by Government. Our understanding has now transformed. We know that work is part of the solution for people with disabilities, not part of the problem. A key thing that we are trying to do in this Bill is to integrate the work process for people, whether they have disabilities—whoever they are. That is what the Prime Minister was saying. We are making an enormous effort to get people back into the workforce, and we are spending a lot of money—up to £14,000—on the people who are hardest to help, many of whom will have a disability. Underneath the political rhetoric, I think all noble Lords would agree with that sentiment.
Baroness Turner of Camden
Was the Prime Minister not speaking in support of the continuation of Remploy?
Lord Freud
I think we had the discussion about Remploy yesterday, and I will not go on about it again today.
Lord McKenzie of Luton
My Lords, I would just remark that if that is what the Prime Minister was intending to say, his usual high command of the English language eluded him on that occasion. My noble friend Baroness Wilkins emphasised the fear that people have about this process and about the WCA. My noble friend Lady Hollis was quite right to refer to carers. In fact, my shorthand amendment was meant to encompass that and I entirely accept the point. I am increasingly concerned about the impact of this on young carers as well. The noble Lord, Lord Wigley, referred to support for work. He is right, it should not only be about supporting people linked to the labour market. It is a question of how we are going to increase growth and create jobs as well, which is a much wider debate.
My noble friend Lord Beecham made reference to the housing benefit changes and the impact that those will have on labour mobility. I think that the noble Lord referred to people not losing out from universal credit. When you look at the impact of universal credit and some other measures in the Bill, particularly the benefit cap and housing changes, I am not sure that that assertion would necessarily hold true. Having had a good start to proceedings today, we will revisit many of these issues.
The Earl of Listowel
I apologise for coming a little late to this debate, but there is an important point on which I would like some clarification. The Minister in his response said that we are trying to move from a complex system to a simpler one. That resonates with me, having listened to what Professor Eileen Munro has been trying to do with social work, where there was a very complex, bureaucratic system and they have tried to move to a more simple system. But they have discovered that the professional judgment of people at the front line becomes particularly important. The way they use their discretion becomes much more important, and listening to the noble Baronesses, Lady Wilkins and Lady Campbell, and the way in which some of these complex cases are being dealt with by people at the front line reminded me of what my noble friend Lady Meacher said about the importance of training people who work on the front line. It perhaps also reinforces the point I have made in the past about making the culture of the organisation in which people work sensitive to the needs of those who may be mentally ill or vulnerable, and who may respond very poorly to people who seem to be persecuting them in the way they are pursuing them. Have I understood that correctly or is the Minister referring to a different paradigm?
Lord McKenzie of Luton
I think we would all support the concept of a system that was simpler and more readily understood. It helps with take-up, which is the point that the Minister made; we accept that. As we go through the Bill we will examine in fact how simple we can make the system. People have complex and sometimes very chaotic lives. How easy it is to distil those issues into a very simple system and still maintain fairness is one of the challenges we face as we go through the Bill. I readily accept the need to provide full support for people, particularly those at the front line. In a sense, we have an interesting situation in which the work programme, the “black box” approach, gives a lot of discretion in that respect to those working at the front line, but at the same time we have a universal benefit which is more constrained and potentially more restricted. Having said all that, it is probably time to withdraw the amendment, at least for the moment.
Lord Kirkwood of Kirkhope
Lord Kirkwood of Kirkhope
My Lords, having regard to the constructive and comprehensive debate we had in the first session of the Grand Committee, and because there is a very important amendment next in the name of the noble Baroness, Lady Hollis, which I wish to support, I beg leave of the Committee to withdraw this amendment.
Lord Foulkes of Cumnock
My Lords, I added my name to this amendment and intimated to the Clerks and to the previous Chairman that I wished to move this amendment. It is unfortunate that my noble and assiduous friend Lord Kirkwood—he is a friend—did not seek to move it. He has drafted it very well and I shall speak to it briefly because I know we have a very important amendment in the name of the noble Baroness, Lady Hollis, and, indeed, many other important amendments coming up. But this amendment allows us to discuss at an early stage the implications of devolution in relation to the Bill. It also gives me an opportunity to raise an issue about devolution that applies to other Bills as well. Indeed, a lot of what I am saying about this Bill applies to them.
Unfortunately, because of devolution, we have had less consideration of Scottish, Welsh and Northern Irish business here in the United Kingdom Parliament. That has had some unfortunate consequences in Scotland that are causing political difficulties for some of us. It has now gone too far because the United Kingdom is still responsible for about half the identifiable public expenditure in Scotland, including welfare benefits, and for about half the legislation affecting Scotland, including this Welfare Bill. Yet we seldom discuss the implications for the devolved authorities because they have different arrangements for dealing with certain things, and I want briefly to mention one or two of them.
Lord Wigley
My Lords, I hope I will not distress my noble friend Lord Foulkes unduly by supporting what he said. I preface my remarks by supposing that there will not have been the studies in the National Assembly in Cardiff that he was calling for in Edinburgh, but I will not castigate the Labour regime in Cardiff for not undertaking such studies. The point, however, is a material one. In the eight months that I have had the opportunity to speak in your Lordships’ House, I have realised that in many Bills—I think of the Police Reform and Social Responsibility Bill, the Localism Bill and the Public Bodies Bill—there are implications for the devolved Administrations as a result of changes in legislation here that do not always become apparent on first appearance.
In the context of the knock-on effects of this Bill, there will most certainly be implications for the housing sector because most of the responsibility for housing rests with the National Assembly, but housing benefit does not, and there is going to be interplay. There will be an impact in the realm of carers. The initiatives taken in Wales have not been quite as radical as some of the ones taken in Scotland, but none the less there is a bearing if the state takes certain responsibilities in Scotland, Wales and Northern Ireland that are not undertaken in England with regard to the support that is given. There has to be at least an understanding of how those two factors may work.
With regard to the opportunity for work and training, again responsibility will lie with the devolved Administrations. There needs to be an approach across government to legislation that is going through Westminster in general to take on board the knock-on effects. There needs to be a systematic approach to co-ordinating them. It may well be that your Lordships’ Chamber has a role to play in that.
The system of devolution that we have is unbalanced. I can well understand that that causes difficulties for those who are framing legislation in London when the interpretation and the interactions will be different from area to area. What has also become apparent to me is that in the context of matters that are totally non-devolved, there is still an implication for the National Assembly, and that in matters that are totally devolved, there is an implication here, from cross-border issues, from consequences of the Barnett formula and so on, where there is an interplay. Therefore in both areas one cannot just assume that there is a sealed border and there should not be a discussion.
I would have hoped that, in raising the issue at this stage—and it could be raised at any stage going through this Bill—there will be the approach of thinking “is there going to be any direct bearing with regard to the legislatures in Scotland, Wales and Northern Ireland?” If so, these can then be built in and assurances given at the appropriate time that they will be taken on board. That would be helpful for the progress of the Committee.
Lord McKenzie of Luton
I thank my noble friend Lord Foulkes for picking up the baton from the noble Lord, Lord Kirkwood, so that we have the chance to have the explanation of the points that were put by my noble friend and by the noble Lord, Lord Wigley. Doubtless the Minister will be able to tell us what consultation and engagement has taken place, but I think that the request is that it is not simply done at some formal stage, perhaps when policy is being formulated, but that we consider it as an integral part of our consideration of this Bill. If we can get nothing other than that from this amendment it will have been worthwhile preserving it for our brief debate.
Lord Freud
My Lords, I will deal with Amendment 3, which is the one noble Lords have concentrated on. Amendment 3 would introduce a requirement to consult the devolved Administrations before the introduction of universal credit. I must point out that social security is a reserved matter in Great Britain but the implementation of universal credit will have an impact on some matters of policy which are devolved, for example, housing, skills provision and childcare. For that reason, we are working closely with the devolved Administrations on the implementation of measures in the Bill and will continue to do so to ensure that the introduction of universal credit goes smoothly.
We have been discussing aspects of the Bill since well before its introduction during the latter part of 2010. The Secretary of State and I have had a number of meetings with Ministers in the devolved Administrations. A formal role has also been established for the Scottish, Welsh and Northern Irish Governments and for the Scottish and Welsh local authority associations on the universal credit senior stakeholder board. We have a concordat between DWP and the Scottish Government that sets out the commitment on communication and consultation; indeed, the Secretary of State met Scottish Ministers most recently a fortnight ago. I therefore hope that noble Lords will be reassured with regard to the concerns they have expressed. We are addressing these issues, we are consulting thoroughly, and on that basis—
Lord Wigley
Before the Minister sits down—although he perhaps cannot give a reply now—would he consider at some stage during the passage of this Bill the possibility of introducing a new clause or subsection? This could perhaps come towards the end, where questions such as extent arise, and propose that there should be a duty on Ministers to consult not only with regard to the primary legislation, but with regard to the impact of the orders that will be coming from the primary legislation. If it is in the Bill, there will be no excuse for not consulting at the appropriate time.
Lord Freud
Currently, my understanding is that there is not a formal duty, but I have a commitment, and I am informing the Committee that we have an intense consultation process and we will continue that. I think it is an entirely unnecessary, bureaucratic thing to change that. The Committee has my assurance that that process will continue with a great intensity, as it has up to now.
Lord Foulkes of Cumnock
I do not know whether the Minister had intended to finish, but can I back up what my noble friend Lord Wigley said? I find his support in no way embarrassing, by the way. It is indicative of the fact that Members here, and outside, did not seem to be aware of the implications in relation to the separate matters affecting Scotland or of the consultation that has taken place. Reading the debate in the Scottish Parliament yesterday, it seems that Members of the Scottish Parliament were also not happy about the way in which consultation was taking place. Voluntary bodies did not seem to feel that some of the differences that affect Scotland—and no doubt that applies to Wales as well—were being taken account of. Therefore, would it not be better to have a specific duty for Ministers to consult? After all, this Government will not be there for ever. Maybe they might like to put some responsibility on to the next Labour Government to make sure that this consultation is undertaken. It would seem to me that the noble Lord, Lord Wigley, has a very good suggestion. If the Minister is keen to do it anyway, why would it create any problems if it was specifically included?
Lord Newton of Braintree
Having been restrained by my noble friend Lord Kirkwood from what would have been some inflammatory remarks at an earlier stage, can I ask two questions at this stage before my noble friend sits down? First, if we are to go down this path, can we also have an obligation imposed on the devolved Administrations to consult on legislation they pass that has a significant knock-on effect in England, of which we have just heard another example in the housing field? Secondly, and quite separately, could he say a word about Northern Ireland, which to my recollection did not accept UK legislation but passed the same thing through its own procedures? Is that going to be the future situation as well?
Lord Freud
Yes, my Lords. In Northern Ireland they have a system of what they call parity. In practice they pick up Great British legislation.
Lord Newton of Braintree
It is not an exempted issue but they do the same thing.
Lord Freud
They do the same thing. It is a different arrangement. I have gone to Northern Ireland particularly on this matter. I am anyway, as you might imagine, not in a position to offer duties of this or that either way. However, I would not want to go back and try to do it under any kind of pressure because we are talking about the implementation of a very complex set of changes. Having a bureaucratic to-and-fro process is exactly the wrong way to do it. The right way to do it is the way that we are doing it, which is in intense dialogue and working it through. If noble Lords are interested in practical implementation of complicated transformative changes to our social welfare, they should allow us to do it this way because that is the best way that it will be achieved to time, to budget and to the betterment of the people in all the countries that we are talking about. I beg the noble Lords to withdraw the amendment.
Lord Foulkes of Cumnock
My Lords, there seems to be some encouragement from the other side.
Lord Foulkes of Cumnock
If the noble Lord, Lord Newton, had waited a minute, I was going to say there seems to be encouragement for me to withdraw this amendment, and I certainly intend to do so. I have great respect, particularly for the noble Lord, Lord Newton, who was a distinguished Secretary of State and who I remember with great affection from when we were both in the other place together. I also have a lot of respect for the noble Lord, Lord Freud, who I have got to know and have heard speak on this issue regularly in the House, if not in Committee. I accept his assurances with no reservations whatever on that.
I agree wholeheartedly with the point made by the noble Lord, Lord Newton. To take one random example, if there had been greater consultation by the Scottish Executive with the United Kingdom Government on free personal care, some of the problems that arose would have been obviated. However, I am genuinely concerned—and this is no criticism of the Minister—with something that applies across the board, even more in the House of Lords than in the House of Commons, because in the House of Commons there are MPs from Scotland, Wales and Northern Ireland who get up regularly to raise these issues. I get the impression sometimes that the House of Lords is very Anglo-centred, very south of England-centred, sometimes very London-centred, sometimes very north London-Camden-Islington-centred. It is useful from time to time to remind people who find it easy to come in here on the tube day by day and go home at night, and who live that kind of life, that there are some of us on the periphery who have a different kind of life with a different set of regimes. Legislation passed by this United Kingdom Parliament affects the whole of the United Kingdom, and sometimes some people need reminding. I withdraw the amendment.
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I am not quite sure what was in the mind of the noble Lord, Lord Kirkwood, when he drafted the amendment. He may want to take the opportunity to enlighten us. But looking at the distinction between “awarded” and “paid”, our attention was drawn in particular to Schedule 1, paragraph 6. This paragraph enables an award of universal credit to be paid in whole or in part by means of provision of a voucher. Perhaps the Minister could expand on the intention behind this paragraph, and on the circumstances in which it might apply. I am aware, of course, that there are existing programmes where vouchers are used: in health, for example, for specs and contact lenses and for the Healthy Start food initiative. I know that the Minister has turned his mind to vouchers in the past. I think it was in connection with the sanctions regime on an earlier piece of legislation we were debating. Does this provision herald a new approach, or does it simply look to replicate existing arrangements? If so, what are they? I beg to move.
Lord Freud
My Lords, regarding the reference to vouchers in paragraph 6 that the noble Lord, Lord McKenzie, picked up—very sharp-eyed, as I would expect—we are looking at an option of paying childcare through vouchers. It is similar to some of the ways currently used by employers. It allows the flexibility of a parallel system with the employer system. I have to tell noble Lords that it is not the approach we are expecting to use. It is very much an option, but as I intimated earlier, we will announce our childcare proposals very soon.
On the voucher system, we have used the term “award” here because it is widely used across social security legislation and therefore makes a link to other legislation that provides for claims, payments and appeals. Changing the word would remove those links and require major changes in legislation across the piece. For that reason I ask for the amendment to be withdrawn.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for that explanation. I have no particular problem with the term “award”: it was just the passing reference to the use of vouchers. I took it from the Minister’s reply that it is only in relation to childcare that this is to be developed, and that does not look as though it is the front runner. We will know that soon. The only plea I would make is that if we go down the path of vouchers, we should do so sensitively. The prospect of stigmatising people who access facilities by paying cash or providing a DWP voucher has significant ramifications. It appears from what the Minister says that we will not have to face that in practice. On that basis, I beg leave to withdraw the amendment.
“( ) an amount for council tax,”
Baroness Hollis of Heigham
My Lords, I am grateful to the noble Lord, Lord Kirkwood, for his efforts to bring this on and for the support for a similar amendment which seeks to deal with the same issue from the noble Baroness, Lady Meacher.
Council tax benefit is a social security benefit and in my view should be within universal credit. DCLG, in another turf war, disagrees and stays out. The effect of this will be very damaging. I remind your Lordships that council tax benefit is paid to 5.8 million people at a cost of £4.8 billion, the average benefit being about £16 a week. At the moment local authorities are reimbursed by the DWP for their actual expenditure. In other words, it is demand led: or, to be technical, it comes within annually managed expenditure headings.
In future, by going over to DCLG, local authorities will be awarded a fixed-rate grant to fund a local scheme which is also expected to carry a 10 per cent cut to their usual expenditure. Given that that will now come within the departmental expenditure limit, the level each and every year will have to be negotiated with the Financial Secretary to the Treasury. It will not be demand led. Before the Minister says—I do not know whether he will—that local authorities are in a position to top this up, I am sure that he will be aware of the situation that local authorities find themselves in, which we can perhaps go into later.
In August the DCLG sent out a consultation paper, Localising Support for Council Tax in England. This consultation closes on 14 October. DCLG proposes to localise council tax benefit. Every local authority and every shire district within every county will have its own scheme. If that is not administratively complex enough, they will be required to make 10 per cent cuts in it.
On whom will the cuts fall? Pensioners—we are not sure yet whether it will be the over-60s or the over-65s—are 42 per cent of the recipients and will be protected. So the 10 per cent cuts rise to 20 per cent for everybody else. Thereafter, protecting other vulnerable groups is discretionary. If the local authority protects disabled people and families with children as well—a further 25 per cent of the client group—cuts of 40 per cent will fall on the rest. Finally, if a local authority went further and sought to protect those on 100 per cent council benefit, on IS or on JSA, cuts of 10 per cent would fall on the residual 9 per cent: the working poor, the working population. My Lords, do the maths. They will get no CTB whatever. If that does not impede the move into work, I do not know what does. So low-income families, encouraged into low-paid work by universal credit, which I strongly support, will find that the cuts from HB, which we will come to, and these huge cuts, given the protected groups in CTB, may wipe out any gain from work. What is the point of universal credit if it does not do what it says on the tin and make it worth working? Is this cut in CTB necessary? Why is it fine for DCLG to find £800 million to freeze council tax for all of us around this table today, while cutting £490 million from the poorest, who depend on council tax benefit? I think that it is disgraceful.
Lord Kirkwood of Kirkhope
My Lords, I share the credit for Amendment 13 with my noble friend Lady Meacher. We always expect forensic analysis from the noble Baroness, Lady Hollis, and she has excelled herself this afternoon. I will take a slightly different approach because I do not think that there is anything much to add to the critique. I cannot understand where this came from. We are talking about single working-age benefits. To my certain knowledge, for 10 years, it has always been expected that any change of this kind would embrace council tax benefit. For me—I am in favour of universal credit—this is not a constructive step to take because, as the noble Baroness has just said, it diminishes the effectiveness of universal credit. It goes in the opposite direction—not to mention the fact that it will inevitably cost local authorities more, and not to mention the confusion and conflicts on tapers and capital limits.
Baroness Meacher
My Lords, it is difficult to follow the fantastic contributions of the noble Baroness, Lady Hollis, and the noble Lord, Lord Kirkwood. Most of the points have been made, but there are a few things that I want to add. I have a cynical mind because I fear that the real rationale behind this proposal is to somehow split council tax benefit away from housing benefit because this is one of the proposals which will open a gap between the costs faced by the individual or householder and the benefit payable. If you add that gap to the housing benefit or housing allowances gap, it becomes very embarrassing because there is no way that people on JSA or reduced levels of ESA and all the rest of it as time goes on will be able to cover their costs. That perhaps makes it easier for the Government—I know this sounds cynical and a bit unreasonable, but I fear that it is true—to devolve some of that responsibility on local authorities rather than have the lot at government level. That is the only possible rationale I can think of for demolishing one of the great pluses of this whole reform—the 65 per cent take-up.
What we are going to see, undoubtedly, is a growing level of debt across the land. Council tax debt is already the largest type of debt dealt with by citizens advice bureaux. There were 170,000 cases last year, before we even start on this new reform, and the level will surely soar. That is one of my big concerns and the Minister will not be surprised that I mention it. Of course, the big group most likely to be in debt is people with learning difficulties and mental health problems. I can envisage many of these people coming to our door in need of in-patient care because they will be under such stress that they cannot deal with it. They will have bailiffs at their door and they will not be able to handle it. The CAB cites the example of someone with mental health problems coming along with a £518 bill in debt for council tax and a £183 bailiff charge. I would be very distressed in that situation and, clearly, our particular group cannot cope.
That is one of my issues. Another one is the work incentive, which I understand, respect and support, but you have to have a situation where the people who are given that incentive can actually work. The state has a special responsibility for those groups who, however much they may want to work, will find it extremely difficult to find an employer to take them on. All the talk about the importance of incentives to work, which we all subscribe to, has to be balanced by that recognition. The state cannot just abandon responsibility for people who simply will not be able to get into work; they will be on JSA because they will have been excluded from disability benefits. They will then have these gaps opening up and they will have incredibly little money to live on.
My last point is a question for the Minister. What will it cost local authorities to set up these administrative systems to run council tax benefits? How much of the apparent saving of £490 million will be lost in the cost of the administration of all these systems, plus the costs of bailiffs, debt collection and so on? I would be interested to hear the Minister’s response.
Lord Williamson of Horton
My Lords, I support the amendment proposed by the noble Baroness, Lady Hollis—not perhaps with quite the same vehemence, but I definitely support it. In fact, I am getting into the habit of supporting the noble Baroness; that may not continue, but for the moment it seems to be well established on my part.
Those of us who strongly support the introduction of the universal credit recognise that the clause we are discussing is the most important one of the whole operation. That is because there can be nothing more important than deciding and making clear what it is by reference to which the award is to be calculated. This is the part of the Bill that says what the award is to be calculated by reference to. At the moment, the current text is “housing”. That is open to quite a bit of discussion and dispute until we are absolutely clear about what is going to happen on council tax.
This is the clause in the Bill that beneficiaries may actually read; they will want to know how their award is calculated, and council tax is an essential element. If they are told, as appears to be the case, that the level of benefit and the calculation of council tax is to be based on everyone else in their locality, whether they are pensioners, disability sufferers and so on, that will give rise to quite a lot of concern about the complexity of the arrangements that are apparently being proposed. I am concerned about that.
Those like me who have a child with a disability know that it is extremely important that, as far as possible, we should find some form of independent living for them. It is extremely important on the social plane. These people are considerably affected by how the universal credit is going to relate to housing and council tax costs. The standard rate will not prove so difficult, but this element of housing and council tax will be controversial. They will feel worried about it—I think that some are worrying about it already—and that is liable to reflect on the universal credit, which I strongly support.
I hope that the Minister will look favourably at the battery of comments on the issue of council tax which, if we follow what is set out in the consultation paper, seems to be complicated to an amazing degree. That is why I support the clarity of the amendment brought forward by the noble Baroness, Lady Hollis.
The Deputy Chairman of Committees (Lord Colwyn)
My Lords, I wonder if we could hear from the noble Lord, Lord Newton, who is feeling invisible and has asked to speak from a sitting position.
Lord Newton of Braintree
My Lords, I have said that I will stand up if I can, but it is easier for me to sit down. I wanted everyone else to speak first in order not to frighten the Government Whip, but we are one short of a full house and I want to make it clear that this is indeed a full house, as it were, regarding worries about this issue. I had some rather less coherent concerns when I first read that this was to be excluded. Maybe the Minister has some wonderful answers that I cannot predict; I am just glad that I am not in his position. I think that we have had a devastating critique of this proposal, and I will take some persuading that it makes any sense. I chair a mental health trust and should declare that interest. I have some affinity with the noble Baroness, Lady Meacher, over her concerns on that front, but that is not what I want to spend my time on, nor do I want to repeat points. I have some questions, though.
If this is to be based on the allocation of a capped sum to every local authority, someone is going to have to devise a formula for the division of that sum. I look to the noble Lord, Lord Beecham, because of his local authority experience, and there are other noble Lords with similar experiences. Devising a formula for allocations between local authorities is the nearest thing to a magic art that anyone has ever devised. I once had ministerial responsibility for one aspect of it, and the fact is that I understood what my officials were telling me about this formula only for three minutes after they had explained it to me. In any event, there were said to be only two people in the country who actually understood it. Are we going to have to have another of those formulae, and what will that cost?
We are being told, if I hear the noble Baroness aright and the Minister does not have an answer, that every local authority in the country is going to have to invent its own social security system. That is what we are talking about. Unless they get together in Essex or wherever it may be, then Braintree will have its own social security system, as will Chelmsford and Norwich. How much is that going to cost? “Is it sane?”, I ask, and hope for an answer. We are also told that in a world in which the existence of separate tapers has been one of the problems, and the aim is to get a consistent single-taper approach, we are now leaving a second alongside the main one. I can hardly believe my ears.
There is a practical question relating to the allocations point. Someone referred to factory closures. I had a lot of them in Braintree in the early 1980s. Courtaulds was one of the biggest local employers in the textile industry. It did me a lot of political damage but, leaving that aside, obviously it sent up the number of people on benefits, including whatever council tax benefit was in those days. The same thing will probably happen up in Fylde due to British Aerospace’s intention to close its factories. However, there may be places where great new factories are being built. Is this going to bring windfall benefits? If there is a factory closure, everyone else in the area on council tax benefit has to have their benefit cut to pay for the new arrivals on to the benefit. If a factory opens or Tesco takes on 400 people, either the council or every council tax benefit beneficiary gets a bonus. These questions need thinking through and need answers.
Lastly, there is the question of appeals. If I hear the noble Baroness right, they are going to remain national. Who do the complainants go to? Is it the social security chapter of the Tribunals Service, which I know something about? If so, the judges of the Tribunals Service will need to be tutored on and informed about hundreds of different benefit systems and they will not be able to deploy their tribunal judiciary in the way they would at the moment. You will not be able to send someone who knows about Suffolk—you will not even be able to send someone who knows about Ipswich—to Norwich, let alone to somewhere distant or to London. At the moment, the aim is to deploy these judges with efficiency, bearing in mind that we are talking about the national systems that they know. Have these questions been addressed in the department? Have they been answered? Can the Minister answer them today? I live in hope.
Lord Beecham
My Lords, my noble friend Lady Hollis and I go back a long way politically in local government terms, and throughout that long acquaintance I have always been impressed, as noble Lords have been since she came to this place, with the forensic mastery of figures that she has displayed today. She has produced a devastating analysis of the proposals and their impact in relation to council tax benefit. I have a reservation about the proposal she makes which I shall come to in due course, but fundamentally the problem is occasioned by the shift from, oddly enough in an era of universal tax credit—most of us wish to see it working and can see the logic of its applicability in general terms—to what will be a multifaceted and locally specific council tax benefit, one of the most significant benefits that are available. The noble Lord, Lord Kirkwood, asked where this has come from. In the bicentenary of Dickens’s birth, the answer is fairly obvious: it comes from 19th century poor laws with differential rates being determined locally, in those days by the squirearchy and nowadays by local councils, a burden that most local councils would not particularly wish to adopt.
The impact will be very significant. The Local Government Association—I declare my interest as an honorary vice president, in the presence of the noble Lord, Lord Best, who is the president—has to my mind rather supinely accepted the underlying philosophy of the Government in deciding that council tax rates should be determined locally. I rather regret that, but the association at least points out some of the absurdities that stem from the actual implications of the proposal. Its analysis suggests that 80 per cent of local council tax benefit is paid to people receiving 100 per cent relief; that is, it is given to the poorest in our society, while some 35 per cent is paid to pensioners. If you take those two groups together as being likely to receive protection—pensioners will be protected under the Government’s proposals, and presumably there is a strong argument for extending it to people on 100 per cent benefit—the entire burden of the £500 million cut will fall on the rest. Apparently it means that 1.3 million claimants will share a loss of £500 million a year, which is an average of £330 each. That is a formidable figure. Of course it would be less if you did not protect people on 100 per cent benefits, but by the same token those people would be paying a higher proportion. There is a huge problem in terms of the impact of all this.
There is also a potential problem with take-up. Even council tax benefit, although it reaches a significant number of people, fails to reach everyone who is entitled to it. Some £1.8 billion a year in council tax benefit goes unclaimed. Incidentally, and for the record, that figure is about 50 per cent more than is lost to the Treasury through fraud, not that anybody is for a moment defending fraud. It must be dealt with, but let us get these things in perspective: more money is unclaimed in council tax benefit than is lost through fraud by a minority of claimants.
What would be the impact of a new system of the kind that we have heard about? The likelihood is that that benefit would be claimed less than hitherto and the amount unclaimed may well go up. That is one area of concern in my noble friend’s proposal, and it is a point made by the Local Government Association. Instead of receiving a council tax demand which is already rebated, people entitled to the benefit will simply receive a sum with which to pay their council tax at the ordinary rate—the universal rate in that particular locality. There is a significant risk that arrears problems will mount up substantially. Actually, council tax collection under the present system is pretty good in most if not all local authorities. I heard last night that the figure for collection in my own authority is 97.3 per cent, which is pretty high for any tax collection. There is a risk that that will fall, which will compound problems for local authorities.
There is a concern about the proposition that in future council tax benefits would come in the form of a payment effectively made directly to the claimant, who then pays the local authority. Similar issues have arisen over housing benefit and whether it should be paid directly to tenants or landlords. These are somewhat difficult areas and possibly—I put it no higher than that—need to be considered in a different way from benefits that do not relate to a specific payment which has to be made.
Another problem with the Government’s proposal is that there does not seem to be much incentive for local authorities to promote take-up of the claim. They have a fixed amount to distribute and I suspect that it is not of any great significance to them who takes it up. In particular, what if demand is greater than the amount the Government allocate? A perfectly legitimate question was asked by the noble Lord, Lord Newton, with whom I also go back a long way: how is the formula to be calculated? If there is a shortfall, I would suggest that councils will not be particularly incentivised, especially in the present circumstances, to pursue the interests of those who are not claiming; there would be no extra money to pay for that. This all makes the whole scheme extremely problematic.
I turn finally to one other matter that goes beyond this clause, but in a sense relates to the take-up issue. In delivering benefits of this kind, local authorities have on the whole a pretty good record—although, as I have indicated, not one that is 100 per cent successful. However, they are experienced in dealing with claimants. There is a front-line system with a telephone line in almost all places, and often face-to-face contact so that people can be helped directly and conveniently with their problems. I repeat that all your Lordships support the principle of universal credit, but one problem is how in fact it is to be delivered. There is an assumption that everybody is online and it can all be done remotely. Frankly, that is an optimistic view. The possibility of delivering universal credit, whether or not it includes council tax benefit, through local authorities rather than the DWP or by some remote system should be experimented with. Leeds City Council has developed a good working relationship with the department in terms of delivering not only local authority benefits, but other benefits as well. I suggest that it might be worth the Government at least considering piloting the delivery of universal credit, in whatever form it finally emerges, through a number of local authorities to see whether that is more effective than simply relying on the current structures of the department and its agencies.
We all wish to see those who are entitled to benefits receiving them. There is a real concern among advice agencies, voluntary groups and so on, particularly if council tax is shifted in this way, that the face-to-face, convenient approach may be lost, and with it benefits might also go adrift. I hope the Government will look at that in the broad context of their proposals alongside its particular relevance to council tax benefit.
Baroness Turner of Camden
My Lords, I hesitate to intervene in what seems to me a very complex and quite difficult discussion, but are we talking about a discount or a benefit? I remember some time ago I was approached by a number of organisations that told me that people were not applying for something called a council tax benefit because they did not want to look as if they were appealing for a benefit. I therefore tabled an amendment to the legislation at the time not to call it benefit at all, but instead to call it discount. Discount suits the description rather well. I myself get a discount from the council, not a benefit, because I am a widow and I live on my own. I do not call it a benefit. When we discussed this and I got acceptance for the idea to call it a discount, the organisations concerned were very pleased because they thought that a number of veterans who did not apply for the benefit would now apply for the discount. Whether or not that happened I do not know, but that is what we went ahead with. I think there is a difference between a benefit and a discount. Which are we talking about here?
Lord German
My Lords, I would support this amendment regardless of whether it was related to a cash change in Government. It is the policy issue that is most important here. I favour a national scheme, locally delivered, and I worry very greatly about the proposals before us for reasons which I will outline. Largely, the Bill will not be able to meet the principles on which it is set. I have one disagreement with the noble Baroness, Lady Hollis: I found that all four principles—not five in my copy—in Paragraph 5.2 can be criticised equally, because they cannot be delivered through a national scheme.
Earlier this afternoon we heard a passionate plea from the noble Lord, Lord Foulkes, about the need concentrate on the United Kingdom. In his reply, the Minister talked about our benefits structure being a system reserved to the United Kingdom. I want to point out to noble Lords that we try to be consistent in what we do in Government. We ought to recognise that the Scotland Bill is proceeding through Parliament at present. The origin of that Scotland Bill was a commission chaired by Sir Kenneth Calman which looked at which aspects of our society make it worth having a United Kingdom and at what holds the United Kingdom together. Apart from foreign affairs and defence, the one key thing which he said was holding this country together was our social security system. As a reflection on what we have heard this afternoon, I ask why it is that we want to damage that system of reserved powers which works for the United Kingdom as a whole. We have heard how it works in Northern Ireland, but it works in the same way and with the same outcome, so it is therefore a United Kingdom system.
We are going to take £5.8 billion, whether it is cash-reduced or not, out of this system for the United Kingdom, and put it into a system which, quite frankly, will not work according to the principles laid out in the document which is being pursued by DCLG. I am reading from paragraph 5.2, just so we can get some consistency; we may be on a different page, but I am on page 13. It says, “We therefore propose,” that is, the DCLG,
“the following principles to underpin local schemes:
Local authorities to have a duty to run a scheme to provide support for council tax in their area”.
This Parliament and this Government can deliver that in England, nowhere else. It then says:
“For pensioners there should be no change in the current level of awards, as a result of this reform”.
This Parliament and this Government can deliver that only in England, not in the rest of the United Kingdom. It says further:
“Local authorities should also consider ensuring support for other vulnerable groups”.
This Parliament and this Government can deliver that for England alone, not the United Kingdom. Finally, it says:
“Local schemes should support work incentives, and in particular avoid disincentives to move into work”.
This Parliament and this Government can make sure that that works in England alone. Therefore, the principle upon which I believe the United Kingdom is based is being breached by this Bill and the change that we have before us.
Lord Skelmersdale
My Lords, we have heard an enormous amount of words, some of them very persuasive, for this amendment. But I find myself remarkably schizophrenic about the whole thing. The noble Baroness, Lady Turner, put her finger on at least half my schizophrenia.
Universal credit is a cash sum. You get it in your bank account, through your giro, from the post office or wherever. Council tax benefit is exactly the opposite. It is a discount; you do not see the money. Therefore, I can see that it ought to be treated in a totally different way from universal credit. On the other hand, you cannot live in a house without paying council tax. This is where my schizophrenia comes in. From your lump sum of universal credit, you are going to pay your rent, and so on, but you have the likelihood of outgoings and you cannot from those outgoings separate out the council tax that you are also going to pay. I wonder whether my noble friend Lord Freud can solve this great dilemma that I have.
Lord McKenzie of Luton
My Lords, I will speak briefly on this issue in support of the amendment proposed by my noble friend Lady Hollis and the exceptionally powerful case made by her and by pretty much every other the noble Lord who has spoken on the issue. The noble Lord, Lord Skelmersdale, raised an interesting point about how you would extract the payment. My noble friend Lady Turner asked whether it was a rebate, a discount or quite what it was.
I recollect that she pressed us in Government on behalf of the Royal British Legion, who were campaigning to have the term rebate replacing the benefit. We all signed up to that at the time. I am not quite sure what progress was made. I think that it went to local authorities. However, I remember that there was a potential price tag of tens of millions of pounds to local authorities just for that one system change. These are not inexpensive projects that we are dealing with. I cannot believe that this is what the noble Lord or the DWP want. The noble Lord is an exceptionally logical person. He analyses things. The scale of the problems that the localisation of council tax would bring seems to me to be totally out of kilter with all of the work and analysis that has gone on in producing plans for the universal credit. As everyone has said, it undermines the universal credit—the benefits of the single taper in particular. With all the raft of issues about how people would understand what their position was, the simplicity of the system would fall away.
We had a meeting with officials. As ever they were very helpful. We explored this issue a little bit. My understanding is that it was not until March of this year that the department started to contact local authorities to get their minds around how it would work. To produce something in a Bill and develop a policy on an assumption that this component can be dealt with separately without any clear knowledge as to how that will work in practice seems unusually foolhardy. Again, I cannot believe that the Minister believes that this is the best way forward. There are lots of practical issues. We know lots of local authorities will have outsourced their arrangements in respect of housing and council tax benefits. You would have to break the costs involved in the multiplicity of contracts. I do not know if the Minister has any idea of what would be involved in that exercise.
What we are seeing here is what we have seen in the Localism Bill writ large. There have been a lot of instances where the Government and the Secretary of State have said that they want to devolve power and give more freedoms to local authorities, but have then realised the consequences and drawn those back with all sorts of regulation powers, which, as my noble friend Lady Hollis said, would have to be there if you were going to make any sort of sense of this proposal to have any sort of understanding of whether it is regional systems, which are common.
There is another component as well. It relates to the cut in the total amount available. I agree with the noble Lord, Lord German, that in a sense there are two issues: the financing and what cash sum is available, and how it should be dealt with. This Government have a record of imposing on local authorities and getting them to take the pain, the heat and the difficult decisions, and seeking to walk away scot free. We will see and debate what is going to happen with the social fund. That is another example—no duties on local authorities and no ring-fenced funding from it.
My noble friend Lady Hollis made a telling point. If our understanding is correct—and the Minister will doubtless confirm this—this is switching AME to DEL, the reverse of what I think the Minister himself negotiated so effectively when he was dealing with work programmes. It does not make any sense. I know that the Minister has to do his job. We have all been in the position of defending the indefensible before. However, I cannot believe that it is going to end up as currently proposed because it would seriously undermine the universal credit and all the good work that the Government are trying to do on that.
Lord Freud
My Lords, I am grateful to noble Lords for raising this series of amendments. Clearly a point of real substance has been discussed this afternoon. The group of amendments would have the effect of incorporating help with council tax for those on low incomes into universal credit and state pension credit.
Noble Lords will be aware that we are proposing to abolish council tax benefit and replace it with localised schemes of support to be set up and run by local authorities. The Department for Communities and Local Government is currently consulting on proposals for local schemes in England, as a number of noble Lords have pointed out. This approach will allow local authorities, who determine and administer this tax, to have a say in how the burden of paying for services is shared across their local community, taking account of local priorities.
The Government’s approach addresses concerns that have often been expressed about the complexity of council tax benefit and, particularly, that council tax support should not be part of the social security system at all. Nevertheless, in localising support, we need to ensure that the improved work incentives that universal credit will bring are not undermined in any way. We believe that the key principles required to incentivise work can be delivered through local schemes and therefore that localisation is the right approach.
Lord Freud
As I was about to say, we will soon publish an impact assessment on the universal credit that incorporates this approach. As noble Lords will be aware, the existing impact assessment assumes council tax in the system. This one will assume council tax out of the system.
Lord Skelmersdale
My Lords, does that mean that in this impact assessment, there will be an assumption that the taper will be the same? That seems to me to be all-important.
Lord Freud
I ask my noble friend to resist pressing me, which I know he enjoys doing, at this moment. Let us wait for the new impact assessment.
Lord Freud
The impact assessment that I am talking about is the one on universal credit and how it will respond to the exclusion of council tax. We will not have an impact assessment from DCLG available for some time. I do not know when we will have that impact assessment, but I will write to the DCLG and find out.
Lord Newton of Braintree
That means that this impact assessment will not be an impact assessment of the effect of these proposals on poor people.
Lord Newton of Braintree
I am not going to press my noble friend further, but that is what it means.
Lord Freud
I think noble Lords will be somewhat relieved at the approach and will get quite a lot of information from the impact assessment on universal credit on its own. If it comes out soon, as I expect, there will be an opportunity to debate it again, perhaps around Clause 11, or possibly Clause 8, when we can look at the taper, so there will be a chance reasonably soon to look at the implications again.
Lord McAvoy
Before the Minister passes on to the next issue—that may have been a Freudian slip—he has charmingly used the words “soon” and “very soon” to, quite frankly, parry requests for a wee bit more detail on timing. Can he give us an idea whether the assessments that he keeps referring to are operating at a normal pace? Is there an expectation about how long that should take? Are these assessments that we are waiting on taking longer than he would expect?
Lord Freud
No, we had anticipated that this impact assessment would come out during Committee stage, and I think we said that. I hope I gave noble Lords a reasonable clue when I suggested the opportunities we might have to debate it because I referred to a couple of clauses that, depending on our speed of progress, we will get to soon.
I shall return to the main topic and the question of pensioners. Noble Lords will be aware that there have been persistent concerns about the low level of take-up of council tax benefit among pensioners. I know that the noble Baroness, Lady Turner, has had this as her absolute central focus. As the noble Lord, Lord McKenzie, pointed out, there was cross-party consensus on the word “rebate” a couple of years ago. Many have argued that the reasons that pensioners are reluctant to claim are because it is an income-related benefit and because they believe that the process for claiming it is complicated and intrusive. We believe that there is a strong and persuasive case that council tax support for pensioners will be better delivered through localised schemes of support. Noble Lords will have seen that DCLG’s consultation paper stresses that the position of current and future pensioners should be fully protected.
I will take the opportunity to answer the specific questions raised by my noble friend Lord Newton. The allocation of cash to local authorities will be based on existing CTB expenditure, less 10 per cent. The current cost of delivering housing benefit and CTB is £500 million per year. I am not able to say what the new system will cost, mainly because the consultation that DCLG is conducting has not been concluded.
My noble friend raised the appeal process. The consultation paper does not set out a final view on what that process might be, and it is the subject of one of the consultation questions. The nature of the appeals system will depend on the final design of the system.
To summarise, the approach the Government are taking on the aspects that this amendment raises is the right one. Therefore, I thank noble Lords—
Lord Wigley
Is the Minister going to respond to the point made by Lord German earlier about the application in Wales, Scotland and Northern Ireland? I am sorry to come back to that like a bad penny, and I will try not to do it all the time, but in this instance, it is of direct material consequence, particularly this week when one is aware that the money to freeze council tax, so far as England is concerned, when transferred to Wales, will not be used for that purpose. Will the resource that the Minister sees going to local government in Wales go directly to local government or via the Assembly? Has he discussed this with the Welsh Local Government Association and Assembly Ministers?
Lord Freud
My Lords, without being over-coy on that question, this matter is out for consultation and we expect the responses from Scotland and Wales to be incorporated as part of it. So the answer, I guess, is that it will be looked at in that context. With that, I ask the noble Baroness to withdraw the amendment. I am sure that we will return to the some of the substance later.
Baroness Hollis of Heigham
Yes. Before coming back to some of the main themes that your Lordships have adduced, could I thank everybody who has taken part, because all sorts of issues have come up that I had not fully clicked on? I now have an even clearer sense of indignation at what these proposals might mean for—as the noble Lord, Lord Newton, rightly said—the poorest people in the land. I appreciate your Lordships’ contributions.
I am sure that the noble Lord, Lord Freud, will take this Committee’s views back to his close working colleague Mr Pickles. Bar a couple of open questions, I think they were unanimous in being deeply concerned both about the effect on the individual and on universal credit.
Lord Foulkes of Cumnock
I agree with every word my noble friend says about the revelations that have come out in this Committee, which have been fascinating on both sides. The Government do not seem to have had any support from anyone on any side. Is it not now clear why the Government Chief Whip wanted this Committee hidden away up here, rather than on the Floor of the House?
Baroness Hollis of Heigham
Actually, my Lords, it is oddly enough not about trying to win a vote in the House; that is irrelevant. We are seeking to persuade the department that this proposal is profoundly unworkable as well as profoundly indecent. It has to be taken away to the Leg Committee—to use the shorthand—and rethought. That is what I am trying to do. This is not meant to be a grandstanding effort on the Floor of the House, though it might get even more contributions there. It is trying to strengthen the DWP’s concerns between the lines, if I judge it right, and empower it with some of the powerful arguments advanced today by experienced people—a former Minister in your Lordships’ House, a former Secretary of State, and in particular people who speak directly from the nations of this country outside England—that this should not and will not run. It should be taken back to the drawing board to think again. Given that consultation on the document finishes on 12 October, this discussion today is designed specifically to take that debate forward. I thank the Committee, because I am confident that they have moved the debate forward.
I will pick up the point made by my noble friend Lady Turner and reiterated by the noble Lord, Lord Skelmersdale, about discounts, rebates and benefits. My noble friend is absolutely right. Discounts and rebates are, for example, a quarter off for a single person. This is a standardised figure, irrespective of the individual’s circumstances. That is why it is a discount or rebate.
One of the reasons why the British Legion was campaigning on this—and I stand to be corrected—was that it had succeeded in getting through the proposal that local authorities on a voluntary basis, but in practice fairly universally, awarded a 50 per cent rebate on the old council rates system for those veterans who enjoyed war pensions. I remember the debates vividly. If any council thought it might do otherwise, there was a march to City Hall and they occupied the first three rows in their uniforms and decorations as councillors tried—or did not try—to meet their concerns.
They were seeking a rebate. The difference about a benefit is that it is tailored to individuals’ circumstances and council tax benefit does precisely that. That is why one cannot put it into the same category as rebates, which are a category which does not depend on means testing.
Three issues have come up today, and I am very much indebted to your Lordships for these. First, there are worries about localisation as such. This was put powerfully by the noble Lord, Lord Newton, and I am very grateful. Added to that were the concerns—which I am sure are right—of the noble Baroness, Lady Meacher: the worry and stress that will affect individuals.
The Deputy Chairman of Committees (Lord Colwyn)
My Lords, discussions at this end of the Table suggest that it might be convenient to take a short break. I suggest that we adjourn for 10 minutes, but first I will take the business to a convenient point.
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, this is a probing amendment, which would delete subsection (2), which states:
“Regulations may specify circumstances in which a member of a couple may make a claim as a single person”.
As I say, it is a probing amendment to seek some clarity as to the likely scope of such regulations. I accept that the Notes to the Bill refer to circumstances where one member of a couple does not have the right to reside in the UK and is not entitled, so the other member will be able to make a claim as a single person. My question is: what other circumstances might be envisaged? It is understood from the notes circulated that further work is ongoing in this regard, but perhaps the Minister can help us with the following questions. When, for example, a couple are in the process of separation or divorce, will they be treated as being a couple or two individuals? Under what circumstances will members of a couple be legally entitled to live separately and receive universal credit independently of each other? In particular, will there be any scope for individuals who are in an abusive relationship to receive universal credit independently of their partner?
These sorts of issues highlight how convoluted some people’s lives can be. There are circumstances where, under existing provisions, people are treated as no longer being a couple: for example, if either or both is in custody, has been released on temporary licence from prison or is a compulsory inpatient detained in hospital under mental health provisions. Those sorts of arrangements exist at the moment. Are they going to be built in to universal credit? In what other circumstances might a member of a couple claim as an individual? I beg to move.
Lord Freud
My Lords, to summarise, the general principle is that a couple should make a joint claim for universal credit to ensure that both members of the couple take responsibility for the claim and obtain support to find work, where appropriate. This principle is already established in jobseeker’s allowance for joint claims, and we are extending it to universal credit, so that both members of a couple will have equal opportunity to access the support.
As explained in the briefing material sent to Peers last week, there will be a fairly limited range of circumstances in which only one member of a couple is eligible for universal credit, such as the example that the noble Lord, Lord McKenzie, raised where a claimant’s partner is a person from abroad who has no right to reside here. However, there are other circumstances, such as when people are students and so forth, when they will not be eligible for benefit support.
This amendment would remove our ability to make these exemptions. I understand that it is a probing amendment implying a series of questions. We are currently developing detailed regulations on this. There is no intention to change some of the existing protections—the noble Lord mentioned people in custody and people detained in hospital. In the work we are doing, as we build a coherent single system, it is fascinating to see how many different definitions of the same thing there are scattered through the current system. One thing we are doing is trying to get a consistent definition. We have four meanings of the word “work”—or is it five? When you are writing a computer program in code, that kind of thing needs to be precise.
We are going to have to get the timing of when people separate and all that precisely right, and that is work in progress. We are aware of the issue. It is being addressed, and it will be much more coherent than it has been in the past for that reason. Therefore, I ask the noble Lord to withdraw this helpful probing amendment.
Lord McKenzie of Luton
I am grateful to the Minister for that information. I am going to have to allocate a bit more of the weekend to catching up on all the briefing material that we have. I understand that there is no basic intent to change the current provisions. I am interested in the range of different definitions. The next group of amendments will touch on that a little as well. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I shall speak also to the other amendments in this group. Amendment 17 would make the minimum age for universal credit 16 rather than 18. This issue was raised in the other place but, despite assurances, we continue to hold the view that this matter should be reflected in primary legislation. Currently 16 and 17 year-olds are able to claim means-tested benefits if they are in a vulnerable group. Such groups include lone parents, carers, those estranged from parents and those with limited capability for work. They can claim JSA if they would otherwise face severe hardship. Housing benefit can be claimed to meet liability for rent, and they can claim working tax credit if they are responsible for a child or a have a disability.
There are two points that I wish to pursue with this first amendment. Given that there is a bit of a patchwork at the moment with separate benefits, can the Minister put on record what the rules will be under universal credit for 16 and 17 year-olds? Will all the strands of support available via one benefit or another under the existing patchwork of benefits and credits be available in universal credit, and what conditionality will apply? Why not at least encapsulate in primary legislation the prospect of 16 and 17 year-olds accessing universal credit? We accept that Clause 4(2) provides a route for overriding the provisions of Clause 4(1)(a), as does Clause 4(3), but why not have it the other way round and set the 16 and 17 year-old ages in primary legislation?
Amendment 18 is a probe, the purpose of which is to understand other circumstances in which regulations may provide for exceptions to the requirement to meet any of the basic conditions. Can the Minister help us on this? He may again say that this is buried in the mass of notes and draft regs that we have had delivered to us this week. If he does, we will catch up with him soon. Let us get it on the record here. Are there any parallel easements in current benefit and credit provisions that are not being carried forward?
Amendment 19 similarly probes the circumstances in which it is expected that the regulations in Clause 4(5) will be used. Current benefit provisions cover a range of conditions—namely, presently resident and ordinarily resident—and the basic conditions for universal credit require somebody to be in Great Britain. Will the Minister explain why this formulation has been adopted? What, if any, are the EU ramifications of this formulation? The UK has a number of social security treaties. Will they automatically cover universal credit or will there be a need for some renegotiation or changes to those treaties?
Finally, Amendment 20 is a probe to understand what the regulations may say about who is receiving education and who is not, and therefore who is entitled to universal credit and who is not. It is quite right that most students should rely on income from student support, family or work, but I hope that the Government will not remove entitlement from groups that currently have it. This is what the amendment seeks to put in the Bill. This is an example of where there are different rules for different benefits. Perhaps the Minister will accept that universal credit should be available for students who are parents, lone or otherwise; individual single foster parents; those who have disabilities or are vulnerable and therefore qualify because they are young or living away from parents through difficult circumstances or were previously in local authority care; and those who are refugees studying English. I think those are the current types of arrangements which enable benefits to be accessed. Perhaps the Minister can say the extent to which these will be replicated under the new system. I beg to move.
Lord McAvoy
My Lords, I ask the Minister for some brief clarification. If I am picking it up correctly, the definitive removal of any option for anybody aged 16 to apply for these benefits under the special circumstances is proposed. I have the benefit—it might not have seemed like a benefit at the time—of 23 years of parliamentary surgeries as a former Member of the other place. There is one thing these surgeries teach you, and that is that there can be no definitives in dealing with human beings. I can certainly recall occasions—not hundreds but certainly scores over the years—when people of that age had special circumstances. I am worried about the reasons for removing the possibility of applying, and about the alternatives being brought into legislation to account for that option being removed. I always worry about definitives and a lack of options, and I would like to hear what the Minister has to say on that.
Lord Freud
My Lords, Amendments 18 and 19 seek to amend the basic conditions of entitlement to universal credit and would in effect limit our ability to provide for exceptions to those conditions. Amendment 20 would create a new regulation-making power to set out circumstances in which certain groups are to be treated as not receiving education: specifically, young people, parents and disabled students. Clause 4 sets out the basic conditions that must be met in order to be entitled to universal credit. These basic conditions are designed to be simple and easily understood, fitting together with the support for people in education and for older people through state pension credit. However, as I am sure noble Lords will agree, there are always exceptions to the general rule, and it has never been our intention that these basic conditions will be so prescriptive as to prevent certain groups of people being entitled to universal credit. In that sense, we are entirely in accordance with the sentiments just expressed by the noble Lord, Lord McAvoy.
Amendment 17 seeks to make universal credit adopt the principle that entitlement to support begins at 16 rather than at 18. We intend to maintain the current rules where 18 is the minimum age. This is consistent with the approach taken by the previous Administration, and we see no reason to change it. Equally, however, there are circumstances where people aged 16 or 17 should be entitled to universal credit in their own right. This includes people with responsibility for a child, disabled people and people estranged from their parents. Sixteen and 17 year-olds should be in education or training and not living on benefits. If we were to set the lower age limit to 16, we would send the wrong message to young people and their parents about the value of education and the strength of the family unit.
We will continue to support young people who find themselves in straitened and difficult circumstances through leaving care, family break-up or whatever, at the age of 16. We are not planning to change the rules for care leavers in any way. However, as a result of the last Government’s Children (Leaving Care) Act, care leavers cannot usually claim benefits until the age of 18. That is why the Bill makes provision in subsection (3) of this clause, and why I do not think that the amendment is necessary.
Amendment 18 seeks to remove the regulation-making powers that will allow us to provide for exceptions to the basic conditions. While we would still be able to specify some of them through other subsections of the clause, the amendment would limit our ability to make provision in all cases. I am sure that noble Lords will appreciate the importance of flexibility in these matters. The power can in any event be used only to extend eligibility, not restrict it.
Amendment 19 would remove subsection (5), which allows us to make regulations in respect of residence and presence. We have been clear that migrants will generally be able to claim universal credit only if they have a right to reside here and are habitually resident. This position has not changed—and was reiterated by the Secretary of State and Minister for Employment just last week. In the tough financial conditions we currently face, it is particularly important that UK taxpayers should not have to subsidise people with very tenuous links to this country. “In Great Britain” is the same formulation as in the primary legislation for income support. Nothing sinister is implied by the wording.
On the question of the noble Lord, Lord McKenzie, about the EU ramifications, we do not expect to have to renegotiate social security treaties, although he will be aware that there is considerable movement currently going on about export of benefits, which we are concerned about. Removing the powers in this subsection would also prevent us providing for circumstances in which a person can be treated as being in Great Britain although they are temporarily absent. Current provisions allow us, for example, to pay benefits to people who may have gone abroad for a short period of time to receive medical treatment for themselves or their children. They also, in the case of tax credits, ensure that service personnel and their families are not prevented from claiming because they have been posted overseas. We want to replicate this position within universal credit. The amendment would prevent us doing that. This is a valuable thing for us to be able to do: I am sure that that is not a contentious claim to make in this Committee.
Amendment 20 would require the Secretary of State to specify the circumstances in which certain groups will not be treated as receiving education. There is a long-standing principle that in general the benefits system should not be a source of financial support for those within the education system. Young people are primarily the responsibility of their parents until they leave school. Students in higher education have access to a comprehensive system of student loans and grants. However, there have always been exceptions to the general rule and, as the Minister for Employment made clear during debate in the other place—and I am happy to repeat here—the current boundaries that exist in relation to income-related benefits will not be redrawn.
We do not wish to widen the extent of support for those in education. Nor do we intend to remove support from those groups of young people and students who currently receive it under the current system, such as lone parents, disabled students and youngsters in non-advanced education who are living independently. The powers we need to do this are already contained in subsections (2) and (6)(b) of the clause. We do not need to make the extra provision that this amendment would provide.
I apologise if that was a lengthy summary of our position. I need to track back a little bit because I may have inadvertently misled noble Lords on the point of support for care leavers. I want to make absolutely clear with regard to care leavers that our support is constrained by the previous Government’s Children (Leaving Care) Act, which starts the clock for them at 18. I think that I inadvertently said 16 earlier and want to make sure that that is absolutely clear and on the record. With that explanation and assurance, I urge the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
I am grateful to the Minister for that explanation. As I hope I explained, these were probing amendments to get answers on the record.
I shall follow up on two points. On Amendment 17 concerning16 and 17 year-olds, there are currently different rules for different benefits. There is the JSA rule and rules for other means-tested benefits. For the latter, you must be in a vulnerable group: for JSA, you must be facing severe hardship. Given that we end up with just one benefit, universal credit—plus a bit of council tax—will all the easements for 16 and 17 year-olds be reflected in the universal credit, or only some of them? As I understand it—I am not sure that I have my mind fully round this—there is currently a patchwork of provision, and it is a question of seeing whether that is brought forward in its totality.
That is the first question. I will pose a second one as I see that the team are working hard at the back there. In relation to definitions around residence, I think that the noble Lord said that “in Great Britain” is used for income support. Certainly, the text that I have is that you must satisfy the “habitual residence” and “right to reside” tests and be “present in Great Britain”. I accept that there is nothing sinister in it, but I am trying to understand what “in Great Britain” actually means. Does it mean physically here, and that you have to remain physically in Great Britain throughout the period for which you are seeking to claim? What about periods abroad for whatever reason? It looks to me as though that is a change of formulation. It may just be an attempt to simplify the language, but I am a little mystified by it. Perhaps the Minister can help.
Lord Freud
Yes. On the first question about all the rules, our intention, from the policy principle area, is to reflect the current rules. I am hesitant to make an absolute commitment because I am conscious of our work to smooth them out, and there may be some wrinkles. Wrinkles do appear in this area, surprisingly. The main principle and direction will be to take them over in their entirety in the universal credit. Clearly, to the extent that there are wrinkles, when we get to regulations—in some time—we will end up discussing them. We will be able to look at that and discuss it at the appropriate time, but that is the general policy intention.
The expression “habitual residence” is the one used in secondary legislation. That reflects what the primary legislation says, which is “present in Great Britain”. That is the relationship. Clearly, “present in Great Britain” now has a case-law framework around it to define what it really means. Can you pop over to Calais for lunch and still be present in Great Britain?
Lord Freud
There are some very cheap fares now; £12 return on P&O, I think. So maybe even on JSA you can have the occasional treat. Joking apart, there is a context and an understanding. We are not planning to change that. Clearly, when one abandons those key words it has a lot of ripple effects, not least in the social security treaty network that we have.
Lord McKenzie of Luton
I am grateful to the Minister for each of those additional explanations. I understand the point about the terminology being primary and the secondary legislation having these other descriptions. Could I ask the noble Lord about this current debate on the exportability of benefits and their components? How, if at all, does he see the universal credit fitting in to that debate?
Lord Freud
We expect the universal credit to be treated as social assistance, which is within the rules, so we can keep a reasonable amount of control over it. This is something that is causing great concern to countries throughout Europe. The European Commission is taking infraction proceedings against us. Twenty members have expressed strong concern. Fourteen member states have joined the UK in calling for a debate on the matter with a view to amending EU social security rules as soon as possible. This is a live and changing issue but currently, as we understand it—nothing is locked down in this area—we have designed the universal credit in a way that it is protected from some of the exportability concerns. That is our intention.
Baroness Hollis of Heigham
Could the Minister help us a bit further? It might be more helpful to have a letter on this later on. The benefits that he is bringing together have different rules—or they had different rules—according to whether they were regarded as coming within the free movement of labour and the support for this through some of the tax credit rules and some of the other benefits that were localised and related only to being present and so on. By bringing them all together, does this mean that, for the first time, universal credit, with a much bigger price tag—so to speak—on the individual entitlement, could now be freely exported to people who are coming to work in this country and whose family members are living in other European countries?
Baroness Hollis of Heigham
If the Committee will excuse me, I have one further point. One of the things that I thought was deeply unfair, but about which we could do nothing, was that a British citizen who took her child to Bangladesh, Pakistan or India for 12 weeks or so thereby lost her child benefit. However, if a worker from one of the eastern European countries came here, and their family had never even visited the UK and their wife and children and so on remained in their home country, they were able to continue to enjoy such benefits.
Lord Freud
I am slightly at a loss to respond, mainly because the noble Baroness has opened the door to such an enormous area. It is so complicated that I have spent quite a long time going through it. Yes, there are lots of anomalies because it is not a stable area of law, but the bottom-line point is we do not think that with universal credit we are putting ourselves in any worse a position than that we are currently in.
Lord McKenzie of Luton
I am grateful to the Minister for those explanations. At some stage may we have a little note which sets out the existing benefits and components that are going to go in to universal credit and what the exportability issues and access by non-residents are? That would be helpful to us. We accept that this is a moveable feast, but a note based on our best understanding as of today?
Lord Freud
Having checked with my officials, I am happy to provide a letter summarising the position. I have had a reasonably recent brief on it, and although I cannot remember the detail, I will get the salient points circulated.
Lord McKenzie of Luton
I am grateful for that and for the other explanations we have received. I beg leave to withdraw the amendment.
“( ) Prior to the implementation of regulations made under this section, the Secretary of State shall initiate and respond to a public consultation concerning the operation of the claimant commitment.”
Baroness Hayter of Kentish Town
I beg to move Amendment 21, which stands in my name and that of my noble friend Lord McKenzie. It relates to subsection (7) on the top of page 3; an important, albeit small clause, stating that,
“regulations may specify circumstances in which a person is to be treated as having accepted or not accepted a claimant commitment”.
Amendment 21 would add:
“Prior to the implementation of regulations made under this section, the Secretary of State shall initiate and respond to a public consultation concerning the operation of the claimant commitment”.
Central to the Bill, as my noble friend said in an earlier debate, is the twofold aim of supporting work for those who can work alongside providing security for those who cannot. Key to the former is the availability of work, as was stressed by the noble Lord, Lord Wigley, who is not in his place now, but also assisting those who can work back into the workforce after a period of unemployment, illness or injury or the raising of children.
As the Government have reiterated, one aspect of returning to work or entry to the workforce lies firmly in the hands of the potential employee or claimant of universal credit under this clause. This is not new and not simply from when my two noble friends were Ministers, but, as briefings provided by DWP have said, the requirement to seek or accept suitable work has long been part of the benefit system. Indeed, it has been a condition of receipt of unemployment benefit for 100 years, since 1911 when the system required claimants not to have left work without just cause and disqualified them if they refused to accept a suitable offer of employment. So, in slightly new wording, the Bill seeks to capture that responsibility and to enhance it by way of a claimant commitment. What is new is that for the first time, this covers those in work.
Commitment is an interesting choice of word. Any dictionary tells us that a commitment is an obligation, a promise that restricts one’s freedom of action. That is fine. The problem is that such a commitment appears one-sided. It lays obligations on the claimant but, unlike the National Insurance Act which offered a guarantee of unemployment insurance for a fixed period for those who paid contributions, we are told nothing as to what commitment the state will make to the claimant under universal credit. Yet looking or preparing for a job is meaningless if no employer is under an obligation, or indeed helped, to create or provide jobs. There is also no commitment for an employer to be willing to take on someone who perhaps lacks an established work record or satisfactory referees, or someone who may have lost their job—for example, in Sheffield because the Government refused the loan to Sheffield Forgemasters, or in Derby because the Government did not help with a vital contract there, as my noble friend referred to earlier this afternoon. A one-sided commitment will mean little if the Government do not work with employers as actively as they work with claimants. I hope I may be forgiven for quoting something I said at Second Reading. It is a quote from the Work and Pensions Select Committee in the other place, which called on the Government,
“to pay as much attention to getting employers to take on someone who has been out of work as they do to getting the claimant ‘work ready’”.—[Official Report, 13/9/11; col. 364.]
Those were wise words which I repeat today.
There is also no commitment that a parent will be better off in work, despite the voiced aim of the Government, due to the strong likelihood that support for childcare costs for working parents will be reduced. Modelling by Gingerbread and the Resolution Foundation suggests that under one of the Government’s options, to pay 70 per cent of childcare costs up to £125 per week for one child, a single parent on minimum wage who needs childcare for each extra hour of work would keep only 6p out of each pound earned for each hour over 24 hours per week. That is hardly a just reward, and certainly higher than the 50 per cent tax rate that so upsets Boris Johnson. With the option of paying 70 per cent of childcare costs up to £210 per week for two children, a second earner on £7.20 an hour would keep only 9p of each pound earned and would take home no extra cash at all from working beyond 30 hours per week.
We are still awaiting an announcement, perhaps very soon, on how childcare is going to work under universal credit. But how can a claimant commit to take a particular job if they are not sure that they would be better off after paying for childcare? The draft regulations state that if there is no suitable and affordable childcare that may, at the discretion of the adviser, be good cause for turning down a job offer, but it is not a certainty.
There is no commitment in the Bill that second earners will always be better off in work. Indeed, the DWP’s own impact assessment suggests that nearly 1 million second earners will face increased costs on entering work compared with the situation now. We do not yet know how many hours people will have to work in order to escape conditionality. The DWP briefing note published yesterday said that the department will set an earnings threshold above which claimants will not be subject to conditionality, so that single claimants will have to earn £212.80 before being free of conditionality. Lone parents with children aged 5 to 12 will be expected to work within school hours, but no limit has been set for the number of hours that they need to work. A couple, neither of whom has health issues or caring responsibilities, will both be subject to conditionality until they earn £425.60 per week between them, but we do not know what thresholds will be set for couples who do have caring responsibilities.
We do not know what thresholds will be set for those with health issues. Will those with disabilities be expected to find work for 35 hours a week before they can escape the threat of benefit sanctions? The briefing note suggests that the DWP will set what it calls “personalised thresholds”, but without defining what they are, claimants are being asked to sign up to a commitment when its details have not yet been written. The number of hours are to be set in legislation, but it is unclear when these will be decided.
Lord Freud
My Lords, these amendments would require a formal consultation on the operation of the claimant commitment and a yearly review on its impact. We will have the opportunity to discuss the claimant commitment in detail when we reach Clause 14, so right now I would like to make some specific points. Before I do that, I would like to make a more general response to some of the general points that the noble Baroness, Lady Hayter, made around the mutual obligations she said are not there and the argument that this is a one-sided commitment. Clearly, it is not one-sided. Part of the Government’s side of this is to pay the benefit to the claimant. The other part of it is to help claimants to find work through, in the case of Jobcentre Plus, adviser interviews and, more importantly, through the investment in the work programme which is, as noble Lords know, a very substantial investment in this country to help people back into the workplace. I will not go further on childcare costs, which the noble Baroness thought would be revealed very soon. Let us have some facts, and then have a discussion on them.
There is genuine mutuality, a two-sided commitment, in the claimant commitment. It is intended to be of benefit to claimants. It will provide all claimants with a single, clear statement of their responsibilities. This will ensure that claimants understand those responsibilities from the very start of their claim and help to improve compliance. Indeed, I am spending quite a lot of time to make sure that the commitment is helpful, understandable and specific to an individual. We are spending a lot of time and energy doing that because, up to now, similar measures have been rather vague and more general.
The content of a claimant commitment will include the hours the claimant is expected to work and it is drawn up between the claimant and the adviser in dialogue. The threshold for things such as the time spent on job search per week will be set according to personal capability and circumstances rather than being prescribed in legislation. The regulations set out only the maximum limit beyond which we will never apply conditionality, so some of the newspaper articles—I am not sure whether this was an upmarket favourite read or in a more downmarket one—apply to the maximum expectation. Clause 17 sets out the kinds of activities we might expect claimants to undertake, and we will get to it later.
We will ensure that the process of accepting a commitment is not onerous. For those claimants who have limited responsibilities—for example, where the only requirement placed on the claimant is to report changes of circumstance—the commitment will be an integrated part of the claims process and could be accepted online or via the telephone. For other claimants, primarily those we would require to look for work, their requirements will need to be discussed with an adviser face to face. They will be able to accept their commitment at their first meeting.
However, we recognise that there may be some very exceptional cases where the claimant cannot fulfil the requirement to accept a commitment: for example, where the claimant is suddenly incapacitated through illness or where the office we were expecting a claimant to attend is forced to close as a result of flood or fire. We will be using regulations under subsection (7) of this clause to cover such circumstances and enable us to treat the claimant as having accepted the commitment. Noble Lords may have spotted that we have responded to the Delegated Powers Committee and agreed to make these regulations affirmative for their first use.
My third and final point is that the claimant commitment is not an entirely new invention. It builds on similar products in the existing benefits regime, most notably the jobseekers’ agreement which JSA claimants must agree to as a condition of entitlement. Operationally, we already have good experience of the use and implementation of such products. Obviously we feel that the claimant commitment is an improvement on the jobseekers’ agreement. Most notably it will bring together all the requirements placed on the claimant, while the jobseekers’ agreement covers only some requirements. We intend to introduce and implement the claimant commitment in JSA in advance of universal credit, and we will, of course, be looking to learn from that experience in advance of universal credit. As I said, I will be able to explain more about this process later as we get to those clauses. I urge the noble Baroness to withdraw this amendment.
Baroness Hayter of Kentish Town
I thank the Minister for that reply, and, through him, I thank his officials for the examples they sent through of the individual claimant. I have only two points to make. First, the Minister said that part of the Government’s commitment is to pay the claimant. Many of these benefits are earned and contributed and are something that people have paid for, so it is not quite the act of generosity and philanthropy that he made it sound.
Secondly, on the individual threshold and the negotiation to make sure that the claimant commitment is tailored to particular needs, I echo a point that was made by at least two other noble Lords about the training of staff. Getting that right will be key to this and is important. As we go through, I look forward to further discussions on this. As I said, such a commitment is not new, but we want to make sure that it does what it is intended to do, which is to assist someone in finding their way into work or back into work rather than to be an excuse for sanctions as an end in themselves. I beg leave to withdraw the amendment.
Lord De Mauley
My Lords, this might be a convenient moment for the Committee to adjourn until 3.30 pm on Monday.
House of Lords
Railways: Brighton to London Line
(12 years, 7 months ago)
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Lord Berkeley
To ask Her Majesty’s Government whether they will safeguard Uckfield station and the rail track of the former Uckfield to Lewes route for possible future use to provide additional capacity to the main Brighton to London line.
Earl Attlee
My Lords, there are no current plans to issue safeguarding directions. However, the former Uckfield to Lewes route is safeguarded by both Wealden and Lewes district councils in their local plans.
Lord Berkeley
My Lords, I am very grateful to the Minister for that Answer. Is he aware that East Sussex County Council has plans to build a road across the formation outside Uckfield which would, of course, completely prevent the line being reopened? Furthermore, is he aware that British Rail Property Board, which, as the House will know, is being abolished, is trying to sell off all its surplus land, which includes the land of the old Uckfield station, which, again, is essential to the reopening of this line? Will he instruct the property board not to do that and to keep this and other similar pieces of land for future reopening?
Earl Attlee
My Lords, the noble Lord raised two points, the first of which is the road. One of the benefits of the proposed scheme is that it allows for the building of a bridge at a later stage should that be necessary. In fact, the scheme makes it easier to open the line, should that be necessary, because to the west of the proposed road crossing is a level crossing, which would be unacceptable if you wanted to open the railway.
The noble Lord asked about the BRPB and whether we would give it directions. No, we will not. It is not necessary. We are absolutely confident that nothing has been done that will compromise the ability to open the railway at some point in the future, should it be desirable to do so.
Lord Bradshaw
Will the Minister widen his consideration just beyond this line. There are a number of noble Lords who have in their areas of interest railway lines that could be reopened with advantage in the future. Surely the land concerned should be vested in Network Rail, which in July last year pronounced the Uckfield to Lewes line of strategic importance. There are many other such lines, of which one example is Oxford to Cambridge. This has been made almost impossible to open between Bedford and Cambridge because of building.
Earl Attlee
My Lords, it is important to ensure that disused railway lines could be reinstated if it was necessary. The difficulty with my right honourable friend the Secretary of State issuing safeguarding directions is that he can do so only if it is intended to reopen the railway line, not to make it possible. In addition, if he does give safeguarding directions, it can result in compensation to developers.
Baroness Whitaker
My Lords, does the Minister accept that his words “at some point in the future” are not very consoling to south-east commuters, of whom I am one, who regularly have to stand on overcrowded trains at certain times of the day?
Earl Attlee
My Lords, the noble Baroness makes an extremely important point. We all know that at peak periods, the commuter railway lines south of London are all running at peak capacity. One difficulty is that we cannot easily increase the capacity to the main line terminals. In the case of Uckfield to Lewes, one of the bottlenecks is East Croydon, so even if we increased capacity in that area on the south of the line, you would still encounter the bottleneck at East Croydon, and there is very little we can do about that.
Lord Dubs
My Lords, does the Minister agree that many people believe that the Beeching cuts represented an act of terrible vandalism in the previous century? There are local campaigns to bring back many small railway lines up and down the country that have fallen into disuse because of Beeching. Can the Government at least say that they will encourage local initiatives to help us restore those railway lines? They have environmental benefits and tourist benefits. If the Government were to say that that is their policy, many of us would be very grateful.
Earl Attlee
My Lords, it is great that there are local initiatives to reopen lines—to make my department think carefully about that—but there has to be a good business case.
Lord Dholakia
My Lords, does the Minister accept that Gatwick Airport is a very popular destination for those travelling between London and Brighton? The number of passengers has increased. Secondly, does not the maximum use of the line between Victoria and Brighton demonstrate the need to preserve an alternative method, especially when this expansion of the Brighton line is exhausted?
Earl Attlee
My Lords, I fully accept that the Brighton line is running at capacity, but this particular scheme will do nothing to relieve the bottleneck. For instance, the path between Sevenoaks and Orpington is just twin track and there are no more train paths available at the peak period.
Lord Rosser
Nearly all line reopenings that have taken place have proved successful and have more than met projected passenger figures. Can the Minister say whether other lines are being considered for reopening? In particular, what is the current position with the reopening of the Skipton to Colne route and the safeguarding of that route?
Earl Attlee
My Lords, the Skipton to Colne route is a little far from Uckfield and Lewes. I can point to the dualling of the Swindon to Kemble line, which is very expensive but will bring many benefits. I see the Leader of Her Majesty’s Opposition nodding her head enthusiastically.
Lord Berkeley
My Lords, I am very grateful to the Minister for the answers that he has given to various colleagues on my original Question. Lewes-Uckfield is in Network Rail’s route utilisation strategy, which was published last year, so a lot of people in Network Rail must think that there is demand there.
The Minister said that if the Secretary of State was asked to give some assurance or make some designation on certain routes, the developers might try to claim compensation. Given the time that it takes to develop any of these new railway lines—noble Lords have given different examples—surely there is a case for looking at the policy again so that routes can be safeguarded even for 10 or 20 years. It may take that time to get a new project off the ground.
Earl Attlee
My Lords, we do not think that that route will need to be opened within the next 20 years.
Legislative Timetable
(12 years, 7 months ago)
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Lord Soley
To ask Her Majesty’s Government whether they have any proposals to review and revise their legislative timetable.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, like every other Government before us, we intend to enact the legislative programme set out in the Queen’s Speech by the end of the Session. We have no plans to review that objective.
Lord Soley
Does the Leader of the House accept that there is concern in all parts of the House, including among his own Back-Benchers, about the amount of ill-drafted legislation being presented, resulting in Bills being withdrawn or changed? The situation has been made increasingly complicated, in ways which we all understand, by deals that have to be done within the coalition, which makes it more difficult to compromise after the event. However, does that not mean that it is vital that the Government go the extra mile to liaise with the other political parties and Cross-Benchers in this House to deliver an outcome that gets us through? Otherwise this House will be sitting on Christmas Eve, and we all know it.
Lord Strathclyde
My Lords, I was not aware of the noble Lord’s concerns. However, he is entirely right that the Government wish to go the extra mile with our own Benches, with coalition partners, Cross-Benchers and, indeed, with members of Her Majesty’s loyal Opposition, and that is precisely what we do. That is one reason why we spend so much time on legislation. Noble Lords will remember the 20 days in Committee that we spent on the PVSC Bill earlier this year. I wonder whether they feel that that time was well spent.
Lord Ryder of Wensum
Exactly two years ago, on 5 October 2009, at the Conservative Party conference in Manchester, the then shadow Leader of the House of Commons, now its Leader, Sir George Young, stated:
“Conservatives will legislate less, but we will also legislate better. So today I can announce that we will abolish the practice of automatically guillotining government bills”.
Why have Sir George and the Government broken those two promises?
Lord Strathclyde
My Lords, on the first point, I am delighted to tell my noble friend that in the first Session of the last Labour Administration, in 2005-06, 4,005 pages of legislation were enacted. So far this Session, which is longer than the 2005-06 one, we have passed only 1,392 pages of legislation. As for automatic timetabling in another place, that is up to the procedures there. However, I understand that most of that timetabling is agreed with the Opposition, very often without a vote.
Baroness O'Neill of Bengarve
Does the noble Lord the Leader of the House consider that it might help both Houses if legislation were drafted at an earlier stage? At present, I understand that departments of state receive a budget for parliamentary counsel to start drafting only when they have a guarantee that such legislation will be in the forthcoming Queen’s Speech. That is too late, and I believe that we might have better drafted legislation that we could deal with more expeditiously if that were changed. It does not require legislation to change it.
Lord Strathclyde
My Lords, I broadly agree with the noble Baroness. She will welcome the fact that the Government are committed to promoting other forms of scrutiny and have already published a number of Bills for pre-legislative scrutiny in this Session alone. We are currently scrutinising in pre-legislative scrutiny some six Bills, including clauses relating to individual electoral registration and electoral administration.
Baroness Royall of Blaisdon
In relation to the PVSC Bill, I suggest that noble Lords may wish to look at comments made recently by the noble Baroness, Lady Warsi, and the noble Lord, Lord Rennard, on the boundary proposals. Many noble Lords, and certainly colleagues down the Corridor, might think that we did a jolly good job in this House.
Does the Leader of the House agree that it is preferable for this House to sit in the same weeks as the House of Commons? We are two Houses but one Parliament. Can we have the noble Lord’s assurance that next year we will not sit during party conference weeks? To do otherwise is not good for the smooth running of business, not good for Parliament and not good for politics. Some of us in this House are proud to be politicians and we wish to participate in our party conferences.
Lord Strathclyde
My Lords, I have received a number of representations from noble Lords all around the House who are very opposed to sitting in September and would infinitely prefer to sit earlier in October and sometimes even later in July. That is something that it is right for the usual channels to discuss. Of course we are one Parliament. We are also two Houses. We have different rules and regulations and are not the same in that respect. We deal with legislation very differently.
Lord Maclennan of Rogart
My Lords, can my noble friend the Leader of the House give some indication of the progress of his consideration, and that of the Government, of the recommendations of his group on the working practices of the House, which gave some consideration to the programming of Bills in another place and made some suggestions that might help to ease the pressure and enhance the careful deliberation on these Bills?
Lord Strathclyde
My Lords, I am glad to say that the Procedure Committee will be meeting on 24 October and a number of the proposals made by my noble friend’s group, the Leader’s Group on Working Practices, will be debated and then brought to the House, hopefully for agreement.
Lord Grenfell
My Lords, would the noble Lord the Leader of the House agree that it would be a very good idea if the usual channels would not do what they did recently over the Armed Forces Bill and make an agreement that matters discussed on Report would not be voted on until Third Reading? This is not in keeping with what the Companion says, nor is it particularly acceptable that we should be told that this is a one-off that does not set a precedent. When you do something you set a precedent and the only question that is open after that is whether it is going to be followed. My fear is that this could be followed because we have opened a door that should have been kept closed.
Lord Strathclyde
I agree with the noble Lord: I have never accepted this line that something is not a precedent when it so clearly is, and I would not have used that argument. Of course, usual channels make agreements on a whole range of matters in relation to how we deal with business on a daily basis. That is for the benefit of the House as a whole and for good order in the House, and I think that was so with the recent decision that took place earlier on this week.
Apprenticeships: Dyslexia
Lord Addington
To ask Her Majesty’s Government what progress they have made in making apprenticeships available to those with dyslexia.
Lord Addington
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and draw attention to my declaration in the register of interests.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Government recognise that there are issues with delivery that can make it difficult for people with dyslexia to get the English qualifications that apprenticeships require. We want to ensure that all learning providers offer the right provision and support, and are challenging these providers’ representatives to see what more their members can do to make this work. I know that assessment arrangements for key skills are a particular concern to my noble friend Lord Addington and I assure him that this qualification will be phased out of the apprenticeship by the autumn of next year.
Lord Addington
I thank my noble friend for that Answer. I am sorry to have to return to this subject yet again. I hope the Government can give us an assurance that they are looking at finding a way through this and give us some sort of timescale. With that in mind, could the Government please tell us whether any precedent that is set in other parts of the education department is appropriate to be taken as a whole to this area? If you can get through the A-level system and to university, surely you should be allowed to get through the apprenticeship system.
Baroness Wilcox
My noble friend rightly repeats a worry and a question that he has over the fact that using the key skills system for the apprenticeships is extremely difficult. We are looking, as he knows, at how we can improve access. There is no doubt that to encourage employers to take as many apprentices as possible is good for our country and we want to use all the talents that we have. That means harnessing able and disabled students wherever possible.
Lord Martin of Springburn
My Lords, would the noble Baroness consider the fact that when I was an apprentice those who were most helpful to the apprentices in the factory were normally the journeymen over the age of 50 who had more patience and tended to mentor the young people, not only in their trade but in their behaviour and other matters? A large number of men and women are unemployed and retired and could be used for mentoring apprentices. Could this be considered by the Government? By the way, I welcome the Government’s action in encouraging apprenticeships.
Baroness Wilcox
I agree with the noble Lord. My father was an apprentice and he, too, became a journeyman, which is a wonderful thing. Perhaps we can find a use in that way. I will take this back and discuss it, and will come back to the noble Lord.
Lord Young of Norwood Green
Can the Minister guarantee that, given the importance of assisting all disabled people, especially the young, and the record levels of youth unemployment, there is sufficient budget to achieve this objective? If the Government have found a spare £250 million to spend on weekly bin collections, would it not have been better spent on encouraging more than the current 4 per cent of employers to provide apprenticeships?
Baroness Wilcox
I think the noble Lord knows that we are taking forward the work that he started and I hope that he is pleased with the way we are doing that. We are allowing the money that is needed to do this work, which is so important to us. There is no question that the bins come first.
Scotland: Civil Service
(12 years, 7 months ago)
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Lord Foulkes of Cumnock
To ask Her Majesty’s Government what responsibility the Cabinet Secretary has for the work of the civil service in Scotland.
Lord Wallace of Saltaire
My Lords, the Cabinet Secretary is also the head of the UK Civil Service, including those parts supporting the devolved Administrations in Scotland and Wales.
Lord Foulkes of Cumnock
I thank the noble Lord for that clarification. Is the Minister aware that the Conservative, Liberal Democrat and Labour leaders in the Scottish Parliament have all made official protests over Sir Peter Housden, the Scottish Permanent Secretary, advising the SNP Government on tactics and policy in relation to the break-up of the United Kingdom? Surely it is the responsibility of Sir Gus O’Donnell to say to Sir Peter Housden that he should be advising the SNP Government only on devolved areas and not on matters which are reserved to this Parliament, particularly those which are politically sensitive.
Lord Wallace of Saltaire
My Lords, I should of course declare a family interest. A relative of mine campaigned actively for Scottish independence and was executed by the English. I do not think that it is appropriate for a Minister to comment on the behaviour of a senior civil servant. I have read the Scottish press for the past week and I am well aware that the leaders of the three opposition parties in Scotland have written to the Cabinet Secretary. I will ensure that a copy of his reply, when it is ready, is placed in the Library of the House.
Lord Lang of Monkton
My Lords, is it not one of the strengths of the United Kingdom Civil Service that it is a United Kingdom body? In the past, great advantage has arisen for both sides when Scottish civil servants have served in United Kingdom departments and vice versa. Will my noble friend ensure that he makes every possible effort to prevent any diminution of this historic trend which might undermine the union?
Lord Wallace of Saltaire
My Lords, there are civil servants in Scotland working for the UK Government as well as civil servants in Scotland working for the Scottish Executive. This is a single Civil Service and there is extensive interchange. Indeed, the Permanent Secretary in Scotland about whom these complaints have been made has worked for a number of other institutions within the UK. Perhaps I might read the relevant parts of the Scottish version of the Civil Service Code, which was first issued in 2006. I shall quote from the 2010 version. It states:
“As a civil servant, you are accountable to Scottish Ministers, who in turn are accountable to the Scottish Parliament”.
A footnote adds:
“Civil servants advising Ministers should be aware of the constitutional significance of the Scottish Parliament and of the conventions governing the relationship between the Scottish Parliament and the Scottish Executive”.
Perhaps I may add that the next paragraph states that,
“‘impartiality’ is acting solely according to the merits of the case and serving equally well Governments of different political persuasions”.
Lord Sewel
To go a little further on this, generally, would it be proper for any Permanent Secretary at the Scottish Executive to give policy development advice to Scottish Ministers on constitutional matters when the constitution is clearly and explicitly a reserved matter? Secondly, is it proper for the Permanent Secretary of the Scottish Executive to make clear in public his personal views on a matter of controversial policy?
Lord Wallace of Saltaire
My Lords, on the second of those two questions, my understanding is that this was an internal blog. Noble Lords will have their views on the advisability of blogging. It was leaked to the Scottish edition of the Daily Telegraph. There might be a certain lack of wisdom there.
On the first question, once we have a devolved Government, although constitutional matters are reserved to the UK Government they are bound to be discussed within the Scottish Government. How far civil servants should offer advice is an important question. There is also a director-general for constitutional reform in the Cabinet Office.
Lord Butler of Brockwell
My Lords, will the Minister confirm that, just as it is the duty of the rest of the Civil Service to support the policies of the Administration that it serves, so it is the duty of the civil servants in Scotland to advise on the policies of the Scottish Executive?
Lord Wallace of Saltaire
My Lords, I entirely agree with that. It is important that the Civil Service working for the Scottish Government commands the confidence of Scottish Ministers of the day, regardless of their political complexion, just as it is for civil servants in Whitehall working for the UK Government.
Lord Forsyth of Drumlean
My Lords, I recall being given a wigging by the noble Lord, Lord Butler, when he was Cabinet Secretary and I was Secretary of State for Scotland, for issuing an official press release from the Scottish Office in which I used the term “tartan tax”. Although my Permanent Secretary approved it, the then Cabinet Secretary told me that it was inappropriate for a Scottish Office press release to contain something that might be politically contentious. I accepted that advice: he was quite right and I was in the wrong. So what on earth is going on when the Permanent Secretary for the Scottish Executive circulates what is described as an internal blog—a newsletter—to civil servants in the Scottish Office, which, among other things, advised going to see a play about an army of occupation in 11th-century Scotland which he said,
“does genuinely speak to our present condition as a nation”?
What on earth are this Government doing in standing aside? Surely it is the absolute duty of the Cabinet Secretary to maintain the impartiality of the Civil Service, which is a centrepiece of our constitution.
Lord Wallace of Saltaire
My Lords, the noble Lord will recall that on an earlier occasion the SNP strongly recommended that the population of Scotland go and see that dreadful film “Braveheart”, one of the most historically inaccurate films that I am aware of.
Lord McFall of Alcluith
My Lords, the Minister says that he should not criticise civil servants’ actions or behaviour. Why is that the case when the Permanent Secretary crosses a line that he should not? Will the Minister ensure that the Cabinet Secretary writes a letter to him, which is then placed in the House of Commons Library so that we can ensure that the proper constitutional arrangements are maintained in this country?
Lord Wallace of Saltaire
My Lords, I have already said that the Cabinet Secretary will write a letter in response to the three opposition leaders in Scotland. As the noble Lord knows well from the press, the Cabinet Secretary has already visited Edinburgh and a copy of the letter to those opposition leaders will be placed in the Libraries of both Houses.
Lord Stephen
My Lords, I first thank the noble Lord, Lord Foulkes, for raising this important and controversial issue. Is the Minister aware that most people in Scotland would far rather that senior civil servants, particularly such highly paid ones, spent their time improving the education system, health service and transport networks in Scotland, than pandering to the party political objectives of our First Minister? This is a serious issue. The core issue should not be the independence of Scotland but the independence, neutrality and objectivity of our civil service. When that is struck at, as has clearly happened in this instance, it is very worrying not just for Scotland but for all parts of the United Kingdom.
Lord Wallace of Saltaire
My Lords, I hesitate to get too embroiled in current political arguments in Scotland. The coalition Government do not agree with the SNP Administration on Scotland’s future but they are an elected Administration with a policy programme that their Ministers wish to pursue. In delivering that programme for Ministers, all civil servants must comply with the appropriate ministerial code.
Lord Soley
Does the Minister accept that there is a need for a policy on the United Kingdom? Many of us in this House are concerned that no one is speaking up for the advantages of keeping the United Kingdom united. If we are not careful, the arguments for splintering, dividing and breaking away will get very strong. The Government need a policy that advances the arguments in favour of keeping the United Kingdom united. Let us put our heads above the parapet and defend it.
Lord Wallace of Saltaire
My Lords, I entirely agree with that. This Question, however, was about the division between what is political and what is administrative; what it is appropriate for the Civil Service to do and what it is appropriate for politicians to do. I am a strong supporter of the union myself, although I am not a unionist fundamentalist, as the Scottish newspapers are apparently alleging some are. We are finding a new balance between the devolved Administrations and the London Administration. It is very important that we all engage in the active debate on what that balance should be, but that is a political activity.
Lord Selkirk of Douglas
Would the Minister accept the principle that it is extremely desirable that civil servants should remain impartial, especially in the context of a referendum on whether the United Kingdom should or should not remain in existence? Is it not extremely important that individual civil servants should be like Caesar’s wife—above suspicion?
Lord Wallace of Saltaire
I am never sure about Caesar’s wife. One of the things I have learned in government is that special advisers—political advisers—are a very useful way of maintaining the distinction between what is political and what is impartial Civil Service advice. That is a distinction that I think everyone here—and, I hope, everyone in Edinburgh—wishes to maintain.
Lord Hughes of Woodside
This is asking the wrong question. The question is not whether there should or should not be a political debate. We are all agreed on that. The problem is that of civil servants entering that political debate. That should not happen, ever. The Minister should make that absolutely clear.
Lord Wallace of Saltaire
I entirely agree with that. Discussions are under way to ensure that the Civil Service remains impartial.
Financial Services and Markets Act 2000 (Exemption) (Amendment No. 2) Order 2011
(12 years, 7 months ago)
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Lord Strathclyde
That the draft orders and regulations be referred to a Grand Committee.
Procedure of the House
(12 years, 7 months ago)
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Lord Strathclyde
That, as proposed by the Procedure Committee, and notwithstanding the normal practice of the House in the conduct of Divisions, any Member of the House with restricted mobility who satisfies conditions A and B below shall be entitled to vote in his or her place in the Grand Committee in any Division in the Chamber occurring while the Grand Committee on the Welfare Reform Bill is sitting in Committee Room 4A;
Condition A
The Member has notified the Clerk of the Parliaments of his or her intention to take part in the Grand Committee on the Welfare Reform Bill and to make use of this entitlement at least 24 hours in advance of the sitting of the Grand Committee in which he or she first proposes to make use of the entitlement;
Condition B
The Member is present in the Grand Committee room in order to be told by the Clerk by the time the question is repeated three minutes after a Division is called in the Chamber.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, the second Motion in my name on the Order Paper is largely self-explanatory but perhaps I may give some background to it. We are conscious that, if there should be a Division in the House while the Grand Committee is meeting in Committee Room 4A, and many Members with restricted mobility are taking part in that Grand Committee, it could be challenging for them all to make their way to the Chamber in order to vote within the eight minutes allowed. The Motion therefore seeks to address that concern by allowing Members of the House with restricted mobility to vote in their place in Committee Room 4A during sittings of the Grand Committee on the Welfare Reform Bill, subject to certain conditions, and only if they so wish.
A paper in my name setting out the proposal embodied in this Motion was circulated to the Procedure Committee during the Recess and received the unanimous support of the members of that committee.
I should emphasise that this entitlement would be a one-off, limited to the Grand Committee on this particular Bill, and deviating from the normal practice of the House in the conduct of Divisions only on account of the potential concentration of Members with mobility restrictions participating in the proceedings.
A Grand Committee on the Welfare Reform Bill presents a unique set of circumstances, in the light of which I believe that we should make what adjustments we can to allow all noble Lords, including those with mobility restrictions, to play a full part not only in the work of the Grand Committee but also in any Divisions that take place in the Chamber. That is what the Motion is about and I hope that the House will support it today. I beg to move.
Lord Foulkes of Cumnock
I hesitate to try the patience of the House, having had such a useful discussion earlier in relation to Scotland. I welcome this Motion from the Leader of the House, as it will be of great help to people of reduced mobility in the Grand Committee to enable them to vote in the House. However, it is unfortunate that we have had to go this way. It has happened only because the Government, and the government Chief Whip in particular, saw fit to force on this House that all sittings of the Welfare Reform Bill Committee should be held upstairs in Committee Room 4A. That has resulted in what I understand to be substantial expenditure of many thousands of pounds on that Committee, when a number of the sittings could have been held here in the Chamber of the House. That would have been much more convenient for all of us, much better for the public, much better for people of reduced mobility and much better in every way.
I was in the Grand Committee the other day and the possibility was raised, as it has been raised elsewhere, that if the Grand Committee itself were to ask that certain parts of the Bill be held on the Floor of the House, particularly those that relate to people with disabilities, the House might reconsider the question and have at least one or two sessions dealing with these particular items on the Floor of the House. There appears to be some time. On Monday, the House rose before six o’clock; on Tuesday, it rose before eight o’clock; and there are in the forthcoming programme days on which there are no matters of any great substance to debate compared with the Welfare Reform Bill. Therefore, it would be really helpful to all of us if issues of particular contention could be taken on the Floor of the House and if the House could be given an opportunity to reconsider this matter.
Lord Strathclyde
My Lords, I am very grateful for the noble Lord’s support of this Motion. I am glad to have that, but I cannot agree with him on most of the rest of what he said, mainly because the House has already decided that the Committee stage of the Bill should be in a Grand Committee. Earlier today we had a Question from the noble Lord, Lord Soley, about the amount of legislation that we have. It was decided a long time ago that, if we are to try to close at 10 o’clock at night, we need to put Bills into Grand Committee. There are many important Bills before us and the principle of Grand Committee has been well established.
I understand that there is also an advantage in going to Committee Room 4A. More Members can participate overall compared with the Moses Room; more members of the public who wish to view the proceedings can get in compared with the Moses Room; and, indeed, there are more places for wheelchair-using members of the public to view proceedings than in either the Moses Room or the Chamber. Moreover, there are more places for Peers in wheelchairs to listen to the proceedings in Committee Room 4A than there are in the Moses Room or, indeed, in the Chamber of this House. Therefore, at every level there is an advantage to being in Committee Room 4A and this added Motion will be of extra benefit to those who have mobility issues.
Health: Non-communicable Diseases
(12 years, 7 months ago)
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Lord Crisp
To call attention to the worldwide incidence of non-communicable diseases; and to move for papers.
Lord Crisp
My Lords, it is a privilege to open this debate on such an important issue, which sadly affects, or will affect, the lives of all Members of your Lordships' House, either directly or indirectly through family members. In talking about non-communicable diseases, I am talking about diabetes, cancer, cardiovascular disease, respiratory diseases and mental health. You may ask why I am drawing attention to this at this time, because these diseases have been with us for a long time. The reason is that this is a growing problem. It is now the biggest set of health issues globally and the fastest growing set of health issues in every continent, including those afflicted by HIV/AIDS. We are ill equipped to deal with them, and we need a new and concerted effort to confront them.
When I put forward this proposal for a debate, I actually wrote, “To draw attention to the worldwide epidemic of non-communicable diseases”. Somebody in the Table Office, quite rightly I guess, chose to change that to “incidence of non-communicable diseases”, reasoning that an epidemic is something that is spread and communicated. In the ordinary sense of the word, however, we are dealing with an epidemic. As far as we know, these diseases are spread not by infection or biological process but they certainly are spread by social processes. Diet, the availability of food—healthy and unhealthy—smoking, alcohol, lack of exercise, stress and social pressures, which may in turn lead to overeating, alcohol, smoking and so on, are all key factors in the major spread of these diseases. They are sometimes called the diseases of affluence but, as I will say later, they also strike the poorest in the world.
I am very grateful to the distinguished noble Lords who are taking part in this debate and I know that they are bringing great expertise and knowledge in the fields of mental health, diet, cancer and coronary heart disease. I am particularly delighted that my noble friend Lady Hayman is returning to speaking in the House. My task is to set the scene, identify some of the key strands and ask just a few questions of the Government. Let me start with the context of the diseases.
I am not going to give your Lordships a lot of statistics but will try to limit myself to a few which scope and shape the problem. Now, 60 per cent of deaths in the world are due to these diseases—twice the number due to communicable diseases. This has changed markedly in recent years and is growing fast. While these diseases are associated with ageing, as they are with affluence, it is noticeable that a quarter of the deaths from them globally are in people under the age of 60. If we look at the UK, a quarter of the deaths from these diseases are in people under the age of 70. They are what we in the Department of Health and elsewhere would tend to call, or have called, preventable deaths. If I might take one example to show the pace of growth, diabetes is one of the fastest growing diseases and there are now 300 million people in the world affected by it. It is estimated that there will be 500 million by 2030. The numbers are vast: in India, it is 52 million people; here in the UK, it is something like 2.8 million people and growing fast. I believe that the noble Lord, Lord Kennedy, will have more to say on this.
These diseases are often called diseases of affluence. Indeed, as societies develop more of these diseases become more prominent. In Europe, 85 per cent of deaths are now due to these diseases but they hit the poorest population in a society worst. If we think of those causal factors such as smoking, diet and so on, we can understand that. Globally, Africa is the fastest growing area for non-communicable diseases. This is not just about death. It is also about disability and dependency, and the long-term and economic impacts in both the treatment of these diseases and lost productivity. This has been authoritatively estimated as being of the value of $47 trillion over 20 years. One-third of that is in mental health and I am sure that my noble friend Lady Murphy will have more to say about that. What is also noticeable about those costs is that $7 trillion of them are in low and middle-income countries—in other words, it is disproportionately hitting their economies.
I have already alluded to the fact that perhaps the most significant issue here is prevention. Up to 40 percent of cancers, 80 per cent of type 2 diabetes and much of heart disease and stroke are preventable or can be delayed to the advantage of both patients and of costs. I have already mentioned the causes which, again, your Lordships can see in one simple statistic: 7 per cent of UK hospital admissions are due to or related to alcohol, diet, exercise, smoking and, of course, obesity. I know that the noble Lord, Lord McColl, will be talking more about obesity and diet but in the UK 25 per cent of people are now in the category labelled as obese. In India—this may be much more surprising— 45 per cent of children in its cities are underweight and 25 per cent are overweight, so they are being affected by both aspects of the problem. I read an extraordinary story in the newspaper, perhaps reminding me that I should not always believe what I read there, that something like half of the Indian Cabinet has had gastric bands fitted—in other words, surgical devices to restrict the size of their stomach to prevent overeating.
So we have here a picture of a set of diseases that are distinguished by applying to us all, rich and poor, in every country in the world. They are driven by social factors as well as others, require a massive focus on prevention and, crucially, cannot be handled in the same way as the diseases of the previous century. Diseases have changed since health systems were set up. Our systems in the UK, for example, based on hospitals and doctors, were set up largely around episodes of care coming in and being dealt with—being killed or cured, if you like—whereas another way of thinking about these non-communicable diseases is to talk of them being long-term conditions. Those conditions last, and we live with them, for many years. Over those years a typical patient will have some acute episodes where maybe they need to be in hospital, they will have a lot of self-care and they will get care from neighbours and social services as well as from health services. They need a completely different pattern of care from the ones that our systems deliver.
The South African Minister of Health, Dr Aaron Motsoaledi, says that incentives in all our systems are in the wrong place. In talking about diabetes, he asks why we pay only a certain amount to the people who prevent diabetes, much more to the people who treat diabetes and the highest amount possible to those who deal with the complications of diabetes. We have a system that incentivises the highest level of treatment as opposed to one that incentivises prevention. I know that there are no simple answers, no one has the answers and the situation is changing all the time, but here is a real opportunity for global learning and working with others around the world on how to deal with this growing epidemic.
This debate is timely. I was extremely fortunate to be successful in the ballot because two weeks ago, on 19 and 20 September, there was a UN summit on non-communicable diseases, which was attended by virtually every country in the world and 34 heads of state. This got very little reporting in the UK, which was understandable, given what else was going on at the time, including the economic situation, but I am pleased to have the opportunity with this debate to draw a little attention to this set of issues and to what happened at that summit.
The summit was important; it was part of a process of the world, as it were, starting to agree what will replace the millennium development goals when they come to fruition in 2015. As noble Lords will know, those goals were set in 2000 for reducing deaths from TB, HIV/AIDS and malaria, as well as reducing child and maternal mortality. These are wholly admirable and there has been a lot of progress. We always need priorities. However, one of the negative impacts of priorities is that other things are deprioritised, and over these years we have seen that as more money has gone into communicable diseases and, rightly, into child and maternal care, systems and resources have moved to those areas at the cost of non-communicable diseases. We have seen systems broken up as priority has been given to those areas. In due course, we will need to move beyond the MDGs and think about global targets and priorities for non-communicable diseases. I suspect that over the next two or three years there will be other debates in your Lordships’ House around these issues as the collective will moves towards some target-setting.
The UN summit identified six strands of action. The first was that this is not purely a health problem; it is a problem for the whole of government and society—industry, civil society and NGOs as well as health.
The second area was about reducing risk factors and creating health-promoting environments. Of course a lot of this is about individual responsibility for what we eat and drink but there is a lot that can be done through regulation and nudging, through lateral thinking and creativity. To take one terribly simple example, it is about how we design our buildings. Somebody drew to my attention the other day that, in most of our schools, children now stay in the same classroom all day. I was used to a system where I moved from one classroom to another, sometimes quite considerable distances during the course of the day. That meant that, just through the act of being at school, children were doing a certain amount of exercise. The design of a lot of our public buildings and spaces is important.
The second area is about reducing risk factors and creating health-promoting environments. The third is about national policies and systems. The fourth is about global collaboration on regulation, trade and development policies. The fifth is research and development, and the sixth is monitoring, evaluating and learning. The outcomes from that summit are that, by the end of 2012, the Secretary-General must report back to the United Nations Assembly on what is happening. This is starting to move.
The UK has a proud record in development, with what was achieved under the previous Government and, indeed, during the current Government. I am a great admirer of the work of DfID and the priority that has been given to it by this Government. The UK played an enormous role in the development of the millennium development goals. It is globally influential and can play an enormous part in giving this new agenda the priority that it needs.
The Minister knows that I am not, however, an admirer of the NHS Bill, in part because it does not put these long-term conditions and non-communicable diseases absolutely at the centre of priorities. If it had, integration of services would not be an add-on. We would see much closer integration of health and social care, and all the carers together. Nevertheless, there are many good policies in the UK on treating non-communicable diseases and dealing with this problem. I look forward to hearing the Minister say more about that.
I have four questions and challenges for the Government if they are to play this leading role. The first is aimed more at DfID than the Minister’s department, and I will understand if a reply comes later. There is a problem not just of prevention but of access to treatment. In Zambia, for example, 90 per cent of people with diabetes do not have access to insulin. This leads them to a major problem. The World Trade Organisation agreed in 2001 that, in the event of a public emergency, countries could apply for exemption to international patents relating to essential medicines so that they could be produced generically and, therefore, much more cheaply.
In the run-up to this high-level summit, the EU and the US and the pharma-companies argued that this should apply to non-communicable diseases. What is the Government’s position on this? What is the Government’s policy on the use of these exemptions of essential medicines relating to real crises and public emergencies in low-income countries?
The second question applies both to the UK and to the global situation. What do Her Majesty’s Government believe is the role of industry in non-communicable diseases, specifically the food industry? It must be involved, but I note that it is being given quite a prominent position. How will self-regulation work and what evidence is there that self-regulation will have the desired effects? Thirdly, what are the Minister’s views on the research that is required here, and how we can link together non-communicable and communicable diseases?
Finally, I notice that DfID uses MDGs as a method for determining what funds are awarded. Given that people in DfID understand as well as I do that this is the coming epidemic, what will be their role in exercising greater flexibility on this issue, and paying more attention to these diseases in the future? I beg to move.
Lord McColl of Dulwich
My Lords, I thank the noble Lord, Lord Crisp, for introducing the debate. As he has indicated, I intend to speak only about the terrible epidemic of obesity. It is the worst epidemic to affect this country for 100 years. It is killing millions, costing billions and the cure is free: eat less.
What a strange world. Half the world is dying of starvation; the other half is gorging itself to death. Obesity is a disease which wrecks the human body; it causes an enormous amount of distress, disease and suffering. In the United Kingdom there are over 2 million people suffering from diabetes as a result of obesity and a further 750,000 have diabetes but do not yet know it. So-called adult diabetes has reached epidemic proportions and now affects teenagers and young children. Parents seem to be unaware and unconcerned that their children are obese and there needs to be a great deal of education in this field.
Sport, of course, is important, but green spaces and sports centres do not influence the physical activity of children. Social inequalities are no longer a major factor in obesity. All children are at risk, regardless of family income or postcode, as the noble Lord, Lord Crisp, mentioned. Obesity leads to inactivity rather than the other way round. Obesity comes first. Reducing the intake of calories, rather than physical activity, is the key to weight reduction. Most obesity starts before children go to school; Professor Terence Wilkin and Linda Voss, of the Peninsula Medical School, have done a lot of work on the subject and found that 90 per cent of excess weight in girls and over 70 per cent in boys is gained before the child ever gets to school.
What else does obesity cause? The arteries become silted up with fatty material, called atheroma. As noble Lords know from their Greek studies, atheroma means porridge. It may be Greek porridge, but it is not Scottish porridge. It silts up the arteries and can cause heart attacks, strokes and blockage of the arteries of the leg, leading to amputation. Blindness is another result, as are high blood pressure and cancer. The excessive weight wears out the joints, so people need their knees and hips replaced. Obesity leads to cirrhosis. We always think of cirrhosis in terms of alcohol poisoning, but now the commonest cause seems to be obesity, so we have a big problem.
An even greater problem with this epidemic is that politicians refuse to admit that the cause of obesity is overeating. The Minister stated in Question Time on 12 September that his reason for refusing to believe that overeating was the main cause was that he was following the advice of NICE. Indeed NICE stated that:
“A person needs to be in ‘energy balance’ to maintain a healthy weight—that is, their energy intake (from food) should not exceed the energy expended through…exercise”.
This obsession that Ministers have had for some years that it is a balance between what you eat and how much you exercise is the crucial mistake. The real balance is between calorie intake and the total expenditure of energy in the body. We have to run miles to get rid of a pound of fat and, bearing in mind that as little as 25 per cent of the calories we eat go on exercise, where do the other 75 per cent go? They go on the numerous activities of the body over which we have no control. The heart beats several million times in a lifetime, the kidneys filter a vast quantity of blood—about 360 pints over 24 hours—and there are myriad other activities in other organs, such as the liver, pancreas, bones and the alimentary tract. Where do those who believe that the energy from food is all used up in exercise imagine the energy comes from to run the heart, the pancreas, the liver and so on? Perhaps they imagine they run on air—perhaps hot air.
What could the Government do to encourage the food industry, canteens and restaurants to serve smaller portions of food? There is a company called Cook, which has 50 outlets and prepares meals of the right size—meat, two vegetables and gravy. They are cooked, frozen and then stored. They can be heated in five minutes, giving an instant meal of the right size, the right quality and the right price.
During the war, we had no obese people. We had the right quantity of food and the right kind of food. The only people who were obese were those who used the black market, and we children used to point our accusing fingers at them. Surely most mothers who are making their babies and children obese do not realise the terrible damage that they are doing, condemning them to a life of hardship, suffering and early death.
Bearing in mind that most obese people cannot exercise because they are so overweight, all they have to do to lose weight is eat less. The noble Lord, Lord Soulsby of Swaffham Prior, has given me permission to tell your Lordships the following story. As you know, he cannot exercise because he is confined to a wheelchair, but he decided to take three stone of weight off. He used a really revolutionary technique: he took three stone of weight off by eating less. There are no mysteries, only mysterious people.
Telling obese people that they have got to exercise is demoralising because they cannot. Most of them realise that it is nonsense to say so. What hope is there of dealing with this very serious epidemic if Ministers deny its cause? Exercise is of course very important—it is ideal for the functioning of the heart and control of cholesterol, and it gives one a sense of proportion and well-being—but it does not deal with the obesity epidemic. Of course I recognise that it is not the job of politicians to tell people how to live their lives, but it is surely the duty of government to speak the truth and give a lead. By continuing to stress that exercise is the answer, politicians are misleading the public.
The message is absolutely clear: this is the most serious epidemic to affect this country for 100 years; it is killing millions and costing billions; it will wreck the NHS for sure. The answer is simply to eat less. When obese people reduce their weight, then they can begin to exercise to keep fit—but not to solve the obesity epidemic.
I have been to see the director of NICE to reason with him, and he has now admitted that its advice is wrong. I have also been to see the Chief Medical Officer, and she has admitted that the advice is wrong. So the Minister is out on a limb. When will he listen to the Chief Medical Officer and NICE?
Lord Kennedy of Southwark
My Lords, I congratulate the noble Lord, Lord Crisp, on putting down this Motion for debate today. He has had a distinguished career in health and related fields, culminating in serving as the chief executive of the NHS and Permanent Secretary at the Department of Health. It is a timely Motion that allows us to reflect on the four major chronic non-communicable diseases and the enormous problems and suffering that they cause. I agree wholeheartedly with the thrust of the points that the noble Lord has made.
The four major non-communicable diseases are, of course, cardiovascular disease, type 2 diabetes, cancers and chronic lung disease. As the noble Lord, Lord Crisp, said, 6 per cent of deaths in the world is a truly shocking statistic. I will speak briefly today about type 2 diabetes.
For many years I felt stressed, agitated, tired and run down at work. You could say that if you work for the Labour Party for 20 years, what do you expect? But in reality, I was an undiagnosed diabetic, having symptoms and developing complications but not getting the treatment that my body desperately needed. The point made by the noble Lord, Lord Crisp, about how we have an about-face, with more money going into dealing with the complications than the prevention, is absolutely right. I hope the noble Earl can address that in particular in his response.
Undiagnosed diabetics are an even more at-risk group. Enabling people to spot the signs, have a proper test, and seek medical care at as early a stage as possible, thereby offsetting some of the complications that can develop, is important for us all. Annual eye screening, regular checks on feet, and regular visits to a diabetes nurse are all welcome measures to deal with complications and enable sufferers to deal with the problems. They enable people with the condition to have a better quality of life and save the NHS considerable sums of money in treating otherwise preventable complications.
Complications such as heart problems, strokes, amputations and blindness are all things that we can work together to eliminate and to improve people’s quality of life. I am sure the noble Earl, in his response, will tell the House how much better prevention is than cure for sufferers of type 2 diabetes. Bearing in mind the huge number of preventable amputations that are still taking place today, something must be done to improve on this situation.
I am delighted that my noble friend Lord Collins will respond to the debate for the Opposition. Like me he has type 2 diabetes. In our previous lives, mine as the director of finance for the Labour Party, and that of the noble Lord, Lord Collins, as general-secretary, we worked and sat closely together. Having been diagnosed some time earlier, I saw the signs in my noble friend and was not surprised when he told me the diagnosis from his GP. Getting the diagnosis, advice and treatment has certainly considerably improved how I feel and enabled me to take positive steps to control the condition.
Soon after I was diagnosed, I joined Diabetes UK. I am sorry that my noble friend Baroness Young of Old Scone, who is the chief executive of Diabetes UK, cannot be with us today. She is at a board meeting, or otherwise would be taking part in this debate in your Lordships’ House. Diabetes UK is a great charity and has given me great advice, help and support.
I want to say congratulations and well done to Diabetes UK for winning the healthcare and medical research award at the charity awards this year for its diabetes roadshow, which goes out into communities to make people aware of the risk they are at. Through its campaigning and briefings, the research that it is funding, and the awareness and support that it gives, working with the Health Department, it is leading the way in ensuring that people can live fulfilling lives and avoid the problems and complications that diabetes can bring. Diabetes UK also has a fantastic care line, the only dedicated helpline in the UK, which enables sufferers to get advice and guidance when they need it.
I also pay tribute to another diabetes charity, Silver Star, which my right honourable friend, Keith Vaz, the Member for Leicester East, was instrumental in setting up. It raises awareness of diabetes and its complications, particularly in the Asian community, both in this country and on the Indian subcontinent. Diabetes is one of the conditions where prevention is the key. Proper information is needed to allow people to make informed choices about their lifestyle. Better diet, losing weight, and more exercise all contribute to dealing with what has become an epidemic across the globe but that can be avoided.
Again, I thank the noble Lord, Lord Crisp, for initiating the debate and look forward to the response by the noble Earl.
Lord Roberts of Llandudno
I thank the noble Lord, Lord Crisp, for introducing such a revealing and fascinating debate. I think I will need a consultation with my noble friend, Lord McFall, very soon.
At the meeting in New York in September, just a week or two ago, the interesting thing was that 192 countries were represented there. There were 30 world leaders and 100 Ministers, who all came because they thought this was such an important subject. Is it not great that we are able to have international consultations that bring in the most vulnerable countries as well as those who have the most ability and knowledge? Anything that hinders international discussion and co-operation is very unwelcome. We support all these international efforts and must continue to do so. Many people from the UK attended that event. I was interested to read that not only were representatives present to discuss the four main areas but that discussions covered many other areas that affect many people. The noble Lords, Lord McColl and Lord Kennedy, referred to those areas. Diabetes can lead to blindness, for example, so there was representation from organisations representing blind people. Palliative care bodies, Catholic medical missionaries, Help the Aged, the Alcohol Policy Alliance and neurologists were also represented. These areas all touch on the core of non-communicable illnesses that we are discussing. We have heard these described as western diseases. However, as the third world develops, these diseases are becoming more prevalent there, although in Africa diseases such as AIDS still cause the most concern.
The risk factors in the UK comprise tobacco consumption, excessive alcohol consumption, an unhealthy diet and a lack of physical activity. As has been said, these factors cause poverty, disability and death. However, they can be regulated, even though we often have battles with those who benefit from the sale of alcohol or tobacco. We need to find a balance. Perhaps we do not want to return to the prohibition era in the United States, but how far should regulation go? Drink is sold not only in one part of my local supermarket but in several parts. How can we regulate that? Binge drinking can result from such practices. Are we too sensitive and nervous about regulating alcohol?
I declare an interest as a teetotaller. Perhaps I should not be speaking in this debate. People say that drinking is acceptable as a social activity, but in many cases it is harmful, especially when it involves excessive alcohol consumption. We are engaged in a battle over tobacco sales and displays and warnings on cigarette packets. However, these industries provide employment. Do Parliament and the Government have an adequate dialogue with these people? They might respond more positively if we could discuss the problem with them in a different manner. There are still problems to be tackled. Once problems are tackled, you see a great change. My grandfather on my father’s side was a quarryman in Blaenau Ffestiniog. He and many of his friends died from silicosis and pneumoconiosis, as I note when looking at cemeteries in the Conwy valley. These diseases are caused by inhaling quarry dust and mining dust, but they can be prevented.
People have mentioned the need to monitor the content of food and the availability of various fitness opportunities. The forthcoming Olympic Games and Paralympic Games provide an opportunity to encourage and engender enthusiasm for keeping fit among people of all ages. They could increase participation in physical activity. However, we have not only a responsibility to ourselves as individuals but a responsibility to provide role models and examples to other countries to enable them to avoid making the mistakes that we have made in the past. The relationship between poverty, deprivation and ill health can be seen very clearly.
We have raised standards and improved lives and life expectancy. In Swaziland the life expectancy is 31.8 years and in Japan 82.6. So much could be done, and I am delighted—and I will stand by it all the way—that our overseas aid budget is not to be tampered with and that we will, I hope, reach 1.7 per cent of GDP for overseas aid during the lifetime of this Parliament. I can assure noble Lords that we on these Benches at least will not consider any diminution of that particular part of our budget.
I am a past chairman of Wales Water Lifeline. We were on the border of Iraq and Iran during the war there, and the children just wanted safe drinking water. That was all they wanted. There was also a high death toll in Rwanda due to unsafe drinking water. As I think I have said before in the House, Wales Water Lifeline provided water-purification plants and well digging in these places when cholera, diarrhoea and so on were rampant. One morning a fax came telling us that we had stopped cholera dead in our patch because of safe drinking water. That was wonderful.
I used to say, although I am not sure whether it is true or not, that if we could stop the manufacture of armaments just for two weeks, the money saved could provide pure piped drinking water for every family in the world. Is there a way of doing it? I am an eternal optimist and I would like to think that, if only we could take the measures that have been outlined by others and that I have touched upon in an inexpert way, we could in our lifetime halve many of the deaths caused by preventable diseases in the world today.
I thank the noble Lord, Lord Crisp, for introducing this debate.
Baroness Masham of Ilton
My Lords, I thank my noble friend Lord Crisp for bringing up this most important topic today in your Lordships’ House. He is an important ambassador, taking expert knowledge to the World Health Organisation and the United Nations and bringing information back to the UK. This is a timely debate for your Lordships as we will be debating the Health and Social Care Bill next week and non-communicable diseases need to be highlighted. They are a huge part of the health agenda.
My husband, who was a Member of your Lordships’ House and for a time Deputy Chief Whip, sustained several non-communicable diseases. He had several strokes, diabetes, Parkinson’s disease and a cancer tumour of his lower bowel. After 10 years of living with these conditions, he died of a respiratory disease—pneumonia—in an A&E department on a Sunday evening. My father died of coronary heart disease on a Sunday morning in Scotland when I was 18. The locum doctor thought he had a chest infection. He died half an hour later. Perhaps your Lordships will understand why I am so passionate to see correct diagnoses, care facilities improved, and the prevention of and research into the hundreds of different NCDs high on the agendas of countries across the world. In the mean time, however, the correct drugs should be available to help with the different diseases.
The UK, as a so-called developed country, has many improvements to make. Many people who watched the recent “Panorama” programme on the treatment of vulnerable people living in a care home near Bristol are still reeling from the horror of what they saw. Many people are surprised to learn that care assistants can get a job with no registration. They can be nurses who have been dismissed for dangerous and disgraceful practices and then be taken on as care assistants with no registration and no control. Surely all patients with non-communicable diseases who are vulnerable should feel safe and protected. I hope that the Government will take the safety of all patients very seriously. There have been far too many unkind and unacceptable incidents in recent years. That just cannot go on.
The Global Status Report on Noncommunicable Diseases 2010 states:
“Noncommunicable diseases (NCDs) are the leading global causes of death, causing more deaths than all other causes combined, and they strike hardest at the world’s low- and middle-income populations. These diseases have reached epidemic proportions, yet they could be significantly reduced, with millions of lives saved and untold suffering avoided, through reduction of their risk factors, early detection and timely treatments”.
The Global Status Report on Noncommunicable Diseases is the first worldwide report. It shows ways to map the epidemic, reduce its major risk factors and strengthen healthcare for people who already suffer from NCDs.
It is important that the World Health Organisation gets support from Governments worldwide. Of the 57 million global deaths in 2008, 36 million—or 63 per cent—were due to non-communicable diseases, principally cardiovascular diseases, diabetes, cancers and chronic respiratory diseases. As the impact of NCDs increases, and as populations age, annual NCD deaths are projected to continue to rise worldwide. Accurate data from countries are vital to reverse the global rise in deaths and disabilities. At the high-level UN meeting this September, world leaders unanimously adopted the political declaration on non-communicable diseases, agreeing that the global burden and threat of NCDs continues to be one of the major challenges for development in the 21st century, undermining social and economic development throughout the world. The director-general of the World Health Organisation, Dr Margaret Chan, told the meeting that NCDs are,
“the diseases that break the bank”.
Recommendation No. 6 is of the utmost importance. It is to:
“Recognize the urgent need for greater measures at global, regional and national levels to prevent and control non-communicable diseases in order to contribute to the full realization of the right of everyone to the highest attainable standard of physical and mental health”.
There are thousands of non-communicable diseases across the world, but there seem to be clusters in different parts of the UK. Two such conditions are spina bifida and leukaemia. Why should that be? There is a vital need for ongoing increased research into all non-communicable diseases. The health department, universities, pharmaceutical bodies, specialised units of experts and voluntary associations should all be working together to address the multitude of needs.
Diabetes has become a serious global emergency. The epidemic is now imposing a heavy dual burden of infections and non-communicable diseases on already under-resourced health systems. To date, no country has succeeded in turning around the figures. There are 50.8 million people with diabetes in India and 92.4 million in China. Africa will have the highest percentage increase in the number of people with diabetes over the next 20 years; 80 per cent of people with diabetes in Africa are undiagnosed. It is encouraging that countries are working together to try to find ways to stem that ever-increasing problem.
The Neurological Alliance is the collective voice of 80 brain and spine charities, representing the 8 million people in England with a neurological condition. They are often called the neglected 8 million. I hope that the Minister will see that every person diagnosed with a neurological condition has access to high-quality, joined-up services and good information.
Being a member of the all-party group on cancer and rarer cancers, I must make your Lordships aware of the great concern that exists about late diagnoses, especially of rarer cancers. The Government must be congratulated on setting up the rarer cancer fund, but research from the fund on the diagnosis of rarer cancers revealed that GPs are failing to diagnose almost a third of people with rarer forms of cancer at an early stage, damaging their chances of long-term survival. Late diagnosis is the major reason why cancer survival rates in England lag behind those in other developed countries. GPs should be rewarded for identifying the signs and symptoms of cancer when they are at an early stage and for referring patients for investigation; they should not be encouraged to delay referrals, which seems to be a worrying trend. I hope that the Minister will help over this serious matter.
I hope that the specialist voluntary associations which bring members’ needs to the Government’s and the public’s attention, and which lobby for better conditions, will be listened to. I have experienced at first hand with my husband’s condition the value of specialist nurses when they are involved in the treatment of patients. They support patients with conditions such as diabetes, strokes, Parkinson’s disease, MS, rarer cancers, and so many others. Not having specialist care would downgrade treatment and care.
Many improvements can be made for adults and children with non-communicable diseases here in the UK. I refer to services such as wheelchairs and prosthetics. Assessments of patients and the supply of aids and equipment can take months, if not years. Someone with a condition such as motor neurone disease needs help immediately. Sometimes patients languish in hospitals far longer than necessary due to the inefficiency of the system.
I end by asking the Minister whether he is satisfied with the training of doctors in pain control for thousands of patients with non-communicable diseases, such as arthritis, when pain can interfere with employment and the quality of life. Is it not the case that several pain clinics have had to close down for lack of funds? I hope that this debate will highlight some of the needs of people living with non-communicable diseases.
Baroness Hayman
My Lords, I have a double reason to be grateful to the noble Lord, Lord Crisp, for his introduction of today’s debate. Not only is it timely and important, it gives me the perfect justification for reversing my intention of keeping a dignified silence in your Lordships’ House until 2012. Instead, I shall use the opportunity of today’s debate to make my first speech after leaving office as Lord Speaker. This is also my first speech from the Cross Benches. In my 15 years in your Lordships’ House I have led a peripatetic life. I have spoken from the Front and the Back Benches, and from the opposition and government Benches. I fear that there is nowhere left for me to go. I look across to the Bishops’ Bench but the obstacles to that are many and insuperable, so I will probably have to stay where I am.
The reason why I feel justified in abandoning that intention of not speaking is because today’s debate chimes with so many of my interests—past and present. For four years I was the founder chair of Cancer Research UK. Having the privilege to do that made me aware of the burden of non-communicable diseases in the UK, particularly cancer, but also the growing threat and damage that those diseases cause in middle-income countries. The issue has already been raised today of their being in a way diseases of growing affluence. One needs look only at the increase in the incidence of lung cancer in China with the increase of smoking there. The noble Lord, Lord McColl, made us very aware of the dangers of diet leading to ill health in those major non-communicable diseases. It is important to recognise the role of public health in countries that are developing their health systems—public health in terms of surveillance, of education and of prevention.
There are often debates on whether health interventions in the developing world should be in terms of programmes or systems but, when DfID is looking at investment, the knowledge that we have gained in this country in terms of public health systems—based very much on having a comprehensive and truly national NHS—is an important gift that we can share with other countries. Another past interest as trustee of the Tropical Health and Education Trust also made me aware that it is not a one-way street when we talk about exchanging knowledge and healthcare professionals and practices with other countries. There is much that we can learn from the developing world in attitudes to medical problems and innovation. You need only look at the recent reports of how technology is being used in Tanzania to transfer by mobile phone the bus fare needed to women who have obstetric fistula. For them the problem is not the cost of the operation, because that is provided through charitable support to hospitals in that country; their problem is not having the bus fare to access that treatment. The innovations in technology being used through mobile phone networks can at a stroke end that problem. In that and many other areas there are possibilities to learn from other countries.
I should declare not a past interest but the only responsibility that I have taken on since leaving office in your Lordships’ House, which is as a trustee of the Sabin Vaccine Institute in the United States. That institute has as its mission:
“To reduce needless human suffering from infectious and neglected tropical diseases through innovative vaccine research and development; and to advocate for improved access to vaccines and essential medicines for citizens around the globe”.
Some noble Lords will have noticed that word “infectious” and perhaps considered that in another place I might be out of order because the debate introduced by the noble Lord, Lord Crisp, is about non-communicable diseases. I shall return to that in a moment because there are links between NCDs and NTDs that need to be explored.
Neglected tropical diseases are a tremendous scourge of the world’s poor. They are diseases of poverty. Of the bottom billion—the 1.4 billion people in the world who exist on less than $1.25 a day—virtually every man, woman and child will be afflicted by one or more of the seven most common neglected tropical diseases. These diseases have been disabling, disfiguring and blinding their victims for centuries. They have enormously debilitating effects on individuals and economies because they cause a lack of growth and well-being, not only for the patient but for the nation concerned. That is an important point to make to follow on from the noble Lord, Lord Roberts of Llandudno, in the argument about investment in overseas aid. At a time of global economic crisis, we need those middle and lower-income countries to be growing their economies, not for them to be ravaged by the effects of the diseases that make many of their citizens unable to contribute economically.
I said that I would deal a little with this interaction between communicable and non-communicable diseases. In many ways, neglected tropical diseases behave like chronic non-communicable diseases. They are chronic; their clinical manifestation—the weakening of the immune system and the resulting long-term disability—is very much the pattern of non-communicable disease. They have the same effects and therefore it is important that we recognise the interactions between them and the fact that those interactions are not only in the parallels that I have made but are in co-morbidities and often in the neglected tropical disease being the catalyst for the non-communicable disease.
There are many examples. Schistosomiasis is one of the areas in which the Sabin Institute is working on the production of a vaccine. We also know that urinary schistosomiasis is a leading cause of bladder cancer in Africa and the Middle East. Significant numbers of cases of anaemia are because of hookworm infections, and liver flukes account for a number of cancers. That connection is there and my plea today is that we do not only look at vertical programmes of health but look at the health systems that we are supporting in the developing world; and at the interaction of the sorts of social factors that have already been described, and of the communicable and the non-communicable diseases, in our attempt to end the scourge and the pain and suffering that are caused worldwide.
Lord Rea
My Lords, I congratulate the noble Baroness on returning to the Benches; she has shown that it will be greatly beneficial to all of us by the quality of the speech that she has just given. I would also very much like to congratulate the noble Lord, Lord Crisp, on securing this debate so soon after the recent high-level conference on NCDs that we have been talking about. If your Lordships will forgive me, I am going to use the abbreviation for brevity and to save tongue-twisting.
This topic has been growing in importance for more than 50 years, since communicable diseases came more under control. NCDs are now the major public health problem of the developed world. More recently, as the noble Lord, Lord Crisp, has pointed out, there has been a major increase in these diseases in the developing world, where they now cause around 60 per cent of deaths, which in total numbers greatly exceed NCD deaths in developed countries because of their greater populations. A higher proportion of these deaths in developing countries occur in people under 60 than in the developed world. The rapid increase of NCDs in the developing world was the main stimulus for the UN conference two weeks ago.
I come to this debate from a background in UK general practice but with a particular interest in public health. This was triggered by a three-year stint working with children in Nigeria where I came face to face with the importance of the environment and particularly nutrition in giving rise to childhood disease and high mortality—of course, in that case from communicable disease. I declare an interest as current chairman of the all-party Associate Parliamentary Food and Health Forum and as a trustee of the respected National Heart Forum, an NGO that brings together more than 50 organisations with an interest in the prevention of heart disease. Because the risk factors which lead to cardiovascular disease are very similar to those underlying most NCDs—smoking, faulty diet and lack of exercise—the National Heart Forum has recently widened its remit to embrace NCDs other than heart disease. It has published numerous reports, tool-kits and interactive programmes to help NCD prevention activities throughout the world, and two members of the National Heart Forum team were delegates at the New York conference.
NCDs are age-related diseases; they are degenerative in nature, but they do not affect everyone. Some people and populations develop these diseases much earlier than others. Some of these differences are due to increased genetic susceptibility; for instance, people of South Asian origin are particularly prone to diabetes and heart disease and those of West African origin are more likely to have high blood pressure when exposed to the typical Western diet of high salt, sugar and saturated fat. The external risk factors that favour their development are well known, as many noble Lords have pointed out, and affect many more people than the genetic causes. As has also been pointed out, these can be reduced or eliminated—in other words, these diseases are largely preventable.
Apart from the basic three risk factors I mentioned earlier—physical inactivity, faulty nutrition and smoking—other conditions that result from these factors are themselves risk factors; for example, as well described by the noble Lord, Lord McColl, obesity results from a combination of faulty diet with, to a lesser extent, lack of exercise. Obesity is a risk factor for some forms of cancer and particularly for type 2 diabetes, which often leads to cardiovascular, kidney and other diseases; high blood pressure can lead to stroke and heart disease. In the developed world, mortality rates from NCDs have come down considerably, partly through preventive measures, particularly tobacco control legislation, but also because it is now possible to palliate and control many of these conditions, though not to cure them, because of their degenerative nature. So we are left with many if not most of our older citizens, including quite a high proportion of your Lordships’ House, on some form of medication or living with a prosthetic limb or organ. This is very expensive and a major reason why the costs of the National Health Service continue to escalate.
In the past, heart attacks and stroke—or apoplexy, as it was known—were the preserve of the well fed and wealthy: but not any more—in fact the reverse is the case. The better off and better educated you are, the less likely you are to suffer from an NCD. If you do, it will hit you later in life than those at the other end of the social scale. They provide a prime example of health inequality.
This is even more the case in low and middle-income countries where diabetes and its complications are probably the most common form of NCD. There, the costs of treatment are borne mainly by sufferers themselves or their families as state health budgets are meagre. NCDs are therefore important contributors to poverty, as well as vice versa, and have a major economic impact. The reasons for the rapid escalation of these diseases in the developing world are well encapsulated in the words of Jean Claude Mbanya, the new Cameroonian president of the International Diabetes Federation. He said:
“We have moved away from our traditional cultures towards a Western lifestyle associated with prosperity. It is good, but it brings a trend to be more sedentary, not eat the right foods, not exercise enough, and to drink and smoke more”.
The political declaration agreed by the UN summit two weeks ago describes the problem with impressive thoroughness as well as the action needed in its 65 paragraphs and 36 sub-paragraphs. It correctly concentrates on prevention, emphasising the need for a comprehensive approach and, as the noble Lord, Lord Crisp, said, the need to create “equitable health-promoting environments”. It draws attention to the WHO’s framework convention on tobacco control, its global strategies on diet, on physical activity and health, and on reducing the harmful use of alcohol and its recommendations on the marketing of foods and non-alcoholic beverages to children. To my mind, its main benefit is that it flags up the importance of NCDs and puts them firmly on the international agenda. What I regret is that it does not come up with any suggested targets to stimulate action, such as the millennium development goals. That is put off to a future date. Some of the action suggested could well be taken to heart by our own Government—of course, some of it is. For instance, paragraph 43(f) includes the words:
“Research shows that food advertising to children is extensive, that a significant amount of the marketing is for foods with a high content of fat, sugar or salt and that television advertising influences children's food preferences, purchase requests and consumption patterns”.
That research was carried out in this country by Professor Gerard Hastings at the request of the Food Standards Agency.
Another paragraph suggests that Governments should:
“Promote … interventions to reduce salt, sugar and saturated fats, and eliminate industrially produced trans-fats in foods, including through discouraging the production and marketing of foods that contribute to unhealthy diet”.
Unfortunately, under pressure from industry, it does not mention how these interventions are to be made. Long experience in public health, backed by research, shows that voluntary agreements with industry or commerce to act in this way are usually ineffective. But our Secretary of State, Andrew Lansley, appears sincerely to believe that bringing industry on board through Responsibility Deals is the way to do it. This is a course of action that one delegate likened rudely to “letting Dracula advise on blood bank security”.
Lord May of Oxford
My Lords, I join with others in expressing my appreciation to the noble Lord, Lord Crisp, for initiating this debate, which, as others have noted, is very timely. I also think that I can confidently speak for the Cross-Benchers collectively in saying how warmly we welcome the noble Baroness, Lady Hayman, to our ranks. We are honoured and delighted to have her.
Five years ago I had the privilege of giving the opening address of the international meeting on parasitology. In that, I joined with others in emphasising the need for communicable diseases to go beyond their then focus on the big three—tuberculosis, HIV and malaria—to move on to the neglected communicable diseases of poorer countries; that is, diseases of poverty. There has been welcome progress in that area.
As this debate reminds us, the fact remains that roughly two-thirds of annual deaths today come from non-communicable diseases, 80 per cent of which are in poorer or middle-income countries—that is, four in five deaths. The recent high-level summit is the UN’s first meeting on non-communicable diseases. Perhaps more interestingly, it is only the second meeting it has ever had on diseases, the first being several years ago on HIV.
The meeting emphasised many of the complexities and issues. There is no question that non-communicable diseases are a big problem in poorer countries but just how big they are is not quite so clear. For one thing, the number of deaths from NCDs, which is emphasised by the World Health Organisation and many earlier speakers, tells only part of the story. Perhaps more relevant is the age at which disease strikes, the morbidity or mortality. Whether they are communicable or non-communicable is a more important statistic. When one looks at that statistic, the fact remains that communicable infectious diseases, especially HIV/AIDS in sub-Saharan Africa, remain the biggest burden in most poorer countries.
Several speakers parsed the word epidemic. To talk of an epidemic of NCDs clouds the fact that the rise in such deaths derives more from demographic changes— from populations increasing and people living longer—than from other factors, such as obesity and smoking, important though they are. Fifty years ago, the average life expectancy on this planet of a child born was 46 years. Today, it is a little more than 64 years. We cannot relate intuitively to the notion that average life expectancy is 46 years because half a century ago the gap between the developed and the developing world in life expectancy was 26 years, whereas today it has shrunk to a still disgraceful 12 years.
In this time, that shrinking simply means more older people, which means more deaths from NCDs. Projecting the trends we have today into the future is not easy. In a moment I will express some rather harsh opinions on the outcome of the summit, but one of the useful things that it did—at least, I hope it has—was to call for better monitoring and better data collection, which is welcome and appropriate.
Despite all these complexities and uncertainties, many people have pointed out some of the effective and important things that we could and should be doing to diminish the surge of non-communicable diseases in poorer countries. For one thing, the noble Baroness, Lady Masham, called for more research on NCDs. As a researcher, I would never fail to endorse a call for more research. One of the interesting facts about NCDs is that essentially all biomedical research is on diseases of the rich. A rough estimate is that some 90 per cent is on non-communicable diseases. The good thing is that as a result we have many drugs that are both cheap and effective against some NCDs. Particularly for heart problems, statins and aspirin have made a big difference in the developed world and are little used in the developing world. That is one opportunity.
We have heard some good and important facts about risk factors and what can be achieved by banning smoking in work and eating places. Taking such successes from the developed world into the developing world is not easy. In the lobbying that preceded this meeting, it was distressing to find tobacco lobbies from the developing world opposing implementation of the sorts of things that, despite their protests, we have managed slowly and haltingly to implement here. The active promotion by elements of the food industry of eating habits that lead to obesity—and thus increase the incidence of NCDs such as diabetes, heart problems and the things we have heard about—is already proving a rather intractable problem in the developed world. The noble Lord, Lord Crisp, was right in expressing some satisfaction in the good examples that we have set and our proud record of helping not just ourselves but others, but even in our own country encouraging self-regulation of the food industry is simply not working.
I amplify some of the good remarks made by previous speakers, particularly the noble Lord, Lord McColl. There is an authoritative recent book by a chap called David Kessler, who was the head of the United States Food and Drug Administration—the FDA—and dean of the medical school at Yale. It is rather a gloomy book with an upbeat title, The End of Overeating. I recommend it. With forensic precision, it documents some of the ways that the high levels of salt, fat and sugar in processed foods have come about and the consequent damaging effects on health, and even suggests that, like smoking, there are elements of addiction in some of these additives. It also documents how the attempts to address this problem are opposed by skilled lobbies, using many of the techniques and indeed some of the organisations that battled against regulating smoking.
Coming back to the UN summit, I will read a brief account of what went on before it convened from the journal Science:
“The game plan was for diplomats to craft a political declaration that their leaders would endorse in New York City, spelling out the extent of the problem and concrete actions”.
It goes on to say that what has emerged is,
“a watered-down document that is long on talk and conspicuously short on actions, with little guidance on who should do what to combat NCDs”.
It then goes on to say that, leading up to the meeting, the World Health Organisation identified four priorities, as we have heard: cancer, diabetes, cardiovascular disease and respiratory disease. It continues:
“The report also named four major risk factors: smoking, unhealthy diet, lack of physical activity, and alcohol abuse. Health advocacy groups called for the world’s governments to address them by … committing to targets such as reducing salt consumption or instituting tobacco taxes by a certain date … But a leaked 5 August draft of the declaration showed other interests getting in the way. According to sources who saw”,
it, including,
“editors at The Lancet, the British Medical Journal”,
and others, the successive modification shows how any,
“solid commitments were ‘systematically deleted, diluted and downgraded’”,
by the developed countries, including our people. It goes on:
“They were replaced with ‘vague intentions to “consider” and “work towards”’”.
In summary—I will read so as not to make it more verbose—we certainly need to move beyond the encouraging successes in the campaign against the big three infectious diseases and the promising extensions to other neglected diseases of the poor. We must include action against the incidence of avoidable deaths from non-communicable infections in the developing world. As others have emphasised, international summits and aid are important. Ultimately, it will devolve to national Governments.
Lord Kakkar
My Lords, I, too, join noble Lords in congratulating the noble Lord, Lord Crisp, on securing this important debate so soon after the United Nations summit on the problem of non-communicable diseases. In making my contribution, I remind noble Lords of my declarations of interest as professor of surgery at University College London and director of the Thrombosis Research Institute in London. Both institutions have active research programmes globally in the area of cardiovascular disease, the non-communicable disease that I will concentrate on.
As we have heard, non-communicable diseases now account for 63 per cent of all deaths—of the 57 million people who died in 2008. By 2020, some 52 million individuals around the world will die of non-communicable diseases. In 2008, some 25 per cent of the 57 million deaths were due to two important cardiovascular disorders: stroke and coronary artery disease.
We are making excellent progress in our own country in the management of patients with coronary artery disease and stroke. The national strategy addresses the 3 million of our citizens who suffer from cardiovascular disorders. That burden of disease was associated in 2006 with some 50,000 premature deaths in our country. It is estimated that by 2020 cardiovascular disease in the United Kingdom will be associated with some 58,000 premature deaths. Annually in our country, prescriptions for circulatory disorders cost the National Health Service some £2 billion. The total economic burden of direct and indirect costs associated with the management of cardiovascular disease in our country is estimated at some £30 billion a year. In the United States of America, the direct and indirect costs associated with the management of cardiovascular disorders come to some $400 billion a year.
It is in the developing world, in low and middle-income countries, that we see the fastest growth in cardiovascular disorders, one of the most important of all non-communicable diseases. Twice as many people in low and middle-income countries die of cardiovascular disease than they do of tuberculosis, HIV/AIDS and malaria combined. We can recognise the risk factors associated with the development of cardiovascular disorders in these developing countries. They are very similar to the risk factors that have been identified in our own population. High blood pressure, high cholesterol, lack of physical exercise, abdominal obesity, smoking and inappropriate diet are all important risk factors that can be recognised in these developing populations. As the noble Lord, Lord May, said, longevity ensures that populations are living longer in these countries, so they start experiencing cardiovascular disease.
The pattern of cardiovascular disease in low and middle-income countries appears to be quite different from the patterns seen in western countries. As we have heard, the onset of this disease is at a younger age in populations in India, in China, in Africa and in other important nations around the world. The pattern of disease in coronary artery disease, for instance, anatomically seems to be quite different, with disease more distally distributed in blood vessels, making it less amenable to the interventions that we provide for our patients successfully to treat coronary artery disease underlying coronary disease before it presents as a heart attack.
Of course, in addition to the pattern of disease and the early onset of disease, we also recognise in low and middle-income countries that the risk factors that are seen to be associated with the development of coronary artery disease are also associated with poverty in those countries. The high burden of cardiovascular disease in those countries is associated with increasing poverty in those populations.
If we look at the report by the World Economic Forum presented as part of the United Nations summit, we see that for low and middle-income countries over the period 2011 to 2025—a 14-year period—the economic loss to those communities associated with non-communicable diseases accounts for $7 trillion of lost economic output; for cardiovascular diseases it is some $3.76 trillion over that same 14-year period. That has huge impact in those nations in terms of avoidable economic burden.
If we look at this in terms of individuals, it is estimated that across Brazil, China, India, South Africa and Mexico, 21 million years of productive life are lost annually due to cardiovascular disease, a disease that is often attributed, as we have heard, to lifestyle choices, and of course to other environmental factors, but that is in many circumstances avoidable.
In driving economic benefit, therefore, there are important opportunities to be derived from targeting cardiovascular disorders and trying to promote strategies for prevention. Important public health strategies might be adopted around the world that could help reduce the risk of cardiovascular disease and its burden both for the individual and for society. Many of the strategies that have formed part of our national frameworks for targeting cardiovascular disease in the United Kingdom could usefully be adopted elsewhere in the world. We have heard during this important debate about the importance of prospectively collecting data to understand the distribution of risk factors for cardiovascular disease in low and middle-income countries, and in so doing better target our interventions that drive prevention on a population basis.
There are also some very exciting novel approaches to the prevention of cardiovascular disease at a population and an individual level. One of them is the concept of the polypill—identifying large populations and offering them; a pill that combines elements such as the statin that we have heard about from the noble Lord, Lord May of Oxford; aspirin, an agent that inhibits the activation of the blood cells in the circulation that come together to form small blood clots in the coronary arteries or the blood supply to the brain that result ultimately in a hard attack or stroke; an agent to drop blood pressure; and medications to control blood sugar. This polypill offered to populations, it is suggested, will reduce the impact of risk factors for the development of cardiovascular disease and therefore reduce the burden of that disease both clinically and, eventually, economically.
Another important approach is to target nutrition during pregnancy and in early life because it is well recognised that poor nutrition during pregnancy and in the first few weeks, months and years of life is associated with a heightened risk later in life for high blood pressure and the development of heart disease.
A third approach, which my own research institute is involved in, is the concept of vaccinating against atheroma, the disease pathology that was mentioned by the noble Lord, Lord McColl. The narrowing of the arteries is considered to be multifactorial, and there is some suggestion that an immunological response to the vessel wall as a result of chronic infection might play an important role in its pathogenesis, so vaccination across populations might be an alternative strategy to the prevention of cardiovascular disease. These are all novel ideas, with research being undertaken at many institutions here in the United Kingdom.
The research, whether conducted here and directed to populations elsewhere in the world, or conducted elsewhere in the world and directed to populations in our own country, is hugely important, because the burden of cardiovascular disease is a true global problem. In this regard, I ask the Minister what proportion of National Institute of Health research funding is directed towards the important problem of cardiovascular disease, both in improving the management for those with established disease and in the strategies targeted at risk identification and the development of biomarkers to understand better those at high lifetime risk for the development of cardiovascular disorders.
What proportion of our overseas aid budget is directed towards promoting research into cardiovascular disorders in low and middle-income countries? Potentially understanding the disease better in those nations, and therefore helping to prevent or treat it more effectively, could offer substantial economic benefits to those countries—benefits that are derived from such appropriate prevention and treatment of cardiovascular disease being directed to more beneficial areas of economic development.
Finally, I turn to the potential of using the Commonwealth—there was in your Lordships’ House some weeks ago a very interesting debate on the ongoing role of the Commonwealth—to develop a network between our own country and those with whom we have strong emotional and economic ties to pursue research into this important, chronic, non-communicable disease to determine whether that would both help us serve the people of those nations and ensure that nations on whom our own economic growth in the future is going to be dependent through export could avoid the economic and medical toll of cardiovascular disease.
Baroness Murphy
My Lords, I add my voice of thanks to the noble Lord, Lord Crisp, for securing this debate and for the opportunity that it gives us to talk about the scourge of these five chronic diseases. This is also an opportunity for me to express my personal admiration for his commitment in recent years to the cause of improving global healthcare through the improvement of the education of healthcare workers in developing countries. I wish all strength to his arm in that area.
Before I go on to talk about mental health—which will be no surprise to anybody because everyone knows that that is what I do—on behalf of the well rounded of this world I want to pick up on something that the noble Lord, Lord McColl, said. He is absolutely right that the obese should eat less and that we should all eat less—that is a message that comes over strongly—but I should like to point out that an obese individual losing weight permanently by eating less is as likely as a heroin addict coming off heroin. It is almost impossible. We must go back to the comments of the noble Lord, Lord May: we need population solutions; we need to support people to eat less; and we will need to tackle the food industry to do so. I am sure that the noble Lord, Lord McColl, will forgive me but it is an issue which is so easy to say but so difficult for many people to follow.
As we have heard, the World Economic Forum, which through the Harvard School of Public Health did the research on the anticipated costs of these five chronic diseases, found that mental health will account for one-third of the overall $47 trillion. I am not sure that I can take on board what a trillion is, but a huge amount of money—about one-third of the anticipated costs that NCDs pose—will be lost due to the dependence of people with mental health problems. As a result, countries and economies are losing people in their most productive years. About 70 per cent of lost economic output is due to mental illness and heart disease alone. That means that it is the largest burden of disease globally, measured by disability-adjusted life years; there is a greater economic toll globally from mental disorders than from any of the other major disorders. I suppose that that is not surprising, as the human brain is the seat of all higher intellectual, emotional and cognitive functions, which are essential for individuals to fulfil their fullest potential. Many of these disorders begin in childhood and adolescence—a critical period of life when an individual is being educated, establishing effective social relationships and laying the ground for a successful career.
Even in the least developed regions, where infectious diseases are prominent and still important sources of disorder and disability, mental and neuro-psychiatric disorders remain and are a growing source of disability. Suicide claims the lives of 800,000 people annually. That is clearly a gross underestimate; the way in which we collect suicide statistics is very poor. Over 90 per cent of the 24 million people suffering from schizophrenia reside in low and middle-income countries, and less than half those 24 million receive any treatment, even in developed countries. Some of the treatments available in near neighbours such as eastern European countries are pretty frightening. There are still some profound human rights abuses in some of our neighbouring and many developing countries, akin to the sorts of treatments that were available here in the medieval period. They are still happening in many countries. Countless millions of mentally ill people go untreated, suffer misery and poverty and, quite often, grave human rights abuses.
The World Economic Forum research was published just a fortnight before the UN meeting on non-communicable diseases, which was billed as a once-in-a-generation opportunity to tackle the predicted wave of the diseases. I cannot but express my disappointment that mental health was scarcely given a mention. It was not on the agenda and the final communiqué had three and a half passing mentions of it. Our Government were urged to promote mental health at this meeting but did not do so. How are we to get the countries of the world to take it seriously if our Government do not?
We can guess why these disorders were ignored. The problems of stigma, the rejection of mental health patients and the denial of how economically important they are, are all too frequent. But of course there are unique challenges associated with mental disorders because of the cultural influences in the manifestation of illness, the stigma which attaches to family and healthcare workers as well as patients, and pervasive misunderstandings about causes and appropriate treatments. Most diseases have straightforward diagnostic systems that are relatively impervious to the influence of culture and context, but mental disorders are hampered by shifting and imprecise diagnostic systems, a weak evidence base for their causality and a lack of awareness and resources for appropriate assessment. The treatment facilities for mental disorders are generally segregated from those for other health problems. That is a problem that goes back to the way in which European colonialists often viewed these disorders in the past two centuries and has resulted in very fragmented funding streams, haphazard training and care pathways. In many countries, the system of care is based around a single large, rare specialist facility, often in an old mental hospital—maybe one per country in an urban centre—which provides for a tiny fragment of the country’s mentally ill and separates people from the care of the community where patients and families live. There is a need for decentralisation of services to scale up access to treatment and care. We now have evidence-based knowledge of very effective treatments and delivery systems that can be adapted to meet the needs of different cultures.
This morning I was talking to Professor Martin Prince, who is Professor of Epidemiological Psychiatry at the Centre for Global Mental Health at the Institute of Psychiatry. I asked whether he could give me some up-to-date good examples of where some new cost-effective delivery systems were in place. He particularly wanted me to mention two excellent services. One is in Goa and is being delivered by community mental health workers, picking up antenatal depression across large numbers of people in the community. I understand that the cost of treatment there is less than the cost of a loaf of bread a day, so it is extremely cost-effective. There is another one around Rawalpindi in Pakistan, where a system of community mental health workers provides basic community mental healthcare across a very wide area on an algorithm that reaches a primary care physician for those where the provision of community mental health workers is uncertain. Again, that is extremely cost-effective, and it is very well researched to show how effective it is in bringing sustained benefit over a number of years. There are many examples such as those.
To echo the point made by the noble Baroness, Lady Hayman, we have a lot to learn from some of the systems that have been put in place. There are some very cost-effective, economical and simple ways in which to pick people up and treat them early, using people trained with specific tools over short periods of time. Nevertheless, these are isolated good examples that I can quote—there is an enormous gap—and the time for global action has come.
Sadly, while we know that mental health is integral to achieving social, economical and health goals of development, it continues to get short shrift. It needs to be included explicitly and independently as a key component of discussions and recommendations. The World Federation for Mental Health has set up a convention of working groups to aid the United Nations in developing guidelines, goals, tasks and outcome measures—all those United Nations phrases which I suspect sometimes do not lead to much action. However, we have to start somewhere. There is much good work going on and it deserves government support.
Finally, can the Minister explain why the Government, whom I will praise for having done so much to foster mental health as a priority at home, have not given a vigorous lead at the United Nations? I understand that this particular meeting wanted to get some action on smoking, diet and exercise—particularly smoking—and that there was some hard stuff to be done. I understand the importance of that, but it does rather play into the hands of the ignorant, stigmatising mental health yet again by denying its crucial importance to suffering and national economies. What plans do the Government have for putting right that neglect of mental health on an international stage? It is really one of those disorders that we cannot stand by and ignore.
Lord Collins of Highbury
My Lords, I, too, congratulate the noble Lord, Lord Crisp, on initiating this debate. I have huge respect for the work that he has done and continues to do in promoting better health here, and globally, through his experience of the National Health Service, his involvement as a fellow of the Institute for Healthcare Improvement and, above all, his leadership on global health. In his book, Turning the World Upside Down, the noble Lord highlights the most striking thing about health in the 21st century which is, he says, the way the world,
“is now so interconnected and so interdependent. This interdependence is changing the way we see health, creating a new global perspective and will affect the way we need to act”.
As we have heard, the UN conference has set out plans to tackle non-communicable diseases such as diabetes and heart disease, which now pose a greater global burden than infectious diseases. As has been said in this debate, lifestyle-related diseases are now the leading cause of death worldwide, killing 36 million people a year. Much of that toll, as we have heard, is in low and middle-income countries and that is where efforts must be focused.
However, as we have also heard, Europe today has a high prevalence of non-communicable diseases, such as cancer, diabetes, cardiovascular diseases, obesity disorders and musculoskeletal disorders, which together cause 86 per cent of deaths in the EU. According to the EU, the causes of these diseases can be attributed to the interaction of various genetic, environmental and, especially, lifestyle factors—including smoking, alcohol abuse, unhealthy diets and physical inactivity. Linked by these common risk factors, many of these diseases are, as we have heard, preventable. Spreading access to effective treatment more evenly across the EU would bring significant health and economic benefits to all EU countries.
At this point in my contribution, I feel I must declare an interest; in fact, I should say interests. When I read the WHO report on this subject, I realised that I was very much a victim of my own bad lifestyle. Five years ago, I stopped smoking and subsequently put on weight. As the noble Lord, Lord McColl, has said, I think that I ate too much. I then took on a very stressful job, as my noble friend Lord Kennedy said, as general secretary of the Labour Party. I discovered soon after taking that job that I had high blood pressure. As a result of further tests, I was told that I had very high cholesterol levels and to cap it all—my noble friend Lord Kennedy has already outed me in this respect—I was formally diagnosed as a type 2 diabetic. Early diagnosis and the excellent response of the NHS means that I have a chance of avoiding the worst consequences of these diseases, but would it not have been better if I could have avoided them in the first place? Early preventive action not only saves lives, it also saves money.
This is where I also want to amplify the conclusions we have heard from the WHO report, which focused on affordable actions that all Governments should take. First, as we have heard, there should be measures that target the population as a whole such as high taxes on tobacco and alcohol, and smoke-free indoor workplaces and public places, as well as campaigns, more importantly, to reduce salt and dangerous fats. I very much understood some of the comments about some agencies that are trying to stop us making progress in this area. Secondly, there should be other actions focusing on individuals such as screening and early treatment, which I have already mentioned in my own case. As I said in my maiden speech to this House, the personal is the political. It was the smoking ban that prompted me to stop smoking, while my local swimming pool provides an excellent service enabling me to deal with some of the stressful elements of my life—I go swimming every morning—and that screening led to my early treatment for diabetes. These are the factors that influenced my health. Unfortunately, no one yet has found a cure for my addiction to chocolate but maybe that will come.
A telling fact for me in the WHO report, as the noble Lord, Lord Crisp, said, is that the total cost for adopting these strategies in all low and middle-income countries would be £7.2 billion a year. In comparison, the cumulative costs of heart disease, chronic respiratory diseases, cancer and diabetes in poorer countries are expected to top £4.4 trillion between 2011 and 2025—an average of nearly £316 billion a year—according to the World Economic Forum. Many countries have already adopted the public health interventions that have seen marked reductions in disease incidence and mortality. The WHO monitored the progress of 38 countries taking steps to address cardiovascular disease at both population and individual levels over the space of a decade. All recorded substantial decreases in exposure to the risk incidence of disease and death toll; proof, if we ever needed it, that there are affordable steps which all Governments can take to address non-communicable diseases.
It is also a fact, as we have heard, that men and women in low-income countries are around three times more likely to die of non-communicable diseases before the age of 60 than they are in high-income countries. In the 2008-2013 EU health programme, the main activities focus on raising public awareness, improving knowledge and reinforcing preventive measures. To support these actions, it proposes networks and information systems across member states to generate a flow of information along with analysis and exchange of best practice in the public health field. As the noble Lord, Lord Crisp, has said, we need to promote a strong global approach involving integrated action on risk factors combined with the efforts to strengthen health systems towards improved prevention and control. I therefore urge the Minister to support positive intervention on this important global health issue and, as the noble Lord, Lord May, said, to have action—not just words.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I thank the noble Lord, Lord Crisp, for introducing a debate on an issue of such global importance. Indeed, I am grateful to all noble Lords who have spoken so powerfully and I welcome in particular the noble Lord, Lord Collins of Highbury, to his Front-Bench responsibilities. Non-communicable diseases, or NCDs, kill millions of people across the world every year. Indeed, they are responsible for three in five of all deaths and bring illness and disability to countless more. People with NCDs are high users of health services worldwide. In England alone, around 70p in every £1 spent on health and care is spent caring for people with a long-term condition, the majority of which are as a consequence of the so-called four big killers: cancer, cardiovascular disease, chronic lung diseases and diabetes.
I listened with huge interest to the noble Baroness, Lady Hayman, and I am so glad that she gave way to temptation by joining our debate today. To pick up on what she said, non-communicable and communicable diseases combined can both devastate the lives of individuals and hinder the growth of whole countries. This is particularly the case in developing nations, which face the double burden of communicable and non-communicable diseases. The true prevalence of non-communicable diseases is often hidden in a number of countries, simply due to the lack of data. I shall come on to that in a moment.
The noble Baroness, Lady Masham, is right: the scale of the challenge is huge but it is not insurmountable. We start from a position of collective international commitment to act. The UK, along with other Commonwealth countries, has called for global action. The recent UN high-level meeting about NCDs, which a number of noble Lords referred to, raised awareness of the issue and culminated in a unanimous declaration by all member states stating their commitment to taking concerted action to prevent, manage and treat NCDs. There is a helpful practical focus on tackling the common risk factors and the WHO has introduced the idea of “best buys” that can be introduced by all countries at little cost.
My right honourable friend the Secretary of State for Health participated fully in that meeting. I take note of the disappointment expressed by the noble Lord, Lord May, but at the same time the meeting was an important first step and a sound basis for sustained action in the years and decades to come.
In reply to the noble Baroness, Lady Murphy, I say that mental health is referred to in the political declaration and the UK supported this inclusion, but we wanted to ensure support for the primary focus to be on tackling the common underlying risk factors and wider social and environmental determinants for the four big killers. We do not in the least underestimate the burden of mental ill health. I hope that the mental health strategy is evidence of that, but we believe that, once we see benefits from this initial focus, there will be positive impacts on health and well-being far beyond these four disease groups, including mental health. The linkages in risk factors were highlighted in the UN declaration.
Global health has long been a priority for the UK Government. I can tell the noble Baronesses, Lady Masham and Lady Hayman, that we are trying, working through both the Department of Health and the Department for International Development, to help developing countries to build health systems that can meet today’s challenges, including the problem of NCDs but also all causes of ill health, especially for the poorest in society.
The UK also supports multilateral organisations. We are the third largest donor to the World Health Organization and we support initiatives such as the Global Alliance for Vaccines and Immunisations, GAVI, to which the UK is the largest contributor. Indeed, GAVI has immunised over 250 million children against hepatitis B and saved over 3 million lives as a result. I was interested in the work of the noble Baroness, Lady Hayman, in promoting vaccine uptake in the third world.
Whatever we do, though, I fear that we need to face one unpalatable fact: we will not be able to eradicate NCDs, unlike smallpox. There is no obesity inoculation. Prevention alone, important though it is, cannot be the sole answer either at home or abroad. Globally, we continue to work to strengthen health systems so that they can provide early, cost-effective care to all who need it, including the poor and vulnerable.
I mentioned that we are strengthening the capacity of countries to deliver improved health services. This is a key area of DfID’s work. So, too, is the health partnership scheme, which facilitates links between UK health institutions and professionals from developing countries to improve health outcomes by sharing skills and capacity building. We are also supporting the medical training initiative, designed for doctors from developing countries to benefit from training in the NHS and foster exchange programmes. I pick up the point made by the noble Baroness, Lady Hayman, that we can learn from others overseas.
I can tell the noble Lord, Lord Crisp, that we also support research on global health. For example, DfID has recently launched PRIME, which stands for “programme for improving mental health care”. That is a new multinational research programme that will focus on the development, acceptability and impact of mental health care packages for priority mental disorders. We have also supported research on tobacco, and I can let the noble Lord have further details on those programmes if he is interested.
The noble Lord asked me about access to essential medicines. This is a priority for us. We are supporting countries to develop domestic health financing mechanisms to ensure sustainable and long-term funding for cost-effective interventions to tackle NCDs, not just drugs but diagnostics and vaccines as well.
Health services have a key part to play in reducing health inequalities in terms of access and quality and working with others to improve health outcomes. We need health systems not simply to treat disease but to be reoriented towards preventative action. As ever, as the noble Lords, Lord Crisp and Lord Kennedy, reminded us, prevention is better than cure—preventing the onset of disease rather than merely treating the symptoms.
Our health reforms in the UK are designed to strengthen our approach to improving public health. On the Health and Social Care Bill we will debate how there is a new health improvement duty for local authorities, supported by a ring-fenced public health budget. This will allow local decisions on health improvement to be taken about the interventions that are most suited to local needs. We think that that will represent a very responsive system, more so than we have at the moment. We are committed to reducing health inequalities, which is why for the first time, subject to parliamentary approval, we are putting into legislation a duty on the Secretary of State for Health focused on the need to reduce inequalities. That makes this the strongest health inequalities duty we have ever had.
First and foremost in the UK, we focus on prevention through an integrated approach as the major non-communicable diseases share a number of common risk factors. We address the causes of the causes, the underlying wider social and environmental determinants. The conditions in which people are born, grow, work and age, their education, employment and housing—all these shape the health of individuals and communities. The Public Health Cabinet Sub-Committee, which we established, allows a wide range of Cabinet Ministers to agree how best to respond to the public health challenges. The importance of taking a whole-of-government approach is emphasised in the UN political declaration.
We are a world leader on collecting data on public health, and other countries draw on our approach to surveillance. WHO is looking now to strengthen global monitoring of the prevalence of NCDs and the common risk factors, which is essential if we are to establish the kind of meaningful targets referred to by the noble Lord, Lord Rea. In England we are putting in place a new strategic outcomes framework for public health at national and local levels—again, in an effort to benchmark these matters—which will be based on the evidence of where the biggest challenges are for health and well-being.
On the domestic front, we are making progress on some of the key areas of action highlighted by the UN and we stand ready to share those experiences with others. NCDs share common risk factors—tobacco use, unhealthy diets, physical inactivity and alcohol misuse. Our actions, particularly on tobacco control and reducing salt intake, have been highlighted by WHO as international best practice.
The noble Lords, Lord Rea, Lord May and Lord Collins, rightly lay particular emphasis on tobacco policy. The UK strongly supports the WHO Framework Convention on Tobacco Control, and we take it very seriously. Tobacco use is by far the biggest risk factor for NCDs, so effective policies to reduce smoking rates are essential. We urge all countries that are not yet parties to the treaty to sign up to it as quickly as possible, and equally we urge all those who are signatories to implement the treaty fully, as we have done in this country. The convention encourages parties to take comprehensive action on tobacco control. The Tobacco Control Plan for England, published in March, sets out a range of actions that will bear down on tobacco use.
The noble Lord, Lord Collins, mentioned salt. As he knows, we have made considerable progress in recent years by working in partnership with industry and others to reduce salt intake. It has gone down by about 10 per cent in the past few years, which has served to prevent over 4,000 deaths a year and saved the NHS a great deal of money. We are taking that work forward as one of the pledges contained within the Public Health Responsibility Deal.
As well as these initiatives, which aim to tackle population health here in England, we are working to strengthen our primary care system, putting the patient and their GP at the heart of service delivery. This will reduce the impact of non-communicable diseases through programmes such as the NHS Health Check, which I hope is of particular interest to the noble Lords, Lord Kennedy and Lord Collins. Our NHS Health Check programme assesses people's risk of heart disease, stroke, diabetes and kidney disease. It has the potential to prevent 1,600 heart attacks and strokes a year—so I am told—to prevent over 4,000 people a year from developing diabetes and to detect at least 20,000 cases of diabetes or kidney disease earlier. It is an important programme.
The noble Lord, Lord Crisp, asked me about the training and the DfID programme. He suggested that DfID was too rigid on this, and too focused on NGOs. Health system strengthening includes training as a key part of DfID’s work. Globally, we provide training through a number of different organisations, including government organisations, NGOs and our contributions to multilateral organisations such as the Global Fund to Fight AIDS, Tuberculosis and Malaria. DfID estimates that 25 per cent of its aid to health supports human resources, including training.
The noble Baroness, Lady Hayman, spoke about neglected tropical diseases. I am pleased to tell her that, only yesterday, the UK announced that we would support the final push to eradicate guinea worm from the world. My honourable friend Stephen O’Brien yesterday issued a challenge: we will increase our support to guinea worm eradication and fill up to one-third of the financing gap, provided that others step forward and fill the other two-thirds. This funding would form a vital part of the push from former US President Jimmy Carter to ensure that guinea worm is consigned to the history books alongside smallpox. We have already committed £25 million over five years to tackle schistosomiasis, or bilharzia.
The noble Lords, Lord Crisp and Lord Rea, and my noble friend Lord McColl expressed doubts about engagement with the food industry in this country. We start with the recognition that people’s lifestyle choices are affecting their health. The Government cannot address this challenge alone through central, top-down diktat. Everyone has a part to play, not just government but also business, industry, retailers, the third sector and individuals themselves. The Responsibility Deal is not a substitute for the development of government policy on public health; it complements it. We also know that businesses can reach consumers and deliver information in ways that other organisations, including government organisations, cannot.
My noble friend Lord McColl spoke very powerfully on obesity. I would like to think that he and I are not so far apart as he perhaps indicated. We are clear that the Government cannot tackle obesity alone. It is an issue for society as a whole. We all have a role to play. We will shortly be publishing our plans for how obesity will be tackled in the new public health and NHS systems in England, and the role of key partners. I could not help feeling, listening to my noble friend, that we might be talking at cross purposes. There is surely a distinction between keeping healthy people healthy—and the advice that goes with that—and helping obese people become less unhealthy. For the latter group, my noble friend’s advice is surely spot on. The NICE advice, I suggest, is relevant and accurate for the former group. Diet has an important role, and we are indeed working to improve it, reducing the consumption of fat, sugar and excess calories. However, it is not tenable to suggest that physical activity is not important. I wonder whether my noble friend and I can agree that physical activity helps to balance the energy consumed. I look forward to a little conversation with him about that afterwards.
The noble Lord, Lord Roberts of Llandudno, spoke extremely convincingly about alcohol. Retailers, producers and pubs ought to promote, name, market and sell their products in a responsible way. We need to see leadership from them to produce a radical and better balance between business interests and social harm. I am encouraged to tell him that there has been a wide sign-up to the first set of collective pledges under the Responsibility Deal. Networks are already developing the next tranche of pledges. Again, by working closely with industry, we help it to shoulder its responsibilities and can go further and faster in developing the initiatives that we all want.
The noble Lords, Lord Kennedy and Lord Collins, referred quite rightly to diabetes. Our national diabetes service framework, begun in 2003, has been reinvigorated this year by a new NICE quality standard for diabetes against which future care will be measured. Our national diabetic retinopathy screening programme has been offered to 98 per cent of people with diabetes; that is a great record. A National Health Check programme for 40 to 74 year-olds in England includes an assessment for those at risk of developing type 2 diabetes as well as cardiovascular and kidney disease. That programme has real potential to identify people at risk of diabetes early and prevent its debilitating complications.
Now, I have a few apologies to make; first, to the noble Baroness, Lady Masham, who asked me about the training of doctors for pain control. I do not have information on that in front of me, but I will certainly write to her. I shall also write to the noble Lord, Lord Kakkar, who asked me about the proportion of NIHR funding on cardiovascular disease and any research network that there may be on that disease in the Commonwealth. He also asked me about UK funding for research on cardiovascular disease in developing countries, and I can tell him that the Indian Council for Medical Research is collaborating on several research topics related to NCDs; indeed, there is a collaborative research programme in Mumbai studying the impact of nutrition in pregnancy and early childhood on the risk of heart disease in later life, and its intergenerational effects.
I hope that what I have said will reassure the House that we are taking action on all fronts to prevent and manage NCDs both nationally and globally. However, concerted action is needed across Governments and industry to meet the challenges of NCDs. The human and economic consequences of inaction are too grave for us all to do anything else.
Lord Crisp
My Lords, I said at the beginning that it was a privilege to introduce the debate, and it has certainly been a privilege to listen to it and to hear the wisdom, insights and wide range of interests of the noble Lords who have spoken. I think that we have all learnt something; I certainly have. It has been very good to have insights from the patients’ perspective as well as from clinicians and everybody else.
This will be a continuing theme. The UN summit to which we have all referred was described as the end of the beginning. Non-communicable diseases will now be a major global theme of those sorts of global meetings. In due course, we will no doubt start to see some targets being set. For the time being, however, I beg leave to withdraw the Motion.
Building Stability Overseas Strategy
(12 years, 7 months ago)
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Baroness Falkner of Margravine
To call attention to the Building Stability Overseas Strategy; and to move for Papers.
Baroness Falkner of Margravine
My Lords, nearly 50 years ago, John F Kennedy spoke a simple truth:
“The basic problems facing the world today are not susceptible to a military solution”.
He was speaking in the context of the Vietnam War. Since then, the United Kingdom has deployed its forces in the Falklands, Kuwait, Bosnia, Kosovo, Sierra Leone, Afghanistan and Iraq. In this century, we have seen the continuation of conflict in Iraq, Afghanistan and, recently, Libya.
It is right that I start this debate by paying tribute to our men and women in uniform who do so much to defend our country’s interests. However, we should also note with relief that we live in a significantly safer world. Inter-state war has declined considerably since the end of the Second World War. It is estimated that 29 million people died in declared wars in the previous century. Civilian deaths caused by despotic Governments were on an even more horrifying scale. The Soviet Union and China alone account for nearly a million deaths. Joseph Stalin found that:
“The death of one man is a tragedy. The death of millions is a statistic”.
For us, that comment represented a collective failure of our humanity.
In recent years, civil wars, too, have become less numerous and less dangerous. According to the World Bank’s world development report, there were 21 active major civil wars in 1991-92, but since then the figure has steadily fallen to less than 10 each year since 2002. Thankfully, the toll of battle deaths has also diminished. In 1988 there were more than 200,000 deaths per year, whereas in 2008 there were some 50,000. In the post-World War 2 settlement it has been the creation of institutions that has most powerfully militated against conflict.
Despite the rise in sovereign states from around 50 to nearly 200, the United Nations, the Bretton Woods institutions and the international judicial system have worked to diminish the violent resolution of disputes. The international community has succeeded in building institutions to cover the three essential characteristics for maintaining international order: an overarching body to maintain peace and security; a legal settlement system to adjudicate disputes; and an enforcement mechanism to carry out the will of the community should all else fail.
However, there are still too many states within the international system which lack the resilient frameworks that might safeguard against violence, hence the continuation of conflict. In fragile states, the Government are often illegitimate or weak, the rule of law absent and public institutions are at best ineffective or at worst partisan. To this mixture add poverty, ethnic, religious or ideological strife and chronic underdevelopment. When conflict breaks out, its spillover has consequences for all other countries in the region too, with the internally displaced and many millions of refugees in other countries.
Conflict’s costs are borne disproportionately by women. A recent assessment shows that 80 per cent of those displaced are women and children. Some 75 per cent of the world’s refugees are hosted by neighbouring states, with consequent destabilisation there, too. It is in this context that we can think about how a middle-sized European power such as ours can achieve the security of its citizens, as well as play a significant role in reducing the fallout from violent conflict for others.
We have started in the right place, with our commitment to reaching 0.7 per cent of GNI in development assistance. Committing resources to others at a time of austerity at home is a difficult argument to put to the public, but it is the right one. It is incumbent on the Government to find the most effective mixture of soft, smart and hard power that Building Stability can exploit. I am enthusiastic about this strategy’s focus. It is predicated on a simple hypothesis: to work early on identifying areas of risk and, where we can, to work upstream to prevent conflict and maintain stability. Once a crisis has broken out, for whatever reasons, we should use our diplomatic and other resources for a rapid response to ameliorate the situation.
The strategy seems to hint at another important element: that of staying the course for the longer term. Too often when a crisis occurs, the attention span of both policy-makers and the public is too short. A classic example of this is Afghanistan in the late 1980s, where, once the mujaheddin had repulsed the Russians, our attention turned elsewhere. Civil war took hold, 4 million refugees became Pakistan’s problem, while Afghanistan was seized by the Taliban and hosted al-Qaeda, with the subsequent war which has cost lives and treasure.
The World Bank’s research shows that recurring civil wars have become a dominant form of armed conflict in the world today. Every civil war that has begun since 2003 was a resumption of a previous civil war: 90 per cent of conflicts initiated in this century were in countries that had already had a civil war. Peace is often not enduring: fighting has also continued after several recent political settlements, as we have seen in Afghanistan and the Democratic Republic of Congo.
With that in mind, let me turn to the work of the stabilisation unit which is the engine room for this strategy. Will the Minister assure me that while the strategic defence and security review, which establishes the roof under which the unit sits, is due to be reviewed or renewed every five years, the ongoing programme work of the stabilisation unit will have a longer horizon? Building stability is a long-term venture, which cannot be picked up and put down according to the vagaries of five-year electoral cycles. Partners tend to have little confidence in our staying the course with them if we are subject to changes in priorities every few years.
Sound analysis is also key to the effectiveness of the strategy. Above all, conflict is predicated on a failure to resolve political differences peaceably, whatever the root causes behind the political situations. As a former foreign affairs analyst, I know only too well that crises come in two forms: they often blow up where you could see them coming but were powerless to change things; or they blow up in places where, if you had anticipated them, you could have done something at an earlier stage. Improved intelligence and horizon scanning will no doubt improve our capabilities, but I want to know more about what criteria we would use to decide the level of our involvement.
Let me use the Middle East as an example. It seemed that in our desire to engage with the regime in Bahrain, we mistook assurances of reform for substance. As these assurances have evaporated like the morning mist—if only they had been as pure—we have been wrong-footed. In Syria, as in Libya, our previous Government courted regimes that are and have always been—there are no surprises here—every bit as venal as history had predicted. If our future analytical capabilities are to be more robust, which I hope they will be, I hope the Minister will take away the thought that henceforth our political and diplomatic priorities should be based on a longer-term strategic framework of alliances than those of the previous Government.
This brings me to the criteria for deciding which crises to respond to and how. I accept that in most cases this will depend on how much we can achieve multilaterally and bilaterally, and the extent to which our own interests are engaged. However, the lesson here must be that we need to lay the ground for multilateral action upstream, working with those who are willing at an earlier stage, in a preventive mode. It is in this area that the civilian stabilisation group can be most effective.
This pool of personnel with expertise in institution building, economic recovery, security sector reform and other practical state-building roles is commendable and I applaud its success in support of the National Transitional Council in Libya. However, one gets the impression that it is more of a reactive force than a preventive resource. I would argue that if it were to shift its focus to more preventive work, it would provide the skills and training for peacemaking and crisis management later in the day. Turning to skills and training, are the members of this group to be given regular skills updates and capability upgrades to keep them at the top of their game? Deployment is often too late to serve as a good training ground. Will resources be dedicated to this role specifically?
I also want to highlight the importance for the strategy’s success of recognising the role of women. I acknowledge the references to United Nations Security Council Resolution 1325 and attempts to improve a gender focus. However, what is missing is a practical appreciation of how to mainstream gender. Women’s active and meaningful participation must be central to all post-conflict and peacebuilding processes. For example, the use of stabilisation response teams should acknowledge that at least one member of the SRT should have the knowledge and skills to address sexual and gender-based violence.
At a more strategic level, the BSOS steering board could take a proactive decision to promote government co-ordination in longer-term thinking about gender impacts on decisions. In Afghanistan, a decision was taken to draw down our commitment by the next election, a decision which I fear will not be conducive to stability. In the political calculations, was any effort made to think through the impact on Afghan women, who I fear will be hung out to dry in a Taliban-ruled Government of the future?
In Libya, where we have leverage here and now, what steps are we taking to encourage the National Transitional Council to work with women towards a new political settlement? Can the Minister tell us whether talks have been held with the group Women4Libya to see whether we can assist its campaign for rights? Can he also assure us that our generous support for UN Women will continue and that we will work with that organisation to ensure that UNSCR 1325 is given practical effect?
I welcome the strategy for its attempts to improve the effectiveness of our efforts and to redefine our priorities in the period ahead. I am the first to applaud a “whole-of-government approach”, as it is only when we pool our ample talent and our still-considerable resources that we can deliver best. My final concern, therefore, is one of accountability. When we have complex structures which are pulled together but remain autonomous, it becomes difficult to see where decision-making lies or where change can be effected. I would ask that one of the three contributing departments assumes overall responsibility for the strategy. We are talking here of work which will expend potentially billions of pounds, yet we cannot be sure whether we need to go to the FCO, the MoD or DfID for detailed scrutiny. My own preference would be for a named Minister to take ownership of the strategy—for a clear letter box to be identified and accounted for. I am delighted to see my noble friend representing the FCO in answering this debate, and I would be entirely happy for the FCO to be the lead department, but I am pragmatic in this regard as long as we have that accountability in a named Minister.
I am grateful for the opportunity to debate stability beyond our shores. In closing, let me recall to my noble friend the Minister the words of a Conservative Prime Minister, Benjamin Disraeli, who said:
“War is never a solution; it is an aggravation”.
Let us hope in this House that we can redouble our efforts to avert it.
Lord Black of Brentwood
My Lords, I warmly welcome the publication of the Building Stability Overseas Strategy and congratulate my noble friend Lady Falkner on securing such an early and, I hope, comprehensive debate.
We have seen in very sharp focus in recent years the consequences of societal breakdown in too many countries. It must be right to address this crucial issue and to do so, as this paper does, by drawing together expertise from across government and across disciplines.
I have always set great store by the axiom that prevention is better than cure, which in this field means that we should try to build stable and cohesive democracies before trouble strikes, rather than picking up the pieces afterwards. While the paper has an admirable amount to say about rapid response and the handling of crises once they have become established, I want to concentrate on what it describes as “upstream prevention”, which in the words of the strategy means,
“helping to build strong, legitimate institutions and robust societies … that are capable of managing tensions and shocks so there is a lower likelihood of instability and conflict”.
This paper sets out with great clarity the building blocks of that process. Society must respect human rights and the rule of law. Governments must win the consent of their populations, and political systems must have broad-based public legitimacy.
The “web of institutions”, in the paper’s phrase, that provide the basis of trust and confidence—the police, the legal systems, the banks, and religious and civil society groups—must function effectively. Political systems must be accountable and everyone should have a voice. All sectors of society—the paper highlights women in particular, as well as young people and diverse ethnic groups—must feel that they are part of society's “warp and weft”. Corruption and bad governance need to be rooted out. The strategy document rightly points to a range of states, including Somalia, Zimbabwe and Burma, where corruption is rife and is a breeding ground for conflict. And then, of course, most crucial of all is the question of economic growth. The strategy document highlights how that is an essential part of the glue sticking stable societies together.
Central to the achievement of all of these laudable aims is, in my view, the role in a stable society of a free and independent media. I should like to talk a little about that today and, in doing so, declare an interest as chairman of the Commonwealth Press Union Media Trust and executive director of the Telegraph Media Group.
The one slightly disappointing aspect of this otherwise excellent strategy is that it does not cover this issue, and the positive role that free independent media—print, radio and broadcast—can play, more centrally. There is, to be fair, some mention of it. The BBC World Service is highlighted, along with the excellent work of the British Council, as an example of how “soft power” can be deployed in building stronger societies. The media are also cited as being among the institutions that can help cement together riven societies. But their role is far more central and far more essential than that. The strategy sets out how:
“The most peaceful political systems are accountable, giving everyone a voice and trusted to manage difference and accommodate change”.
It adds that where elections take place,
“losers must have a clear stake in the future of their country and sufficient trust in the system to believe they are not permanently excluded from power”.
That is absolutely right. But what more effective way is there to secure this than through a vibrant and diverse media which can tackle at their heart that sense of exclusiveness which fosters instability? This is particularly true, as the paper highlights, among women.
The example of what has been achieved in Ghana is highly pertinent, where a move towards democracy could not have been achieved without a move towards a free and diverse media, particularly radio, which is the main medium for communication. In Ghana, it is worth noting, women play an enormously significant role in the media, reflecting their importance in society and the economy. Ghana is now one of only three sub-Saharan African countries which appears in the top 30 of the world press freedom index. This set of principles will be particularly important in the countries impacted by the Arab spring, specifically Libya.
The paper highlights how, from Sierra Leone to Afghanistan, we are learning that we cannot build stable states without a properly functioning justice system. But for a justice system to be effective, and to build confidence among the public, again a free media is crucial. Justice always needs to be seen to be done, and that means that someone independent has to report it and ensure accountability in the system. The same is true, as the paper points out, for the accountability and legitimacy of the security services.
There is also the issue of corruption. The strategy document admirably sets out how corruption, discrimination and violence against women or children,
“fuel the grievances of the population”.
I have to say again that a free press and bad governance do not coexist, because free media hold those in positions of power and influence to account. Establishing independent media that are prepared to undertake this watchdog and scrutiny role is vital to rooting out corruption and bad governance.
There is also the vital question of economic growth. Lack of economic opportunity is most often cited, as the paper points out, as a cause of conflict, particularly among young people who, often out of desperation, join gangs, rebel group and other criminal organisations. Again, the link between a free and plural press and economic growth is well established. At its bluntest and crudest level, you will never find famine in a country with independent media, a point underlined famously by the Nobel laureate, Amartya Sen, back in 1994. He argued, rightly, that gross disadvantage is not tolerated in democracies with a plurality of voice and free media which underpin them. Only recently, in 2008, a report from UNESCO, Press Freedom and Development, set out in painstaking detail the linkage between growing economic prosperity and press freedom. It is a link that cannot be ignored. I certainly recommend the report in that regard.
In all these areas, press freedom is crucial to achieving the aims of this strategy, to build stable, peaceful societies. I am pleased that the Government have committed in this paper to working with the media—among other groups—to impact on what it describes as the “dynamic amongst political actors”. That is absolutely right. I would like to highlight three practical steps in such a partnership, which are, as my noble friend said earlier, likely to be long-term ventures.
The first step is to invest in the training of journalists, and to harness the expertise that exists in this country, and in a number of other Commonwealth countries, to do so. This can be achieved by working with established in-country training institutions and experienced media organisations. It is crucial that this training is tailored to local requirements, as there is never a one-size-fits-all solution. Advice must always be sought from individuals and organisations who have a successful record in training, and not from government, or government-led organisations. That would be entirely inappropriate.
Secondly, I believe we must encourage the removal of barriers to the development of a free and independent media in countries that are at risk, including licensing systems of the sort that exists, for instance, in Zimbabwe, statutory press controls, and laws such as criminal libel, all of which make the establishment and work of a free press exceptionally difficult.
Finally, I strongly believe, following what my noble friend said earlier, that we should encourage women to play a more active role in the media, especially in developing countries. The strategy document highlights the key role of women in achieving stability in societies, and there could be no better way to enhance that than to make sure that they have an active voice in the media.
This is a very welcome initiative and an effective framework for the Government to move forward. I hope that the debate we are having today can help identify areas such as this, for further work and consideration, as we set about building, with our international partners, the stable societies which are vital for peace and prosperity across the globe.
Lord McConnell of Glenscorrodale
I, too, thank the noble Baroness, Lady Falkner, for securing this debate, not least because it is taking place at a particularly appropriate time. This year we have seen not only real progress in the international processes for dealing with stability, peacebuilding, post-conflict reconstruction and conflict prevention; we have also seen the temperature change. We have seen further progress in the United Nations and the Peacebuilding Commission, and in the different agencies of the United Nations, and a further momentum towards improvements in the way in which they support those trying to build stable societies out of previously conflict-affected states.
We have seen a tremendous report from the World Bank—the World Development Report—which provides a route map for all of us, particularly the international institutions, for the way in which they need to tackle this challenge. In recent weeks we have seen the European Union agree to review the Gothenburg Programme before the end of this year, through the Foreign Affairs Council, and so again make its contribution towards this end.
We have also seen real progress in individual actions that can provide momentum for those of us who believe that change is possible. We do not have to have conflict-affected states in a permanent state of conflict. There is a potential for change. We have also seen actions this year that challenge the pessimists.
There are those who say that there are countries where democracy is never possible; cultures where democracy will never grow and where independent institutions will never be respected. We have seen people across north Africa and the Middle East this year demand those independent institutions—transparent, democratic frameworks in which to live and develop their societies. That should hearten all of us and convince us that where that demand exists, we can help and support those countries, through existing international frameworks, towards stability, progress and growth.
These issues are important for us in this country because they affect us directly by the encouragement of drug trafficking and human trafficking and by providing hiding places—and, in many ways, growing places—for terrorism and other challenges to our security. But they also affect us because they are issues of global justice. It cannot be right that half the children in the world who die before the age of five will die in conflict-affected or fragile states. It cannot be right that not one of the fragile or conflict-affected states anywhere in the world is in a position to meet even one of the millennium development goals.
Stabilisation across the world is an issue for our security, but it is also an issue of global justice. That is why it should concern us. The ability of the international community to support conflict-affected and fragile states to a position of stabilisation, prosperity and growth is the single biggest development challenge of our time. In the period ahead, as we move from the millennium development goals to a fresh challenge set by the international community for the next decade and beyond, this particular challenge should be the one that the international community sets as its number one priority.
We all now know what is required: greater international leadership, and better in-country leadership, both from the elected Government and from the international community, working together. Stronger, firmer co-ordination is needed. I have heard Paul Collier say on a number of occasions that everyone talks about co-ordination, but nobody wants to be the one who is co-ordinated. But greater co-ordination among the agencies, and throughout the international community, is essential.
It is a long-term commitment, and it is important to stick with it, going beyond national-level support for countries coming out of conflict, and going deep into communities to resolve local conflict and long-standing issues of identity and mistrust. It is about changing international institutions in the way that they approach these issues, as highlighted by the World Bank. It is about coming together, compromising and accepting the leadership of others; not always looking after your own internal interests but working collectively as an international community to support societies in developing.
It is also about early wins in social and economic development. Yes, it is about the rule of law, democracy and better governance, but it is also about proving to populations that through jobs, and through educational, health and water improvement, there can be real change in local communities as a result of peace, and that conflict is never going to be the answer again. The United Kingdom is in a unique position to help with these challenges. We are not only a member of the UN Security Council and a leading member of the European Union; we are also active in the OSCE and a key participant in NATO, and we have the incredible breadth of the Commonwealth in which we participate across the world.
We also have a record on aid and a leadership—in recent years in particular—on these kinds of issues that gives us a unique position in which we can contribute to this international debate. I had the absolute privilege of serving as the Prime Minister’s special representative on peacebuilding for two years, from 2008 to 2010, serving with the noble Baroness, Lady Kinnock, and her predecessor, the noble Lord, Lord Malloch-Brown, in the Foreign Office, but working across the departments.
The UK was at that time, and I believe still is, leading the international debate on this issue. We need to ensure that in the United Nations, the World Bank and the European Union, and elsewhere, each of these institutions addresses this issue consistently, coherently, and with firm resolve, in order to ensure that no more time or resources are wasted. We must ensure that in every country where there is a UN mission, there is fast and effective action working with the elected Government of that country, to take the mission forward and ensure that the mission will not still be there in five, 10, 15 or 20 years’ time, as has far too often been the case in the past.
For every good example, such as Sierra Leone or Rwanda, where real progress has arisen out of terrible conflict over the past 10 or 20 years, there are bad examples too. I saw some terrible examples of lack of co-ordination or misappropriation of resource. One country in particular had had its national police force trained by nine different nation states from around the world, in different police techniques, in a three-year period. The Justice Minister in that developing country despaired of ever having a coherent set of police standards in her country that could be taken forward with the trust of the population.
I saw political stalemate in Nepal, Bosnia and elsewhere, where politicians were unwilling to compromise in the national interest, and the international community struggled to force them in that direction. So there are problems and bad examples, but there are good examples too. We have seen economic progress in Sierra Leone, and progress in terms of governance and the creation of institutions in Rwanda and elsewhere, as well as the participation of women in countries such as Rwanda, which now has the highest levels of women’s participation anywhere in the world. There is the potential for progress. We should highlight those examples at the same time as dealing with those that are falling behind.
I want to make three brief points before concluding. First, the UK needs to continue to practise what it preaches. I welcome very much this strategy and the new Government’s commitment to continue with the cross-departmental approach begun by the previous Government. I also welcome their commitment to the Stabilisation Unit, the Conflict Pool and the other mechanisms under the National Security Council that we hope will allow the UK to be as effective as it has been this year in Libya in this regard.
Secondly, I also want to see further progress on the international stage. We need to ensure that there is accountability; that the responsibility for action within individual states is clear; that there is fast and effective action and that the international community is pulled together by those of us who contribute to each of those institutions in every state where they have a mission. The regional organisations have a key part to play in the longer term. It is not possible for a body the size of the United Nations, the World Bank or perhaps even the European Union to play the sort of role that a neighbourhood, regional organisation can play in somewhere like west Africa or even in south-east Asia and elsewhere. It is important to build up the regional capacity. There are two great African proverbs. One is that rain does not fall only on one roof; it falls on several roofs at the same time and therefore conflict affects everybody in a neighbourhood. The second is that if your house catches fire, the first people to help are your neighbours when they bring buckets. You do not wait for the fire engine. Neighbourhoods are becoming increasingly important in this respect but help from the African Union, ASEAN and others is also vital.
My next point has been mentioned, so I will not labour it. However, it is fundamentally important that women should have a role not only as elected politicians, community leaders and mediators—they are not used enough in that regard by the United Nations and others—but also as entrepreneurs and leaders in every field of society. The post-conflict societies where women occupy leadership positions at every level are those that are making the most progress. That is not a coincidence; it is a reality that we should continue to encourage.
It is not possible or desirable for the world to continue to increase the number of peacekeepers year after year as we have done in the past 40 years. It is almost scandalous that every UN peacekeeping mission that has ever been set up is still in place. There are now 120,000 UN peacekeepers across the world. If a small proportion of the budget that is spent on those peacekeepers was spent on peacebuilding and post-conflict reconstruction and stabilisation, it would make a huge difference. The loss of human potential and the scale of human misery associated with conflict should make us strive more and more in that direction. I hope that as the Government take forward this strategy, they will do so with vigour, dynamism and enthusiasm. They will certainly have my support. The 21st century provides us with many challenges but it also provides us with an opportunity to make this strategy work in practice.
Lord Chidgey
My Lords, I, too, welcome this debate and congratulate my noble friend Lady Falkner on securing it. I am pleased to follow the noble Lord, Lord McConnell, who reminds those of us who take a great interest in the affairs of the developing world of the stark reality of the impact that instability and conflict have on developing communities in terms of poverty, sickness and the denial of basic rights of education and a reasonable life. This affects many communities, and not just African countries such as Sudan or the Congo. Afghanistan is a classic case in point. We should not forget the terrible situation that existed in the Balkans. Therefore, I welcome the debate and I welcome very much the Government’s paper, Building Stability Overseas Strategy, about which I wish to make some detailed remarks.
Part one concentrates on the reasons why we should engage in conflict prevention and why stability matters. As recent international events have clearly shown, there is little to disagree with in this assessment. Part two of the paper, however, is where the meat of the argument, discussion or analysis—whichever way you want to put it—lies, dealing, as it does, with the concept of early warning, improving our ability to anticipate instability and conflict triggers. It deals with rapid crisis prevention and response, improving the ability to take fast, appropriate and effective action to prevent crises developing, spreading or escalating. The final section deals with investing in upstream prevention, building strong institutions and robust societies in fragile countries able to withstand and manage tensions and shocks, reducing the potential for instability and conflict. That should be underpinned—it must be added—by democratic accountability, locally and nationally.
Within the concept of early warning, the production of a watch list of fragile states and an early warning report based on a Cabinet Office six-monthly review of countries at risk, and assessed by the building security overseas steering group for overall efficacy, are all appropriate measures. There is no question of that. They do, however, suggest that previously departments of state went about conflict prevention in a more ad hoc and unco-ordinated manner. The danger is that these high-level initiatives will not be followed by positive action at working level. In the context of early warning there is a need to ensure that evidence gained from these initiatives is acted on in a timely manner. For example, the UNPD produces a monthly early warning report, which originates in the field, on countries at risk. Rarely is it acted upon in a timescale that prevents further deterioration of a situation. To quote senior officials,
“there is often too much process and not enough progress”.
Therefore, my first concern that I ask the Minister to address relates to the processes that will be established to ensure that departments, particularly DfID, are recording and then working on indicators produced by the early warning report and annual horizon scan. Too often these outputs are read and then just filed while existing planned programmes continue stubbornly on their way unaltered and unaffected.
As regards crisis prevention and response, the BSOS recognises the speed at which events can change and stresses the UK’s comparative advantages in adaptability, speedy action and whole-government approach. That is very worthy. The creation of a £20 million annual early action facility within the Conflict Pool seems to underline this. Given the anticipated greater use of stabilisation response teams, as first deployed in Libya earlier this year, can the Minister provide details of the composition, training and availability of personnel for these SRTs? Are they to comprise serving civil servants from government departments and military personnel drawn from the MoD? Will they be held on the strength of the Stabilisation Unit or will they be called on as required? How are their training, availability and fitness for deployment to be monitored? Will deployable civilian experts or civilian stabilisation groups be deployed or will it be a combination of both? Again, how will they be recruited and trained? Is the Minister confident that the core team at the Stabilisation Unit is of sufficient size and has the right expertise to deal with rapidly changing scenarios, and that the right mix of DfID, MoD, FCO and Cabinet Office staff will be maintained? In this regard, are these civil servants and military personnel to be “double hatted” to ensure that we get value for money in periods of calm between crises?
The Minister will be aware that in its responses to the BSOS document Saferworld suggested that the Government could build on their multilateral aid review and the BSOS by evaluating the impact that multilateral institutions have on prospects for promoting peace and sustainable security. Saferworld has also suggested that the scope of the Government’s analysis of multilateral institutions should be expanded beyond those with which the UK has an aid relationship; for example, to the UNSC, the African Union and the OSCE. What is the Government’s assessment of the usefulness of such measures, and are they considering implementing them?
A number of noble Lords have mentioned investing in upstream prevention. Upstream conflict prevention requires, in part, developing a thorough understanding of what generates conflict within or between communities. As Saferworld points out, responses need to address both underlying drivers of conflict and the factors that lead to it becoming violent. The BSOS considers that work to prevent conflict is most likely to succeed when it marshals diplomatic effort with development programmes and defence engagement around a shared integrated strategy.
The Government are providing more resources for upstream prevention through the Conflict Pool, which provides joined-up delivery across DfID, the MoD and the FCO. Stronger results focus and improved programme management will be introduced as part of this process. As I understand it, some £1.25 billion worth of funding will be provided for the BSOS, which will include investing in partnerships beyond fragile-state Governments in, for example, key groups such as local government, the private sector, faith groups, civil society and the media, as previous speakers have discussed.
The to-do list includes work to reduce corruption and enhance the role of women. It also includes ensuring that the defence engagement strategy sets out clearly how a commitment to direct more non-operational defence engagement to conflict prevention will be implemented. The BSOS also provides an opportunity to set out the Government’s analysis of how the broader international aid effectiveness agenda impacts on conflict and fragility and how it can promote dialogue on ways in which aid can support peace and stability in fragile states.
As many noble Lords will know, the Government have been co-chairing the International Dialogue on Peacebuilding and Statebuilding that will feed into the Fourth High Level Forum on Aid Effectiveness in Busan. The UK is seen as a world leader in this area and in many other international initiatives that are taking place. Do the Government agree that a vital aspect of their programme and that of the Building Security Overseas Strategy is investing in the development of democracy in fragile states, investing in strengthening Parliaments and in their capacity to hold Executives to account, and in monitoring the delivery and effectiveness of aid projects?
With regard to the overall extremely worthy, not to say challenging, to-do list, can the Minister elaborate on how engagement with civil society and faith groups and how efforts to reduce corruption will be undertaken in practical terms? What procedures are envisaged for facing host Government opposition and observing key, defined and stubborn local ownership practices? How will they be monitored and evaluated?
We seek clarification of the monitoring and evaluation and results framework that the BSOS will use to assess the long-term impact of actions taken to prevent conflict upstream. These actions frequently concern changes in institutional and individual policies, along with attitudes of behaviour, which are very difficult to measure. How do the Government plan to overcome these problems?
In its response to the BSOS report, Saferworld stresses that a key aspect of evaluating upstream conflict prevention should be the measurement of public perceptions of safety and security in conflict-affected and fragile states. It also sees a need to include an assessment of how well conflict-affected communities have been included in the planning, implementation and monitoring of the UK’s conflict-prevention work. The BSOS does not set out how measurement of upstream conflict-prevention efforts or its rapid crisis-prevention and response activities will be achieved. It will be helpful to know what criteria and what indicators will be used, and which organisation in London and in the field will be responsible for this onerous and costly responsibility.
Finally, the successful implementation of the BSOS will require the closest possible co-operation between key departments—the FCO, DfID and the MoD. This will not just happen. The creation of the National Security Council will provide that umbrella but that will not in itself ensure that the three departments adopt a common approach. It can happen only through making sure that key players establish working relationships and come to appreciate the different cultures and skills that the other departments can bring to the table.
There have already been some very good reports on the outcomes of joint exercises, which have brought together the three departments to work together on resolving problems that require military, diplomatic, humanitarian and aid interventions. I trust that Ministers will now ensure that there are more such opportunities for the departments to work together on such exercises to maximise the chances of success when we have to deal with real situations in the real world.
Lord Hylton
My Lords, I join in the thanks that have been expressed to the noble Baroness, Lady Falkner, for securing and introducing this debate. It is good to be able to welcome a joint paper from three government departments. I hope that the Department for Business, Innovation and Skills will study this in relation to our military exports.
I suspect that the work of producing this paper may have been more important than the document itself. The paper has a wide focus on the whole world, so it can seldom be specific. However, in just one paragraph, 3.5, it mentions that by 2025—that is, in 14 years’ time—2.8 billion people in 48 countries will be facing water shortages. The signs are already obvious. The Aral Sea, for example, is largely dry. The Jordan is reduced to a trickle, while the Dead Sea has receded by several hundred yards. I saw this myself last year. In China, the Yellow River now seldom reaches the sea and some Pacific islands have to rely on imported bottled water. All these examples are mainly caused by human activity.
At the same time, the world’s population is rising steadily and will do so for some years before it is likely to level off. Climate generally seems to be getting more extreme so that some areas have serious and disastrous droughts while others suffer typhoons, hurricanes and floods. The stresses and tensions over resources are likely to get worse.
If one looks at eight of the world’s major rivers, all flow through two states and many traverse three or four. The fresh water in them is crucial for human consumption and for food production, as well as for other uses. In some regions there are already consultative processes for discussing water use and allocation but in others nothing is set up. Already the Euphrates and Tigris are causing much concern. In Turkey, more irrigation and more hydro-electricity are planned. Downstream in Syria and Iraq, some former farmland is turning to desert, whose production cannot be balanced by just increasing irrigation.
The report, rather charmingly, speaks about “investing in upstream prevention”. Will the Government take this both seriously and literally? Will they discuss with the major riparian states the need to establish dialogue and consultation on whole-river strategies for co-operation? Is this something that the Commonwealth could usefully promote among its members, not only in Africa but also, and especially, in the context of détente between India and Pakistan? The report is helpful in setting down what we mean by conflict and suggesting that this becomes problematic only when it turns violent. Some countries, which might otherwise be quite prosperous, such as Colombia, have a tradition of civil war.
The report goes on to mention frozen conflicts. In my experience, in Moldova, Georgia and Nagorno-Karabakh, the conflicts frozen following ceasefires almost always have an external as well as an internal dimension. I suggest that interested external parties should not be called upon to act as mediators. Will the Government concentrate greater effort on resolving frozen conflicts, especially when British NGOs are already involved? This also makes sense because the unresolved conflicts cause poverty and make people migrate, as we have seen, for example, from Armenia, Moldova and Kosovo, the last of which we debated on 15 September.
The report ticks many important boxes, such as the role of women, reducing corruption, justice and law enforcement, or political reform in the Arab states. It speaks of helping to build strong, legitimate institutions able to manage tensions, and it mentions the EU, the OSCE, the African Union and the Economic Community of West African States. Of those, nearly all have their own internal weaknesses. They have nevertheless made a start, and regional groups for preventing war and other disasters should be encouraged everywhere.
I conclude by posing a more fundamental question. In Britain, we still have memories of the days of Empire, when our sea-power enabled us to impose our will in most parts of the world. In today’s circumstances, should we not adopt a narrower focus and select those regions where we can best contribute to preventing violence and promoting good government and economic prosperity? Would we not be more effective by concentrating our efforts on, say, south-east Europe, the Middle East and North Africa, and perhaps the Horn of Africa? We have historic responsibilities arising from the Middle East but also much local knowledge and expertise. Progress towards resolving the long outstanding issues of Israel and Palestine would be a huge benefit to our interests, not least in reducing the motives for terrorism and in helping the Arab spring to produce worthwhile fruit. Progress, I believe, is likely to depend on work with the many shades of political and public opinion as much as on negotiation between the elites in government in the various countries.
Lord Sheikh
My Lords, I thank my noble friend Lady Falkner for securing this debate. This is an important and timely debate and an area of policy in which I have had considerable interest for a long time. The Building Stability Overseas Strategy is of great importance to our domestic and international interests. It is focused and comprehensive in identifying three pillars upon which the strategy is formed: early warning; rapid crisis prevention; and response and investing in upstream prevention.
The early warning system makes a commitment to produce an internal watch list of fragile countries that have the potential to become unstable over a 12-month period. The watch list is subject to an annual review. I welcome this requirement, as it will ensure that our efforts are targeted at the most fragile regions. Early intervention may prove to neutralise tensions among warring factions. We can take the lead, along with our international partners and supranational organisations to prevent conflicts from occurring.
The rapid crisis prevention and response pillar comprises a stabilisation response team, as mentioned in the strategic defence and security review. The progress made by the stabilisation response team deployed in Libya last May is a testament to the importance of such an initiative in promoting stability. By investing in the upstream prevention of instability, we can ensure that our aid goes towards promoting democracy while addressing civic challenges in fragile nations.
I welcome the announcement that 3,000 former combatants will be re-integrated into civilian life in Nepal by 2015. I would be grateful if the Minister could elaborate on the progress made by Her Majesty's Government in meeting this target. I visited Nepal last July, where I inaugurated a business school of excellence in Kathmandu.
I am also involved in helping with the trade delegation that will be visiting Nepal next week, and I am pleased that our ambassador to Nepal is participating in the arrangements of the visit. I feel that we need to develop stronger business links with overseas countries which will help our economic situation and build bonds between us and other countries.
The Secretary of State for the Foreign and Commonwealth Office has recognised that untapped potential. He has undertaken to overhaul our network of foreign embassies to turn them into engines for trade, supporting the Government's ambitions for an export-led recovery from the current economic situation. There is good will towards the United Kingdom, but we need to build on these relationships to achieve mutual benefits.
I am pleased that the Building Stability Overseas Strategy mentions this vital element. Our diplomacy should recognise the importance of greater dialogue among the Department for International Development, the Ministry of Defence and, of course, the Foreign and Commonwealth Office. Those departments are paramount to achieving progress through preventive diplomacy, and should form an integral part of any decision to embark upon any intervention overseas.
I am encouraged by the fact that that strategy has been developed by the various departments. In helping fragile nations to build institutions, we can make a vital contribution in furthering our national interests. Building institutions is important if we are to achieve progress. In addition, we should also of course assist in bringing peace and stability, making democracy work, helping economic growth, creating jobs, empowering women and children and helping to deal with poverty and lack of education. I emphasise the need to empower women and raise their standards of education.
The challenges facing our nation and the world at large require a multifaceted approach to our conduct of future relations. In recognising our status in the global arena, we have a role to play in preventing the rise of dictatorships and rogue states. Democratic values and freedom should be at the heart of our approach to international and foreign affairs. Our policies and actions must support countries that aspire to achieving democracy and ending the oppression of citizens. It is vital that the strategy should enable us to work more effectively with our international partners such as the Commonwealth nations and the European Union.
I have spoken on several occasions in your Lordships' House about the importance of the Commonwealth. I feel that the Commonwealth may play a greater role in conflict resolutions and promoting trade between the various countries.
I am pleased that there are now closer links between Commonwealth countries and Sri Lanka. I have visited Sri Lanka, where I was impressed with recent developments following the end of hostilities. I am a strong believer in the merits of education and its ability to contribute to stability in fragile nations. I feel that we must build connections between universities in the United Kingdom and educational institutions overseas.
Through initiatives such as the Union for the Mediterranean, the European Union has a part to play in the reconstruction of countries in north Africa, following the Arab spring. This is reminiscent of the role played by the European Bank for Reconstruction and Development in helping countries in central and eastern Europe to achieve democracy and build a free market economy following the collapse of communism.
I have visited both Egypt and the Gulf region in the last six months, where I have spoken with citizens about the challenges facing their countries. I feel that our involvement in any such country must be soft; we should exercise soft influence. When I visited Egypt, I found that the Egyptians had very high expectations. Although we can provide assistance to the people of a country where there are problems, the people must themselves find the solution and form a system which suits their circumstances. We should not expect foreign countries to adopt our form of government and there should be no attempt on our part to do so.
I have always supported the Government’s plan to ring-fence the international development budget. However, I remain concerned that there is consternation among the general public about this commitment. I would therefore be grateful if the Minister could provide information on what Her Majesty’s Government are doing to inform the public that this makes a vital contribution to stability in fragile nations.
I also welcome plans to boost the resources of the conflict pool and efforts to expand the Arab partnership initiative over the coming four years to support economic and political reform in north Africa and the Middle East. The tragic loss of life as a result of the Arab spring must not be in vain and it should be used to promote commerce and a strong civil society in these nations to make them free from corruption. Achieving peace and stability in any region that has been ravaged by war and has a wealth of cultural differences is always a challenge. It is important to recognise the strong regional dynamic of the barriers to peace in any region. By focusing on individual nations, the risk of instability in neighbouring countries must be heightened as ethnic divisions transcend borders.
Foreign policy and national security are intertwined and should be treated as such. The success of our foreign policy will work to promote our national security and interests both at home and abroad. We have the capability and intelligence to identify volatile regions where there is a danger of an outbreak in hostilities. World history is littered with examples of the repercussions inherent in a failure to identify unstable regions or places that have the potential to descend into instability. Government departments involved in forming this strategy deserve praise for devising a scheme that is both pragmatic and strongly relevant to the challenges facing both Britain and our national interests overseas.
Lord Desai
My Lords, we are grateful to the noble Baroness, Lady Falkner, for introducing the debate. I compliment her on her speech, and say all this because I will be quite critical of the document we are discussing. I find it intellectually inadequate and do not think that it can be a basis on which to frame any sort of policy. I shall go into some detail about why I think that.
It is economically deterministic and takes a rather naive view that in any conflict there are bound to be economic causes, and only economic causes. In proposing a solution, it has the defect of all the UN documents that I have had to read over the years of being far too idealistic in the requirements that it imposes on what kind of a perfect solution there has to be. Everything has to be democratic, transparent, accountable, gender-friendly, environmentally sustainable and what-not. I once headed something called the Centre for the Study of Global Governance at the London School of Economics and, on one of the first discussion papers we published, a brilliant Canadian scholar pointed out that people sitting in New York ask their UNDP branches out in Kenya and so on to add new things that they have suddenly thought of that we must have in conflict resolution. We do not have to do it but people out there have to satisfy so many constraints. At the end of it, whatever we do will be inadequate.
I start by saying why I think that the document is analytically defective. Then I will say something about the solution. First, the document is analytically defective because the notion of a fragile state is not an adequate notion. Most things that are called fragile states are not states. They are not even nations. Because of various things, either colonial developments, or something else, they have been designated as states by some constitutional accident but then have followed a long struggle to find out whose nation it is. Consider Afghanistan, where we have had trouble for 40 years. It was a kingdom once upon a time, and as kingdoms go it was stable. In a kingdom you can command the loyalty of different tribes who may not agree with each other. Then there was the communist revolution and other things later on, and we are still trying to establish a nation state there. A nation state is very different from a kingdom. In a nation state, numbers count and different tribes have to quarrel to take command of resources. The notion that everything is a state is inadequate for analysis of fragility.
I even say, at the opposite end, that we should consider Sri Lanka. Virtually everything that people want—gender friendliness, good health, education, a fantastic welfare state, high literacy, high ranking of human development—was reported over the years. What happened? Almost horrendous genocide takes place there in a 25 year-old civil war. The notion of a fragile state does not help us to analyse Sri Lanka or Zimbabwe. Until the late 1990s Zimbabwe was thought to be an ideal combination of social development and economic growth. I was part of the UNICEF project. In an article somebody listed Zimbabwe as one of the 10 most successful countries combining social development and economic growth. Why did Zimbabwe fall apart? This document will not help us to explain that. We have to be much more critical.
What are we being asked to intervene in? We may be asked to intervene in situations not because states are fragile. None of the states in the Arab spring revolutions was at all fragile—not Egypt, Tunisia, Libya—but all were subjected to considerable change and had to respond to it. I urge Ministers to look again and to have a more robust doctrine on why we have to have early warning and on what we can do. We were able to do nothing about Sri Lanka despite it being a member of the Commonwealth. We were not able to expel it, like Zimbabwe, or even Pakistan. It not only continues to be a member but will host the CHOGM in 2013. We need a slightly better concept of not just fragile states, but rogue states and maybe states that are perfectly well functioning but which because of that can be perfectly efficient at oppressing their people. Iraq, for example, under Saddam Hussein, was not a frail state at all—not even a fragile state. It was a very powerful state but it was oppressive to its own people.
The doctrine of liberal interventionism, of which I think I am the last friend, says that if you live in a global village and see a neighbour beating his wife you will intervene. You do not regard it as his affair. If a country—especially a non-western country, if I may say so—has a dictator who is eliminating some part of the population through genocide and so on, we do not say, “No. Their values are different, so we cannot intervene”. I think that it is quite right to intervene. It was right to intervene in Iraq. I have no problem with that. Iraq today is a democracy. Not only that, I believe—although I cannot prove it—that some of the inspiration for the Arab spring must have come from the fact that Iraq was seen as a functioning democracy. It is such a stable functioning democracy that after the elections it did not have a Government for six months but still nothing happened that could upset the political balance.
That is an achievement and that kind of liberal interventionism was successful in Bosnia and Kosovo and very effective in Sierra Leone. We have to learn positive lessons from that. We cannot just rely on the doctrine of fragility. Maybe we should have “fragile states”; we should have “rogue states”; we should have states that are perfectly all right but suddenly undergo a conversion—in all these different situations we may be required to intervene and what kind of intervention we make will be important.
Time is running out so let me say a few things on the ideal solution. It is very important, especially in fragile states, states that are breaking down, or even states in which we are intervening, that we prioritise what kind of intervention is needed. Before all the democracy and accountability and transparency—all those good things of life—are achieved, we have to restore law and order. The restoration of law and order and the security of property and people is absolutely the top priority. In doing that you may not achieve all the good bits that you want to achieve. Very often, especially after a civil war, it would be very difficult for even the domestic security forces, let alone somebody from outside, to really be able to give proper, perfect equal justice to people who were previously the masters and committing the genocide—just think of how it was in Rwanda. First should be some sort of security of property and life on an equal basis, and later one can go on to look at institution-building and things like that.
How many years did we stand by and wring our hands over Darfur and all the time the crisis was happening? Was Sudan a fragile state? Was Sudan a state at all? Now coming out is what we knew all the time: that Sudan had very deep divisions, north and south, on the basis of religion. At that time we were not able to operate on the idea that perhaps Sudan should not be a single country. My own private view is that the Democratic Republic of Congo should not be a single country and is not viable as a single country, but that is for another day.
As far as Her Majesty’s Government are concerned, if you are going to set up an early warning system, please have a much more robust analytical model on the variety of different situations in which we will have to intervene and not just this notion of a fragile state and that it is fragile because it is economically weak. That will not do; that is not a proposition which would pass any examination. Therefore, we should be deeper in our analysis and economise on the objectives we pursue when we intervene—and once we intervene, get out fast.
Lord Hussain
My Lords, I thank my noble friend Lady Falkner for initiating this important debate. I welcome the Building Stability Overseas Strategy as it clearly stipulates the importance of peace and stability overseas and its impact in the United Kingdom. I sincerely hope that in pursuance of this strategy, among other things, we will be able to bring an end to what is perceived by many in the outside world as double standards on our part when dealing with conflict zones; for example, our active participation in response to the situations in Iraq and Libya versus the laid-back and semi-neutral position in the cases of Palestine and Kashmir damages our credibility and reputation in the eyes of many.
May I take this opportunity to remind the House of the Jammu and Kashmir issue which is one of the oldest conflicts in United Nations history? The Kashmir issue goes back some 64 years. Many people outside the Indian subcontinent have lost track of this and others may have forgotten about it, but Kashmiris do not forget it. I was born in Kashmir and have friends and relatives living both sides of the line of control, and would like to remind the House of some of the facts on this issue. First, as many Members of this House will be aware, India took the matter to the United Nations in 1948 and the first UN resolution of 13 August 1948 promised a plebiscite for the Kashmiris to decide about the future of the state. This was followed by many similar resolutions. Both India and Pakistan made numerous public pledges and statements honouring the promised plebiscite. The famous words of India’s first Prime Minister, Pandit Jawaharlal Nehru, are part of history, when he said: “It will be Kashmiris who have the final say about the future of the state of Jammu and Kashmir. At the end, even if they decide to stay separate from India, we will swallow that bitter pill”. Those promises were never kept.
Since then, India and Pakistan have been to war three times. There have been many formal agreements, including the Tashkent Declaration in 1966 and a similar agreement in 1972, when both countries agreed to resolve Kashmir through negotiations—but they never did. Kashmir remains one of the most heavily militarised zones in the world. India’s 700,000 armed forces, with special powers given to them under the notorious Armed Forces (Special Powers) Act, are committing some of the worst human rights violations in the world. Killing, rape, arrests and torture are taking place regularly; for example, the incident of Kunan Poshpora, where the whole village was rounded up by the Indian army, the men and boys detained in the nearest army camp while girls from the age of six to elderly women of the age of 80 were all gang-raped by the forces.
This and many other such cases are well documented and reported by Indian human rights organisations. In the last 20 years, more than 100,000 people have lost their lives. Tens of thousands have left their homes. Thousands have gone missing, while 2,800 mass graves have been identified with no knowledge of the victims. This needs an international independent inquiry. According to Amnesty International, India is using draconian laws such as the Jammu and Kashmir Public Safety Act to arrest, torture and detain people from two years to up to 20 years. According to its report, 16,000 to 20,000 people have been arrested under this law so far.
Periodic, bilateral negotiations and so-called confidence-building measures between India and Pakistan have proved to be no more than minute gestures which are often halted, derailed and discharged, and are used as a time-passing exercise and nothing more, as far as Kashmiris are concerned.
Jammu and Kashmir is not a territorial issue. It is one of the British legacy’s unfinished agenda of the partition plan when we decided the fate of more than 500 such other princely states in India and left Kashmir bleeding. Not only do we owe it to the 12 million Kashmiris directly affected by this conflict to oppression, occupation, rape and torture on a daily basis, but also to a further 1.2 billion people of India and Pakistan. They could benefit immensely from better use of the multi-million pounds in the defence budgets that both countries are spending due to the conflict in Kashmir, while millions of people in both countries are living without houses, electricity or access to drinking water.
Given the importance and helpfulness of the Building Stability Overseas Strategy, how does the Minister think that this strategy will help to resolve the long-standing issues such as Kashmir and will the Government consider taking the issue of Jammu and Kashmir back to the United Nations asking for the implementation of the UN resolutions? Will he raise the human rights issue with his Indian counterpart at his next meeting and press for an international inquiry into the mass graves? Will he ask the Indian Government to repeal the notorious laws, such as the PSA and AFSPA, and for withdrawal of the army from residential areas to start with? Finally, will he ask both countries for a complete withdrawal of their forces from the state to allow the plebiscite to take place?
Baroness Warwick of Undercliffe
My Lords, I join in the thanks to the noble Baroness, Lady Falkner, for securing the opportunity to debate this new Building Stability Overseas Strategy. I share her view that this is a timely and important piece of cross-government work, drawing as it does on much expertise and experience within the Foreign and Commonwealth Office, the Department for International Development and the Ministry of Defence.
The strategy is bold and its aims are clear. This is essential if we are to respond effectively to conflict where it arises but, even more importantly if we are to anticipate and prevent triggers for future conflicts. The recent uprisings in the Arab region have been a reminder of how quickly and unexpectedly political landscapes can change. They also, I believe, reinforce the importance of our continued investment in governance in complex and challenging regions.
When announcing the strategy earlier this summer, the Secretary of State for Foreign and Commonwealth Affairs noted that at its heart lies the conviction that stability can be achieved only when a society has the “strong, legitimate institutions” it needs to manage tensions peacefully. I share that conviction, which stems from my time as chief executive at the Westminster Foundation for Democracy during the early 1990s—a function that I shared with the noble Baroness—and my continuing involvement with Voluntary Service Overseas. I further believe that working with local, credible organisations, as do both these organisations, will continue to be a critical element of effective UK support for those legitimate institutions.
Increasing the proportion of UK official development assistance that supports conflict-affected and fragile states to 30 per cent by 2014-15 is a bold decision. Explicitly focusing on unstable states is not an easy or necessarily an obvious option, because it produces potentially higher risks for those involved on the ground. I do not mean just the Armed Forces, of course, but the many involved in humanitarian work, aid workers, NGOs, the media and others engaged with civil society in those states. On the other hand, the emphasis on co-ordinating all the forces available—the 3D approach which puts diplomacy, development and defence into an integrated strategy of prevention—makes complete sense. It is, as they say, a no-brainer as the basis for a more effective approach to managing tensions, offering the greatest chance of success.
I welcome the strategy’s intention to create an early warning system to help us anticipate instability. I support its creation of a £20 million early action facility within the conflict pool to help us act fast to prevent a crisis or to stop it escalating. However, I believe that it is the third of the three pillars of this strategy—that of upstream prevention—which will be the most effective and most likely to succeed in the long term. It is here that I want to focus my remarks. Upstream prevention tackles the underlying drivers of instability before a crisis occurs, avoiding the enormous human and financial costs of conflict. As the Secretary of State for International Development, Andrew Mitchell, said in another place, upstream prevention,
“goes to the heart of the drive to achieve better targeted, more effective aid”,
helping,
“to improve the lives of some of the poorest and most vulnerable people on the planet”.
As the strategy reminds us, nine of the 10 poorest countries in the world are classed as fragile states. Five countries, all in the midst of conflict, produced 60 per cent of the world’s refugees in 2009. It is right to focus our efforts on helping fragile states build those strong, legitimate institutions that provide the basis for trust and confidence. These institutions range from the police and legal systems to civil society organisations, religious groups, political parties, government departments and banks. The strategy is also right to emphasise that,
“effective local politics and strong mechanisms which weave people into the fabric of decision-making—such as civil society, the media, the unions, and business associations—also have a crucial role to play”.
That is at paragraph 4.4.
Bodies such as the Westminster Foundation have long recognised that working with local government, communities and the media is how we will reach the most vulnerable people. This so-called soft power is critical. I particularly welcome the recognition that our capabilities to ensure that this strategy is effective go beyond government. Our universities, NGOs, think tanks and the private sector have much experience and indeed expertise to offer. The Westminster Foundation works explicitly to help encourage democracy as it believes, as the strategy acknowledges, that democracy provides the best route to building accountable and responsive states that are able to promote social and economic development.
Of course it has long been the work of the British Council, on whose council I served for 10 years some years ago, to build engagement and trust for the UK through the mutual understanding of our values. Our universities have also had a key role to play in this in their links with overseas institutions, their welcoming of international students through scholarship programmes —some sadly no longer funded—and their education of the future leaders of many countries.
I have spoken on this issue previously but make no apology for referencing the vital role that educating and empowering women can play in building stability, as indeed did the noble Baroness, Lady Falkner, and my noble friend Lord McConnell. For example, I draw noble Lords’ attention to the work of the Westminster Foundation in Sierra Leone, a country where concentrated action has had real impact. WFD helped build the capacity of elected women and women community leaders to take a greater role in political life following a decade of civil war.
Working with local organisations that have credibility is key to all this. It is what will make upstream prevention a truly worthwhile and effective strategy. People directly affected by conflict offer unparalleled insight into changing dynamics but this is of limited value if local institutions are not in place with legitimacy to respond. As bodies such as the Westminster Foundation are working to show us, partnering local civil society offers the best chance that interventions will be relevant, legitimate and sustainable.
So far so laudable, but I raise two related issues of concern. I do not feel they have been sufficiently addressed in this strategy and ask the Minister to comment. The first relates to evaluation. We are all feeling the impact of public funding cuts and will do so for some time to come. But we must see results when we spend substantial sums—I remind noble Lords that 30 per cent of UK official development assistance will go to conflict-affected states by 2014-15. We must also know that what we are spending represents value for money. The strategy makes only a passing promise of
“rigorous internal and external ... evaluation”,
and an annual progress report within the public statement about SDSR. That is about it and that is not good enough.
The strategy itself says that,
“the overall evidence base and conceptual foundations for engagement in fragile states remain patchy, underdeveloped and, in some areas, contested”.
Yet the strategy proposes to spend millions in high-risk situations and high-risk states. Given the financial climate I am not impressed by the strategy’s bland assertion that we need to be “realistic” about what we can achieve and about the pace of change. Can the Minister tell us about the evaluation to be put in place? Will we have the mechanisms to ensure that our money will be spent effectively? What are we learning from the evidence that currently exists on aid effectiveness in conflict situations?
My second question is a related one: the issue of corruption in conflicted-afflicted states. We know that corruption is endemic in fragile states. It is not limited to the Governments, and misappropriation of funds is widespread. Instability is one of the drivers for organised crime. Yet when outlining why we should put more of our money towards supporting these countries, the strategy has very little to say about what it will do about tackling corruption to ensure that money is spent effectively. Indeed, as the Select Committee on Economic Affairs observed last month, it is pretty well silent on this issue.
I am rather astonished by this. Guidance on applying the UK Bribery Act and supporting local efforts to tackle organised crime do not amount to a strategy to tackle corruption in fragile states. In the absence of any more detail in the strategy, my question to the Minister is whether our existing anti-corruption programme at country level is enough to support the delivery of this strategy and, if not, what are we going to do about it?
Lord Stone of Blackheath
My Lords, I too am grateful to the noble Baroness, Lady Falkner, for this debate and for her ever-present energy and smile in the House. I recall debating here as early as 1999 the idea of detecting areas of potential conflict. Then we suggested devising a plan for more subtle, non-military interventions before, or even during, a conflict and certainly after a conflict. In fact, more than 10 years ago, we were talking in this House about building stability overseas. Now that this has become a BSO strategy, with an agreement to draw on external expertise and cross-governmental co-operation, the next step should be to find pragmatic, large-scale projects that are already under way. They should be monitored and, if they are successful, could be replicated across the world under the strategy being suggested.
In February this year, I reported on an example of such an intervention. It started three years ago in the Middle East—in the Palestinian West Bank and in Jordan. We called it Moon Valley. I must declare an interest as I have been involved, unpaid, in this project from its inception. It is a perfect example of a conflict zone which at this moment has the potential to erupt into a major war or settle into progressive stability. The Moon Valley project has opened the way to allow, in the future, thousands of Palestinian farmers access to the international market for food and agricultural products.
The project has had great support from external expertise; Marks and Spencer, Sainsbury’s and the Co-operative Group in this country, Whole Foods in America and Carrefour in Europe have been supportive. It is a good example of cross-governmental co-operation. The Foreign Office has been helping, particularly the consul-general in east Jerusalem, as has the Department for International Development, both locally on the ground in the region and here in London.
Our perception is that the creation of stronger local enterprises, with firm backward linkages to the poor, creating jobs, opportunity and prosperity, are essential for the prevention part of this strategy. It is obvious that such a strengthening of well led, well managed, inclusive businesses is not going to happen automatically in these more conflict-prone regions, where investors will be more risk-averse. When such regions have benefited from the old-style aid handouts that were driven by political rather than economic reasons, this type of intervention creates a culture of aid and political dependency, which can be antithetical to social and economic development. That type of aid does not build strong, local, civil society institutions, such as business associations and unions. Instead it creates monopolistic regimes that specialise in bidding for and squandering aid.
Moon Valley, on the other hand, has created trade. It is transferring technology and skills. It is planning to build a much greater capacity involving thousands of small farmers while still improving quality and reliability. Since February, to help this happen, DfID has sponsored a programme whereby an experienced NGO—Technoserve—is working with Oxfam and DAI, completing research into the entire agribusiness sector in the West Bank and Gaza. It will show that helpful interventions such as these can build a vital industry on an even greater scale and benefit tens of thousands of Palestinians. This kind of mindful intervention can drive the development of high-quality, export-oriented businesses, which operate on sound business practices, foster inclusion and enable people to influence the development of their own community and have a say in the future of their own country.
It is exciting that since this initiative, interest in food from Palestine is being shown, not only by European retailers and supermarkets in America but, as my noble friend Lord McConnell suggested, by neighbours—that is, interested parties in the Gulf. All these countries and companies now have a growing need for a future supply of large quantities of high-quality food products; and there is a desire for them to be from Palestinian farmers, to help their cause. In some cases, parties are prepared to offer the possibility of providing up-front cash, in pre-orders, to allow us to scale up the venture to millions of pounds a year. The noble Lord, Lord Howell, is familiar with this project and has been very supportive in the past.
Now, with this new BSOS strategy, I call on the Government, through the Minister, to organise high-level missions to various countries. The delegation would comprise representatives of our Government, together with Palestinians who are developing the agriculture in the West Bank and some of the experts who have been involved from Technoserve and Moon Valley. The quartet can also provide helpful support, and the Israeli Government have said that they can provide secure and reliable passage for the products’ transportation. We would go together to several regions to put forward a plan and agree a strategy for Palestinian agriculture to become a reliable and viable source of high-quality food products on a worthwhile scale. In this way, this could become a model for other BSOS projects planned for the future in other countries, particularly the Middle East and north Africa.
Baroness Kinnock of Holyhead
My Lords, I thank the noble Baroness, Lady Falkner, for initiating this timely debate, which has offered all of us a wealth of expertise and analysis, which I and all noble Lords welcome. The report, as many noble Lords have said, has a number of very positive elements, which we need to follow very closely. It will, of course, involve the importance of holding the Government to account on this strategy. It is, of course, not a new agenda, because it was under the last Government that the stabilisation units and other initiatives were taken. For many years there has been an analysis and there have been efforts to link and integrate defence, diplomacy and development. Therefore, we have to applaud the joint strategy—we like joined-up government, do we not?—which is designed to bring coherence across DfID, the FCO and the MoD.
The report acknowledges, as I know many noble Lords have done, that what we are talking about—indeed, conflict has been the central subject this afternoon—has repercussions for countries, individuals and whole regions. We have a comprehensive definition of stability in the strategy, which goes beyond definitions confined to merely the absence of war or to threats to national security. It also clearly and unequivocally identifies the need for humanitarian aid to be delivered on the basis of need alone. The strategy is also about recognising the need to be in for the long haul. If transformational results are to occur, clearly that has to be what we do.
We should also welcome the commitments to the international arms trade treaty. On this subject, we know that the Arab spring raised many concerns about arms transfers that have taken place over a number of years, whereby arms are transferred by the UK to authoritarian Governments. More than 150 licences had to be revoked, for instance on sniper rifles, teargas, ammunition and armoured vehicles, which had been delivered to Bahrain, Egypt, Libya and Tunisia. It would be good to know what is being done to avoid a repetition of these mistakes. I would certainly appreciate it if the Minister could comment on whether we can expect a full-scale review with engagements with Parliaments, civil society and the arms industry. It is good to see that the early warning system will inform the work of BIS on arms export licensing.
Stability is characterised not just by an absence of war but by promoting open, inclusive societies, which are the key to tackling fragility and conflict. We need to know more from the Minister about how it is anticipated that this will be achieved. Since 9/11, we have seen increasingly that development and security concerns have been linked. The lexicon is: fragility; radicalisation; stability. Many of us hoped that development objectives, when clearly identified, would deliver human security, but we have also feared the securitisation of aid, which serves only to compromise development and humanitarian activities. After all, DfID has now joined the National Security Council, and David Cameron has explicitly said that development aid,
“is a powerful instrument of our foreign policy”.
Countries selected for aid increases—Afghanistan, Pakistan, Somalia and Yemen—are also all seen as actual or political terrorist threats. UK aid to Afghanistan is set to increase by 40 per cent over the next three years. It remains essential that aid is allocated according to need and not to serve short-term political or military gains. We know that since 9/11 we have increasingly seen statements from politicians linking poverty and alienation with terrorism, while we see military engagement with development work in order to win hearts and minds. People want security and justice, but communities must identify their own security priorities and concerns. Will the Minister confirm that the new approach will seek to meet the genuine security and justice needs of vulnerable people?
I am also interested to know more about the distribution of aid. DfID has said that 30 per cent will go to fragile and conflict-affected states. Would the Minister care to clarify, now or later if necessary, whether this is bilateral or multilateral aid, or both? How does the new commitment fit with the limited number of countries—27—that will receive aid following the bilateral aid review? The criteria for country selection in the strategy are also not the same as in the multilateral and bilateral reviews; those identified are different. Paragraph 1.5 says:
“where the risks are high, our interests are most at stake and where we know we can have an impact”.
I fail to see any reference there to criteria on improving the lives of poor people.
What, then, is absent from the strategy? On military engagement, it addresses soft power and security sector reform, but what about the places where the UK is militarily engaged? The strategy is strangely silent on this. There is nothing at all on when, how or if military intervention is appropriate, or on checks and balances when it happens. Is this not a serious omission? It will also be necessary to address how potential tensions between the three departments will be handled, because I and many other noble Lords know that it cannot be assumed that there will not be tensions between the various departments. On the role of the MoD, when working with armed services overseas we need to know that the notions of the importance of human rights programmes, democratic oversight, gender equality and the accountability of security forces are understood and promoted. The FCO must lead on addressing the causes of fragility and conflict and ensure that conflict is firmly on the list of UK diplomats’ priorities.
There is such a lot to say on this subject, but I now turn to a serious lack of emphasis, to which many noble Lords have referred: clarity on the commitment that is to be made on the importance of women in peacemaking and peacebuilding, and, indeed, in tackling the appalling levels of violence that women experience. In every single aspect of this report, we should see a strong commitment to the integration and involvement of women. On early warning systems, we need to see indicators on levels of violence against women; on government co-ordination, I suggest that Lynne Featherstone, the Home Office Minister responsible for following violence against women overseas, should be engaged in the process and take part in NSC discussions in that role. On partnership and accountability, we should make a commitment to provide core funding for women’s organisations in these countries. Security and access to justice is a critical issue because women have particular problems with accessing justice.
Much more needs to be included, and I hope that consideration will be given to drawing up a focused set of policies now to address the fact that there are only fleeting references to women in the strategy and that it is necessary to come up with tangible and substantial commitments on this issue. Indeed, there is scant reference in the strategy to human rights more generally and no clarity about why human rights matter. In the context of the nature of the objectives of the strategy, this is regrettable.
We are, of course, aware of the difficulties that we face when we talk about state-building, and a number of noble Lords have identified those difficulties. It is a highly political activity. Lessons have to be learnt from Afghanistan, for instance, where the state’s loss of legitimacy and accountability is a major source of instability. The process has to be nationally owned, not devised or imposed by outsiders. That is critical. For instance, it took Portugal a decade to move from military to civilian rule, and this when they already had fairly strong institutions. We should learn from those kinds of examples.
Finally, the UK must work closely with others. The OECD recently reported that there is generally a lack of co-ordination or even contact between those working on stabilisation. We need to reassess this and see how we can change it. In this and many other areas of policy, going it alone is simply not an option, and I trust that in future we will see more collaboration.
Lord Howell of Guildford
My Lords, we are deeply grateful to my noble friend Lady Falkner of Margravine for initiating this debate. It has confirmed once again something that is obvious and known to us already, but I repeat it: the staggering accumulation and store of informed expertise and experience available in this House that can be marshalled and focused upon issues such as the one that we are discussing today. As always, for all of us it has been a fascinating and a learning experience to listen to the views of your Lordships, many of whom have been deeply involved in the practice, assessment and implementation of the issues in building stability overseas and meeting our international aims, interests and obligations. I thank my noble friend Lady Falkner, as we have all done, and all noble Lords who have taken part. I welcome the chance to comment on the Government’s strategy and on the statements that have been made, and to update the House on what the Government are doing to prevent and resolve conflict and promote stability overseas.
The opening sentence of my noble friend’s speech set the tone when she quoted President Kennedy in saying that the great issues of our times internationally are not susceptible to military solutions. There are great warriors around who are always telling us about defence expenditure and, as it were, measuring effectiveness by such expenditure, but that is the wrong measure—it is not the measure that counts any more. In this debate we are dealing with efforts, programmes and resources that are just as important in establishing what might be called “the new defence”. It is not just a question of moral rectitude, but of our national interest. The truth, as many who are sitting in this Chamber now know, is that the texture of international relations has changed beyond recognition in the past decade or so. That was fully recognised by the previous Government, it is recognised by this Government, and recognised perhaps a little more slowly by the media and commentators who tend to go on repeating the shibboleths and mantra of yesterday. However, there is a new world which we must now address and cope with, and develop the instruments to battle with. That is what we have been discussing today.
I announced in this House on 19 July the publication of the Building Stability Overseas Strategy, which was the first integrated cross-government strategy to address conflict issues, building on the work of the previous Government. The strategy took on board the lessons of the Arab spring and sets out three ambitious aims where the Government will concentrate our efforts. The first is early warning, where we will improve our ability to anticipate instability and potential triggers for conflict—a matter which my noble friend Lord Chidgey and many others raised. I will come to that in a little more detail in a moment. The second is rapid crisis prevention and response by taking fast, appropriate and effective action to prevent a crisis or stop it escalating. The third is investing in upstream prevention—again, mentioned by the noble Baroness, Lady Warwick, and many other noble Lords—by helping to build strong, legitimate and robust societies in fragile countries, a phrase about which the noble Lord, Lord Desai, had one to two characteristically acute and somewhat critical comments to make, to which I will also come in a moment. The strategy makes clear how we will try to deliver these aims, across the Foreign and Commonwealth Office, the Department for International Development and the Ministry of Defence, using our diplomatic, development and defence capabilities in an integrated way.
Many of your Lordships have raised the issue of how, being a tri-departmental operation—as it is under the building stability overseas board—this can be properly integrated and co-ordinated. I do not want to sound like an ancient mariner, but I have now been in and out of Whitehall for 41 years and engaged on many occasions, right back to the new style of government in 1970, in wondering whether we should co-ordinate or disperse more, delegate or gather together. It is a sort of cyclical process. The impulse to co-ordinate activities, particularly the impulse to appoint a Minister who is going to be responsible, can often end in tears. The Minister may feel that he is responsible. Somehow all the channels are opened around him or her and, in the end, they co-ordinate nothing.
One has to be a little worldly wise about co-ordination. The programme we have now, bringing together the three departments under the Building Stability Overseas Strategy, drawing on the resources of the Conflict Pool and delegating tasks to excellent organisations such as the stability unit is—we are entitled to say this with a little pride—working experimentally but extremely effectively as we go on into the new international landscape and events such as the Arab spring bring us new lessons and new ways of tackling these problems.
We have announced the substantial extra resources to underpin this strategy. By 2014-15 we will have increased to 30 per cent the proportion of UK official development assistance that supports conflict states and fragile states. The 100 per cent UK-funded Arab Partnership Initiative will expand to £110 million over the next four years, to provide support for political and economic reform in the Middle East and north Africa. The resources of the Conflict Pool, jointly operated by the FCO, MoD and DfID to fund our conflict prevention work, will increase over the spending review period to a total for the period, as one of your Lordships mentioned, of £1.125 billion. Through the Building Stability Overseas Strategy, the Government will prioritise those countries where risks are high, our interests most at stake and where we know we can have an impact. This involves—as your Lordships have emphasised—some difficult decisions about where to focus efforts and there is not always 20:20 vision about exactly how events will develop or what crises will spring up.
I should like to refer to some of your Lordships’ specific comments, which have been very valuable, in the time available. My noble friend Lady Falkner began this debate so well with the quote that I have already mentioned. She urged the stabilisation unit to have a long-term perspective and I totally agree about that. She asked how we decide about really difficult issues, such as Bahrain, where we have seen some deeply concerning developments, particularly the ongoing disturbances; or Syria, where we have tried repeatedly to get an effective resolution through the United Nations. Our latest efforts, as your Lordships know, have been blocked by Russia and China.
We urge the Government of Bahrain to meet all their human rights obligations and to uphold political freedoms, equal access to justice and the rule of law. These do not run contrary to security, but are integral to long-term stability. We believe that dialogue is the best way to bring long-term stability to Bahrain and we encourage the Bahraini authorities and opposition groups to show real leadership by engaging constructively with one another. Whether the latest news from Bahrain indicates some acceptance and realisation of the strong views of Britain and the rest of world I do not know, but one certainly hopes so.
My noble friend Lady Falkner also raised—as did several other speakers, such as the noble Baroness, Lady Kinnock, in her comprehensive comments—the central question of the role of women in building stability overseas, including in Libya and many other areas. The Government have mainstreamed the importance of the role of women in conflict prevention through our national security strategy and our Building Stability Overseas Strategy. I repeat: mainstreamed. Women have a central role in building stability. In line with our national action plan for UN Security Council Resolution 1325 on women, peace and security, we will continue to address violence against women and support women’s role in building peace. I do not think there is any ambiguity about that, barring only the concern we all have about the dangers of stereotyping, which I know many women feel strongly about. Barring only that, the commitment to upgrading and opening up the opportunities for women to play their proper and full role is unambiguous, determined and one that we will support with all possible resources.
The noble Lord, Lord Black, spoke about practical steps towards media and press freedom. These make a great deal of sense, particularly training journalists. I cannot comment precisely at this moment but it is certainly the basis for a good and sensible approach. The noble Lord, Lord McConnell, said we should tackle this area with vigour. I promise him that we are doing that and will continue to do so. The noble Lord, Lord Chidgey, and the noble Baronesses, Lady Warwick and Lady Kinnock, asked about evaluation and monitoring. How do we know that the system works? A lot of money is involved, as the noble Baroness, Lady Warwick, rightly said. Let me put it this way: the strategy is clear, but investments must deliver results while providing value for the UK taxpayer. To ensure this, a new transparent cross-government reporting framework, subject to independent scrutiny, will be implemented to measure and compare the UK’s impact across the regions.
Aspects of our conflict prevention work are being examined by each of the House of Lords Economic Affairs Committee, the National Audit Office and the Independent Commission for Aid Impact. Focusing on upstream prevention is central to the strategy, but, ultimately, establishing the UK’s contribution to conflict prevention relies on counterfactual analysis—examining what level of conflict would have been likely without intervention, which is obviously a very difficult assessment to make. That, I hope, meets the concern about the very proper need for evaluation.
The noble Lord, Lord Hylton, spoke about waters and rivers, a vital and central issue. I have a very long briefing note on the matter which I shall try to impart to him, though possibly not in this debate because I do not want to take all the time available. We understand that the analytical work being undertaken by the South Asia Water Initiative is already yielding benefits by brokering greater information-sharing between riparians on water, development of co-operative research and the development of a Ganga River Basin authority in India. Rivers drying to trickles and causing despair, or turning into raging torrents and causing floods, are obviously a central issue on the international scene.
My noble friend Lord Sheikh spoke with great authority on Nepal, where he has been recently. It was extremely helpful to have his views. As always, he gave support to a cause dear to my heart, which is the immense value of the Commonwealth network in promoting stability overseas and carrying forward all our programmes.
The noble Lord, Lord Desai, to whom I have already referred, made a critical remark about fragile countries. If the criteria are to be the rule of law and respect for property, I can hardly think of a single country where that does not apply, including possibly our own. He knows as I do that judging fragility is fraught with subjective standards and is often governed by, to use the words of Harold Macmillan, “events, dear boy, events” which no one foresaw beforehand.
My noble friend Lord Hussain asked whether we would help in Kashmir. It is our view that this matter must be handled between two great countries, India and Pakistan, and that remains all I have to say on that matter.
I have already mentioned upstream prevention and evaluation in response to the noble Baroness, Lady Warwick, who was quite right that the issue of corruption is central and must receive our full attention.
The noble Lord, Lord Stone, knows that I think that his initiatives and what he has already achieved with his colleagues are quite marvellous. We take the view that the private sector should take the lead in these matters, but with DfID’s support. I shall look again at his latest set of ideas, which I believe are totally constructive and to be supported in every possible and practical way.
I have not covered every point that was raised—there is never time—but I hope that I have responded to as many of the very important observations as has been possible. Since the launch of the BSOS, the Foreign and Commonwealth Office—my own department—DfID and the MoD have been working across government and with NGOs and international partners to implement the strategy. Our actions for weeks and months ahead will include establishing an improved early warning system that can inform early action to help prepare for and prevent conflict; putting in place a new £20 million early action facility to speed up support for emerging crises; supporting multi-year programmes through the Conflict Pool; and engaging bilateral and multilateral partners and NGOs, whose support we must have to make real progress in reducing the risk of conflict globally.
We are committed to drawing in more external expertise and data to challenge, evaluate and strengthen our work. We also look forward to the recommendations from your Lordships’ Economic Affairs Committee inquiry into the economic impact and effectiveness of development aid, and to the forthcoming evaluations of the Conflict Pool by both the National Audit Office and the Independent Commission for Aid Impact. A vital element of delivering the BSOS will be working through the multilateral system, with the European Union, the Commonwealth network, our bilateral partners and civil society in all its multiple manifestations.
At the UN Security Council in September my right honourable friend William Hague emphasised the UK’s commitment to conflict prevention: at one end of the spectrum by supporting local upstream conflict prevention efforts, and at the other end, as a last resort, through coercive measures to prevent conflict. In Libya the United Nations Security Council mustered legitimate diplomatic and military pressure to prevent a regime from waging war against its people, and to deter its members from committing horrific crimes. Swift action prevented a major humanitarian catastrophe and saved thousands of civilian lives.
In Syria, as I have indicated, we believe that a response from the Security Council is overdue. We have been pressing for it, but it has been blocked in the way I have already described. The consequences of an action would weigh heavily on us if we turned a blind eye to killings, abuses and repression.
In the margins of the UN General Assembly a week or two ago, I had a number of bilateral meetings with ministers from states who had been through the most appalling periods of conflict, including Algeria, Iraq, and—further into the past, but still very difficult—Azerbaijan. What struck me was the determination of these states to move on from the past and to deploy economic resources as a way of consolidating peace and stability.
Our European Union partners also have a role to play, and we welcome the Foreign Affairs Council conclusions of 20 June this year, which set out the need for a more comprehensive EU approach to conflict prevention, including the strengthening of early warning and a greater emphasis on early action, such as mediation.
The strategy recognises the need to strengthen ties with partners, such as Brazil and South Africa. We shall invest greater diplomatic efforts in new prevention partnerships with these countries, and we are already reinvigorating relations with Commonwealth partners. The Commonwealth is an ever more relevant body that can add its collective voice and collective action to the great global challenges that we all face.
I leave your Lordships with the message that we can all play our parts, particularly the many experts who have spoken in this debate. Your Lordships have an important role in engaging with civil society, and with other parliamentarians through your networks, both in this country and overseas. Through these networks we can help to strengthen partnerships beyond government, supporting efforts to strengthen and develop effective conflict management and peacebuilding capacities. I thank noble Lords for this debate. I am sure that there are one or two questions that I have not covered, but I have covered quite a range. I will always be ready to write to any of your Lordships who have a particular point they want to pursue with me. I thank noble Lords again for an interesting and informed debate, which has raised many issues that can be carried forward greatly to the benefit of our nation and the wider world.
Baroness Falkner of Margravine
My Lords, it has been my privilege to move this Motion. It has been a fascinating debate, and we have certainly heard a diverse range of views, painting on a very wide canvas. I look forward to reading these speeches in more detail tomorrow, so that I can inform myself better.
In these foreign affairs debates we often have the pool of usual suspects. We all know each other and are enthusiasts for many of the same causes, so it has been particularly gratifying today to see additions to our pool with speakers who are not usually involved in this, from all Benches and from three political parties. I thank all noble Lords who have spoken, and beg leave to withdraw the Motion.
Motion withdrawn.
Social Enterprise
(12 years, 7 months ago)
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Baroness Andrews
To ask Her Majesty’s Government what proposals they have for promoting social enterprise.
Baroness Andrews
My Lords, it gives me great pleasure to open this debate on social enterprise. I am particularly gratified that at this hour on a Thursday so many noble Lords have decided to join it. That clearly indicates that we consider this issue to be very important. Since I tabled the debate some months ago, there has been a cast change. I am very pleased to see that the noble Lord, Lord Wallace, will reply to the debate, and I look forward very much to hearing the Government’s response.
I had hoped to have the debate earlier in the year, but today’s debate has turned out to be more timely. We urgently need to discuss the future of social enterprise, particularly in the light of the comments made by the Chancellor at the Conservative Party conference this week about how to revive the economy. My argument is very simple: if the Government were really smart, the Chancellor and his colleagues would engage, as a matter of priority, with the social enterprise sector to provide it with the tools it needs to prompt growth through innovation, enterprise, skills and jobs, particularly in hard-pressed communities. There is not a moment to waste.
It is fair to say that this country is a world leader in recognising the unique possibilities of social enterprise, whether we are talking about social business or the habit of enterprise, which is clearly now spreading across the whole of the third sector. Over the past few decades we have seen a range of very effective and successful models emerging.
Some years ago I had the enormous privilege to work with Lord Young of Dartington, probably the greatest social entrepreneur of the previous century, when he was creating the School for Social Entrepreneurs. That was a hugely prophetic idea and one which has not only had great success in this country but has been replicated in other countries. The school and the growth of social businesses in general across the country show how innovation, skills, jobs, enterprise and social solutions can grow modestly but effectively in local circumstances, and sometimes in very unpromising circumstances.
The evidence suggests that social enterprises can succeed where private enterprise might fail or not entertain the idea of going. That is why, no doubt, in 2010 the Government promised to support the creation and expansion of mutuals, co-ops, social enterprises and charities so that they could have a greater say in the running of public services. It was a brave step forward, but it was not a new idea. My colleague on the Front Bench and I were in a department which committed itself entirely to the promotion of social enterprise. With the New Deal for Communities we saw in very disadvantaged communities across the country extraordinary innovations developing by way of social enterprise. I think, for example, of the Shoreditch Trust, led ably by Michael Pyner, and many different examples across the country. However, more significant than the scale or the diversity of the sector— £20 billion at one estimate—is the rate of growth, the evidence of sustainability and the public support that it commands.
We hear a lot about how the private sector is the solution to our economic malaise and how it must lead the economic recovery. In fact, the research undertaken by Social Enterprise UK, tellingly called Fightback UK, contains evidence of how, compared with the private sector SMEs, social enterprise shows three times the level of start-ups. It is outstripping private sector SMEs in growth, confidence and sustainability. I give a couple of examples of that. Some 800 social entrepreneurs who have graduated from the School for Social Entrepreneurs generate jobs to the value of £13 million each year—70 per cent of them are in the 20 per cent most deprived communities. Unlimited, another extremely interesting social innovation set up with millennium funding years ago, has enabled the most vulnerable in our society—refugees, no less—to start successful small businesses which address the aspirations as well as the needs of communities which might otherwise be excluded. The problem is that this window of opportunity may now be closing, just at the point when we need new ideas, new energy and new commitment. To quote from the SEC’s research:
“Social enterprises working in public services are drastically low on confidence. A large proportion of these are planning redundancies or turning away from public service markets”.
Across the third sector as a whole, there has been a 5 per cent reduction in jobs just in the past year.
Social enterprises seem to be facing a perfect storm. On the one hand, they have cuts in public spending and services which have a disproportionate effect on them because they are nearly always outward-facing into the public sector. On the other hand, they have not been equipped with the tools to enable them to compete with a highly capitalised private sector. Specifically, we see cuts in grants but, more critically, cuts in contracts from local authorities and national bodies. There is an absence of strategies or support for local and national commissioning to enable the sector to contribute. There is an increase in demand for local services, which is bound to increase in the next three years.
So far we have not seen much understanding from this Government of the impact of this and we have not seen a great deal of response to these threats. The Mutual Support Programme announced by Francis Maude in November 2010 has yet to materialise, as has a national programme for third sector commissioning. Therefore, my first question to the Minister is: when will these policies be published and what will they contain, and what impact does he think they will have? On the other hand, all the signs are that, far from public service markets opening up to social enterprise, they are being captured by a small number of highly capitalised large private sector providers. The barriers to entry at the moment are simply too high for even the most efficient social business. The Wise Group, which has an outstanding record of performance, to everyone’s dismay lost out to massive private sector providers to deliver the welfare to work programme.
The Government’s health flagship, Central Surrey Health, which is an exemplary social enterprise, lost out to Assura, which is 75 per cent owned by Virgin. If these bodies fail, what hope is there for smaller social enterprises, no matter how good and no matter how efficient? At the same time, they are of course, like other small businesses, being turned down for loans by banks. This week, I understand that a leading social enterprise with £5 million-worth of contracts was refused a £50,000 overdraft to ease its cash flow.
The Minister may well say that Big Society Capital and social impact bonds give us a way out of all these problems. They will help but they will not solve the structural problems that we are facing. For example, I understand that the pilot which is under way in Peterborough on reducing reoffending has generated partnership but not from the private sector; it is from the charitable sector and charitable investment. Social impact bonds, which are a very important new idea, are very cumbersome and slightly oblique. They will be very slow to deliver, or to understand how to deliver, the long-term complex, subtle problems that they are supposed to be assisting with. I should be interested to know from the Minister what lessons are being learnt from the way that these two initiatives are working so far.
The diagnosis is fairly simple. If the country is to take advantage of what social enterprise can offer, it means putting the resources, advice and skills into commissioning bodies, whether it is health or social care or crime reduction, so that they can identify, design in and invest in social enterprise. It means recognising the ecology of social enterprise in the system and why outcomes need to be defined appropriately and not by imposing crude regimes such as payment by results on the sector. There has to be a serious and intelligent attempt at dealing with lending and capitalisation. For example, why do the Government not ensure that further investment in the banking system from UK taxpayers will be bound to quotas on SME lending and job creation in the UK’s most deprived areas?
In a very timely fashion, George Osborne came forward this week with seven plans for credit easing to support small businesses. Can the Minister tell me whether this will extend to social enterprise and, if not, why not, and will he be an advocate for extending the principle to social enterprise? It also means supporting the sector itself, enabling umbrella bodies such as Social Enterprise London or the Social Enterprise Coalition to spread and support good business practice in order to jack up competitiveness.
It means, in short, promoting national infrastructure to extend and exploit the value of social enterprise for social and economic benefit, drawing on local, national and international expertise and knowledge. Those are not my words but those of the prospectus of partnership offered by the University of Plymouth, which is leading the higher education sector in developing social enterprises to ensure that they become more competitive and more sustainable. That is a very progressive move.
If there were time, we might be able to wait for this to evolve, but there is not time for the economy or for the sector. Capacity and resources are draining away. The exam question for the Minister is: given the expectations raised and the urgency of the situation that we face, when will the Government engage with the sector on these very practical terms so that it can realise its economic and social potential? The Chancellor also said in his speech last week, very loudly and clearly, that he was willing to work with anyone. There are thousands of social businesses and thousands of social entrepreneurs who are willing to work with him. They are waiting for the chance to do so and I hope that he acts now on that opportunity before it is too late.
Baroness Wheatcroft
My Lords, I first congratulate the noble Baroness, Lady Andrews, on securing this debate on what is such an important issue which could be so beneficial to our country. I confess that, over the years, I have learnt a bit about entrepreneurs and enterprise, but “social enterprise” was a term with which I only relatively recently became acquainted. I have known many entrepreneurs. Only a few of them would claim to have been social entrepreneurs; some of them probably should not have been let out on civil society.
Social enterprise is now a growing phenomenon, and we should all be doing all we can to encourage it. Before going more deeply into that, I make a plea that we do not fall into the trap of thinking that if businesses are not social enterprises they are antisocial. From what I hear, someone was coming dangerously close to asserting in Liverpool last week that businesses that were not social were antisocial—not his words, mine. That is misguided. Business generally is a force for good. It creates jobs, produces wealth and provide for our pensions. We are in a terrible financial state at the moment. We need business to help us out. To categorise businesses as producers or predators is simplistic. To suggest that there should be differential tax rates for them is to risk turning Her Majesty's Revenue into an outpost of the Taliban, threatening physical floggings for those companies which flash a glimpse of predatory tendency.
All businesses should, in one way or another, see themselves as social enterprises benefiting the community not just through various charitable donations but through a wide range of their activities. Nevertheless, there is a special breed of organisation now emerging under the term “social enterprise”, and we need to help that sector to grow. The noble Baroness, Lady Andrews, detailed the obstacles that currently face many in that sector. There is no denying those obstacles but personally, given the straitened finances of the country, I do not think that it is such a bad thing if charities step in and invest in those enterprises rather than them having to depend on public sector handouts.
We also have the Government making serious moves to encourage social enterprise. We heard about the Big Society Bank. It is shaping up now and, through the big society investment fund, has made its first loan of £1 million. By 4 July, the closing date for the first applications, there have been 57 entries. Many of those will receive funding in the medium term from the Big Society Bank. It will have resources of £600 million. That will be leveraged because of the way that the money goes to investing institutions, which will then put that into the hands of the many smaller organisations that are going to do the good work that they can.
The Government are also making it easier for social enterprises to win public sector contracts. There is a new website, for instance, that speeds up the process. They do not have to go through the early stage application forms that larger contracts require. The Government are also cutting the red tape that is one of the real barriers to small firms generally and social enterprise, too.
My noble friend Lord Hodgson of Astley Abbots produced a report earlier this year entitled Unshackling Good Neighbours, which was an excellent read. It contended that enterprise and energy, particularly social enterprise, was being held back by a combination of red tape and a bureaucratic wish to cut back risk. In one telling example, he cited the snow code. Some noble Lords may be familiar with the Government’s snow code. I recommend it. It says that you will probably not be prosecuted if somebody falls down after you have cleared the ice. That is not the sort of satisfaction that people need. They need to be sure that if they have done their best they will not be dragged through the courts. The whole tenor of regulation at the moment is prohibitive. It does not encourage people to do things. The snow code is just one of the bureaucratic barriers to enterprise.
To be fair, the Government have put a moratorium on regulation for small firms—the smallest—and that will benefit some social enterprises. They have launched the red tape challenge in an attempt to scythe through all the regulations but the scythe is blunt. We need a stronger weedkiller to deal with this crop that keeps producing new barriers. There are too many regulations. Despite the barriers, community interests continue to generate thriving social enterprises. The registrar of community interest companies now has almost 5,000 companies on his books. They are businesses that are committed to social enterprise and to doing social good, but they can also pay a dividend—a dividend that is capped but nevertheless an incentive for people to invest in them. All sorts of businesses have subscribed to becoming community interest companies. Very few are turned down. One that was, I am told, was a sadomasochistic organisation that claimed that it produced public benefit because it disseminated information. That shows a lack of education in what social enterprise is all about. The Government could spread the word much more than they already do. Jobcentres, for instance, should really be making more of the opportunities that there are for people to launch social enterprises.
There are other positives that the Government could do without great cost. I refer noble Lords to Robert Ashton, who dubs himself “the barefoot entrepreneur”. He has been a social entrepreneur, has written books and comes up with ideas. I shall cite just two of them. He suggests that community interest tax relief should be at the same level at least as that for the enterprise investment scheme. That seems a reasonable suggestion. After all, if you are investing in businesses for the good of the community, why should you not get the same incentives as those who are investing in small risky businesses in the hope of making big profits? Even at a time of straitened finances, I suggest that the Government might want to look at that. His other proposal, which I fully endorse, is that unemployed graduates might be put to work in social enterprises. Before very long the subsidy that they would need would turn into a wage paid for by the social enterprises that they would help to grow. It seems to me that the big society intern programme would be no bad thing.
Lord Bhattacharyya
My Lords, we are all indebted to the noble Baroness, Lady Andrews, for giving the House an opportunity to debate the Government’s plans to support social enterprise.
Social enterprise is a very broad topic. As time is limited, I will focus on one issue that is essential to achieving the Government’s ambition: the need for social innovation to drive the strength of social enterprise. Social innovation is a vital yet often neglected component of any social enterprise. It is the development of new technical, product or process solutions to pressing social issues. At the root of any successful social enterprise, you will find social innovation.
The most famous social enterprise in the world is the Grameen Bank, with its hugely innovative approach to microfinance, but even Grameen faced challenges when expanding its innovation to different environments such as cities. As microfinance expanded, banks struggled to maintain the bonds of trust that sustained the early lending programmes. Indeed, Mohammed Yunus, who was given a Nobel Prize, has criticised the impact some microlenders have had on the urban poor. Yet those people still desperately need capital to improve their lives. Therefore, there is the demand for more regulation but that would not stave off the predatory lenders. This is a challenge only further innovation can answer. You have to find new ways if the old ones are not working. In Britain, there is a tendency to focus on identifying new funding methods, not developing the social innovations which will attract funding. Both are vital.
Take the case of social impact bonds, which Professor Paul Corrigan has recently argued should be expanded into the NHS. In a recent paper he showed that innovative methods of managing patients with diabetes or severe asthma can reduce costs and A&E admissions. He powerfully argues that bonds can help deliver these changes if the innovation is credible and sustainable. Whether it is developing a better inhaler for severe asthmatics or helping diabetics manage their blood sugar without hospital visits, any attempt to fund social enterprises through mechanisms like bonds will require proven improvements. Bond investors will not be convinced by hopeful assertions. They want hard evidence. This requires investment in the discipline of scientific evaluation.
This can lead to a Catch-22 familiar to all entrepreneurs: developing an idea into a working product requires funding, yet funders require evidence the product works. As a result, we find many social enterprises travel more in hope than expectation of outside investment. Without support for social innovation, we risk creating wonderful social market models, then finding that no one is in a position to take advantage of them. The Government are taking some welcome steps. The Innovation in Giving Fund is most welcome, as is the Social Action Fund to support structural innovation, and the Big Society Bank.
However, I am concerned that the initial big society capital proposal suggests that the only innovation the Big Society Bank will be mandated to support is financial innovation. If the last few years have taught us anything, surely it is that financial innovation alone is not a good basis for long-term growth. We should make it a priority to support social enterprises that wish to pursue social innovations. Without support, they will find it difficult to compete with private businesses that can fund research and evaluate new products with superior cash flow.
If we do not help social enterprises innovate, we risk regularly repeating the recent failure of NHS Surrey to award its community services contract to a social enterprise, as investors or commissioners will worry about the stability of social business models and the quality of social products. The Americans are ahead of us here, with their recently announced Social Innovation Fund. This brings together state, private sector and philanthropic funding to encourage R&D and to rapidly expand innovation in the undercapitalised social enterprise sector. We should pursue a similar initiative in the UK.
The NHS Social Enterprise Investment Fund might offer a model to expand further; for example, the fund is helping Bromley Healthcare develop ideas like virtual wards to reduce expensive A&E admissions. Beyond the NHS, the UK does not yet do enough to support social innovation, but the capability exists. NESTA, the Young Foundation and the Skoll Foundation are all interested in supporting what you might call social R&D. It is four years since the Young Foundation’s report on social innovation was produced and a clear lead from the centre is still needed. Therefore, perhaps I may ask the Minister what plans the Government have to extend the important area of support for social innovators. We could look at how social innovation could help social entrepreneurs to develop products with a clear impact in areas such as accident reduction, child safety or offender management. We are rightly setting up mechanisms that make social enterprise attractive to investors. We must also help social enterprise to develop attractive innovation for investors. We need social innovation to make social enterprise work.
Lord Newby
My Lords, I, too, thank the noble Baroness, Lady Andrews, for introducing this timely debate. I begin with a declaration of interest as the chair of Live Sport Community Interest Company, which provides education programmes to disadvantaged children via the medium of sport, and as chair of the All-Party Social Enterprise Group.
Previous speakers have already mentioned a number of advantages that social enterprises bring and I should like to refer to three of them. The first has to do with the ethos. The commitment of those who work for many social enterprises is often exceptionally high. The consequence of that is that the productivity of those enterprises is correspondingly high. An example which I have given previously in your Lordships’ House is that of Sandwell Community Healthcare Services, which was able to take over services provided by the local authority and to do it for literally half the price. One of the main contributions towards that saving was that the number of days of sick leave fell from 30 to three. It was all to do with the motivation of people who in their previous local authority guise had not been valued or motivated.
Secondly, social enterprises tend to be extremely flexible, partly because they are small and partly because they tend to have a very flat management structure but they do have the flexibility that one associates with the small business sector more generally. Thirdly, the sector appeals to a new sort of entrepreneur. Many people, particularly young people, want to be exactly the kind of social innovator to which the noble Lord, Lord Bhattacharyya, referred. But they do not want to do it via the medium of a straightforward private sector company or through a public body. They want to have a go themselves. They have an idea and they are just like other entrepreneurs, except that their motivation is towards producing a social good rather than a straightforward commercial good.
However, the sector now faces a number of problems, to which, to a certain extent, reference has already been made. The first is the problem of scaling up. Most social enterprises are small for a number of reasons. One is that they are typically overreliant on a charismatic founder. I see a charismatic founder in the shape of the noble Lord, Lord Mawson—sparing his blushes. The challenge is how, as it were, to clone these charismatic individuals who start an enterprise and get it to a certain size, but then find it very difficult to get beyond that size because there are not the support structures that there are around straightforward private sector activity.
The second general constraint around scaling up relates to finance. There is limited scope for investing in community interest companies bar in a straightforward way because of the asset lock and the limit of dividends. There is an unwillingness in the banks to invest in the sector because it is slightly outside the ordinary. Even in good times, banks find that challenging. At the moment, they find it impossible. So there is an over reliance on high net worth individuals and charities to fund the sector.
The good news is that the sector has grown significantly and there is more recognition that value is to be had in investing in it. It will be very interesting to see how big society capital uses its resources and £600 million is quite a nice start. We hope that it will act quickly and that the big banks which have contributed a third of that will be so inspired by what they see that they might get the habit and either use big society capital through which to invest more of their own funds or put money into social enterprises directly.
There is also quite a lot of activity around more traditional forms of funding. The report commissioned by the City of London Corporation from ClearlySo on investor perspectives on social enterprise showed that there was plenty of scope for progress there. The report produced by my noble friend Lord Hodgson, to which the noble Baroness, Lady Wheatcroft, referred, had the sensible idea of creating a social investor, equivalent to the established concept of an experienced investor, which would make it easier for people to invest in charities and social enterprises. I hope that the Minister will say that the Government support that proposal.
The other big issue that has been referred to relates to winning contracts, given that a large proportion of social enterprises look to the public sector for contracts. The starting point in terms of problems is that the cost is typically twice as much for public sector contracts as for private sector ones. There is a terrific inertia in many parts of the public sector in terms of providers. The sector has a comfort zone of whom it likes to give contracts to and is very wary of going outside that, particularly in the risk-averse environment in which we now find ourselves. As the noble Baroness mentioned, large private sector operators have the ability to undercut smaller social enterprises. They have huge resources with which to do the whole bidding process.
Finally, there are ridiculous delays—I see them myself—between the point at which a public sector body says that in principle it is prepared to let a contract go to a social entrepreneur and then actually signs it and makes the first payment. From my own experience, that sometimes takes well over six months. The social enterprise does not very often have six months of cash flow to cope with that kind of delay.
What is to be done? First, some social enterprises go on the back of successful private sector contractors for the work programme and other big public sector programmes. They become subcontractors, which is a way forward but not ideal. Secondly, on my point about the timeliness of decision-making, the Government ought to see whether there could be a presumption in terms of making a decision and finishing a contract with a social enterprise—and more generally SMEs—within a certain timeframe. This dragging on, which is now almost an art form in parts of the public sector, is very worrying. Thirdly, I commend the Public Services (Social Enterprise and Social Value) Bill which Chris White introduced in another place last November. It has government support and would nudge local authorities and other public sector providers into supporting social enterprises. Social enterprises do much good work already but they have much greater potential.
Lord Mawson
My Lords, I join other noble Lords in thanking the noble Baroness, Lady Andrews, for securing this important debate. We are all conscious that we live in a world that is quickly changing around us. If you stand still, you can feel as though you are moving backwards. People are no longer willing to accept the same predictable services from the public sector but are demanding higher quality services, more choice and the personalisation of services. In reality, can governments deliver this choice?
The situation in Europe at present is just one example of political drama that makes people wary of trusting Governments. People are sceptical—often with good reason—of politicians who hide behind grand phrases, processes and hubris but take little care of the detail and fail to deliver positive, practical and sustainable action. In the social enterprise sector in Britain at present, I, along with many of my colleagues, welcomed the coalition Government’s pledges about social enterprise because they are exactly in the right direction of travel. Yet, worryingly, there is a growing sentiment in the sector that these promises are just not being delivered on and once again Governments cannot be trusted to turn rhetoric into reality.
The coalition Government agreement had two main pledges to support social enterprises in public service delivery. First, it said that they will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services. Secondly, they will give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them deliver better services. Yet, as has been said, the Social Enterprise Coalition, which represents many in the sector, while standing in a slightly different place from me, cannot see at present much support for social enterprises delivering public services. What we all see, they say, is a lot of stagnation: the waters, instead of being clear, are increasingly muddy. The Mutual Support Programme which was announced by Francis Maude in November 2010 has yet to materialise. The national programme for third sector commissioning, a programme designed to support the commissioning of social enterprises and charities, has not emerged.
Without some intervention, there is a real danger that public service markets will be opened up and dominated by a small number of large private sector providers. The Social Enterprise Coalition says that it has seen this happen in a number of public service markets: welfare to work, waste and others where a small number of private companies dominate and the barriers to entry are too high for social enterprises and other small businesses to operate. There is some truth in this and I know from past experience how government departments love to talk to large bureaucracies because they are adept at using that language. Bureaucracies love to talk to bureaucracies. Talking to small and medium-sized social enterprises is quite a different matter because they speak a different language. We will need more than websites to address this issue.
Some of us have seen all this before and it requires focused leadership in government to break the impasse. I am a great believer in the power of the market but sometimes the Government have to intervene to make the market happen. The noble Baroness, Lady Thatcher, knew that.
There are three ways of governing: the centralised state solution, the market, or the present favoured choice referred to by our major parties as going local. While those of us who have operated at a local level for more than 30 years are tempted to welcome this attention, we worry that politicians on all sides do not actually comprehend a lot of the practical detail. The systems of government and the Civil Service can present themselves as something new but when you actually examine the details, old out-of-date processes and systems still prevail and are in danger of replicating themselves a thousandfold in local communities across the country. On my travels, I keep meeting old men in new clothes. There are real and very practical opportunities to grow the social enterprise sector in the process of going local, but it needs nurturing and it will not happen without the devil in the detail being understood within government.
If this does not happen, I fear that we will see yet another phase of a very expensive cycle. Vast sums of money are wasted every year by those politicians who do not take personal responsibility, get hold of the practical detail, and drive forward viable change. The public are tired of seeing very little change and know that the processes of government carry on very much as before, regardless of which party is in power.
There is a challenge here that has not been grasped because there are no particular easy brownie points to be gained by any Government if they grasp this particular nettle. Yet the long-term rewards will be worth the short-term difficulties.
I welcome both the localism and health Bills, but I ask the Minister what evidence is there that the Government are making life easier for those of us who are attempting to deliver these welcome changes on the ground? What evidence is there that there is a level playing field on which social enterprises can compete with large companies? What practical evidence is there that red tape is actually being removed? I can hear many fine words but outside your Lordships’ House, the jury seems to be out on these issues.
The world may be changing but the systems of government and the Civil Service seem to chug on regardless. Without very clear and focused leadership within government none of this will happen and, as with all recipes, the end result depends upon proper preparation, mixing and baking. No one likes an undercooked chicken.
This pretence at change will not do for the modern enterprise culture that our children are now growing up in—a culture where at the press of a button you can receive information from anywhere in the world about virtually anything; a culture where young people, through technology, are learning by doing. The public sector still thinks that the world is about process, system and strategy, but our children are growing up in an integrated world created by entrepreneurs like Steve Jobs, co-founder of Apple, who died today, based around people, relationships, practice and networks. These two worlds are fundamentally at odds and I see little attempt to address the issue from any of our political parties.
The big breakthrough will start to come where social enterprises and business work ever more closely together. My colleagues and I have created a regeneration business, which we have set up as a social enterprise, called One Church, 100 Uses—and I must declare an interest. We have recently moved our head office into the London offices of HLM architects, a business and a well respected firm of architects that operates nationally and internationally. This decision was taken because, as we grow the business, we recognise the potential synergies between us. The development of public buildings over the next decade may necessarily be more small scale with less money about. The churches in Britain own nearly 50,000 buildings across the country, many ripe for redevelopment in favour of the local community. Maybe there is synergy between this business and a small emerging social enterprise. We think there is, and are ready to discover opportunities together. We need to see more partnerships like this in the social enterprise sector.
Lord Wei
My Lords, I, too, thank the noble Baroness, Lady Andrews, for tabling this excellent debate, and declare an interest as an adviser to the Community Foundation Network. Given the limited time we have in this debate, I will not dwell on definitions, even though the term “social enterprise” does differ, depending on whether one uses the more narrow legal definition based on percentage of income earned, or the broader sense of the word, which comprises more a sense of solving social problems in an entrepreneurial way. I prefer to use generally the term “social venture”, which explicitly encompasses both definitions.
There is much about government policy on promoting social enterprise that should be welcomed. Here I must declare an interest in having had a hand in developing some of it. It is particularly pleasing to note that while traditional volunteering and giving may be on the wane, social enterprises have been starting up at an explosive rate since the election. I believe these two trends are actually two sides of the same coin; as we age and as technology changes our lifestyles, it is not surprising that traditional attitudes to giving and volunteering, in which money and work may have tended to be handed over to professionals, are on the wane, and more and more people, old and young, want to give of their time and money in a more hands-on, technologically enabled—that is to say, convenient and, indeed, entrepreneurial—manner. Social enterprises or ventures will be the likely beneficiaries of such a shift.
Social enterprises facilitate all three parts of the Government's programme of sharing greater responsibility for tackling social problems with citizens, otherwise known as the big society. Social action, community empowerment and public service reform are all made possible through social ventures, and the Government have recognised this, for example through their national citizen service programme, which seeks to engage young people from widely different backgrounds in serving their communities, often through social action-orientated social ventures, or their programme of training community organisers who can help citizens locally develop social enterprises as a means of addressing neighbourhood issues, or through the big society capital wholesale fund, designed in large part to help social enterprises to achieve the scale needed to help compete for and then deliver devolved public services.
However, despite this great start, more could be done in each domain to encourage social enterprises to thrive. In the area of social action, for example, there needs to be more follow-through on implementing the recommendations on barriers faced by social organisations, including social enterprises or ventures in the report from the noble Lord, Lord Hodgson, Unshackling Good Neighbours, such as redrafting guidance from government departments that can be written in too risk-averse a manner, causing many smaller organisations to be overly fearful of liability and causing them to incur unnecessary costs that they can little afford.
In the area of community empowerment the Government need to encourage a more consistent treatment of social enterprises by local authorities and front-line officials, which in my view have a very wide range of attitudes to the role of such enterprises locally across the country. In some places, social enterprises are seen as a valued part of the local ecosystem and supported well, whereas in others they are seen too often as a quick way for the local state to offload assets. One low-cost way of achieving this better understanding of social enterprises in the public sector that I have come across is encouraging leaders from the public sector to work in the offices of social enterprise leaders, and vice versa, for parts of their week, which can often help to increase understanding of the challenges and strengths of each others' models and ways of operating, which can then lead to more nuanced policy and co-operation at a local level.
In the domain of public service reform, there remains a real need to create more of a level playing field in commissioning based on social value, as articulated in Chris White’s Private Member’s Bill, which was also mentioned earlier. Officials should desist from trying to water down provisions in the Bill for fear that they might complicate tendering processes or lead to economically inefficient decisions. On the whole, seeking social value does not, in my view, have to complicate or render commissioning decisions uneconomical. Rather, good commissioning should always seek to balance complexity and simplicity in the short and long term. Sadly, too much commissioning today seeks to go for the overly reductionist and short-term answer, which too often in turn leads to a lack of the originally desired outcomes and longer-term costs because best value principles were not followed. It is disappointing, for example, to see organisations such as Surrey Community Health not winning tenders and to see the lack of successful bids, so far, from employees in the NHS to form mutuals, which has a lot to do with the way in which commissioning is currently configured.
I believe that the Government have made a good start in supporting social enterprise and ventures in what are financially difficult inherited circumstances, but the pace has definitely slowed. The Government now need to show how they, too, can be socially entrepreneurial and implement further reforms to build on that strong start—not succumb to timidity or be stymied by bureaucratic roadblocks. To achieve this, they could well do more to work with the likes of community foundations, which are experts in facilitating the start-up, scaling and, increasingly, the turnaround of social enterprises up and down the country. Indeed, the community foundation movement covers about 97 per cent of the country.
I know from personal experience that there are parts that government ultimately cannot reach and I encourage social entrepreneurs, public servants and commissioners to work with their local community foundations to overcome the barriers that they face in helping to support the social enterprise sector, so that the many promising existing and newly started social ventures can continue to thrive, expand and collaborate, forming together a full part of the ecosystem of players needed, now more than ever, to strengthen our society.
Baroness Randerson
My Lords, as the noble Lord has just said, social enterprise is a very broad umbrella term and we could spend the whole of this debate just defining it. We could mean charities that do some trading or we could be talking about large commercial enterprises that redistribute their surpluses to their employees. Taking the generally accepted definitions, however, social enterprises contribute greatly to our economy. They contribute an estimated £24 billion annually and a consistent 1.5 per cent of our GDP, employing about 800,000 people. That is significant, but it could be much more significant still, so I thank the noble Baroness, Lady Andrews, for initiating this important debate.
As many noble Lords will know, I come from Wales, and I want to bring to your Lordships’ attention one notable example of a social enterprise that flies in the face of the general trend that my noble friend Lord Newby referred to earlier: for social enterprises to be, on the whole, small scale. That pattern is indeed the same in Wales as in the rest of the UK, but we have one notable exception in Wales. That is Glas Cymru, better known to its customers as Dwr Cymru, or Welsh Water.
Glas Cymru is the only one of the privatised water and sewerage companies in England and Wales to adopt a social enterprise model and is a single-purpose company formed to own, finance and manage Welsh water. It provides services for some 3 million people throughout Wales and in the borderlands with England. It is a company limited by guarantee under the Companies Act and was established in 2001, when it was bought from Hyder plc, a traditional for-profit company. As a company limited by guarantee, of course, it has no shareholders, and its assets and capital investment are financed by bonds and retained surpluses. It is run by a board of members who have no financial interest in the company and receive no dividend. The customers do not own Glas Cymru; it is not a mutual. In other respects it has the same framework as other water companies, but customers receive a rebate on their water bills in times of surplus—and I declare an interest as a Glas Cymru customer. Customers get a good deal with lower bills, and profits are reinvested in capital development for the company.
When the company gave evidence to the enterprise committee of the Welsh Assembly, it stressed that in its view the model could be replicated elsewhere, and that is my point in raising this today. In its view, the energy market was a prime area for that model; its not-for-profit status has greater legitimacy and greater community involvement than a normal for-profit company. Glas Cymru believes that it is better equipped to make the long-term decisions and investments that are needed in the energy sector than a normal shareholder-owned short-term competitive company. I urge the Government to look at this model with an eye to the energy market as a whole and the renewable energy market in particular.
It is worth pointing out here that the political support of the Welsh Assembly Government was crucial when Glas Cymru was set up. It could not have been done without that support. The UK Government need to provide that political support if that model is to be replicated.
That is an example of a large-scale social enterprise, and there are of course others. However, as has been said, the general problem with social enterprises in the UK is the lack of suitable financial models to allow them to grow. There are a number of potential solutions to this problem, and several noble Lords have referred to that. The important thing is that the Government have a crucial role in developing the levers to ensure that suitable finance options are much more broadly available to allow social enterprises to grow and develop. The signs are good and a number of useful options were flagged in the government report on growing the social investment market, which was produced in February this year.
I shall touch briefly on an interesting option included in that paper: the idea of piloting a social stock exchange or providing incentives for existing stock exchanges to develop an exchange of stocks in social ventures. I believe that there is a largely untapped wealth of interest in investment in social enterprises. Many people would prefer to have a stake in their local community-based business. They are not necessarily interested only in getting the maximum possible profit and, despite being in very hard times now, many people would be prepared to give some of their money to invest in that kind of enterprise, with at least part of their investments going in that direction. I have long had an interest in local stock exchanges generally, and the model suggested in this Cabinet Office report is worthy of further investigation. I urge the Government to pursue it.
It is important that we move on from supportive rhetoric. We had such rhetoric from the Labour Government prior to the current coalition and it is important that the new Government, who have provided so much leadership on this, now provide some concrete support in the months to come.
Lord Haskel
My Lords, many years ago, I was responsible for installing the first computers in our business in Leeds. They were a novelty. Everybody wanted to have a go and so we opened the office in the evening to staff and their families. Before long we had a little computer training co-operative going, which helped local people, particularly staff members’ families, to get better jobs and do better at school. It certainly raised the morale, commitment and loyalty that the noble Lord, Lord Newby, spoke about.
Was it a social enterprise or a social venture as the noble Lord, Lord Wei, put it? In those days, we socialists—that is what we called ourselves in those days—spoke about common ownership. To most people, such as my noble friend Lady Andrews, social enterprise was a contradiction in terms. A few of us were influenced by Michael Young, the social entrepreneur, who convinced us that business was as much about society as profit, as the noble Baroness, Lady Randerson, said. In truth, the name scarcely matters. What matters is that it was right for the time, it was right for the place and it was right for the people. Our little enterprise met the social need for people to become more computer literate: a local and specific social need which we did not even know existed when we started.
That is the secret of successful social enterprise, and why they are generally small and local. Otherwise they become ordinary businesses and lose their distinctiveness and that special aspect which sometimes enables them to succeed when ordinary business fails. As the noble Lord, Lord Mawson, explained, this is why in practice most big contracts in public services go to large private firms which, in turn, subcontract to local enterprises. This is in spite of the rhetoric from the Government, about which the noble Lord spoke.
It is easy to be cynical about social enterprises. It is easy to talk about them having mixed objectives and achieving neither. It is easy to talk about them being soft and therefore being crushed in the tough world of business. However, somehow, the idea of social enterprise keeps going. It just reinvents itself and adapts to the changing times. Indeed, its ability to deliver social benefits as well as commercial benefits may be another intangible asset that we have only just rediscovered about modern business.
The Government are making every effort to promote social enterprise, but they have got some of their thinking the wrong way around. Making 1 million public servants redundant and then trying to persuade them to sell their services back in the form of a social enterprise is getting things the wrong way around. Why? Because nobody is sure what need is being satisfied. Is it cutting public expenditure? Is it encouraging the private sector to provide public services? Or is it social engineering: trying to get people to improve themselves? Perhaps the Minister can clarify this, because until it is clarified it is not going to work properly.
There is clarity over what the Co-operative and Community Finance organisation is about. It calls itself the “lender for social purpose” and has been doing this for nearly 40 years. It raises money by public share issue and I declare an interest as a long-standing investor. Its prospectus says that it lends money for social purposes and collective benefit. But it is small, not because it has no money but because most social enterprises—apart from perhaps housing, mentioned by my noble friend Lady Andrews, or even water—also have a limited capacity to absorb and justify major loans and equity. Social enterprises have to perform. Their leverage is limited. Yes, we may do business with them initially because we support their social aims, but to get the repeat business they have to deliver quality, service, value, efficiency and profits like everybody else. So they have to be careful with debt.
Indeed, the big society and other fundraising ideas may not be all that relevant unless the terms on which loans are made are eased, and the need for more formal management is changed. Social investment bonds may be an idea whose time has come—the social investment market is expanding—but these are early days. We will have to see whether they survive the innovation of the City without the social innovation that the noble Lord, Lord Bhattacharyya, spoke about.
Traditionally, most social enterprises work in towns and cities: housing maintenance and refurbishment, collective living, training, health and welfare, especially for the benefit of those who are failed by the usual system and have particular needs. Interestingly community ownership is moving to the countryside where community-owned shops are replacing some of the many village shops which close each year.
An article in Tuesday's Financial Times told us that there are 60,000 social enterprises in the country, employing 800,000 people and turning over £24 billion a year. I suspect that figure depends on what you mean by social enterprise, but obviously this is a growing sector—growing in terms of numbers and public acceptability. The concept is being promoted by the Government; it has its own advocacy body, business schools are teaching it and institutions are appointing social entrepreneurs in residence.
As the noble Baroness, Lady Wheatcroft, suggested, jobcentres could also play an important role. All this is to the good and, like other noble Lords, I hope this is the way business is going. I wish it every success. I also hope it does not allow itself to be taken over by—or become part of—the existing business establishment. It would then lose its distinctive, special and attractive features and that would be a loss.
I am most grateful to my noble friend Lady Andrews for moving this Motion. It gives us an opportunity to debate some of the better business practices—not social business practices as the noble Baroness, Lady Wheatcroft, suggested—about which my party leader spoke last week.
Baroness Scott of Needham Market
The noble Baroness, Lady Andrews, has done the House a great service by tabling this debate today, which has demonstrated that huge disagreement is not needed for an interesting debate. We by and large agree, but nevertheless there have been lots of different and interesting points. It is perhaps not surprising that we agree because one thing which unites us, wherever we sit, is a sense of public service. That is why we are active in your Lordships’ House. It is also why we do what we do outside this House. As we go around the country, the ideal of public service is absolutely alive and well. Everywhere there are people who, in some way or another, devote their life to service to the public.
Until fairly recently, I regarded public service and the public sector as synonymous. I was wrong and I admit it. I was also wrong to believe—as I did until 1997—that all that was wrong with our public services was a lack of funding. I am sure that privately if not publicly even Members opposite would accept that the large amounts of money put into public services in the last 10 or 15 years have not delivered the outcomes for many of our citizens that we would have hoped. I am not going to theorise why, although I strongly feel that the blame, if you want to call it that, does not usually lie with individual workers. Personally, I deplore the demonisation of people who choose to work in the public sector.
However, if we are looking for solutions and ways to improve public services, the solutions very often lie with the people who are working within our public services. They are the key to reform and making services more flexible, responsible to individual need and circumstances, locally focused and cost-effective. Last year, I met a former youth worker in Suffolk who had left the county council and set up, almost by accident, a social enterprise. She is doing great things with young people with multiple problems. Local social services had to admit that they had virtually given up on those young people, but that lady has been able to deal with it.
Earlier in the summer, I met Dai Powell, who runs Hackney Community Transport. Founded in 1982 from very modest beginnings, it now operates across the country and last year provided more than 12 million passenger journeys. Government need to be sure that they know where these existing, very successful models of social enterprise are. Something like Hackney Community Transport should be used as a benchmark for service delivery, because it is not only cost-effective and efficient but also ethical and locally responsive. It would make a change for government to benchmark against that rather than conventional service delivery.
In this current economic climate, as we have heard, there is a great incentive for this sector to grow, but the danger is that it is seen as some way of getting public services on the cheap, which it certainly is not. Nor will this growth somehow happen all by itself. Some will of course, but if we are to see the step change that the Government seek, then the Government have to get serious about it.
How do they do that? First, they have to play their part in creating a culture in which social enterprise is seen as a serious career option for people leaving education and for those looking for work, and not as some sort of last resort of employment. In this regard, Ministers’ attitudes are crucial both in terms of saying the right thing and ensuring that social enterprise is seen as an intrinsic part of service delivery and not bolted on as an afterthought. It needs to be mainstreamed into all policy and legislative decisions.
Secondly, the sector needs support. I recently spent a very enjoyable day with the School for Social Entrepreneurs in Ipswich, where I met a variety of people seeking to set up social enterprises. Their dedication and enthusiasm will carry them a very long way, but professional support in finance and business planning, legal frameworks and so on is key, and this is where the school comes in. The Ipswich school is great, but we need more of this sort of thing right across the country. We also need social enterprises which themselves help other social enterprises. My colleague in Suffolk, Craig Dearden-Phillips, does this very well through his business, Stepping Out. Social enterprises need help not only in being established but in scaling up, as my noble friend Lord Newby, said, although not every social enterprise wants to get bigger—that is precisely the point.
If services are to be divested from local authorities or health trusts, it is senior managers from those bodies who are likely to head the social enterprises. If they are to make the transition from senior manager to chief executive, they will need help in doing so. Social enterprises continually cite public procurement policies as a major obstacle to growth. The Government need urgently to address that.
For many years now, local authorities have been encouraged to join together to create purchasing consortia to benefit from economies of scale from larger contracts, but this simply has the effect of freezing out new providers who are smaller and in the long run generates higher costs by driving diversity and competition out of the market.
Traditional procurement and commissioning tend to focus on hard financial data and lose sight of those rather harder-to-measure aspects such as advocacy, support and accessibility—those things which make social enterprise so attractive.
The Government have to give serious thought not to giving a handout to this sector but to giving it a step up, perhaps by thinking about quotas for the transfer of services or, as my noble friend Lord Newby said, about speeding up the process, which is so protracted that it stymies local initiative. Starting a new social enterprise is a huge risk for the individuals concerned. They need assurances over length of contracts and the future of the pensions that they have built up while working in the public sector.
The other major problem, which a number of noble Lords have addressed, is finance, both in terms of availability and affordability. A policy of credit easing—or whatever we call it— needs to be extended to mutuals and social enterprise.
Social enterprise has so much to offer us in terms of value for money, flexibility and genuinely responsive public services. The track record of such organisations in some of the poorest and most deprived parts of our country is already impressive, but we can do so much more to unlock the energy and enthusiasm of all these people who are genuinely committed to public service.
Lord Hunt of Chesterton
My Lords, I am grateful to be able to speak in the gap. This is a most important debate, led off by the noble Baroness, Lady Andrews. I was head of the Met Office, an example of a large public sector operation, which relied hugely on community involvement. In fact, many of the community activities supported by this big public body then led to local enterprises. Community projects in the environment lead to tremendous skill and know-how, and I sometimes think that the Government should encourage protest as a way of developing great expertise and local activity. Some of these have become quite successful businesses and social enterprises.
My other point is that it is very important that the government agencies that are interacting with these local groups, and encouraging them, do more to publicise them. We should not denigrate the role of the internet; it can play a tremendous role in explaining what is being done, and it enables other countries to see what is being done here, from—as one might say—an export point of view.
However, one should not ignore that some complex local community exercises involving health and businesses and local communities can be publicised, for example, on London buses. For instance, these tell you what to do if you are suffering from air pollution and are dealing with your local doctor, and want to get very specific local information. Indeed, it was rather disappointing that the Cabinet Office did not, in describing the scheme this year, describe all the aspects that would be possible. There is more to be done by central government and large corporations to help social enterprise.
Baroness Smith of Basildon
My Lords, I have greatly enjoyed this debate. The expertise and support in your Lordships’ House is one which the social enterprise sector will be immensely gratified by. I congratulate my noble friend Lady Andrews on procuring such an important debate, and making such a powerful case. She and others have pressed the Government to match words with deeds. I should declare an interest as a member of the Co-op party, and that I sit as a Labour and Co-op Peer in your Lordships’ House.
No definition is going to be exact, but I always think of social enterprise businesses as those with a heart as well as a head; businesses where profit is measured not just in financial terms, but in how it benefits society. An expression I often use is of businesses that aim for a triple bottom line: that is, good for its business and employees, good for society and good for the environment—in shorthand, perhaps, good for people, profit and the planet.
How that profit is used is absolutely key. Social enterprise’s prime objectives are social and/or environmental. That is not in any way critical of other businesses that have social objectives, but what gives social enterprises their distinctive character is that their social or environmental purpose is their primary purpose, and profits are reinvested in the business. The beginnings of social enterprise can be traced back to the Co-op’s Rochdale Pioneers of the 1840s, which led to other co-operatives and social enterprises being set up in what is now a worldwide ethical movement.
I should confess to your Lordships’ House that my last ministerial position in government was at the Cabinet Office with responsibility for social enterprise, including seeking to establish what was then called the social investment wholesale bank, bringing new finance to social enterprise. Delighted as I was to hold that brief, I never really thought that social enterprise sat well in the Cabinet Office, with what was then the Office of the Third Sector and is now the Office for Civil Society. Social enterprises are businesses—as we have heard, very successful businesses—but with a wider definition of what means success in business.
I was taken by the comments of the noble Baroness, Lady Randerson, about Welsh Water. Indeed, when I was a Northern Ireland Minister, I tried to export the model of Welsh Water to Northern Ireland Water. It has still not resolved the issues there, and it might do well to listen to the comments the noble Baroness made today. Social enterprises are not just about the third sector, and there must continue to be a greater discussion about the role that BIS can play in promoting and supporting social enterprises. I found my meetings with Business Ministers invaluable, and I hope that co-operation is continuing, and expanding.
Although I am consistently impressed by social enterprises, I also get frustrated—that frustration has been illustrated in other comments today—that those in charge of procurement choose not to recognise, or just do not understand, that they could take into account the wider benefits that a social enterprise can bring.
I do not know whether your Lordships are hearing the same “dentists’ drills” as I am and whether their teeth feel as uncomfortable as mine on hearing that sound.
The previous Government set up a Cabinet committee, of which I was a member, with the exciting title of “Miscellaneous 37”, to address some of the issues around procurement. Many of these issues also affect small businesses. As the noble Lord, Lord Haskel, highlighted in his very knowledgeable speech, too often social enterprises have lost contracts to larger businesses which, although delivering on price, may not provide the added value or success of a social enterprise. Those larger businesses then sometimes subcontracted the provision of services to social enterprises. That cannot be right. Often a social enterprise has provided a service at a far lower cost than that for which the original contract was awarded. All we were seeking to do was to ensure a level playing field so that one sector did not have an automatic built-in competitive advantage over another.
This is a difficult area but one in which we were making progress. However, the new Conservative Government—sorry, coalition Government; that was a genuine error—went further. Francis Maude, as the Cabinet Office Minister, said in November 2010 that millions of public sector workers—the noble Lord, Lord Mawson, referred to this—would be given the opportunity of,
“spinning themselves out of the public sector, and taking control of their lives and of the services they provide”.
However, he rather unexpectedly added that this “right to provide” public services would in some cases,
“see services handed to new social enterprises without the need for a competitive tender”.
As an example of extending this brave new world, he cited Central Surrey Health. Other noble Lords have mentioned that. That organisation was set up in 2006 under a Labour Government. Two former directors of the local primary care trust launched a social enterprise with 650 nurses and therapists who each had a £1 not- for-profit share in this new business. They provide services for the PCT. Although it has not been free of criticism, as is the case with all new businesses, it is highly regarded. It is clear that staff motivation and enthusiasm is second to none. Any profit made is reinvested in local services. Francis Maude was enthusiastic, saying, “They are my poster people”. Therefore, your Lordships will understand how expectations in the sector were raised by these comments, especially as regards the tendering process. When so many charities and voluntary organisations were worried about their services in the face of government cuts, many saw this as a potential lifeline. However, when a major new contract came up in the neighbouring area, it was not Surrey Health—the social enterprise “poster people”—but a private company, Assura Medical, 75 per cent owned by Virgin, that won the contract. The noble Lord, Lord Mawson, also referred to that.
I use this example to highlight the great difficulties for social enterprises in bidding for such contracts on a level playing field. Uncertainty was also created for employees leaving the public sector to join a social enterprise. Instead of “not having to tender”, as referred to by Francis Maude, they can later lose the provision and control of that public service to a private company in a way that was never initially intended. We all want to avoid another Southern Cross situation occurring.
The central point is the need to take into account the wider social and environmental benefits as part of the assessment process. Other noble Lords have referred to this as being an important way forward. It is also about improving the capacity to bid, providing support and assisting possible social enterprise consortia, such as was previously done through Futurebuilders. The consensus in your Lordships’ House is that social enterprise is not a political football to speak warm words about and then fail to deliver on when in government.
I was struck by the comments of the noble Lord, Lord Bhattacharyya, on social innovation. It seems to me that it is the crux of the matter. For me the real value of social enterprises, and where they make the most difference and greatest contribution, lies with those which identify a need which is not being met and then devise innovative solutions to meet that need. They also make an enormous contribution to the economy, including employment. We have heard the examples of Sandhurst Community Care and Hackney Community Transport. One of my own favourites is Jamie Oliver’s restaurant Fifteen. This is a restaurant that gets young people, many of whom have convictions, to learn a trade and get their life back on track. Divine Chocolate, led by Sophie Tranchell produces first-rate chocolate and, for the first time, ensured that cocoa farms were not being ripped off. It helped to establish a farmer’s co-operative in Ghana and today almost every chocolate company in the world is looking to be fair trade. Another of my favourite social enterprises is the Elvis & Kresse Organisation, which, seeing how many fire hoses were going into landfill, used that high-quality and very expensive waste for bags, purses and luggage. It then gave 50 per cent of the profit it made to the Fire Fighters Charity.
These examples and others we have heard about are truly inspirational. I also urge the Minister to listen to the social enterprise ambassadors. We have heard about these already from the noble Baroness, Lady Scott. They were introduced by the Labour Government and really impressed me. They are not asking for something for nothing. They are not asking for an unfair advantage but they are asking and seeking to grow the social enterprise sector with the knowledge and experience they have. They need recognition of their work and a level playing field that properly evaluates their worth and their value to society so that they can make their contribution to the economy.
As the noble Baroness, Lady Andrews, made clear, the danger is that we have lost so many of the programmes that support social enterprises; and government announcements are not yet anything more than that. I hope the Minister will be able to positively address the questions of the noble Baroness, Lady Andrews. If the banking crisis and recession has taught us anything it should be about values. The cheapest is not always the best and value for money can be achieved in more ways than one.
Lord Wallace of Saltaire
My Lords, I thank noble Lords for the immensely valuable and expert contributions to this debate, including the speech we have just had from the noble Baroness, Lady Smith of Basildon, who has reminded us that there is a great deal of continuity between what this Government are determined to do and what their predecessor was determined to do and in the obstacles faced by the last Government and this Government.
I thank the noble Baroness, Lady Andrews, for the debate and remind her that I was happy to show her around Saltaire last summer. I often think that Saltaire is in many ways an easy and ideal community, not only because is it a very beautiful village in which the Guardian outsells every other newspaper, and partly for that reason atypical, but because it is full of self-motivated people interested in public service naturally taking part in local activities. I only wish that was common across the whole country. Part of the problem that we face, in answer to the noble Baroness, Lady Scott, is that we do not have, across the entire country, the same level of motivation or willingness to participate in local public community life that we want to generate. That is part of what this Government are now attempting to do.
We support social enterprises because these are now integral to a more active, fairer and more prosperous society. We see social enterprises as ways of supporting citizens in communities to take more power into their hands and to build what the Prime Minister calls the big society—a more engaged and less passive society. Social enterprises are also an important part of a business community that contributes to our economic prosperity. I take the question asked by the noble Lord, Lord Haskel, about how one defines the extent of this large and rather amorphous area, but the estimate that the social enterprises employ 800,000 people and generate 1.5 per cent of GDP is a fair rough estimate that suggests, as we expand this sector, how very useful it can be.
We are supporting social enterprises as far as we can across the whole of government, from pushing through mainstream reforms to recognising the potential of social enterprises, by making it easier to start up and run social enterprises by leveraging resources, by increasing the opportunities and support to help social enterprises grow and by promoting social enterprises in the public sector and beyond. We all recognise how large a task this is and we also recognise how diverse a sector we are talking about.
Some of us have been talking about community assets—local shops, pubs, community halls and grounds. I can think of at least two Members in this Chamber whom I know well who are involved in the setting up and management of community shops. I am very sorry that the noble Lords, Lord Morris of Handsworth and Lord Jay of Ewelme, are not here to take part in this debate today. I have enjoyed talking with them about how they have got involved in regenerating that sort of local community asset. We are also talking more about community interest companies and non-profit organisations which are providing employment and socially valued services. I am familiar with the Cellar project in Shipley, which helps to provide a route back to employment for people who have suffered mental health problems and, in the process, generates a certain amount of income for itself and gives people confidence back in their ability to work.
We are also talking about mutual providers of public services. I have spent some time during the past year with an excellent charity in Yorkshire, Together Women, which has been dealing with first-time women offenders and has had enormous success in reducing the rate of reoffending among women. However, it is dependent on grants from central government and has not yet been able to move, because central government is not doing it yet, into the social interest bonds where it can say, “We are saving you money, so let’s have a different sort of contract from being dependent on central government grants”
We recognise the enormous obstacles that we are facing. Many of our citizens are still very passive. They talk about their rights; they expect services to be provided; but they do not understand that they need to take a much larger part in providing those services among themselves—sometimes preferring to complain rather than to share public responsibility. The government documents that I have been reading as I have read myself into my new responsibilities talk a great deal about encouraging a widening of neighbourhood councils. I am conscious that neighbourhood councils are not easy to set up in some of our cities and in a number of our smaller towns. Regenerating the self-confidence and self reliance of local communities is itself a long-term project. The previous Government did some work in that area; we are continuing it. It is a long-term task.
We are talking about a wider attitude change towards public life, public responsibilities and public engagement in self-government at the local level. Having said that, we are also talking about a broader attitude change. Central government, as a number of people have remarked, often resists the idea that you can really trust local people to run things in their own way. The national media lumps the term postcode lottery on anything that appears a little odd, a little more diverse. Business, especially in the financial sector, should not simply be thinking about its responsibilities to shareholders on a quarterly and annual basis. They should also be thinking about people in local authorities and citizens.
The noble Lord, Lord Wei, and others, have talked about the problems of commissioning. The assumptions underlying commissioning showed that there are real problems with people in central government not yet having thought through what sort of different approach we need.
Increasing investment under the big society capital approach is part of how we are attempting to change the way in which the sector is funded and to transform its relationship with government and public services. The Big Society Capital Group will be an independent financial institution that aims to increase investment in social enterprises. It will do that by supporting organisations that invest in the sector and will be a champion for social investment with policy-makers, investors and stakeholders in the sector and the public at large.
Of course, this is not the ideal time or circumstance in which to encourage new enterprises to grow, so provision of diverse sources of funding is extremely important to all of us. The national survey of charities and social enterprises last year showed that just over one-third of those charities and social enterprises surveyed received some form of funding from central government. So this is not a universal problem for the sector. Community foundations have been mentioned and other sources of funding are also important. Too much dependence on the state and on the central budget has not been good for the voluntary sector. Our aim is to reduce that over the long term, to move towards local contracts and contracts for services provided, and as far as possible, to foster self-generating and self-funding activities where appropriate.
We thoroughly agree with the noble Baroness, Lady Wheatcroft, that business is generally a force for good, but there are issues when one is also looking for a culture change. I am conscious that in the pub sector, for example, the role of the pub companies and of some venture capital trusts has been very much to damage the provision of the availability of community assets for local communities and indeed, to attempt to buy up small breweries for their property assets and then close them.
I am happy to say that my pension fund, the University Superannuation Scheme, is actively taking part in seeing how far pensions can provide social enterprise funds. We all need to be thinking about that sort of thing, or those of us who are a little involved in what our pensions should be doing. The noble Baroness, Lady Randerson, talked about other forms of providing financial social capital, so to speak. We want to encourage closer co-operation between business and social enterprises and between business and the whole voluntary non-profit sector.
The noble Lord, Lord Mawson, talked about the barriers to entry. That again is an area that we need to keep pushing to ensure that central government does not go for the easy aim. Nearly 300 welfare-to-work contracts have been awarded to voluntary sector providers. Of those 300, two have been large-scale contractors, and the other 289 are subcontractors. So we have been making some progress in this regard.
On the question of red tape we are also moving ahead. The noble Lord, Lord Hodgson, has made some 17 regulations in his report, some of which we can do something about. The Association of British Insurers has now moved on the question of ensuring that volunteers do not have to pay more for their car insurance if they are using their car to assist in voluntary activities. That is a useful, small but important step forward. The Payments Council has similarly announced that cheques will now be retained for as long as they are needed. There are a number of small things like that that can make a difference to local enterprise activities.
On the social impact bonds experimentation in Peterborough, the Government intend to build on that with four more pilot social impact bonds that aim to help troubled families in four local areas. We are moving forward on that and it is seen as a success. We are therefore pushing forward on a range of different fronts: social investment; the new big society capital enterprise; and other means of support for this very important sector. It will take some time and means a whole range of changes at different levels. The most important level is to get more back down to the local level, to get more local engagement. Social enterprises, the Government believe, are vital in their contribution not only to economic growth and employment but to a fully participating society.
We have made our support for social enterprises a key element of different parts of this Government’s programme and we have a strong package of market and individual enterprise-level policies that we hope will help social enterprises to start up and grow. I finish by again thanking the noble Baroness, Lady Andrews, and to say that we all need to keep pushing on this. We all recognise the cultural and mindset obstacles that we face at all levels of government: the economy, business and ordinary people themselves.