Grand Committee
The Deputy Chairman of Committees (Baroness Andrews)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
EU: UK Isolation
(11 years ago)
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Lord Dykes
To ask Her Majesty’s Government what steps they will take to avoid increasing United Kingdom isolation in the European Union.
Lord Dykes
My Lords, I am most grateful to the usual channels for the opportunity of launching this vital debate today. Sadly, I have to say at once that the rather controversial and rather expensive funeral event last Wednesday provides a sombre memorial to this theme, recalling to all of us the negative attitudes towards Europe of someone who was—again, I feel sad about saying this—one of the most rebarbative Prime Ministers in Britain’s post-war history.
The present Prime Minister, however, was obliged to call off visits to EU capitals to discuss some changes in our links to the rest of the member states. It is very self-defeating if leading Tory Ministers and politicians refer to the over-repeated phrase “British national interest” as if that were wholly different from our membership of the Union and totally different from that of all the other members. At least the late-interred Prime Minister ended up usually agreeing with the others on treaty changes, despite all the Sturm und Drang in those days of shrill arguments. Mr Cameron, however, is now in danger of launching a risky plan which is designed to appease his wilder anti-EU MP colleagues, and which could quickly get out of control.
It also looks somewhat hilarious if a British politician starts trying to educate our German friends on the goals of economic and mercantile efficiency, bearing in mind the huge gulf in our economic performance. We have a UK trade deficit of around £100 billion, despite a quarter fall in the value of sterling over the past four years. Germany’s trade surplus is the other way round, but even bigger. We should all be grateful to the German ambassador for his polite but riveting comments at Bloomberg’s last July on the dangers inherent in irresponsible isolation and to Dr. Rudolph Adam, the plenipotentiary at the moment. He complained to William Hague’s assistant last October that Britain’s refusal to take a lead in Europe meant that we would just see the red lights of the train that has already left the station.
Indeed, we have heard the same complaints from our own citizens, now alarmed at this possible Cameron demarche. I refer to very prominent business leaders such as Richard Branson, Martin Sorrell and Sir Roger Carr. Incidentally, the US Government intervened collectively and individually to say, “Please do not go down this path”. Former EU and US British envoys such as Sir Nigel Sheinwald have taken this approach. Indeed, in one of our debates on 17 December 2012, the noble Lord, Lord Kerr of Kinlochard, who was originally speaking in this debate, said:
“As the Prime Minister prepares … I really hope he will avoid the temptation to hold out a false prospectus. One should not talk about ‘new deals’ unless one is sure that they are realistic”.—[Official Report, 17/12/12; col. 1391.]
It is never a weakness for any country, struggling as we are with our economic problems in an exposed position, to pay attention to what others think of us. Sadly, we have to recall, painfully, the derision which many mainland Europeans felt when we were first driven out of the exchange rate mechanism on 16 September 1992 as the Treasury was unable to keep the pound from falling below the agreed minimum level. We then became so scared at the huge obligation and discipline involved in a single currency that we effectively decided not to join at all, despite Tony Blair’s pretences.
We have to recall, therefore, the huge disappointment of the other members in other areas. We received the unique budget rebate but did not then become more co-operative on other areas of European endeavour, despite that unusual privilege. We have to recall the irritation, too, when we sought the biggest number of opt-outs and exclusions when Maastricht and the later treaties, including Lisbon, came along.
The irritation we now cause when a UK Minister arrives for a Council of Ministers meeting is palpable. We have become the bad member of the club, whingeing and moaning about European things again and again. One of the dottiest reasons for this irrational behaviour is because an unusually large number of old-fashioned nationalist Tory MPs are the only politicians I know—apart from some of the scallywags in UKIP, many of whom benefit from the PR system for the European Parliament—who have a notion of national sovereignty which is, literally, at least 100 years out of date.
How many times do positive Europeans have to remind such people that pooling sovereignty by way of signing unanimous treaties, achieved by consensus, is not a loss of real sovereignty, it is an increase? We have done it in other treaties, to no ill effect, all over the world. It is quite extraordinary and myopic that a false pride in our so-called special relationship and so-called hyperbolic link with the US can induce British leaders such as Mr Blair, Mr Brown and, indeed, the present Prime Minister, to go into rather questionable military adventures—which we usually later regret—but also cause us to suffer hot flushes when confronted with a perfectly sensible measure of EU co-operation such as a new financial support system between the central banks. They were watching our reactions very closely at that time.
At the same time, as if to emphasise the muddle, Mr Cameron seeks to remind us that he wants after all to stay in the Union. Before we irritate the others to the extent that they muse again about the Lisbon treaty provisions allowing for recalcitrant member states to leave if they wish, we really need some clarification on these vital—indeed, existential—matters. What relationship would replace the present one? As Peter Ludlow, the well known EU analyst based in Brussels, said in January,
“The argument that the rest of Europe will simply acquiesce in whatever kind or arrangement (we) opt for, because ... our partners need us ... more than the UK needs them, is a total illusion”.
Furthermore, when you use the microscope on repatriation, you soon realise that it is the grand illusion and pretence of all time, especially when you see that we already have more opt-outs, exceptions, derogations and exclusions than any other country.
I am therefore extremely grateful to my noble friend the Senior Minister of State at the Foreign Office, Lady Warsi, for coming to answer this debate today— I wish her well in her response—and, indeed, for all the previous occasions when she has dealt with a vast number of questions and debates on these matters with great care and attention to detail. Now she has the precious opportunity to enlighten us all so that we can leave this discussion with a spring in our step.
A few weeks after the PM sadly refused to attend the Nobel Peace Prize award to the European Community in Oslo, I had the chance to ask my noble friend what further opt-outs we would now seek in Brussels. She very kindly stated that,
“the Government always seek outcomes that are in the national interest … our priorities include … the single market and … fair competition”.
When I pressed for more specific answers to try to,
“avoid needless opt-outs of a chauvinistic or nationalistic nature”,
she added that HMG should be,
“putting a case … that the European Union is improved but, within that, we also get a good deal”.—[Official Report, 4/2/13; col. 9.].
I hope that she will not consider it discourteous to suggest that this is all rather vague and generalised.
I live in France as well and have the opportunity to observe public life and politics there at close quarters. It is interesting that such a proud—indeed, sometimes very nationalistic—country sees absolutely no contradiction between its own direct interests and those of the Union. They coincide symbolically too—as in Berlin and Madrid, and most other capitals, the EU flag flies proudly alongside the national tricolour. They do not feel the one cancels out the other. The UK is the only major member state where government buildings never, ever fly the European flag. Why are we so nervous about Europe? Why are we so immature?
Let us return to the need for detail on policies. For example can the Minister guide us on what list of opt-outs we will determine for inclusion and exclusion in the JHA review? My impression is that the Government have not got a clue what to do. My noble friend will know of the report of sub-committees E and F of the EU Select Committee showing the huge weight of non-political evidence that abandoning the JHA provisions, or the principal ones, in most of the specific policy areas such as EAW, would be a monumental disaster. I will refrain from commenting too much on what Kenneth Clarke said at the end of January on these matters. How the Prime Minister must now regret the way in which the Government, including when they were in opposition, have encouraged the most Europhobic MPs to fuel this anti-EU strategy with the business community outside—although not many leading businessmen are now still involved—to the extent that it is even becoming part of future leadership moves by some ambitious new Tory MPs. The bitterness felt by the EPP in Brussels and Strasbourg about the Tory withdrawal in the European Parliament still lingers.
Can the Minister help us today about what kind of referendum will be constructed after so-called renegotiations have run their course, especially since the Business Secretary reminded us again recently that it will scare off investors and hit the economy?
The other area where we need meticulous care by the Government is in responding to the widespread dismay about the City of London market culture which is expressed here so stridently. The City—and I am a City person myself—is indeed a very precious asset which we are proud of and fortunate to possess, but the market crash of 2007-08, the way in which the banks behaved and the speculative spivery background of some people in the City offend some of our continental friends, and that needs to be acknowledged. Although I shall not quote from them, I commend in this context the lengthy but convincing last two paragraphs of the speech by the noble Lord, Lord Liddle, the chief Opposition spokesperson on Europe in this House, in the debate on the EUC report on banking union in Grand Committee on 26 March. He set out very clearly what our responsibilities should be.
Another area where the UK needs to respond sensitively to our partners is in their anxieties about tax havens, where our overseas territories are a particular preoccupation. Above all, we need to remember the chilling reality that, apart from the natural courtesy of a vague response, not a single other member state agrees with our peculiar attitudes, these initiatives that have recently been promulgated, not even the newest member states, not even Poland, very little in the Czech Republic, not at all in Spain or Italy and certainly not in Croatia. The Tory party needs to show the courage and enthusiasm for Europe that Mrs Thatcher showed in 1975.
I look forward to my noble friend helping us today with some encouraging responses about how these strange negotiations will reduce our isolation.
Lord Howe of Aberavon
For pretty well all of our 40-year membership of the Union, successive British Governments have sought to maintain a position of strength for this country at the top table of the European Union politics. Whatever opportunities may have been missed and whatever mistakes might have been made, a common thread throughout the period has been that consistently Prime Ministers and Foreign Secretaries attempted to avoid the development of anything approaching a two-speed Europe. We have accepted opt-outs and derogations in specific cases, but we have never allowed Britain to lose its place at the heart of EU decision-making, although we have been sliding away from the centre.
One of David Cameron’s first acts as Prime Minister was to decline to attend eurozone summits, whereas his predecessor, Gordon Brown, not exactly a noted euro-enthusiast, fought tenaciously to ensure that he was always invited. Our absence has made it more difficult to articulate Britain’s voice on some of the key decisions in the eurozone debt crisis. I do not need to spell out at great length my anxiety about the imminent shift in responsibility for banking supervision, for example, from the traditional EU institutions in Brussels to the European Central Bank in Frankfurt, based on a new banking union from which we seem determined to exclude ourselves. It is worth recalling that when the EU Bill was debated here at Westminster, two years ago, we were assured that it would have no operational effect in this Parliament, yet we now know that fear of the need for the passage of an Act of Parliament helps to explain why the Prime Minister vetoed the EU treaty change that Mrs Merkel wanted in December 2011.
The net effect is not just that we are throwing up unnecessary political obstacles in the way of our own involvement; we are beginning to stand in the way of others moving ahead. In fact, the real terms of British membership of the Union have sadly already been redefined; instead of seeking to continue leading in Europe, the Government are in danger of gradually locking us all into the defensive mentality of a country reconciled to life on the margins, as support for European membership declines and Euroscepticism becomes increasingly dominant.
If the Prime Minister is serious about obtaining what he calls “fresh consent” for our membership of the Union in a referendum that he presumably hopes to win, he must begin now to set out a more realistic account and a more positive vision of why the European Union should feature as part of the future of this country, and how and why we can play an important role in helping to shape the future of our continent, as well.
Baroness Quin
My Lords, I congratulate the noble Lord on securing this debate. He has consistently advocated the importance of close relations between ourselves and our European partners and has always argued for making Britain’s membership a success, as has the noble and learned Lord, Lord Howe of Aberavon, whom it is a pleasure to follow.
I am not opposed at all to a Government arguing for change within the European Union, nor am I opposed to wide public debate about that issue, providing that it is well informed and open, because there is no doubt that Europe is changing and has to respond to a large number of challenges. However, I have great concerns about the Government’s goals and the lack of clarity surrounding them. I also have concerns about the timing of recent government initiatives, which are sometimes unhelpful, particularly as they come at a time when the eurozone countries are, quite understandably, concentrating on trying to resolve current difficulties. I also have concern about the Government’s approach to alliance-building, both with other Governments and in the context of the European Parliament, where the Government seem sadly to have cut themselves off from the European mainstream.
In the short time that I have available, I would like to question the Government about their goals. There is a lot of talk within the Government, and within the Conservative Party particularly, about having a looser relationship with the European Union. The more I read about this, the less I understand exactly what is meant by it, and I would like some clarification of what is in the Government’s mind. For example, what does it mean for environmental policy, an area that has become very important in EU work in recent years? What involvement do the Government expect to have in that very important area of policy in future? What about economic policy? It is not just about the euro but about many other things. How are the Government going to approach this? For example, I was disappointed recently that they managed to get themselves in a minority of one over the bankers’ bonuses issue, even though it is an issue that is of concern to citizens across the European Union. What does it mean for development policy? Will we be involved in development policy in future, in the Government’s view, or is that something that they want to see left to national Governments? What about the extent of foreign policy co-operation, an increasingly important area within the European Union’s work?
Furthermore, we know that the Government said a lot of things in opposition to social policy, which was a part of the EEC from the outset—so it is not a dangerous additional add-on. I remember, when I was first in Parliament, the warnings that the Government gave about what they called the job-destroying social chapter, even though, after the Labour Government signed it, employment was at the highest ever recorded level and their fears seemed to be completely unfounded.
In approaching those things, I urge the Government not to oppose those policies capable of attracting our citizens and electors. I refer to the excellent brief provided to us by the Law Society, which says:
“The EU has taken significant steps towards ensuring equal treatment; in particular in the work place through initiatives such as the Equality Directive and Equal Pay Directive. The Society is keen to ensure that UK works alongside other Member States as the EU continues to protect and uphold such rights whilst respecting differing legal traditions”.
The noble Lord, Lord Dykes, mentioned justice and home affairs co-operation. That has been a welcome area of co-operation in terms of practical results, but it is not at all clear what the Government’s approach will be to that in the future.
My final plea is that I hope the Government will take some of their arguments out to the public so that we can all join in. It would be good if next year’s European elections were about European issues rather than a referendum on national government policies. Perhaps that would be a better opportunity than a referendum at some vague time in the future.
Lord Birt
We thank the noble Lord, Lord Dykes, for allowing us to debate this highly pertinent issue. I have previously praised the Prime Minister’s speech on Europe as a cogent and elegant statement of all the reasons why it is in our interest to remain part of a reformed EU. He set out a positive vision, but I think his speech has created a significant problem for us.
In the past few months, going about my daily business in Europe and countries beyond, I have encountered, as I am sure others here have, senior officials and politicians from some of Europe’s major countries as well as many of the world's leading investors and some substantial business heads who can make investment choices about this country. To a person, they have concluded that the Prime Minister’s announcement of a referendum is the first step in a determined process on the part of the UK to extricate itself from the European Union.
I do not believe that to be the case. I routinely inquire, “Have you read the whole speech?” but, frankly, no one I have spoken to—and I am talking about many people over the past couple of months—has ever read the whole of the Prime Minister’s speech. That should not surprise us. In busy lives, people settle for the summary report, perhaps online, or skim-read and form a quick impression. I have no doubt—again, I am sure that this view will be shared by others here—that all the major players in Europe want us to stay part of the European Union and to engage, not least to help the present and continuing crisis. But in the short term, other major countries doubt our commitment. In the wider world, we risk being seen by major global investors as detaching ourselves eventually from the single European market. I am sure that this will be common ground among us, but we can ill afford an investment pause in the UK for the next four years.
The Prime Minister has now begun his sadly interrupted tour of major European capitals. I have no doubt that he will have conveyed a nuanced picture of our true position to his senior colleagues in Europe. But beyond that, I hope that he will fully engage the global media, which I do not think he has yet done, and seek to counter the damaging perception that has been formed about our true position. I hope that the Prime Minister will put over what I think is his essential message: that reform and commitment, not obstruction and exit, are the UK’s preference and intention.
The Lord Bishop of Exeter
My Lords, it may be thought that the Church of England does not have a particularly European perspective, but that is far from being the case. Through its diocese in Europe it is present in all the member states of the EU. It has effective links with other churches throughout Europe and is active in the Conference of European Churches. Together with our partner churches, we are also deeply aware of some of the roots of the EU and the vision of its founders in Catholic social teaching.
It is from this broad base that the Church of England engages with the EU itself through its own representation and structures. Also, in March 2012, it made a submission to the House of Commons Foreign Affairs Select Committee on this very question of the UK’s relationship with the EU.
That submission started from the basis that for the Church the primary purpose of politics, even European politics, is the promotion of human flourishing and the conditions that are necessary to make this happen. This includes economic, social, ethical, cultural and legal conditions. Here, the value of the EU as a single market is not to be ignored. While growth is, of course, not to be treated as an absolute idol, poverty is the enemy of the good life and so of the common good. Thus, regularly over the past 40 years the General Synod has affirmed that, while it has reservations over certain characteristics of European integration—not least its demographic deficit—our propensity as human beings created in the image of God to be creative, productive and generous beings has been enhanced by pooling certain elements of national sovereignty in a common European project. This project, it is worth remembering, has deep spiritual roots. The treaty of Rome is peppered with aspirational phrases such as:
“Determined to lay the foundations of an ever-closer union among the peoples of Europe”,
and:
“Intending to confirm the solidarity which binds Europe and [other] countries and desiring to ensure … their prosperity”,
as well as:
“Resolved … to preserve and strengthen peace”.
One of its founding fathers, Robert Schuman, wrote:
“Democracy owes its existence to Christianity. It was born the day man was called to realize in his daily commitment the dignity of the human person in his individual freedom, in the respect of the rights of everyone, and in the practice of brotherly love towards all”.
It is against this background that we also responded to the Prime Minister’s recent Bloomberg speech, in which he set out a vision and an agenda for European reform. On that occasion, he was certainly right to say that much in the EU needs to change, that the Union should accept the principle that powers can flow not only from member states to institutions but the other way too, and that national parliaments should become more closely involved in EU decision-making. However, there remains a lingering doubt as to whether the Government’s agenda is one of reform for the good of Europe as a whole or a more narrow focus on the repatriation of powers in response to political pressure nearer to home. It would be good to have some clarification about that today.
The value of this debate is that it is a reminder of how much need there is for a more informed public and political debate that might shape both a renewed vision for Europe and our own understanding of how we might best realise it. The churches of Europe see themselves as very much part of that debate and with much to contribute to it. They are deeply embedded in European culture and, although we are distinct, it is still possible and right to think of the family of churches in Europe in terms of the historical embrace of a single faith. Even perhaps particularly as Europe becomes increasingly characterised by the diversity of faiths within it, our own long experience of interfaith dialogue and co-operation has a valuable contribution to make to the pursuit of that founding vision grounded in the common good.
Finally, in this context, it is perhaps especially good to recall an observation of the Chief Rabbi, the noble Lord, Lord Sacks. In an address in Rome last year, he said that,
“the future health of Europe, politically, economically and culturally, has a spiritual dimension. Lose that and we will lose much else besides”.
He went on:
“To paraphrase a famous Christian text: what will it profit Europe if it gains the whole world yet loses its soul?”.
I hope that the failure of successive British Governments to articulate a coherent and constructive policy towards our European partners and to manage to take public opinion along with this will not contribute to that loss of the European soul.
Lord Bilimoria
My Lords, today a statement was signed by business leaders, and I was one of the signatories for Business for Britain. The statement was very simple:
“As business leaders and entrepreneurs responsible for millions of British jobs, we believe that the Government is right to seek a new deal for the EU and for the UK’s role in Europe. Far from being a threat to our economic interests, a flexible, competitive Europe, with more powers devolved from Brussels, is essential for growth, jobs and access to markets. We therefore welcome the launch of Business for Britain’s campaign for real change in the EU and urge all political parties to join in committing themselves to a national drive to renegotiate the terms of Britain’s membership of the EU”.
After signing that, I was accosted by many people today saying, “This means you are anti-Europe”. I am not anti-Europe in any way whatever—in fact, quite the contrary. A week ago, before this statement, the British Chambers of Commerce released its survey on Europe. The BCC’s European Union business barometer of more than 4,000 businesses shows support for renegotiation with Europe. A week before this statement came out, John Longworth, the director-general said:
“Companies believe that re-negotiation, rather than further integration or outright withdrawal, is most likely to deliver business and economic benefit to the UK”.
This is the first major survey of British business following the Prime Minister’s policy speech on Europe in January, and it has revealed broad support by business for renegotiation of Britain’s relationship with the European Union. In fact, the results were staggering, such as:
“Remain in the European Union, but with specific powers transferred back from Brussels to Westminster received the highest positive impact rating, with 64% … the lowest negative impact rating, with 11% … Full withdrawal from the European Union received the highest negative impact rating, with 60%”.
Businesses do not want to withdraw from Europe. Another result was:
“Remain in the European Union with no change to current relationship received the lowest positive impact rating, with 15%”.
This is business speaking. Do we want to listen to business or do we want to live in a Utopian world?
I thank the noble Lord, Lord Dykes, for bringing forward this really important issue. The Prime Minister’s speech has raised an important matter. Whether to have a referendum is a debatable issue but the reality is that we are against the financial transaction tax. After everything that has happened with the financial crisis, the City of London is still the number one financial centre. On the idea of a “veto” last year with the Prime Minister walking away from the table, I do not necessarily agree that that was the right thing to do. People said that that means that we will not be at the top table of Europe any more. Well, when it came to the budget negotiations the Prime Minister was very much at the top table in encouraging the budget to be cut.
We have MEPs with no representation. Nobody in this country knows who their MEP is; MEPs do not even know their constituents. We have a Parliament that moves between Brussels and Strasbourg. We have billions of euros of waste. We have free trade agreements that are taking years. Will the Minister tell me when the European Union-India free trade agreement will be finalised? We also have the euro, which has been an utter failure.
There is no question that Europe is our biggest trading partner—more than 50%. There is no question that 2.3 million European Union citizens live here and that almost 1 million British citizens live in the European Union. We want the free movement of goods and people but global institutions need to evolve. The UN needs to evolve; the World Bank needs to evolve and the IMF needs to evolve. The EU has evolved, but the euro was a bridge too far. Thank God we did not join the euro but so many people pushed to do so.
Right now we make up less than 1% of the population of the world but we are still at the top table. We are still a permanent member of the Security Council, a member of the G7, the G8, the G20, and we are still at the top table of Europe. The solution is not to cherry pick but for us to sit down together in Europe and remember our priorities—free trade, free movement of people and, most importantly, the maintenance of peace. That peace is priceless and worth much more than the billions we contribute to the European Union every year.
Lord Bowness
My Lords, I thank my noble friend Lord Dykes for posing this timely question, which should concern everybody who wants to see the UK remain a member of the European Union. That, of course, includes my right honourable friend the Prime Minister who sought to make that clear when he indicated his intention to attempt a renegotiation of our relationship with Europe, to be followed by a referendum on the outcome.
Whether intentionally or not, that has put on the table the possibility of the UK leaving the European Union with all the uncertainty that that creates in people’s minds and the regrettable boost which has been given to UKIP and its fellow travellers. Leaving to one side the question of a referendum, which I personally regret, the UK has to have a twin-track approach if there is to be anything approaching a successful outcome of any negotiation and subsequent referendum. To achieve the first, we have to be clear and realistic about what it is we seek to change. The Government’s review of competences will not be complete until the autumn of 2014. There have been press reports that at least two member states—France and Germany—have refused to contribute to the process. Is that correct? I do not expect my noble friend to disclose details of the observations of individual member states but can she indicate whether there have been any responses from anyone and, if so, the nature of those responses?
The Prime Minister is reported to have discussed the question informally with the German Chancellor. Have we already formed a view about what we seek to change prior to the outcome of the competences review and, if so, what is the point of the competences review? Are Ministers looking at matters which could be dealt with by an amendment of existing European legislation? This may be a more productive route and likely to find us more friends among other member states as opposed to treaty change. If we seek treaty change for our benefit, shamelessly exploiting the possible need for eurozone members to make changes for the economic governance of the eurozone, how will we prevent the other member states raising their own particular issues and how many will welcome that process being turned into a wholesale treaty review? Might they not prefer to come to their own arrangements not involving treaty change and, therefore, maybe not involving the United Kingdom? If substantial treaty change is in mind, how do the Government intend to achieve this between 2015 and 2017—the date of the promised referendum—bearing in mind the Lisbon treaty provisions regarding substantial changes?
For us to have influence within the European Union, whether in the Prime Minister’s promised renegotiation or generally, the atmosphere has to change. We must sound as if we want to remain members, recognise negotiations are negotiations, and bring an end to what I have previously described as the current attitude of preferred disengagement. Language and tone for those to whom it is directed and the climate it creates are extremely important.
We have talked of actively discouraging citizens of Romania and Bulgaria from coming here when they become legally entitled so to do. We have thereby created a climate whereby the desirability of having admitted citizens from other EU member states after 2004 is now called into question. Such careless language, which we would not use in respect of nationals of other countries outside the EU, does not win allies, especially when it appears to question one of the four fundamental freedoms of the Union. Can my noble friend state categorically that none of these freedoms is questioned?
The second track, which we must follow if we are to succeed in convincing our partners that we are in the Union for the long run and to win any referendum subsequent to renegotiation, is to put the case for membership unambiguously, enthusiastically and now. The Conservative Party must make it clear that we are not going to dance to UKIP’s tune. UKIP policy on Europe is not the policy of the Conservative Party. The Tory party must not allow itself to become an umbrella under which the otherwise unelectable articulate UKIP views. In passing, would it not be a good thing to change the system of election from closed lists to open lists so that voters who wish to vote Conservative may do so without having to vote for candidates who display Tory colours but UKIP tendencies?
If we are seen to put the case for Europe without threats of withdrawal, there may be a chance of achieving some successes and reforms that might resonate with other member states, and of winning a referendum. Failure to show our desire to be fully involved now and in the future can only reduce our influence to our own detriment.
Lord Davies of Stamford
My Lords, I congratulate the noble Lord, Lord Dykes, on securing this debate. He has been committed to this cause in all the long years that I have known him. He has shown great energy, commitment and often great courage in pursuing that cause. I have great pleasure in paying tribute to him today.
The most interesting thing about this afternoon’s debate is the people who are taking part. Where are all the leading Eurosceptics? Not one of them has turned up. We had a debate in this Chamber about a year ago and all of them turned up. I distinctly remember the noble Lords, Lord Lawson, Lord Lamont and Lord Flight, telling us how the euro was about to collapse and that they had been right all along because they had been saying for years that it was bound to collapse. I remember replying that they slightly reminded me of the Marxists of the earlier 20th century who, every time there was a recession said, “We were right all along; this is the final crisis of capitalism”. I am not sure they appreciated that analogy. They are not here this afternoon, which must be a very good sign as to progress in the European Union.
Of course, there is no disaster to gloat over. The latest news is actually rather encouraging. I am quite convinced that both the EU and the eurozone are emerging strengthened from the crisis. It has been very positive to get the growth and stability pact and to achieve the banking union. The handling of the Cyprus banking crisis has been extremely successful. We have established the principle now that there should be no bailout without a bail-in. We have established the principle that anybody who has more than €100,000 and wants to keep it all in one bank has some responsibility to take a view on the creditworthiness of that bank and, equally, that people who have less than €100,000 in deposits should be protected by public guarantees. All that has been very positive.
Of course, some of these things could and should have been determined well in advance, calmly, because rationally they were the sensible thing to do. But we all know that in human affairs people often only take the right decisions in a crisis. It is difficult to get people to make difficult decisions when things seem to be going well. These structural changes are a permanent legacy and a positive outcome of this crisis.
None of us has very much time to speak, but I do not think that there is an alternative to the EU for achieving what we need to achieve in this country on so many fronts—the environmental, economic, foreign policy and defence fronts. This is an area at which we desperately need to look very carefully now, because budgets are so constrained throughout the European Union: how can we best save money through greater degrees of co-operation, including defence specialisation? That is a very complicated matter and we must return to it on another occasion.
All parties like to say that they are taking a cool, calm, objective view of the national interest. But we must do so without prejudice. We must not reject a particular solution if it is actually in the national interest simply because it has the word “European” or “EU” attached to it. There is too much of that emotional counterreaction on the part of the Government at the present time.
I leave the noble Lord with one thought this afternoon. It is time for us to look pragmatically, coolly and calmly, without hysteria, at the possible advantages to us of joining the Schengen agreement. It would not merely remove a lot of the existing burden on the UK Border Agency, which we have seen so much of in the past few months, but it would address a much more serious problem. This country is losing hundreds of thousands of pounds, perhaps even millions of pounds a year, in tourism particularly from visitors from the Far East who tend to travel in groups. Their travel agents arrange a Schengen visa for them. They come to Europe and visit Amsterdam, they go down the Rhine and visit Paris, Rome and Madrid. They have a lovely time, but they never come here because we are not part of the Schengen system. It would involve additional delays and costs to get visas.
This is a major economic problem. The Government have always excluded even looking at Schengen simply because it is European. But if it happens to be the right pragmatic solution on the basis of the national interest, we should go along with it.
Lord Kakkar
My Lords, I, too, join other noble Lords in congratulating the noble Lord, Lord Dykes, on securing this important debate. I wish to confine my comments to an area where there have been unintended consequences of European legislation—in the delivery of healthcare here in our own country. This is a vital issue. As we move forward, there may be an opportunity for British people to become isolated because they feel that there is an impact on the delivery of healthcare that was unintended and is having a detrimental effect. Before doing so, I declare my own interest as Professor of Surgery at University College London, and as a member of the General Medical Council.
A number of issues have been raised with regard to European legislation and directives that relate specifically to healthcare. They relate to the area of professional qualifications and the free movement of labour within the European Union. There has been important progress with the issue of language testing. The General Medical Council, it is proposed, will now be allowed to test the language skills of all doctors who wish to be registered by the council in the future, including those who come from the European Union. That is an important achievement.
However, there is still concern about the ability to test professional qualifications and the nature and structure of the postgraduate training that has been delivered to healthcare professionals throughout the Union. This is an important issue because doctors coming from other parts of the world are subject to that kind of rigorous testing before they are allowed to join the register.
The issue that I would like to focus on is the European working time regulation. In 2010, when the coalition Government was formed, the then Health Secretary committed to begin negotiations with the European Union on ensuring that working time regulations could be applied in a more flexible fashion with regard to working in our hospitals to reflect the fact that the nature of the delivery of healthcare—the structure of our hospitals and broader healthcare environments—is somewhat different from other European countries, and a degree of flexibility would be important. I recall that the then Health Secretary and the Business Secretary were to commence discussions in January 2011 on this matter, but all seems to have gone quiet because of the broader review of competences that is currently taking place.
We need to be very sensitive to this issue. Recently we have started to see coroners’ narrative verdicts starting to cite European working time regulations as a contributory factor in patient death. We have seen in the Francis report into the problems that were experienced at Mid Staffordshire hospital that the working time regulation was identified as a potential contributor to an inability to provide continuity of care within the hospital system. These kinds of descriptions in coroners’ verdicts and in important reports, such as the Francis report, can cause unnecessary anxiety.
With increasing pressure in the healthcare system, we need to be sensitive to problems identified by, for instance, the Royal College of Surgeons, which estimates that 400,000 surgical hours a month are lost from the healthcare system as a result of the application of the working time regulation to surgical rotas and that some £750 million a year is now spent on locums to ensure that locum doctors can fill gaps in those rotas. Equally, the Royal College of Physicians has identified this whole area as a major issue for the delivery of healthcare.
Therefore, I should like to ask the Minister what progress is being made with regard to the discussion about the working time regulation. This was identified as important on the basis of patient safety and the need to ensure continuity of training to a high standard for our trainees, who will lead the healthcare system in the future. It seems to have become mixed up in the broader question of competences and of bringing them back from Europe. If this issue is not addressed, there could be major problems in the future that will be attributed to it and this could have a detrimental impact on the public perception of Europe, because health was never an issue of competence and this matter is specific to the delivery of healthcare in the United Kingdom. Is the Minister able to guarantee that this important discussion, which started long before, will be continued in a timely fashion?
Baroness Coussins
My Lords, one of the underlying causes of the UK’s isolation in the EU is our lack, as a nation, of the foreign language skills to enable us to participate fully and to derive the full economic, cultural and educational benefits from membership. I declare an interest as chair of the all-party group on modern languages.
There are three main ways in which our language skills deficit is damaging. The first is in terms of influence. The Foreign Office itself has noted that a shortage of British staff in international institutions is detrimental to the national interest and undermines our policy influence. UK nationals make up only 5% of the European Civil Service, although we are more than 12% of the population. In 2011, a mere 2.6% of applicants were from the UK—fewer than from any other member state—and a key reason for this was that English-speaking applicants must offer either French or German as a second language.
Secondly, poor or non-existent language skills prevent UK nationals taking advantage of labour mobility within the single market, while of course leaving them open to competition from incomers. UK employers are dissatisfied with the language skills of British graduates and end up recruiting far more multilingual graduates from other EU countries than employers from any other member state. Although this shows that the single market is working well in terms of the free movement of people, British workers are limited in their ability to take advantage of this freedom in the opposite direction.
This is, of course, linked to export growth. The Department for Business, Innovation and Skills noted recently that the proportion of the UK’s exports to the other 26 member states is falling and now stands at less than 50%. A considerable body of evidence now links export growth to languages. Business leaders say that it is language availability that drives export decisions, not market strategy.
Finally, UK participation in EU mobility programmes is worryingly low, yet this is what equips people with the skills to work across borders. In 2011, more than twice as many French and nearly four times as many Germans took part in work experience placements within the EU. UK university placements under the Erasmus programme are around one-third of those of France and Germany.
To sum up, we are barely present in the EU administration, our students are keeping themselves to themselves, and trade with other member states is in decline.
While I warmly welcome the fact that the Foreign Office has recognised the importance of languages in diplomacy by increasing its budget for language training and the number of posts for which languages are now regarded officially as an absolute requirement, I should like to ask the Minister two questions. First, what specific action will be taken to increase the number of UK nationals able to compete successfully for positions in the European Civil Service? Secondly, given that our language deficit is the concern of so many different government departments, will she undertake to discuss with colleagues and with No. 10 the value of appointing a single government Minister to have cross-departmental responsibility for a co-ordinated policy on foreign languages? Without a step change in our language skills, we will continue to compound our isolation within the EU and be unable to play a full role in the formulation of strategy and policy.
Lord Giddens
My Lords, like noble Lords here present, I have been travelling widely across Europe over the past few months and talking to a range of political leaders and academics. My reading of the situation with regard to the UK is a bit different from that of other noble Lords who have spoken because I think it is much more serious and difficult for Britain than we imply from the speeches that have been given hitherto. Being an academic, I shall express this in terms of a number of steps of reasoning and ask the Minister to say where the flaw in the argument lies because I do not see one.
It goes in seven quick steps: first, the economy of the UK is heavily dependent on that of the wider European Union and there is no chance of diminishing that dependency in the short term. Secondly, saving the euro and returning the eurozone to prosperity is of key importance to a stable future for the EU and hence to the UK’s economic fortunes. The collapse of the euro would have catastrophic consequences for all of us. Thirdly, the euro cannot be saved without greater European integration, including, at a minimum, some form of banking union in the eurozone and, almost certainly, some sort of loose federation for the EU as a whole down the line. Fourthly, you cannot have greater integration and variable geometry at the same time because they are mutually exclusive. This is the reason why our normal allies, such as the Danes, gave such a tepid response to the Prime Minister’s speech in January. Fifthly, the chances of treaty change along the lines the Prime Minister wants to produce are therefore, to my mind, pretty close to zero. The main reason is that they are simply in the opposite direction to that in which Europe has to travel if the eurozone is to be saved, and the eurozone must be saved; at least, it must be stabilised in the short term as a minimum. Sixthly, hence, if by some miraculous happenstance the Government win the next election, the Prime Minister will be forced, when a referendum is called, to campaign for a no vote. Seventhly, since the Prime Minister says that he wants the UK to stay in Europe, this outcome can be described in Shakespearian jargon as:
“Hoist with his own petard”.
Baroness Valentine
My Lords, it is difficult to follow that. The question of this debate takes as its premise that UK isolation is a bad thing, but is that the case? In my role as chief executive of London First, I talk to many business people who have given serious thought to how a UK that is not part of the EU might fare. Some point to our historic success factors—an open business culture, our time zone, English law and the English language—none of which comes from Europe. They question whether our membership really makes it easier to do business in Europe than with, say, Norway. Further, they argue that our focus should be on the emerging economies. Others challenge the assumption that leaving the EU would damage London’s role as a financial centre. Supposing the EU were, in effect, to shrink to the eurozone, a new European financial centre would almost certainly emerge, but with an inward-looking focus, and meanwhile the UK would expand its global financial role.
However, it seems to me that these views merely represent pragmatic ways of dealing with a situation that few would actually welcome. Certainly, business people complain about red tape and employment law emanating from Brussels, but of those multinational companies that I speak to, not one has advocated divergent regulation within Europe. Furthermore, they understand the logic of negotiating global free trade agreements from a base of 500 million people rather than 60 million. While the need to shore up the euro necessitates reviewing relationships in Europe, I have yet to meet a senior business figure who would actively have sought a referendum at this time.
Continental Europe remains a major trading partner for the UK. We must value and respect that relationship. Let us not forget that for many companies, whether British, Asian or American owned, London is the location of their European head office. Any suggestion that the host country is at odds with other countries in the region is clearly unhelpful.
In financial services, what Europe needs is a financial centre which is competitive with the Americas and Asia. What the UK needs is friends to make that point, rather than enemies who resent the Anglo-Saxon business model. This is about tactics in Europe as much as whether one is a Europhobe or a Europhile. Some countries may wish to see London lose its position but there are also European firms and member states that value having globally competitive capital markets within our time zone. Certainly, tactically, it is not clever for the Chancellor to be voted down 26 to 1 on bankers’ pay, whatever way you look at it.
Therefore, my plea to government is not to risk vital relationships with political posturing. The only way to improve the relationship with Europe is to put two feet firmly inside the tent, identify allies and commit wholeheartedly to making the Union work for everyone’s benefit.
Lord Judd
My Lords, the noble Lord, Lord Dykes, serves us well and may he long continue to do so.
The first reality for all of us in Britain is our total interdependence with the world as a whole. We fail the electorate, we fail our children and we lamentably fail our grandchildren unless we take every opportunity to bring that home. Since we last debated this issue, the realities of interdependence have become more underlined than ever. The economic crisis continues, the euro crisis—with all its implications for us as well as for everybody else—is still there, and of course this is complicated by the emergence of south Asia and China as increasingly significant economic realities.
Global security is challenging. There is Syria, the Arab spring with all its implications, the Korean peninsula and more besides; there is climate change, which is not unrelated to the issues of migration, which are immense; and then, of course, there are crime and terrorism. One of the things that we all have to face is that significant crime and significant terrorism are, by definition, international in character. None of these issues can be satisfactorily resolved for the British people by Britain on her own. They all require constant, growing and effective co-operation.
Sub-Committees E and F will produce their report this week. I declare an interest as a member of Sub-Committee F but I commend the report to all members and take this opportunity to thank the noble Lords, Lord Hannay and Lord Bowness, for their outstanding leadership in chairing those two committees. I also commend the evidence because there has been a real attempt to keep the report of those committees evidence-based. One should read that evidence. All the people involved in the front line in fighting international terrorism and crime are saying that it would be madness at this stage to pull out from the closest possible co-operation which is developing so well within Europe.
I conclude by simply making this point. In the aftermath of the Second World War, in those very difficult situations our leaders across the political divide recognised that our future lay in the future of the world, and they became central to the building of viable, relevant international institutions. This was as true of the Conservative leadership at that time as it was of the leadership of my own party. What has happened that we have lost sight of that reality? The challenges today demand that same vision. Of course, there are weaknesses and huge flaws within the European Union, but those are best tackled by a Britain that is seen to be relentlessly committed to its involvement and belonging to the international and European community, not by a Britain that neurotically and negatively constantly undermines the European cause. I thank the noble Lord, Lord Dykes, most warmly and hope that he will continue to keep us up to the mark on scrutiny on this issue.
Lord Hannay of Chiswick
My Lords, it would be idle to pretend that Britain’s always turbulent relationship with the other member states of the EU is not currently going through a more than usually troubled phase, and for that reason, I thank the noble Lord, Lord Dykes, for his initiative. The misguided attempt to veto a fiscal union treaty in December 2011, the balance of competence review, whose purpose often seems obscure to its authors, let alone to most of the other member states which treat it with deep suspicion, and the Prime Minister’s reckless commitment, in my view, to an in/out referendum in 2017 all contribute to a negotiating climate that could easily end up negating the objective of establishing a more settled relationship for a Britain firmly engaged as a full and fully participating member of the European Union.
How is such an outcome, which would be so damaging to Britain’s national interest, to be avoided? First, we certainly cannot afford to sit around waiting until we see the result of the 2015 general election before embarking on a process of reform. Nor can we afford to found such a process on the entirely false premise that the other member states, particularly the members of the eurozone, are poised to embark on an overall rewrite of the treaties, which would provide the opportunity for us to put forward a wish list of our own. That will simply not happen any time soon, and certainly not in the timescale envisaged by the Prime Minister. Nor can any such process of reform afford to be based on a purely British list of vetoes, red lines, no-go areas, items for repatriation or renegotiation. We need a positive reform agenda which takes proper account of the wishes and interests of other member states, and thus has some chance of enlisting their support. That positive agenda needs to enlist cross-party support in Britain; it must not be a ragbag of items designed to appease the unappeasable in UKIP and the wilder shores of Euroscepticism, neither of which forces has the slightest interest in an approach that would leave Britain inside the European Union.
Can such a reform agenda be put together? I believe that it can but it would need to move beyond the comfort zone of Britain’s traditional EU agenda—completion of the single market, with stronger provisions on services and a digital market, further enlargement and freer and fairer world trade, valuable though those components continue to be. It will need to include a more wholehearted embrace of a common foreign and security policy and it should surely include, too, some strengthening of the common security and defence policy to face up to the impact of austerity on defence budgets. It should be focused on policy reform rather than on institutional reform. There will, of course, need to be some areas of increased flexibility in the operation of an EU moving beyond the soon-to-be 28 member states. Variable geometry is alive and well—here I rather disagree with the noble Lord, Lord Giddens —and has been operated successfully in Brussels since the end of the 1980s. We need only look at Schengen, the eurozone, justice and home affairs opt ins and opt outs. There will probably need to be more of that as the eurozone moves to a more integrated economic and monetary union within a European Union where there is still likely to be a substantial number of member states not yet within the eurozone, nor likely to be so in the near future. What needs to be avoided is making such a variable geometry the main operating principle of the European Union—that would be to sound the death knell of the single market; and to avoid, too, any fixed group of inner and outer circles of member states, which would be inherently unstable and unsustainable. It makes no practical sense anyway, as Britain is an essential leading player in any strengthening of common foreign security and common defence policy.
If I had one immediate plea, it would be for the Government to jettison their silly and untrue slogan of wanting less Europe—untrue because the Government’s policy is for more single market, more European trade agreements, and more new members of the European Union. Who are they kidding? The slogan is silly and counterproductive because it separates us from our natural allies in Germany, Sweden, the Netherlands, and in central and eastern Europe, who will never march into battle under the banner of “less Europe”. Shaping and beginning to negotiate with our partners and with the Commission over such a positive reform agenda is the right way ahead, and a far better option than preparing to play a game of Russian roulette in 2017.
Lord Jay of Ewelme
My Lords, it is perhaps worth remembering that the EU has three great achievements to its credit: it brought cohesion to western Europe after World War 2; it provided east and central Europe with a democratic home after the collapse of the Soviet Union; and it has created an almost but not yet complete single market of some 500 million people. All those greatly benefit Britain and the rest of the EU. The second and third of those owe a great deal to the influence exerted by successive British Prime Ministers and Governments, including on enlargement, and here I differ slightly from the view of the noble Lord, Lord Dykes and of Lady Thatcher.
The EU now has no such great forward-looking project. Indeed, in creating the euro, it has created huge, although not—and I agree with the noble Baroness, Lady Valentine—insurmountable problems for itself, brought on and exacerbated by the financial crisis. I believe we were right not to join the euro, but we also benefit hugely from the single market of 27 member states. Therefore, our interest as a nation surely lies in the maintenance of a coherent European Union of 27 or 28, with the euro at its core and the single market intact. That is easy to say but it is not a straightforward goal to achieve. There are strains between the eurozone and the rest, and within the eurozone, not least at present between Germany and France. Achieving that goal, crucial to our interest, will require patience, determination, tough negotiations and compromise, because negotiations always do require that. It will, above all, require maximising our influence, which we should never underestimate.
I do not believe that the noble Lord, Lord Birt, and I can be alone in hearing from business colleagues and others in Paris and elsewhere in the EU that Britain’s traditions of a liberal market economy, an international outlook and democratic strength are really needed in the EU, and the more the EU is in difficulty, the more, frankly, those qualities are needed. I fear, however, that we are also not alone in sensing that some at least in the EU seem increasingly to have given up on us, sensing that there is no longer a commitment in Britain to the European Union at a time when our contribution in our own interest, as well as in the interest of the European Union, is so important. That conclusion is wrong but I understand why they have come to it.
I end by looking on the bright side. I was delighted to see the Prime Minister and family spending time with Chancellor Merkel. I am delighted to see too that the Chancellor of the Exchequer played down the rhetoric of his opposition to the financial transaction tax, focusing instead on the British interest in opposing it. That, surely, is the way to promote our influence and our interests: state clearly our commitment to an EU of 27; establish close links, including at a personal level, with the key member states; and in that framework fight hard for British interests. As it is sometimes said, if you are not at the table, you tend to be on the menu. I know which I would rather be.
Lord Liddle
A lot of the speeches we have heard in this excellent debate seem to make an assumption that David Cameron is going to be Prime Minister after 2015, and that therefore the referendum promised for 2017 is going to take place. In my four minutes, I shall briefly set out what I think a Labour-led Government should do.
One assumption lying behind our present predicament is that, because of the euro crisis and the presumed strengthening of integration that has to go with it, Britain is condemned to be on the fringes of a much more integrated eurozone and therefore can no longer aspire, as Tony Blair’s Government certainly aspired, to play as leading a role in Europe as France and Germany. I think that that assumption is flawed. I am sceptical about whether the steps necessary to save the euro require the creation of an inner core federal Europe. That argument is overdone. I also believe that there are policies that a Labour Government could advocate which would put it right at the core of Europe.
The key thing is that we present a positive vision for the future of the EU, as the noble Lord, Lord Hannay, and others, have said, which suits our national interests but can win support from our partners. There are three key elements to this. One is to have a plan for growth, so that it is pro-reform and pro the single market—and we have talked about extending it in digital and services—but also anti-austerity, and trying to get out of the trap of collective austerity in which Europe has put itself. There is an instrument, for instance, in the European Investment Bank, which could be greatly expanded to deal with that problem.
Second is the need to demonstrate the role of the European Union in tackling the big long-term challenges that all our European societies face, including innovation, climate change, demography and inequality. On innovation, we should be pressing for more co-operative research. On climate change, there is an urgent need to do something about the minimum carbon price. The failure in the European Parliament last week was extremely significant. We cannot have a credible national climate change policy without a complementary European policy. On demography, we should be talking about how we manage the challenges of migration, rather than making cheap points about benefits to Britain. On inequality, we should look again at how we use European legislation to strengthen a more Germanic model of responsible capitalism.
Thirdly, there is the crucial role that the EU can play in the world. We heard a lot in the aftermath of Margaret Thatcher’s death about how she put the “Great” back into Britain. But given that we account in our changing world for about 2% of world GDP, which will be our position in about 10 years’ time, the idea that Great Britain can on its own influence the world is for the birds. We have to do it through the European Union; that is the only way in which we can protect our essential values and interests, and that is what I believe a Labour Government would try to do.
Along with that would have to be sensible institutional reforms. A belief in a stronger EU in some areas is not an argument for a more centralised EU. Powers should flow in both directions—the Prime Minister is right about that—and we should look at the present acquis to see what can be got rid of, as well as arguing for political reform that makes Brussels more accountable both to the European Parliament and to national Parliaments. But the fundamental point is that this has to be an agenda of reform, not of unilateral negotiation of some special deal for Britain, which is really a blind alley.
I shall finish by asking the Minister two questions. Will she take this opportunity to rule out once and for all on behalf of the Government that there are any conceivable circumstances, if they should be in power after the next election, in which they would recommend withdrawal from the EU in a referendum? Do they agree that the task is to forge an agenda of reform with our partners and not to draw up a list of unilateral demands?
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, I congratulate the noble Lord, Lord Dykes, on securing this important debate. Our discussions on this subject are timely as the Government continue to work effectively with partners across the EU to agree on practical, pragmatic reforms that are good for the UK and the European Union. I hope that the noble Lord, Lord Liddle, realises that in that statement I have probably answered his second question.
My noble and learned friend Lord Howe of Aberavon is right to say that the UK needs a positive vision. I believe that we have one. The Prime Minister has set out his vision for keeping the UK at the heart of a reformed EU. It is a vision of a more competitive, adaptable and flexible EU with a strong mandate from the citizens of the EU. I thank the noble Lord, Lord Birt, for his positive comments and assure him that the Prime Minister’s approach is one of reform and commitment, not of obstruction and exit. Unfortunately I disagree with much of what the noble Lord, Lord Hannay, said, but I can assure him that policy reform is a key element of the Prime Minister’s speech, and I agree that the European Union is about much more than just a single market. There is more that we can do to make the common foreign and security policy more effective and to step up the agenda on enlargement, trade development and other matters.
The noble Lord, Lord Jay, referred specifically to a coherent EU of 27 members. I believe that the Prime Minister has set out his vision that tries to address that, based on boosting the competitiveness of the EU as a whole and ensuring fairness for those inside the eurozone and also for those outside it.
I shall return to the original question raised by the noble Lord, Lord Dykes. His question is quite clear; I want to be equally clear in my response. The UK has not been, and is not, isolated in the European Union. The proposals the Prime Minister has set out for reforming the EU ensure that this remains the case. This view is shared by others. The responses of many of our European partners to the Prime Minister’s speech in January acknowledged the key role the UK plays in the life of the EU.
Many also agree on the need for reforms: countries such as Portugal, Sweden, Austria and Estonia have all said so recently. The Netherlands, Finland, Hungary, Portugal, Belgium and the Czech Republic have all said that they too want a more flexible, diverse and democratic European Union. The Prime Minister of Italy at the time, Mario Monti, said he shared the Prime Minister’s opinion that prosperity and growth must be Europe’s priority. Noble Lords can see that the idea of the UK being isolated from partners such as these who are on the record as agreeing with the importance of our reform agenda does not stand up to scrutiny.
The supportive words of our European partners are valuable, but I want to talk about actions, not words. I ask noble Lords whether an isolated member of the EU could achieve the scale of progress we have recently achieved in reform-focused decisions across so many EU policy areas. The Government have, as usual, been busy, influential and successful. Let me share with you some examples. The noble Baroness, Lady Quin, asked specific questions on policy areas, and I hope that some of these examples will answer those questions. Last December, we worked with partners such as France and Germany to secure an agreement on banking union which preserved the integrity of the single market. In February this year, we led efforts to finalise a deal on a unified patent court which will reduce costs for businesses and encourage innovation. Just last month, we worked with other states including Denmark, Germany, Sweden and the Netherlands to abolish the policy of discarding caught fish as part of a wholesale reform of the common fisheries policy.
We delivered the first ever cut in the multiannual financial framework. This is an excellent example of how we have worked with our European partners. Few were happy with the idea of reducing the budget when we started negotiations, but we worked hard to form a coalition and persuaded all member states to agree a good deal for European taxpayers. In the European Union, you cannot reach agreements like those with 26 partners if you are unsupported and isolated.
The EU and the US recently announced their decision to pursue negotiations on a free trade agreement. It is influential member states such as the UK which drive this process behind the scenes. Such agreements are of critical importance to growth and prosperity across Europe and the United Kingdom.
In 2011, we concluded a free trade agreement with South Korea. Last year, we reached agreement with Singapore. This year, the UK is continuing to play its usual leading role as we come close to concluding talks with Canada. If we completed all of the negotiations on agreements currently on the table, it would be worth an additional €60 billion for the EU every year, according to the European Commission. From free trade to fisheries reform, from banking union to bailout rules, we continue to agree sensible changes to benefit the UK and the European Union.
The noble Baroness, Lady Quin, raised the specific issue of banking union, as did other noble Lords. Our key objective is to gain member states’ support that no banking union measures harm the unity and operational integrity of the single market. Banking union is a single currency and not a single market issue. As the UK is not a member of the eurozone, we have been clear that the UK will not participate in the sharing of eurozone risk or the new supervisory system. However, while it is for those who will join the banking union to design the framework, the UK will continue to play an active role during negotiations to ensure that the operational integrity of the single market is protected.
The noble Baroness also raised concerns that the Government are in the minority on the issue of bankers’ bonuses. This is clearly a very politically sensitive issue within the European Union at the moment. This made the debate very difficult. We voted against Capital Requirements Directive IV. Obviously we are not satisfied with the outcome. We have argued that the agreement on remuneration will have an adverse effect on financial stability. But this should not obscure the fact that many aspects of the agreement represent a positive achievement for the UK such as on higher prudential standards and the treatment of investment firms.
The right reverend Prelate the Bishop of Exeter asked, “Is this reform or repatriation?” as detailed in the Prime Minister’s speech. I can assure him very clearly that this is reform. The Prime Minister’s speech does not mention the word “repatriation”. We all need to help re-engage what the European Union means to European citizens and what citizens want. He also spoke about the common good and not to lose the soul of Europe, but I am sure he would agree that we will lose the soul of Europe if the current democratic deficit is not addressed. I hope that he and the church will feed into the balance of competences review.
My noble friend Lord Bowness referred to the balance of competences and to France and Germany’s contribution. The balance of competences review will give us an informed and objective analysis of the UK’s relationship with the European Union. Several foreign partners have already responded in the first semester along with a number of international organisations. Ultimately, the analysis will be focused on what the EU means for the UK and our national interest. We have already received 500 pieces of evidence and we will publish the full list of those who have fed into the review when the first reports are published in the summer, later this year.
The noble Lord also raised issues about UKIP and Conservative candidate selection. My views on both are on record from when I was party chairman.
The noble Lord, Lord Kakkar, raised some very specific issues in the area of health. I hope that he, too, feeds into the first semester of the balance of competences review, which reports in summer later this year. But in relation to the specific issue about the working time directive, the coalition Government have committed to seek to limit the application of the working time rules. We are continuing to work with EU partners whose votes we need to bring this about.
A question was raised in relation to Schengen. The UK already participates in some parts of the Schengen acquis where it makes sense, such as co-operation in managing borders. However, I can assure noble Lords that in 2012 more than 31 million people visited the UK, according to VisitBritain. The noble Lord, Lord Bilimoria, referred to the Business for Britain campaign, which called for a national drive to renegotiate the terms of Britain’s membership of the European Union. I welcome his contribution and the contribution of that campaign on how the UK can continue to be an active member of a reformed European Union. The voice of business is essential to that debate.
The noble Lord, Lord Dykes, referred to our opt-outs on the JHA in 2014. Discussions are ongoing and we have committed to a vote in both Houses, which will take place in good time. Of course, the national interest will be a key factor in deciding which measures we agree to rejoin. The noble Baroness, Lady Coussins, referred to foreign languages. This has been a longstanding issue and we recognise the importance of increasing UK nationals in EU institutions. We have reintroduced language training and indeed, the language school at the Foreign and Commonwealth Office. We have also supported the European fast-stream work and foreign languages in curriculums in schools.
The noble Lord, Lord Giddens, set what seemed like a series of undergraduate questions. He was clearly back in academic mode and I quickly went into undergraduate mode, with sweaty palms, and realised that I had not crammed enough to answer his questions, but I will try to answer them in writing. The noble Baroness, Lady Valentine, stressed the importance of EU free-trade agreements and trade with Europe. The Prime Minister has been very clear that the UK’s national interest is best served as an active member of a reformed EU. We seek reform of the EU for the benefit of all member states, and many European partners agree with us. I fully agree with the noble Baroness on the importance of the EU concluding free-trade agreements, and the Government are actively supporting an ambitious programme.
The noble Lord, Lord Judd, raised the issue of common security and defence policy. The UK has successfully driven common security and defence policy in the EU and we have made it a useful tool for delivering British objectives, whether in the Horn of Africa or the West Bank, and whether it was to improve policing in Palestine, Kosovo or in Georgia, British personnel were in key positions of influence and multinational efforts to help local populations deal with the legacies of conflict. The noble Lord, Lord Judd, also realises that there are flaws and weaknesses in the system, and it is those that we are attempting to deal with, and what the Prime Minister attempted to deal with in his speech.
This has been a thoroughly interesting debate and I thank the noble Lord, Lord Dykes, for giving us the opportunity to examine the issues once again. I thank all noble Lords who have contributed from across the House. As with all matters on Europe there is a full spectrum of views and opinions about the fundamental principles of the debate, but the noble Lord, Lord Dykes, talked about steps taken. In the snapshot of the most recent events I have given today, I hope that the facts speak for themselves, but this is not just about what the European Union is doing now; it is about what the EU wants to do as part of the future. The Prime Minister started the debate in January and it has aroused healthy discussions. We do not deny that there is a range of views across Europe; it would be odd if there were not, but I hope that I have made it clear that this Government dispute any notion of UK isolation. We will continue to put the case to our partners and continue to deliver changes to encourage growth now. We will continue to lead the wider debate on reform to secure long-term prosperity in the United Kingdom and the European Union.
Lord Bowness
Before the noble Baroness finishes, I have two specific questions which she did not deal with. Will she repudiate the policy advocated by UKIP of leaving the European Union and will she commit the Government to a categorical support of the four freedoms, to which I referred in my speech?
Lord Giddens
Mine were not undergraduate questions but Socratic propositions.
Baroness Warsi
On the question asked by the noble Lord, Lord Bowness, the primary supposition is very clear. It is very apparent that the Conservative Party’s policy is one of renegotiation. In my last job I spent many hours touring the country speaking to Conservative members. When I asked them whether they wanted out, in as it is now or renegotiation, more than 90% always went for renegotiation. That is the Prime Minister’s position and I hope that it is clear.
Energy: Nuclear Power
Viscount Hanworth
To ask Her Majesty’s Government what is their assessment of the role of nuclear power in helping the United Kingdom to meet its climate change and energy security goals.
Viscount Hanworth
This is a timely debate, which comes some time in advance of the introduction to the House of Lords of the Government’s Energy Bill. We are eager to discover how, in truth, the Government foresee the future provision of electrical power in the UK. We should like to know what steps they intend to take to secure our future supplies of energy if the optimistic scenario that they have depicted in recent documents fails to materialise and if the commercial providers are not forthcoming. I should like to put this question to the Minister.
There is already a plethora of printed information from which one might seek some enlightenment. In March, a flurry of documents emanated from the Department for Business, Innovation and Skills and from the Department of Energy and Climate Change. Some of these documents contain new information, but much of their material is already familiar from previous publications. These documents seem to indicate a strengthened commitment to a nuclear future. Nevertheless, they do nothing to dispel the doubts about this future.
One of the most significant of the recent publications is the so-called Beddington report, A Review of the Civil Nuclear R&D Landscape in the UK. This report, which has been conducted by the Government’s Chief Scientific Adviser, represents an independent appraisal. The Beddington report amounts to an inventory of our existing research facilities. It has revealed some serious lacunae.
Another enlightening document is a report of the Energy and Climate Change Committee of the House of Commons, Building New Nuclear: The Challenges Ahead. Here, one will find a full expression of the doubts and anxieties concerning the nuclear programme and the energy policy of the UK in general. This document, which comes in two volumes, contains the brief and cogent report of the committee, together with a mass of oral and written evidence from numerous parties. It is to this report that one should go to discover the realities of our situation, which are in contrast to the optimistic aspirations of the Government.
The doubts that affect the Government’s programme arise mainly from the fact that it persists in seeking a wholly market-based solution to the energy problem. Their stance implies that they will have a limited control over the outcome, unless there are contingency plans for the eventuality that the markets will fail to deliver what is required. As the Commons report asserted, there is no evidence of any such contingency plans and it is likely that the markets will fail to deliver.
It is also clear that, in the absence of a successful nuclear renaissance, the UK will fail to meet its commitments, proclaimed in the Climate Change Act 2008, to stanch its emissions of carbon dioxide. According to existing plans, which have been influenced by our climate change commitments, the UK will lose in the coming decade about a quarter of its coal-fired power stations. We will lose all of the old oil-burning plant. We will be losing most of the existing nuclear plant, which consists of the eight advanced gas-cooled reactors and the one pressurised-water reactor, Sizewell B. This is the only current reactor that will still be operating after 2023. That is the reality of the energy gap, which the Government are hoping that the private sector can be induced to fill.
What we will be left with, in the absence of new nuclear plant, is an electricity-generating sector dependent almost entirely on gas and wind power. This assumes that the UK would continue to fulfil its climate change commitments. In such circumstances, the UK will be faced with the choice between breaking those commitments or suffering an even more severe dearth of energy supply.
One might look to the obiter dicta of some of the Ministers to discover what the Government really intend. We know that the Chancellor of the Exchequer, George Osborne, has been vocally supportive of the UK’s shale gas industry, arguing that this prospective energy source could be a cheap and secure way of meeting the country’s energy needs, as ageing power stations are decommissioned. However, most experts have doubts regarding the extent of the shale gas in the UK and its accessibility and they point to the environmental damage that would arise from its extraction. If the UK were to depend on gas, it would need to be imported from abroad. The global supplies of gas are limited and are liable to be pre-empted by other nations that have forsworn the use of nuclear energy. The supplies of gas from abroad will be both insecure and expensive.
Another possibility for filling the energy gap, in the absence of nuclear power, would be by burning coal, which nowadays the UK imports in large quantities. Some people have been able to imagine that this would be an acceptable recourse, if it could be accompanied by the as yet unrealised technology of carbon capture and storage. This technology appears to be a fantasy and the prospect of continuing to rely so heavily on coal fills all but the most ardent climate change sceptics with horror.
Finally, there is the suggestion that, in the absence of nuclear power, we could rely on wind power and wave power, on biomass energy and even on energy abstinence. The supply of biomass is limited and its burning is highly polluting. The energies of the wind and the waves are intermittent and they have to be accompanied by other sources of power to meet the base-load requirement. These renewable sources can play only a marginal role. Moreover, when the full costs of renewable energy, including those of the base-load provisions, are taken into account, they are seen to be exorbitant.
Now I must explain why the Government’s intention to achieve a nuclear renaissance by means of free market enterprise seems so improbable. For a start, one can point to the fact that no commercial supplier has yet given a firm commitment to build nuclear plant in the UK. A significant number of prospective suppliers have already withdrawn. One should also note that there are no other examples of nuclear power stations that have been constructed without the major involvement of a national Government. A new nuclear power plant has a life expectancy of 60 years. Ten years can pass from the initiation of a nuclear project, when the first expenses arise, to its completion, when the revenues begin to flow. Seventy years hence is way beyond the horizon of any commercial enterprise.
The logic of commercial project appraisal depends on a rate of discount that is applied to future earnings and diminishes their present value as they recede into the future. The commercial rate of discount obliterates the value of future earnings to the extent that no enterprise would undertake investment in such a long-term project as a nuclear power station unless it was heavily subsidised. Nuclear power is virtually incompatible with private enterprise. At present, the only realistic hope for a new nuclear plant in the UK is one that would be constructed by what is essentially a state-owned enterprise, namely EDF, or Électricité de France. The heavy subsidy that EDF can expect to receive is largely on account of the high cost of the alternative sources of power with which nuclear energy would be competing. Even so, it is unclear that this would offer a sufficient inducement for it to bear the risks of such a project.
What should the Government do in the face of the eventuality that commercial enterprises will not be prepared to undertake the building of the much needed nuclear power stations? The answer is that the Government should commission and finance the projects directly, as has been the case invariably in the past. By financing the projects directly, the exorbitant costs of the risk premia that are demanded by the financial markets would be avoided and the benefits would accrue to the public.
The Government should not allow themselves to be hamstrung by an atavistic free market ideology. Nor should they be obsessed by the totem of their nominal borrowing requirement. If the Government can afford such massive financial quantitative easing as we have witnessed recently, surely they can afford to finance our energy future. I earnestly hope that the Government have a contingency plan and that it is one that is dictated by common sense.
Lord Jenkin of Roding
My Lords, in my three minutes I really only want to make one point. The assumption behind all the documents published last month was that nuclear energy is going to have to play a major role in the low-cost, low-carbon supply of energy to this country. Of all the reports that were published last month, may I express particular enthusiasm for what the noble Viscount has called the Beddington report, namely the report about the response to the Lords report on nuclear research and development? The other report, on strategy, is also extremely positive and forward-looking. With it, we also have the road map reports, something that the Select Committee called for specifically.
Together, these reports should now provide Ministers with all the guidance that they need on how to ensure that the UK nuclear industry can achieve three things. First, nuclear power should play a long-term role over the decades ahead in providing security, which the Question refers to, and a low-carbon source of electricity. Secondly, by expanding focused research on new technologies, the UK should be able to rebuild its leading role in global nuclear development, something which again the Select Committee looked forward to. Thirdly, the reports should enable the UK industry to become a major nuclear exporter to the rest of the world. These things are all spelled out in the documents with great clarity, certainty and force. I do not share the pessimism of the noble Viscount.
With regard to the Ad Hoc Nuclear Research and Development Advisory Board, I give full support for all 12 recommendations. However, I would like to ask my noble friend just two questions. The first concerns the role of the National Nuclear Laboratory, about which we had a great deal of evidence in Select Committee. When will Ministers be able to announce details of the proposed new structure and role of the laboratory and the details of the programme referred to in the report? There is also recognition that extra funding will be needed. We know that this cannot come from DECC, because it does not have any money, but BIS does. It is, in a sense, the research department. Therefore, I hope that we can look forward to the funding necessary to deliver the programme spelled out in the report.
The second question relates to one of the four areas of opportunity set out in the Nuclear Industrial Vision Statement, which refers to “nuclear fuel cycle services”, where the UK,
“could expand its international market share in current fuel supply and spent fuel management”.
There has been a lot of publicity about the future of URENCO, with the suggestion that the Government may be willing to sell their one-third share in it. That is inconsistent with what I have just read out from the report. Could my noble friend give us any further information about that?
Lord Giddens
My Lords, first, I congratulate my noble friend Lord Hanworth on having initiated this debate. Three minutes on nuclear power is not very much, so I am going to limit myself to three questions to the Minister.
First, exactly what lessons have the Government learnt from the notorious examples of the Olkiluoto plant in Finland and the Flamanville plant in France? Both, as everyone here will know, have been subject to horrendous delays and cost overruns. With Olkiluoto, the whole process was initiated in 2000 and the plant was supposed to come into service in 2009. However, the date now given is 2015 and we do not know whether that will be achievable. The project is billions of euros over its original estimated cost and an unseemly squabble has broken out over who will pay the difference. How are the Government setting out the lessons to be learnt so that we can avoid those outcomes?
Secondly, even if built more efficiently, the reactors planned by the Government will take many years to come on stream. The level of technological innovation in the energy sector is now very high—much higher than it was a few years ago. What will prevent the reactors becoming expensive white elephants? The report sent to the Government by their three main scientific advisers proposes the development of fast reactors using nuclear waste as a power source, thorium reactors and perhaps nuclear fusion. I would support all of those, but how will such development be carried out alongside the building programme and who will pay?
Thirdly, what is the Government’s latest position on the convoluted issue of subsidies, which seems to run and run? As I understand it, the Government are no longer sticking to their position that nuclear investment could go ahead only if there were no subsidy. I do not know anyone working in or around the industry who ever thought that that was possible. Does the Minister agree with the calculations of the energy analyst Tom Burke, who has mounted a series of attacks on government policy? According to him, if the strike price at Hinkley Point was just under £100, the constructors would receive something like a £50 billion subsidy from the Government if the contract were for 40 years and the market price averaged £50 to £60. Does the Minister agree with that?
Finally, with nuclear power there is the constant issue of insurance. What insurance scheme do the Government envisage? Will the taxpayer be mainly responsible if there is a nuclear accident where the costs are over £1 billion, which is mentioned in the government analysis? It would be very useful to know just what kind of insurance scheme the Government have in mind, because different countries use different ones and no one has come near to paying the costs of a serious nuclear accident.
Baroness Parminter
I add my thanks to the noble Viscount, Lord Hanworth, for posing this important Question. I would contend that the complexity and, indeed, the continually rising costs involved in building nuclear reactors and in putting in place appropriate safety, waste management and decommissioning arrangements will limit the role that nuclear energy can play in helping the UK to meet its essential climate change and energy security goals. I have three principal concerns, to which my noble friend Lord Giddens referred.
First, I agree with my noble friend about the costs of new build. He referred to the costs of the proposals in Finland and France. I would add to that the costs of dealing with existing waste. Decommissioning of the UK’s civil nuclear facilities—principally Sellafield and Dounreay—is estimated at being in excess of £86 billion and is expected to rise. By contrast, as observed by the Economist in its recent study on nuclear, the costs of many renewable energy technologies are falling fast.
Secondly, there is the issue of waste. Despite 60 years of civil nuclear expertise, there is still no long-term solution for storing high-level radioactive waste.
Thirdly, there is the issue of accidents—again, referred to by my noble friend Lord Giddens. With corporate liability limitations, it is the British taxpayer who is liable for the clean-up of any major nuclear accident. As the total clean-up costs for the Fukushima nuclear accident are likely to top £160 billion, it is clear that if the nuclear industry had to insure itself properly, its electricity would be unaffordable.
The noble Viscount mentioned the recent report of the House of Commons Energy and Climate Change Committee on nuclear power in the UK. It concluded that the failure to deliver nuclear new build does not pose a significant threat to our energy security. A viable and sustainable option to deliver a successful and cost-effective decarbonisation of the UK’s power sector by 2030 is an increased deployment of renewable energy technologies coupled with a greater focus on improving energy efficiency. Increasing the UK’s interconnection with European grids must also be a priority, with gas playing a role as a transitional and system-balancing fuel.
In conclusion, I shall ask the Minister two questions: first, when do the Government expect a decision on whether the current electricity market reform proposals are illegal state aid under EU law, given that tendering for nuclear electricity does not fulfil the requirements of Directive 2009/72, Article 8? Secondly, following the decision of Cumbria County Council, what plans do the Government have for locating an affordable, long-term solution for UK nuclear waste?
Lord Moynihan
My Lords, I am a supporter of nuclear power for the main reason that it will be a critical component in our future security of supply. The main case that needs to be made by government is the economic case for nuclear power. The decision to go ahead with new-build nuclear on existing sites should be driven by government, independent of direct links to the pricing of, say, future projections of renewables or new-build CCGT. New-build nuclear must secure a significant part of our essential base load supplies of energy. These stations require substantial up-front capital requiring low marginal and operating costs. They face, as was pointed out, major decommissioning costs. However, above all, the Government should not carry the risk of escalating construction costs. The industry has, as has been pointed out, a bad track record, with Olkiluoto in Finland and Flamanville in France both late and substantially over budget. Can the Minister confirm that the contractor will bear in full any cost escalation during the construction and operating phases of the project?
The second point I shall raise today relates to the proposed contracts for difference. Will the Minister confirm how the proposed plan to fund nearly all low-carbon generation through CFDs and the prospect that nearly all future generation will effectively be remunerated under a contract determined by government can be consistent with overall European Union aims for a competitive single electricity market? As the noble Baroness, Lady Parminter, pointed out, this would be extraordinarily difficult. As the Oxford Institute for Energy Studies has pointed out, the European Court of Justice’s 2010 judgment in Federutility, concerning regulated electricity tariffs and the presumption of the EU’s internal energy market legislation, that the market mechanism should be allowed to operate, would indicate that the Energy Bill appears to fly in the face of the Commission guidelines.
The Commission says, among other things, that in assessing environmental operating subsidies it will consider the following:
“duration of the aid: If operating aid is granted for a long period, this is more likely to distort competition … gradual decrease of aid: If operating aid is reduced over time, the undertaking will have an incentive to improve efficiency; therefore, the distortion of dynamic incentives will be reduced over time”.
To me, a grandfathered, 40-year plus contract for a nuclear power station would be seen by the Commission as foreclosing a significant part of the market. What we have here is the prospect of a legal challenge between national targets for carbon reduction and nuclear and the promotion of renewable sources on the one hand and the development of a European barrier-free market on the other. Will the Minister inform the Committee of the Government’s view of this discrepancy and place in the Library any copies she may have of the legal advice the Government have sought to reconcile these discrepancies in advance of Second Reading of the Energy Bill in your Lordships’ House?
Lord Whitty
My Lords, my noble friend’s question relates to the contribution that nuclear energy can make to both energy security and climate change. I shall focus mainly on the latter. The answer to the question obviously depends on the timescale and, in a different sense, on the nuclear industry overcoming the legacy to which the noble Lord, Lord Moynihan, referred, of economic overconfidence, not to say mendacity on the part of the economics of nuclear power. I support nuclear power, but I recognise that history. We have to overcome it and the continuous slanging match between those who support renewables, who slag off nuclear power, and those who support nuclear power who slag off the renewables lobby. We have to get over that because both are vital if we are to meet the climate change target. Mutual recrimination only benefits longer-term use of damaging fossil fuels.
In the short term, nuclear power will not make a huge contribution to carbon targets. To meet our carbon trajectory, we will have to rely on increased renewables and a switch from coal to gas. In the medium term, however, it could be different. In the nearest thing to a road map that the Government have come up with—the carbon plan—it is envisaged that at the end of the fourth carbon budget we will have 10 to 14 gigawatts of new nuclear power on stream, potentially rising to 20 gigawatts by 2030. On present form that seems pretty improbable, but it is no more improbable than that, in the same plan, we will also have 35 to 50 gigawatts of renewable energy, which will be equally difficult, even if we have the subject of the next debate on stream and working. It is important to take decisions now to set the guidelines for nuclear investment to ensure that we get somewhere close to the 27 or 30 targets for nuclear contribution.
The immediate prospect before the Government is the Energy Bill, which will be before this House in a couple of months. The test case for contracts for difference is the nuclear investment by EDF in Hinkley Point. It is a terrible dilemma for the Government and a severe test of whether the contract for difference can actually work. It will also determine whether we have a viable means of delivering nuclear investment in this country. Part of the media coverage on this has been misconceived. The Treasury has a stronger hand against EDF than is indicated. There is not a lot of demand for nuclear power in Europe. The state-aid issue, to which the noble Baroness, Lady Parminter, referred, will be an important inhibitor on what the Government can do for EDF in any case. The idea that we all have to roll over to EDF demands to bring Hinkley Point on stream is exaggerated. That is not to say that it will be an easy negotiation or that the precedents set in the outcome of that negotiation will necessarily be tenable for other proposals for investment into other nuclear sites. I urge the Government to play hardball in this respect, and ensure that the deal that is done on Hinkley Point, which I very much support, is one that benefits the British people and the British economy rather than straightforwardly EDF.
The Lord Bishop of Hereford
My Lords, I welcome the debate and congratulate the noble Viscount, Lord Hanworth, on securing it. In the three minutes allotted to me, I shall make four overrushed points. First, I am hugely supportive of us walking the nuclear path. I would love the 85% target for 2050 to be achieved, and I stress that thorium molten salt reactors should be on the medium and long-term radar. There is four times as much thorium in the world as uranium. One tonne of thorium is equivalent to about 200 or more tonnes of uranium, which is equivalent to 3.2 million tonnes of coal, which would produce 8.5 million tonnes of carbon dioxide and 900,000 cubic feet of waste fly ash. That is a no brainer when we are starting to be green and looking to be green. There is no argument about that, apart from one of cost, but it could be turned on its head and we could say, “Can we not afford this? Is there a way to achieve those reductions without it?”. I do not think that there is.
Secondly, research and development are vital. I appreciate very much the steer towards putting a bit more money in. What a shame that since 1995 we have had almost no money in R&D for fission. I understand that at the moment in our universities there are only five PhD students doing R&D in fission and, if noble Lords would like to guess the number of post-docs, it is 0.2 of a researcher. That is desperate, and we are heading for a massive skill shortage unless we do something about this now and step up hugely the amount of money spent on research. It is greatly needed.
Thirdly, the national decommissioning authority must surely be given a remit that is new, fit for purpose and joined up with the rest of the documentation we have here. Instead of the national decommissioning authority working on its own brief to its own agenda and therefore not being able to use its money to help with the research, we need to make sure that we change the mindset so that some of what is regarded as waste can be regarded as fuel. If we have thorium molten salt reactors, that would be possible. We need to recognise that the new generations of reactors have far less wastage and therefore there is ultimately far less to decommission, which is another good reason for walking this path, and we need to cut down the £2.3 billion a year that is being spent, which I understand is 80% of DECC’s annual budget. That seems an outrageously large sum, and we need to close the gap.
My fourth point is that this cannot and will not happen without government putting in the initiative, as the noble Viscount, Lord Hanworth, has made clear. Anything that has a 15 or 20-year, let alone a 60 or 70-year, lead time is hardly going to be commercially attractive. It needs government to do it. We are having such trouble finding anybody to build our reactors at the moment because we have trusted to private enterprise, and things of this scale have to be joined up and have government support. I would like us also to have something that is far more clear, coherent and comprehensive with a commitment from the Government to go for that, and then others would come aboard with university and other research money to follow.
Lord Judd
My Lords, clearly the demands of climate change mean that this issue has to be promoted to a top priority in government consideration and action. We have got to stop dithering and get on with it. If we are going to get on with it, there are several points which have to be addressed. The first is why we are not deliberating our energy policy more seriously than we do with a real drive for energy conservation. Are we just fatalist about the level of energy consumption and therefore trying to meet it, or do we have a policy on energy conservation, and how is that being pursued and resourced? Talking about further education, higher education and skills, how much effort is going into producing the people who can be expert and relevant in this field?
Next comes the issue of real cost. That has been well illustrated in what has been said already. We have to look at the long-term costs. We have to be very certain. I do not believe that there can be any total certainty, but we have to be as certain as we can be about what those real costs will be and stop shadow boxing. In that context, the real costs of the alternatives have to be evaluated. What is the competitive advantage? There are special dimensions to this, and it would be foolish to overlook them. There is safety, of course, and there is also security in an age of international terrorism and the rest. What we need to be clear about in these extra costs is exactly where the responsibility lies. From the outset, we have to be clear about what the taxpayer may be expected to fork out in the future and what the industry itself is expected to meet. There are some huge issues in that sphere, but we have to be clear about them. We cannot just drift into another example, like the banks, of de facto welfare capitalism in which when something goes wrong, taxpayers are expected to fill the bottomless pit with their taxes.
The noble Baroness, Lady Parminter, referred to waste. I simply say that I think it is irresponsible to move into the next generation of nuclear energy before we have demonstrated what we are going to do with the existing stock. This has immense implications for future generations for hundreds of years ahead. I cannot understand why in Britain we do not have a costed, carefully researched list of suitable sites for the storage of nuclear waste across the country as a whole—suitable geologically as well as on security grounds. Of course, voluntarism in this area matters, but voluntarism should come into operation in the context of what is clearly the best place and what are clearly the less good places in which this waste should be stored. I simply do not understand why that is not being done and I believe that it should be done as a matter of urgency.
Lord Davies of Stamford
My Lords, we must have a nuclear programme. Renewables are not a substitute, as the House knows very well, because they are not base load. Carbon capture and storage is not a satisfactory substitute because it is still an unproven technology, and it would be deeply irresponsible to set our future by making a bet on that particular number on the board. The same applies to shale oil. I think that we should seriously pursue shale oil opportunities, but there are very serious environmental concerns about it. There are suggestions that the fracking process could permanently pollute the water table, and that should obviously be taken extremely seriously. However, even if that matter is resolved, combined-cycle gas-fired power stations continue to emit carbon. If we really are serious about reducing our carbon emissions to the greatest possible degree, we must at least try to replace a proportion of our energy with electricity generated through nuclear fission. As has already been said, that is a very tall order because all the stations except for Sizewell B will be decommissioned by 2023 and it takes 10 years to build a nuclear power station. Therefore, we can see the problems that we have got ourselves into.
I do not agree with the noble Baroness, Lady Parminter, or indeed with my noble friend Lord Judd, with whom I normally agree on most things, that the problems of nuclear waste storage should in any way hold us up in taking decisions about investing in a new generation of nuclear power. We have that problem anyway with the existing stations that we are closing, and the problem is much greater with the present nuclear power stations because current technology is much less efficient and much more waste is produced. Therefore, I do not think that that is a very good argument.
I want to take the opportunity, as I think we all do this afternoon, to ask a very simple question of the Government. What the devil are they doing? What do they have to show in this area after nearly three years in office? They have been arguing about contract differences for two years. They would have been in a much better position to come to a deal two years ago, when we had two German groups, as well as EDF, who were extremely keen on getting involved in the nuclear project in this country. Therefore, I fear that the Government may have got themselves into a very unfavourable position simply by not being sufficiently dynamic or focused earlier in this Parliament.
My second question is: what is the fallback position? If the Government cannot come to an agreement with EDF, what do they do? We know that the Government do not have a fallback position on the economy and their economic policies have not worked. They have not thought through that situation properly. They have not thought through the possibility that the initial strategy that they are pursuing might go wrong. That is a very irresponsible way to run any business or any country. What fallback position do the Government have in mind for our energy requirements if they cannot come to an arrangement with the private sector to build new nuclear power stations?
Lord Jay of Ewelme
My Lords, I must declare an interest straight away as a non-executive director of the main Paris board of EDF. Indeed, I am the only non-French member of that board. I should stress that I favour nuclear energy not because I am a member of the EDF board; I was delighted to accept membership of the board because I believe that nuclear energy should be part of our energy mix. I hope very much that the present negotiations between the Government and EDF over Hinkley Point will succeed. A year or so ago, I would have said that they seemed condemned to do so. However, having observed negotiations more recently, albeit indirectly from both Paris and London, I do not think that success is in any way assured. Robert Peston got it right in his FT blog last week, when he talked of both sides proceeding with “cautious pessimism”. I hope that I am being too pessimistic myself. If we do not renew our nuclear capacity over the next 10 or more years, I believe that we will face real problems of energy security as existing nuclear and coal-based plants close, as gas prices rise when, as it is hoped at some point, the economy picks up, with shale gas being less significant inevitably on this side of the Atlantic than on the other side, and as wind power remains expensive and intermittent.
We would also find it much harder without nuclear as part of our energy mix to meet our carbon reduction targets. It is worth remembering that a nuclear power station will emit around five tonnes of CO2 per gigawatt hour of electricity generated, compared with nearly 500 tonnes from gas and 900 tonnes from coal. I add, in case the noble Lord, Lord Lawson, is listening somewhere, that climate change is not the only reason for clean energy. There is also a very strong public health reason for clean energy as anyone who has experienced Beijing smog in recent years will know.
For all those reasons I welcome the Government’s commitment to nuclear power. I also welcome the conclusion of the Government’s nuclear industrial strategy—in particular its review of the nuclear research and development. Nuclear R&D needs to be far more robust than it is at present. That approach is needed if we are to respond to Britain’s needs and, as the noble Lord, Lord Jenkin, said, if we are to exploit the rise of nuclear power elsewhere in the world, which is the real opportunity for us as a society. Finally, like the right reverend Prelate the Bishop of Hereford, I hope that molten salt reactors and thorium fuel will get the attention they deserve in our R & D programmes in the future, in providing the prospect of nuclear power that is safe, provides economic benefits and much more manageable waste disposal.
Lord Foulkes of Cumnock
My Lords, we should be grateful once again to my noble friend Lord Hanworth for drawing our attention to the looming crisis in the electricity supply industry. We raised it in the energy sub-committee of the Cabinet in 2001. To be fair, successive Governments have done nothing about it—I was going to use another phrase there, but nothing about it is more polite. A total of 19% of our electricity now comes from nuclear power and all but one of the existing power stations will close by 2023. What are the Government planning? They hope to build 16 gigawatts of nuclear capacity by 2025, but we have already heard from my noble friend Lord Jay that even he is pessimistic about EDF being able to deliver the only one that is in prospect, which will produce just over six gigawatts. It really is a looming crisis.
As my noble friend Lord Hanworth said, the markets are failing to deliver. In the past, nuclear power stations have either been funded by Governments, and we cannot do that any more because we privatised British Energy and now it is owned by the French—we know we have one person looking after our interests there, but mostly by the French—or were provided on the balance sheets of companies against their other revenue and assets. As the departing chief executive Volker Beckers of RWE nuclear power made clear, balance sheet financing is not now an option. Therefore the only option is to try and find these loans from the market, and they are proving both illusive and expensive. That is why, as the noble Lord, Lord Jenkin, said, they have been pulling out of the option of building. What is the way forward? By contrast to these expensive loans, the cheapest source of funding would be for the Government to build the nuclear power stations and then either sell them to the utility companies or bring companies in to operate them.
I have only one question for the Minister and I will conclude on it. Why is the Government’s ideology stopping this being done? I predict that this is the only way that we will be able to fund this—I see no other way forward. It would be cheaper, easier and quicker for the Government to build their power stations with the option of selling or hiring them to contractors once completed. Is it only ideology that is stopping the Government doing that?
Lord O’Neill of Clackmannan
I thank my noble friend Lord Hanworth for introducing this debate, although when it was first announced I was not sure that we would have much to debate. I thought that we would probably be well on the way to getting a strike price. Secondly, I did not anticipate the European Parliament having the vote that it did, throwing the carbon market up in the slates. The first question that we have to ask the Minister is what the Government propose to do to retrieve the situation so that the price of carbon can be made clear so that potential investors in all forms of generation of a low carbon character, whether renewable or nuclear, have some sort of idea of where we are going in Britain.
If there is a problem, it is not the Government as such; in my view it is the Treasury. In my recent experience of the nuclear industry within the past decade, I remember two occasions. One of them concerned the pay and conditions of the Nuclear Installations Inspectorate, where there was a dramatic leakage of staff because of the skill and expertise of these individuals and because their pay and conditions was of a Civil Service character. It took the Treasury years to come to an appreciation of the fact that these people had to be put into a special employment box, as it were. Thankfully, the Government’s upcoming legislation will deal with that.
Secondly, there was the whole question of the contractorisation of Sellafield and the insurance thresholds that had to be set for that. It took months and months of trying to get the Treasury to appreciate the significance of this insurance question. The insurance question was quite straightforward. There had to be a raising of the threshold whereby the Government would become responsible for any potential difficulty. It was not an issue that was raised by a single company although the one I was associated with at the time, the Washington Group, had been the favourite company to take the Sellafield account. It eventually took the intervention of the shareholder executive from BIS to get the Treasury moving. We know the merits of the case one way or another and it has been described already, but the Treasury is the department causing the problem.
It is fair to say that DECC in these matters is a well-intentioned lightweight spectator. It has to get its act together. There is so much at stake here. We need to get a price and we need to get a signal sent because there are people not only in EDF but other contractors that are prepared to come in and spend money and to use different forms of generation and different reactors, which could widely expand our industrial base. If nothing else, given that we are no longer going to be able to build lean-tos and conservatories, we need something to help the construction industry. Certainly, starting work at Hinkley Point as quickly as possible would be a good signal to all concerned.
Baroness Worthington
My Lords, if you thought it was challenging speaking on nuclear power for three minutes, try summing up this really fantastic debate in three minutes and also questioning the Minister. It has been fantastic and I congratulate my noble friend Lord Hanworth on securing the debate. It shows what great industry there is in the House for energy matters. I am sure that these debates will continue when the Energy Bill reaches us. On balance, most speakers seem to agree that nuclear power has an important role to play in both decarbonising our power systems and in providing more security of supply. But important caveats were put down by speakers today. My noble friend Lord Whitty said that we may want to pay for nuclear power, but not at any price. It must not be at the expense of consumers.
The noble Baroness, Lady Parminter, made very important points about waste. Waste is an issue. We cannot move to 60 or 70 gigawatts of nuclear power with a once-through fuel cycle. It generates far too much high-level waste. We need innovation if we are to be able to solve that waste problem. My noble friend Lord Judd quite rightly said that we cannot in all conscience go forward planning lots of new reactors until we have solved the problem that we already have today and, importantly, worked out what it costs.
There seems to be a common theme that the noble Viscount, Lord Hanworth, started off: what is the contingency plan? If our current proposals to move ahead with these large-scale pressurised water reactors do not happen, and a number of speakers raised the fact that they are very difficult for the private sector to deliver with the timescales and capital costs involved, the contingency plans and the insurance, it is a very difficult issue. A number of noble Lords mentioned that in the past there has always been a fairly high level, if not a complete level, of state involvement. It is not clear that this is going to work out as we might hope, therefore there needs to be a contingency plan. Many noble Lords mentioned the cost overruns of the Flamanville and Finish reactors. We need to learn lessons from them if we are to pursue this course.
I shall make a few suggestions, picking up on something that the right reverend Prelate the Bishop of Hereford mentioned. There is a way for the state to get involved in nuclear R&D at a much higher level than it is at the moment through rethinking our approach to decommissioning. At the moment, a huge proportion of DECC’s budget goes on the NDA and its role in decommissioning our existing reactors. The legislation that created the NDA in 2004 was written at a time when we did not conceive that nuclear would need to have a renaissance or that it would come back to help us tackle climate change, and therefore the NDA was given a very narrow and limited remit just to dispose of the waste. When is waste not waste? It is when it is fuel. Some of those fuels that are currently stored as waste could kick-start a new generation of nuclear reactors, whether fast-breeders or any kind of closed-cycle nuclear system. If we use thorium, which a number of noble Lords mentioned, we can move to much more sustainable nuclear power, so if the Government do not have a contingency plan, I ask that they develop one and base it around the concept that we could bring about quite a high degree of innovation in the nuclear industry and get back to what the UK was very good at.
We have a very good history of innovation in nuclear power. It was only in the 1980s that we started to see a precipitous decline in R&D and the closure of eight of our 12 nuclear research labs. With the Beddington report, I hope that we are starting to turn that cycle. Let us get involved in nuclear fission research again; let us increase the budgets and make sure that we try to help bring the world a much more sustainable nuclear future in which nuclear can compete with carbon capture and storage, renewables and all the other solutions that will be necessary to deliver us from climate change. I do not think it is an either/or, or that it is nuclear or renewables or CCS. They all have to play a role, but we probably need a new type of nuclear, and I would love us to play a part in bringing that to reality.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, I thank the noble Viscount, Lord Hanworth, for raising this debate today. I know that he has a long-standing interest in this subject. I agree that this is a very timely debate. I hope that when I go through my speaking notes I will be able to answer some of the questions that have been raised by noble Lords today. Those that I cannot answer in the short period that we have for the debate I will write to noble Lords about and place a copy in the Library.
I do not approach this debate as the noble Viscount, Lord Hanworth, did, with pessimism. My endeavour today will be to lift his spirits a little. Noble Lords have asked searching questions. I may have to give better, detailed responses to many of them, so it would be prudent of me not to give half-baked responses now.
We are aware that one-fifth of our power generation will be coming off within the decade and therefore it is vital for our nation’s energy security that we work towards long-term certainty and investment. That is why I am pleased to say that this Government, in recognising that, have introduced the Energy Bill, which will bring forward the biggest electricity market reform that we have seen for a very long time.
Nuclear power has a part to play in the UK’s energy mix. For more than 50 years it has been part and parcel of a route for electricity supply to this country and it contributes more than 19% of all electricity generated in the UK. We are committed to seeing nuclear as a part of the energy mix, alongside renewable energy and carbon capture and storage from fossil fuels. A new generation of nuclear power stations will help to ensure that we have secure, affordable and low carbon energy.
Towards the end of last year we saw the successful sale of Horizon Nuclear Power to Hitachi, and EDF was granted the first nuclear site licence in 25 years at Hinkley Point C. Regulatory approval of the EPR reactor has been given. This March, the Secretary of State gave planning consent for a multibillion pound project planned at Hinkley Point in Somerset. This project alone could enable the generation of enough low carbon electricity to power around 5 million households, making it one of the largest power stations in the UK. The noble Viscount, Lord Hanworth, specifically focuses his Question on our assessment of how nuclear power will help the UK to meet its climate change goals. As he is aware, we see a new generation of nuclear power stations alongside other low carbon forms of electricity as being the most cost-effective as well as energy-secure way to meet our legally binding carbon targets.
The life cycle of carbon emissions from new nuclear plants will be similar to that of emissions from wind power and, of course, much less than those from fossil-fuelled plants. It is competitive with other generation technologies and is expected to be one of the cheapest sources of low carbon electricity in the future. New nuclear can contribute significantly to our economic growth, creating long-term employment and supply chain opportunities. The Energy Bill currently going through the other place is bringing in some of the largest changes in reforming electricity that the UK has ever seen. The Bill will put into place measures to attract the £110 billion investment that is needed to replace current generating capacity and upgrade the grid by 2020 as we see a rising demand for electricity. The Bill puts into place the certainty that generators have looked for in investing in large projects and, through our capacity market, is also building in a mechanism to ensure energy supply. These measures are intended to try to shield us better from price hikes that occur on the international markets and over which we have little or no control.
Last month we published the Nuclear Industrial Strategy, which provides us with essential bridges between our shorter-term policy for the next tranche of new build and the research and development needed for nuclear to play its part up to 2050 and beyond. The strategy’s key actions are to have a new nuclear council that brings together relevant players from across the nuclear supply chain. The strategy will better co-ordinate research and development and innovation through the new bodies—the Nuclear Innovation and Research Advisory Board and the Nuclear Innovation Research Office. It will ensure a long-term plan to meet skills in the sector and will look at how to reduce costs across the industry.
The strategy was in response to the House of Lords Science and Technology Committee’s insightful 2011 report, when the Government undertook a number of actions, along with the findings and recommendations from Sir John Beddington’s advisory board, which formed the basis of the strategy. Government and industry will be working together to drive economic growth and job creation. As noble Lords are aware, we are currently in negotiations with NNB GenCo regarding the contract for Hinkley Point C. The Government are determined to work for a deal that delivers a fair, affordable and value-for-money deal for consumers. Should an agreement be reached, it will be laid before Parliament, and it will include details of the strike price.
Before concluding, I have a number of questions to which to respond, and I will try to whizz through them as quickly as possible. The noble Viscount, Lord Hanworth, asked about our response to the Energy and Climate Change Select Committee’s report on new nuclear. Of course, we welcome the report. It recognises the important role that new nuclear will play in meeting the UK’s energy security, but we will put forward a proper response to the report some time in the coming days.
My noble friend Lord Jenkin asked about investment. I think I laid out clearly to noble Lords that the Government have announced increased investment. Over £45 million-worth of additional investment is going into nuclear research and development, alongside the publication of the Nuclear Industrial Strategy, which was published in March this year. I could give a breakdown, but if noble Lords would like me to do so, I will write to them about that.
My noble friend also asked about EURENCO. The Nuclear Industrial Vision Statement sets out the industry’s own ambitions for the future. The Government intend to work with our partners in EURENCO to move forward preparations for the sale of all or part of our one-third of the shareholding. It is government policy not to continue to hold shares in companies where the shareholding does not deliver any policy objective.
My noble friend Lady Parminter asked whether current electricity market reform proposals are in line with European state aid rules. We are working with the European Commission to ensure that our policies—particularly contracts for difference and the capacity market—are compliant with state aid rules. It is important to ensure that we have a stable and certain regime that has the confidence of industry and provides best value for consumers.
My noble friend also asked about our long-time approach to the management of nuclear waste, as did the noble Lord, Lord Judd. We remain fixed to the idea of GDF being the best way to ensure that nuclear waste is dealt with properly, but we recognise that we need to have communities that come to the process voluntarily. Therefore, when west Cumbria decided in January this year not to go ahead, we began the process of looking at the lessons to be learnt. We recognise that an approach has to be voluntary because in places where voluntarism was not taken forward the process faulted there too.
My noble friend Lord Jenkin asked about the role and structure of NNL. The Government recently announced changes to the management structure of NNL when the current contract expires. We are working with the company to ensure that it is at the centre of our future programme of research and development through the operation of the Nuclear Innovation Research Office.
The noble Lord, Lord Giddens, asked about subsidies in relation to nuclear. The coalition has agreed that there will be no public subsidy for new nuclear power unless similar support is available more widely for other types of low carbon generation. However, it is for the private sector energy companies to construct, operate and decommission nuclear power stations and for the Government and independent regulators to ensure that appropriate levels of safety, security and environmental regulations are met.
The noble Lord also spoke about the experience in France and China. We are already looking at lessons learnt around the generic design assessment, and mitigating risk by making sure that our requirements are understood and that designs are completed on time. But, again, it is for us to work and engage closely with industry and regulators to ensure that early build programmes applied in the UK are built to the UK context.
Both my noble friend Lady Parminter and the noble Lord, Lord Giddens, asked about electricity market reform proposals in relation to nuclear and, in particular, in relation to the minimum price agreement with EDF. We have not yet come to an agreement. We are still in negotiations. These are commercial negotiations and therefore it would not be right for me to discuss here and now where we are with those negotiations. All we can say is that this Government are determined that, whatever price is agreed, it will allow for fairness and provide value for money for the consumer.
I am rapidly running out of time and I still have quite a number of notes to go through. Therefore, I shall conclude and will write to all noble Lords on the questions to which I have not been able to respond. I thank all noble Lords for their valuable contributions to this important debate. We have made, and will continue to make, great progress in ensuring that new nuclear can contribute as much as possible to the UK’s future energy mix. This Government are fully committed to cost-effective new nuclear power contributing alongside other technologies. This is not about ideology; it is about the need to ensure that the UK has a secure and cost-effective low carbon energy supply.
Severn Barrage
Lord Cope of Berkeley
To ask Her Majesty’s Government what evidence they have received about the effects of building a Severn barrage.
Lord Cope of Berkeley
My Lords, I beg leave to ask the Question standing in my name about the possibility of a Severn barrage as proposed by Hafren Power, which the Government are considering. Evidence given to the Commons Select Committee on Energy and Climate Change has made it clear that it is a naive proposal, absurdly short on detail, and I am sure that it will not happen. I am glad about that, because its effects would be highly damaging. I hope that it will be strangled very soon. As long as the idea exists, it is delaying proper, careful thought about realistic ways of generating power from the colossal energy of the tides in the Severn estuary and it is also damaging investment.
When I was first in the Commons, my constituency boundary was the Severn for some 18 miles from the edge of Avonmouth to upstream of Sharpness, although boundary changes later took away the northerly six miles.
The reasons that the present proposals will not be put into practice are several and distinct. The four main ones can be summed up in the words “silt”, “habitats”, “economics” and “ports”.
The Severn is a muddy estuary. Millions of tonnes of sediment—literally 30 million tonnes at high spring tides—are washed up and down by the huge power of the tides twice a day. The question is where the sediment will settle if a barrage is built. On the scale that we are talking about, dredging is an unrealistic solution which makes no commercial sense.
There is no chance of replacing the destroyed habitats as we are required to do under the habitats directive. Salmon and other fish will not survive the turbines according to the Environment Agency and other experts during the Select Committee’s inquiry.
The economics are also crucial. Any tidal generator will produce power at highly forecastable but limited times of day and not always at the peak. However, gas, coal or biomass-fired stations, let alone nuclear ones, cannot be switched on and off as the hours of high water come and go. In any case, you have to provide enough generating capacity of other types to fill the peak while the barrage is resting.
That brings me to the effect on the ports. I am particularly concerned about the ports of Bristol and Sharpness, which I first knew as an MP. The evidence to the Select Committee from Associated British Ports concerning its ports in South Wales is similarly hostile to the proposals.
I was primarily motivated to ask for this debate by paragraph 37 in Hafren Power’s submission to the Select Committee, the only paragraph which refers to the ports. It says there will be,
“minimal inconvenience to navigation. Hafren Power intends to minimise any impact on current business at ports upstream”.
In fact the port of Bristol believes its operations would be fatally maimed by the building of the proposed barrage. Forty years ago, Bristol City Council, which owned the docks, built the new Portbury Dock to add to the existing Avonmouth Dock. Some years later, under a Labour council, it sold the whole complex to the present company. Since that sale, over £500 million more has been invested, making Bristol one of the most modern and productive ports in our country. More major investments are planned to support continued growth, but they are currently inhibited by the existence of the Hafren Power proposals.
Bristol is a big ship port. Ships come from all parts of the world with a very wide variety of cargoes. If the Hafren Power scheme were constructed, the navigable water depth at high tide would be reduced by over two metres and perhaps by three metres, depending on the silt, which I mentioned earlier. In the older Avonmouth Dock, ships over 30,000 deadweight tonnes with draughts of nine metres and above would be unable to enter. That would kill important business for the port. In the newer Portbury Dock, the effect would be similar, but it is larger and vessels with a draught of over 13 metres would be very restricted, and the existing largest vessels, currently up to 130,000 deadweight tonnes, could not enter. Of course, ships with lower draughts would be able to enter, but on many fewer days in the year. The port would be commercially unviable, and the current investment would be wasted.
The new locks to be incorporated within the barrage are another problem. They would necessarily be in the deep water channels, and the ships approaching them would be exposed to the full force of the Atlantic weather, unlike the sheltered approaches to the existing ports. There would be delays and risks attached to their operation. There would also be large costs, not only for lock operations but for dredging, pilotage, survey and towage and for the shipping companies. These costs must be paid by the barrage and guaranteed for its lifetime, but we have not been allowed to see the calculations.
Hafren Power wants a hybrid Bill, sponsored by the Government for the benefit of its consortium which would then sell it on to a sovereign wealth fund. It makes it sound simple. This part of its submission attacked my blood pressure and my funny bone simultaneously. Has it no idea of what the procedures, costs and complications of a hybrid Bill are? Let it look at the Cardiff Bay Barrage Bill proceedings and it will begin to understand the timescale and the huge costs to all parties—promoters and objectors alike—of this route. It would be a long and highly costly process, profitable only to the QCs and their colleagues involved, as well as to large armies of experts. The ports either side of the estuary and many NGOs are united against the proposal. They remain mystified by some of the claims made in Hafren Power’s submissions.
There have been numerous studies of the possibility of a barrage done over the past century and more. The latest thorough government study took several years, examined all kinds of options, and rejected the idea a couple of years ago. Other countries have considered and dismissed this as a form of power generation—for example, Canada, France, or more recently South Korea.
I recognise that this afternoon my noble friend cannot be expected to give the Government’s considered comments on all this. Apart from anything else they need to see the report of the Select Committee, which I suppose will be with us within a few weeks. But I hope the department realises that the matter needs to be settled. My concern is, as was expressed to some degree in the previous debate, that the Department of Energy and Climate Change has that insidious Whitehall disease of ditheritis—constantly talking and consulting about things and never deciding for years on end. These proposals are unworkable and damaging. It is time to decide and to say, “no”. Then we can get on with deciding how really to harness the massive tidal energy of the Severn without all the damage involved.
Lord Whitty
My Lords, I rise with some diffidence, given that the noble Lord, Lord Cope, has made his position on this issue clear. I am afraid that I am still somewhat ambivalent about this proposition. On the face of it, it is a fairly major contribution to meeting our climate change targets—5% of Britain’s electricity could be generated by this. It also has economic upsides of substantial employment. There are probably enough speakers on the list who will emphasise the Welsh dimension. I also emphasise that in the south-west there will be a significant number of jobs—probably more than at Hinkley Point.
However, there are economic and ecological downsides. I declare a past interest as a member of the board of the Environment Agency. I was persuaded, with some reluctance, that we should oppose this proposition, largely on the grounds of the effect on migratory birds and fish and the need to find compensatory habitats, as well as the effect on the whole ecology of the Severn estuary. It is not possible to replace the habitats that exist in south Wales for migratory birds, nor frankly is it possible to construct turbines that do not have some fairly negative effect on large numbers of fish. Nevertheless, this is a conflict between two different environmental objectives. We have to bear in mind that to meet the trajectory of carbon reduction to which we are committed—in a sense the subject of the previous debate—we will have to make some unpalatable decisions and face up to some fairly unpalatable costs, whether it is nuclear energy or some of the major renewable projects, including this one.
I do not think that I will have quite changed my mind again. Despite what the noble Lord, Lord Cope, said, I think that the new proposition has some mitigating factors, although they are not entirely convincing, even to me. We need to look at the latest version with some considerable scepticism, but the project as such has some serious merits. However, I want to seize on the last remarks of the noble Lord, Lord Cope, on whether there are other ways of making use of the great tidal difference in the Severn. There were earlier propositions of having a series of lagoon-type projects that would not save so much carbon—we have to be fair about that—but which would probably cost only slightly less, and would not have either the negative ecological effects nor the damaging effect on the Bristol ports to which the noble Lord, Lord Cope, referred. I ask the Minister specifically whether those other alternatives are still being considered as well as the latest Hafren proposal. I would not want to be as dismissive of it as the noble Lord, Lord Cope, but the Government need to look seriously at other propositions as well.
Lord German
My Lords, I start by looking at the whole issue of the elusive trail that we have had over many decades to try to harness the power of the Severn estuary. I wish that we could call it the Bristol Channel and Severn estuary because when I was a boy we were taught that the line between Newport across to Avonmouth was the line of the Severn and that after that it became the Bristol Channel. Of course, the barrage that has been referred to is in the Bristol Channel, and we need to look at it as a whole.
The elusive trail indicates that we have had sufficient studies and need to consider what might be the best way in which to move forward. I agree with the previous Government’s report, which said that,
“the Government does not see a strategic case to bring forward a Severn tidal power scheme … The costs and risks for the taxpayer and energy consumer would be excessive compared to other low-carbon energy options”.
So the test of all this is, therefore, to find a way of harnessing this energy that meets the energy needs to which we all aspire but also provides a satisfactory solution to the environmental, economic and technical problems that are an inevitable consequence of this work. The challenge is that putting all our eggs in one basket could result in the outcome that was predicted and agreed to by the last Government, with which I agree: that we cannot do it without significant cost and economic and environmental damage.
I believe that we need to look much more widely at the whole range of energy uses—tidal stream, tidal range, wave power and offshore wind power. All those forms of power and energy are available to us; the problem is that we have only nascent technologies, which have not yet been brought to a level where they can be put into action in demonstrable projects. The whole energy sector has been dogged, for example, by the difficulty of creating appropriate turbines to deal with the rise and fall of the tide. I understand that, in the current proposal, Rolls-Royce owns the concept and patent for a nascent turbine that will work in both directions, but there is no sense that it has been developed beyond a prototype into something that could be seen to work. That is why, for example, a lagoon would allow that testing to take place, allowing that to happen and to build in an appropriate manner.
I understand that the Government have invited submissions, which is where this Hafren proposal has come from. Is there a role for Her Majesty’s Government not just to ask for submissions but to give some sense of direction and promotion to the way in which those suggestions should come? We have an urgent need for a scaled-up demonstration project. Out of that might come the world-wide excellence that we need, and expertise and technology that can be developed elsewhere. Are the Government now in a position to establish what the net economic benefit of the current Hafren proposal is to the United Kingdom? What steps do they propose to take to promote the use of alternative and multiple technologies within the Severn and the Bristol Channel so that we can begin to satisfy the need that is there?
Lord Berkeley
My Lords, I am afraid that you have me today, and not my cousin, who joined the House about a month ago. We both have fewer connections with Berkeley than the noble Lord, Lord Cope of Berkeley, who used to represent it in the other place. I certainly have a great interest in this project. Having worked briefly on it as an engineer about 40 years ago, I was interested to read a comment in the Financial Times on 18 December last year, saying:
“There are two varieties of Severn bore. The first is a regular surge of water up-river due to the funnelling effect that the English and Welsh coastlines have on the tide. The second is a regular surge of enthusiasm for slinging a barrage between said coastlines to generate tidal electricity”.
That probably sums up where I think we have got to today.
This is a very big project, if it happens, and much bigger than the Channel Tunnel, on which I worked for about 15 years. The difference is that the Channel Tunnel, although it was difficult to finance in the private sector—and Margaret Thatcher clearly and rightly said that it should be—used proven technology. The technology for boring a tunnel in chalk is well proven, but even so, finances were difficult for the tunnel.
However, for this project the small details available do not yet give me any confidence that the new technology is at all proven; the noble Lord, Lord German, mentioned turbines, which I was about to mention, there are locks, and there is the actual design of the, presumably rock, barrage itself. Bearing in mind that the Severn—or the Bristol Channel as it is quite rightly named—is very deep there, it has already got strong tides and wave heights of between six and eight metres. I do not know who has been in a small boat in a six to eight metre swell. I went to the Scilly Isles last week and the swell was quite big.
The force of the tide on a breakwater is pretty frightening even to conceive. About 30 years ago, a breakwater built in a place called Sines in Portugal had a similar storm attack it and it collapsed completely. I am sure designs have moved on since then, but we need to have confidence not only that the design is adequate for these very difficult conditions but that it can be built on time and on budget. The constructability is equally important. We have had no real answers to any of the questions that noble Lords have asked this afternoon, the noble Lord, Lord Cope, in particular. Until they are answered, I do not think one can talk about finance in the private sector.
I recall very early when we were trying to do the Channel Tunnel trying to get commitments from bankers to say it could be financed in the private sector. We got a variety of letters, but in the end they said, “If it does not rain next Tuesday and it does snow next Wednesday, we think we can finance it in the private sector”. That is not good enough nowadays. You need a lot more study, effort and investigation of all the effects, including on the ports, which are extremely serious. I am very doubtful. My recommendation is to cancel the thing now and start looking at smaller schemes, develop the technology and make sure it does not completely wreck the River Severn and the Bristol Channel.
Lord Jenkin of Roding
My Lords, anyone who has crossed the Rance barrage near St Malo in France will have seen the attraction of being able to harness the tides to generate electricity. Of course, it is a very narrow dam and it is entirely sheltered in the great bay that St Malo stands on—totally different from what we have in the Severn or the Bristol Channel. I have long seen the attractiveness of trying to do it, but from what I have read and studied, this proposal by Hafren Power is simply not the way that it is going to be done.
My noble friend Lord Cope referred to the effect on the ports, particularly the ports of Bristol and Portbury. I would like to say a word or two about that. The thing that has always puzzled me is how on earth it was going to be financed—and there has been a lot of discussion—other than if the Government were going to find the money. As noble Lords will realise, that is not currently feasible. Therefore, is it going to come from the private sector? We do not know. Hafren Power has been extraordinarily economical with its business plan. It has published documents, but not given any real indication of what the whole business case is. The negative impact that this would have on the port of Bristol has been full spelled out to me by the port company. I have greatly admired what it has done in recent years. My noble friend referred to some of the investments and improvements that have been made. Its growth depends entirely on its competitiveness, and its ability to attract shipping in and out in competition with the many other ports that this country has.
This company’s brief refers to,
“the immediate and ongoing impact of commercial blight on their operations and in the longer term if a barrage was consented and built, the drastic impact the change in the tidal range would have on the viability of the port”.
It says it,
“would eventually lead to closure of the port at the cost of many thousands of real jobs”.
That is its view, and I have not seen the answer to that.
Hafren Power has attempted to answer the points, but I am sure that I am not alone in having seen the port of Bristol’s meticulous attack on the Hafren Power paper in which it describes Hafren Power’s claims as far-fetched, unfounded, naive and ignorant of the way a port in this country is operated. I cannot help feeling that this has all been made perfectly clear to the Select Committee, but it is desperately important. My noble friend has said that this threat should be removed and we should be looking again, as others have said, to alternative methods of harnessing the power of the tides in the Bristol Channel and the Severn estuary.
Baroness Jones of Whitchurch
My Lords, I thank the noble Lord, Lord Cope, for giving us the chance to have this debate. So far all the contributions have been fairly negative, so I am very pleased to say that I am going to put the opposite point of view and state some of the advantages of the scheme that is being considered today.
The barrage offers us an enormous opportunity to harness the tidal power of the Severn in a way that could create something unique with a worldwide reputation in terms of its concept and impact. I find it an exciting and innovative project, and if we can find a way technologically to deliver it, it is a prize worth having. It would be clean, secure, sustainable and low carbon. It would deliver 5% of the UK’s total electricity needs. It would be a predictable source of energy as the tide ebbs and flows and, once built, it could continue to produce energy on that basis for over 100 years. Those are all a prize worth having.
The energy it would produce would negate the need for three or four nuclear reactors, going back to our earlier debate, or more than 3,000 wind turbines at a lower cost than either. It is something that should be explored in more detail and, I hope, embraced with both hands.
A number of noble Lords spoke about the environmental impact and obviously this cannot be ignored. There will be changes to the local habitat, but I see this in the context of evolution and transformation rather than of damage and destruction. We had a very similar debate at the time of the creation of the Cardiff Bay initiative with lots of concerns about the wildlife impact, but the truth is that the bay has now attracted new species of birds and fish and has become a new, welcome wildlife sanctuary. I believe that a similar process will occur in the lake behind the barrage which will attract species previously unable to breed successfully because of the strong current.
As I understand it, Hafren Power is working hard with wildlife groups to minimise the environmental impact, and it is important that these discussions continue, but I hope that the local environmental groups will also see the benefit of a big green initiative in their backyard. At the same time, the barrage is being designed to have a minimal ecological impact by being permeable to fish and invertebrates and providing numerous fish ladders which, I understand, take fish only one generation to master.
I have spoken mainly about the environmental advantages of this project but, of course, there are serious economic advantages as well. It will be funded by private investment, with 80% of the investment being spent in the UK. It will employ at least 20,000 people, the construction of the 1,000 turbines will help revitalise the struggling South Wales economy and it could be a major export for us if we get it right.
There is increasing urgency about this matter. We are falling behind in terms of meeting our green energy targets. There may be other options, but to me it seems that this is the only game in town at the moment, so I hope that when the Minister replies to the debate she will be able to reassure us that the Government are taking this seriously and are prepared to consider facilitating the necessary Private Member’s Bill.
Baroness Miller of Chilthorne Domer
My Lords, the noble Lord, Lord Cope of Berkeley, in his extremely able introduction to this debate, mentioned four particular downsides. I would have to add a fifth, which would be flooding. Somerset has had a terrible winter. The effect of the barrage there, as the Severn surge comes up the channel and the Parrett is trying to empty the flood water down into the channel, has not been properly modelled by Hafren. I doubt whether anyone will be able to model it sufficiently. By dint of simply having the barrage, you might be writing off a large part of Somerset. You only have to look at what was flooded this winter to see how likely that is. That is a tremendous downside, especially, obviously, for the people of Somerset. It is a matter that needs to be settled.
The noble Lord, Lord Cope, remarked on what he called ditheritis, which is an extremely important point. Back in 2004, Friends of the Earth published a good comparison between the barrage and smaller, more varied schemes, particularly tidal lagoons. It is now 10 years later and we have lost the lead that we might have had on tidal lagoon technology. It is not too late to imagine that we could still forge ahead with it, but which investors will put their money into anything like that before they know what will happen with the barrage? This needs to be settled and settled urgently.
The smaller schemes offer tremendous upsides as well. If we are thinking about technology that we can export, we can pilot a number of things—the tidal stream and the tidal lagoons, as suggested in Swansea bay, which join up with the land and ones that do not join up with the land as suggested for Bridgwater bay. They relate better to communities and would undoubtedly bring the same sort of employment opportunities as a whole barrage but with a more varied application throughout the world. Not everyone has the place to build an enormous barrage. It might be a world tourist attraction, but it would not be the sort of technology that would lead to replication across the world. There would be only one or two other places where a barrage-type structure as proposed would be applicable, whereas the tidal lagoons could happen in a number of other places.
My question to the Minister, which is not original this afternoon, is what is DECC doing to support the piloting of tidal lagoons? It has been remarkably silent on that subject to date. I remember going to see the noble Lord, Lord Whitty, when he was the Minister to talk to about this. He was very helpful, and we had a discussion about habitats and so on. He, of course, was a Defra Minister and it was the responsibility of another department on the energy side, but departments have changed name so often that I cannot remember what it was called then. We really need to get on now and make a decision so that we can look at the more promising technologies.
Lord Hylton
My Lords, I regret that some remarks about the Severn by senior politicians seem to have generated more heat than light. Following the noble Lord, Lord Jenkin, I suggest that we should learn from France. The tidal scheme, La Rance, opened in Brittany in 1966. It generates 240 megawatts, is extremely reliable and has never had to have a major refit. It operates on an average tidal difference of 8.2 metres, whereas the mean for the Severn is 14.5 metres. A much smaller generator at Strangford in Northern Ireland has been working since 2007.
The Severn and its estuary are a national asset waiting to be developed. Of course, I understand the doubts and reservations already expressed by port, wildlife and fishing interests. It is important, however, to realise that a massive fixed barrage is not the only possible means of generating electricity. A much smaller scheme has been proposed up-river at a site known as the English Stones. Tidal lagoons and tidal canals are both possibilities with or without pump storage. A Bridgwater bay lagoon may perhaps have lower generating costs. It occurs to me that the existing supports for one or both motorway bridges could be strengthened to carry turbines driven by the incoming and outgoing tides.
Her Majesty’s Government have had two and a half years to reflect and make further inquiries since the Department of Energy and Climate Change published its feasibility study in October 2010. I therefore urge them to be proactive and to enlist the best academic and engineering brains to identify the most economic method or combination of methods to produce clean, non-polluting energy for generations to come. They should not just rely on nuclear power with its quite unpredictable clean-up costs. Interest rates are now as low as they are ever likely to be, so the present moment is an opportunity not to be missed. I therefore trust that this debate will inject real urgency into the search for solutions.
Lord Dixon-Smith
My Lords, one certainty has not been mentioned so far, which is that simply leaving the estuary alone will cost nothing. We have to deal with rising sea levels, and the Severn estuary is highly vulnerable to them. We already have a London barrage, which we know all about, and which will have to be replaced. That problem writ large all the way up the Severn estuary will be a problem not only in Bristol but in every other city anywhere near the estuary, and all landowners will have to face it too. It is not an easy question to answer. This is part of a much wider issue. That is the first thing that we must realise.
Secondly, to answer a point made by my noble friend Lord Cope, intermittency is not an issue. It would be perfectly simple to build some barrages on the east coast where we have some quite large estuaries. The time difference for high water is almost precisely six hours. If barrages are built on both sides of the country, there will be an even flow of electricity into the system. That point needs to be made.
Thirdly, we do not sufficiently consider the energy pattern and requirements caused by our Climate Change Act. By 2050 we shall have had to say goodbye—I say good riddance—to the internal combustion engine. All land transport will have to be driven by some other system. My bet would be on hydrogen, which requires electricity to generate it. Those who say that it cannot be done because there is no hydrogen infrastructure have got it wrong. The hydrogen infrastructure already exists. Wherever you have electricity and water you can make hydrogen. It is actually much more efficient to use that in a vehicle than to use batteries, and there is not quite the waste disposal problem because hydrogen is permanently recycled. The electricity generating requirements as a consequence of that are at least twice as big, if not two and a half times as big, as anything we are considering at present, so we have that implication, too.
That brings us back to the point that we have this enormous potential resource. The question is not whether we can afford not to use it but how best to use it. I am afraid that I am not enough of a technician to know whether this latest proposal is appropriate, and there we have to fall back on my noble friend in the Government because they get all the information.
The other certainty—this is where I will finish—is that this is a resource that we cannot afford to ignore. It may seem harsh to say that this may be more important to the country than the port of Bristol, but when the chips go down in 10, 15, 20 or 30 years’ time, that may be a reality that we all have to face. If it is a choice between future energy supplies for this country and the future of the port of Bristol, I would hate to be in the position of the Government, but it is a decision that would have to be taken.
Lord Howarth of Newport
My Lords, talk about building a Severn barrage has been going on since the 19th century. In our own time, we know that every reasonable opportunity needs to be taken to develop renewable sources of energy to mitigate the potentially catastrophic effects of climate change. A Severn barrage would utilise predictable and sustainable tidal power on a scale to provide perhaps 5% of Britain’s energy requirements, the carbon payback time would be a matter of only months, and the installation could be expected to generate energy for perhaps 120 years. If it is not to be Hafren Power’s Lavernock Point to Brean Down barrage, then it has to be another Severn or Bristol Channel barrage scheme.
Of course, the ecological impacts on sites of special scientific interest and on birds are very important. Biodiversity matters very much indeed. Every care should be taken to minimise damage and to compensate with biodiversity offsetting measures. However, the major gain in relation to climate change surely outweighs those other ecological considerations. There are also legitimate and important business interests for Bristol port and for the aggregates industry, but these should be a matter of negotiation and the Government should actively broker a resolution of the differences that exist there. We need vision; we need decision; and we need leadership.
I was disappointed that the previous Government were not persuaded of the strategic case for building a Severn barrage, and DECC, under this Government, continues to equivocate and dither. The Secretary of State, we are informed, told a Liberal Democrat conference that the consortium’s numbers,
“aren’t in the place that they would need to be”.
He suggested perhaps looking at smaller lagoon projects, and he went on to say, tellingly:
“But government isn’t spending a huge amount of our own time developing those projects”.
Quite so.
The benefits in relation to climate change are vital, but the benefits in relation to the construction industry and the engineering industry in terms of jobs and pioneering technology would also be very great. Contrary to what the noble Baroness, Lady Miller, said to us, I believe that there would be flood protection benefits and that there could also be benefits in terms of transport links. There would be benefits for communities on both sides of the Severn estuary and the Bristol Channel.
If the evidence that has been made available so far is insufficient, the Government should get on and establish the evidence. If, having done so, they have decisive reservations about the credentials of the Hafren consortium or the specifics of this particular project, if the Energy and Climate Change Select Committee gives this project a thumbs down or if problems emerge in terms of the capacity of a private consortium to finance the cost of the barrage—perhaps some £25 billion—then the Government should take the lead and put together a scheme that would work. If necessary, the Government themselves should borrow to help to make this investment. They can borrow at exceptionally advantageous rates in present markets, and I believe that the markets would applaud capital investment by the Government in this kind of infrastructure.
The inertia of Whitehall, of Parliament and of the European Parliament in relation to climate change is one of the factors that cause so many people to despair of politics and to take a gloomy view of the future. I would go so far as to say that it would be a crime against the planet if the Government passed up the opportunity to identify and drive forward an ecologically acceptable and financially robust Severn barrage scheme.
The Earl of Courtown
My Lords, this has been a fascinating debate. The noble Baroness, Lady Jones of Whitchurch, mentioned the Cardiff Bay barrage and how that changed Cardiff. I gather that it is a much better looking place than it used to be. On the other hand, she actually said that there were environmental advantages to the work that was done there. In fact, what has happened is that the shelduck and other shore birds that were based in Cardiff Bay have now left that area. Initially, they were found in local areas, but they have now totally disappeared. In addition, common redshanks that moved from Cardiff Bay and then went to the Rumney estuary now have much lower body weight and their winter survival has dropped enormously.
I agreed entirely with the noble Lord, Lord Whitty, when he said that there was no way that any scheme could possibly be put in place to mitigate against environmental damage. Many millions of tonnes of sediment go up and down the Severn on a daily basis in the spring tides. I gather that 68,000 migrant birds go to the Severn every winter. There are 24,000 hectares of Severn estuary, 20,000 hectares of mudflats and sandbanks and 1,400 acres of salt marsh. Neither must we forget the many different species of commercial fish that use the estuary in their life cycle.
Noble Lords might have already guessed that the environmental issues are the ones that concern me most. We have to consider not just the possible vandalism to the part of the estuary directly affected by the construction of the barrage but the environmental blight to the whole estuary as well as the river catchment area—the Severn, the Teme, the Usk and the Wye to name but a few. The barrage is to have more than 1,000 reversible turbines, claimed to be fish-friendly, to be built by a company that has not yet been chosen to a design that has not yet been made or tested. I understand that the turbines will have a tip speed of 9 metres per second, which I imagine would be fairly lethal to any migrating fish.
We have heard what the Environment Agency has to say about this. The turbines will be operating 24 hours a day, seven days a week. Highly protected species under the habitats directive such as twait shads—an endangered species—lamprey and salmon would be vulnerable and species such as the sea trout protected under the UK biodiversity action plan would also be in great danger. All this would be happening in a catchment area that contains 25% of the salmonoid habitat in England and Wales. The Angling Trust reminds us that the sea trout and salmon fishing industry in the Usk and Wye is worth £10 million alone.
I consider myself to be extremely lucky. I live fairly close to the Severn estuary and regularly walk along the banks of the tidal Severn opposite Newnham. I regularly visit the Wildfowl and Wetlands Trust and I just feel that we should be looking at another way of getting our renewable energy as opposed to this present scheme.
Lord Touhig
Like many noble Lords I have had an interest in a Severn barrage for many years. Indeed, when I was a member of Gwent County Council we strongly welcomed the previous scheme for it and some years later when I visited the Rance barrage I was greatly impressed by the power and the way that the whole operation worked.
Britain now finds itself with an energy crisis as a result of a lack of forward planning. Some 25% of our generating capacity will close in the next few years. We are facing potential blackouts by the mid-2020s unless we invest in large-scale energy projects. I believe that a Severn barrage is a sound form of forward planning because it will provide generations of Britons with cheap electricity.
The construction of a barrage will be a massive boost to our economy and provide thousands of jobs during construction and afterwards. Previous schemes have foundered on two issues—the need for large amounts of public money and the significant environmental impact. But if the developer, Hafren Power, is to be believed, its proposal will not require any money from the Government at all. It is up to Hafren Power to demonstrate and prove that. I hold no brief for the developer, but it claims that it has learnt from earlier studies and proposes a new type of barrage, which will put environmental considerations first. The ambition is to build an 11-mile line of more than 1,000 slowly spinning turbines, housed in massive concrete blocks, between Brean in England and Lavernock Point in Wales. It is certainly worthy of our consideration. Such a barrage will generate electricity as the tides go in and out, so the natural tidal flows can be maintained. The turbines will be spread right across the estuary, so the currents and navigation will not be affected. Looking at other options, I believe that the barrage is superior to wind farms, if only in reliability and predictability. I have first-hand experience of wind farms; when I was Welsh Minister, I travelled to Scotland to visit a new wind farm. The only trouble was that, when I got there, there was no wind.
A barrage, unlike wind farms, brings with it a substantial legacy of flood protection, cheap electricity and economic renewal. A Severn barrage will help defend against tidal flooding and storm surges caused by sea-level rises, and will help to reduce flooding upstream, saving billions of pounds in damages. It has already been mentioned that construction could take more than nine years, and 20,000 jobs could be provided. Those things should not be easily dismissed. Opponents of the barrage, including the Port of Bristol and some environmental lobby interests, have raised proper concerns. These concerns have to be taken seriously, listened to and taken into account so far as that is possible. But they should not be allowed to become a barrier to progress in developing a Severn barrage.
Over the past decades, we have seen report upon report written on the subject of a Severn barrage. These reports have been considered, debated, amended and then forgotten. Indeed, if the trees cut down to provide paper for these reports had instead been floated across the Severn, they would probably have covered the 11 miles from south Wales to the west of England. It is time to resolve the issue of a Severn barrage, and to be brave and bold and commit ourselves to this great enterprise. Frankly, I do not mind who builds and operates the Severn barrage, but I would like to see it built, and built in my lifetime.
Lord Grantchester
My Lords, any proposal that presents the opportunity to harness tidal power, and in doing so generate 5% of the UK’s electricity needs, while also bringing in much-needed inward investment to the south Wales, Bristol and Somerset region, is one to be considered very seriously. The many and varied contributions to the debate today highlight not only the interest but the extent of the effects that building such a barrage shall have, bringing lasting energy, economic and environmental changes. It is on these three parameters that any scheme must be assessed, with extensive effects not only on the estuary but throughout the region. The clear conclusion of the debate is that the Hafren Power scheme is unsatisfactory. On that basis, however, the balance of the debate was to try to find some scheme to capture the advantages, albeit with an understanding that there are inherent difficulties. Even the noble Lord, Lord Cope, and the noble Baroness, Lady Miller, hinted that better was to come.
The Department of Energy and Climate Change reported on initial feasibility studies in October 2010. The noble Lord, Lord Touhig, highlighted the background canvas against which the energy assessment can be made. The report assessed five potential schemes to be feasible. As the Government’s feasibility study and Hafren Power’s own plans highlight, the barrage has the potential to generate up to 5% of the UK’s electricity generation, around 15 terawatt hours a year. As well as having the advantage of being entirely free, the reliability of the tides that power the barrage also removes the problem of intermittency that affects other renewable energy sources. The noble Lord, Lord Dixon-Smith, suggested a second tidal scheme. However, it could not be constructed in time to contribute to the UK’s 2020 renewable targets.
On economic considerations, the potential gains to the local area could also be very significant. The expansion of the steel works at Port Talbot and Bristol, and the new factories that Hafren proposes to build in south Wales and Bristol to make the innovative bi-directional turbines that the barrage could hold, could lead to a much broader economic regeneration in the area, which is much in need of inward investment of this magnitude. Indeed, one of the highlights of this project is that, if it were to go ahead, it would be almost unique as one of the few large-scale infrastructure projects not planned for the south-east. But as well as having many positive effects, the designs as they currently stand raise several notable economic concerns that would need to be thoroughly addressed: notably the effect of the barrage on Bristol’s docks, which support up to 8,000 local jobs, is crucial.
My noble friend Lord Courtown reminded us that the environmental consequences of the barrage are even more challenging than the economic or energy impacts. My noble friend Lord Berkeley said that something of this sheer size and with this kind of design has never been tried before. As the government study makes clear, among other things it is unclear how the current regulatory framework would apply to such a structure in an environmentally sensitive area. The 200 or so turbines that would power the barrage still need to be designed, tested and built; something that will take nearly a decade alone.
The Severn and its many tributaries are internationally recognised natural heritage conservation sites. Many characteristics of this unique environment will be changed by the presence of a barrage. Hafren’s controversial suggestion of allocating £1 billion for providing compensatory habitats for affected wildlife, while seemingly attractive, will go no way towards the value of such a unique habitat. The department’s report concluded that tidal power in the Severn estuary would be at high cost, high risk and at a value of money less attractive than other renewable energy technologies.
My noble friend Lord Whitty asked what other schemes were still under consideration. The noble Lord, Lord Cope, despite being against, still wanted further and better schemes to come forward. Rather than embark on a massive scheme, my noble friends Lord Berkeley and Lady Jones, and the noble Baroness, Lady Miller, asked whether there were some smaller schemes worthy of being undertaken to gain expertise and experience that could, by small steps, provide insights into the future, albeit that they may appear less than attractive on their own merits. As the noble Lord, Lord German, and my noble friend Lord Howarth suggested, the lead should be given by her department. The noble Lords, Lord Hylton and Lord Jenkin, asked whether we should not learn from such overseas experience.
While making reservations, the Welsh Government are essentially positive to a scheme. Will the Minister explain what discussions have taken place recently with the Welsh Government, how valuable these discussions have been and whether her department has a shared pathway towards supporting the Welsh Government’s in principle approval in the near future?
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, I thank my noble friend Lord Cope for introducing this debate in a very thoughtful and informative way. We have heard a wide range of views. During the debate, they edged towards one end of the argument more than the other, but again it allows me to lay out the Government's commitment to renewable energy.
We are number one in the world for installed offshore wind capacity. We are also the world's leader in marine energy, with more devices deployed in the UK than in the rest of the world combined. The Government have been a proponent of exploiting our rich marine energy resource and making the most of the jobs and growth that it can bring. There are a number of questions that I need to respond to. Given the shortness of time, I will undertake to write to noble Lords if I do not manage to respond to questions that have been raised.
Harnessing power from the Severn estuary could clearly be a significant asset for the UK, but this has to be done sustainably. That is why my department led a two-year cross-government study investigating the potential of Severn tidal power schemes. The study concluded in 2010 that it did not see a strategic case for a publicly funded tidal power scheme. The Government have remained open to the possibility of a privately funded project coming forward. Our study has provided us with a wealth of evidence on the potential effects of the Severn barrage. In particular, it highlighted how little we knew about the dynamic environment of the estuary itself. It concluded that environmental impacts, particularly on fish, birds and habitat, are likely to be larger than expected and extremely challenging to mitigate and compensate for.
The study demonstrated that a barrage might provide a net benefit to the regional economy, with net value added to the economy and jobs created. However, these would come at the expense of a potentially large negative impact on the current ports, fishing and aggregate extraction industries. The study also identified the likely cost of the Severn tidal schemes to be as much as £34 billion for a barrage at a time when there are easier and cheaper alternatives. Despite the extraordinary amount of work produced, the government study barely scratched the surface of the potential effects of a Severn barrage. Any specific proposal for a barrage would need extensive and credible evidence on the effects of its particular design.
This brings me to the current Hafren Power proposal for the barrage. We have received an outline proposal from Hafren Power and have had some discussions with the company. However, the information provided so far does not allow us to assess whether the proposal is credible. Nor does it demonstrate if the project can achieve the benefits that Hafren Power claims. There are a number of issues that Hafren Power will need to explore in much greater detail before we could take a view as to the whether its proposal warrants further interest from the Government.
In particular, we need to see credible, clear evidence of the likely effects of the proposal, including evidence on the environmental impacts; that the project is affordable and good value for consumers; of the effects of the proposed turbine on both the environment and energy output; on the impact on upstream ports and navigation, and detailed mitigation plans; detailed evidence around flooding impacts; and detailed evidence to support job creation figures. Those are questions that a number of noble Lords have already raised here today. Crucially, the project will require substantial revenue support to provide a return on the investment. It is therefore vital that Hafren Power provides robust evidence that the level of support sought for the project compares well with the expected future cost of alternative low carbon technologies, such as nuclear power or offshore wind, that a barrage would most likely displace.
The Hafren Power proposal has not gone far enough in providing the evidence required at this stage for the Government to justify endorsement of the project. That said, as is the case for any similar project, should Hafren Power develop its proposal further, and in particular provide credible, robust evidence to substantiate the claims in its outline proposal, the Government are prepared to consider it further.
The House of Commons’ Energy and Climate Change Committee is currently running an inquiry on the Hafren Power proposal. The inquiry has raised much interest and the committee has received a lot of input and information. Only a few weeks ago, my ministerial colleague, the Minister of State for Energy and Climate Change, gave evidence at that inquiry, making the points that I have made today. I look forward with interest to the conclusions that the committee will reach within the next few weeks, based on the evidence it has received. I am sure that noble Lords will join in reading its conclusions with interest.
I quickly turn to some of the points raised by noble Lords. My noble friend Lord Cope asked if we would agree to introduce this, as Hafren Power has asked, as a hybrid Bill. The noble Lord knows the complexities of introducing legislation. Given we do not have enough evidence and are not fully confident that the project as it stands is viable or affordable, the case has to be much better made. As I have explained, Hafren Power’s current proposals fall very much short of that.
My noble friend asked about the Government being privy to the financial details of Hafren Power’s proposal. As my ministerial colleague in another place showed to the Select Committee, we have received only an outline of the proposal and this mainly focuses on detailing the work programme in advance, rather than on providing detailed information about the proposal itself, and that includes finance.
The noble Lord, Lord Whitty, and my noble friend Lord German asked about alternative ways of using the Severn estuary. That is why we welcomed the recent Regen South West report on a balanced technology approach in the Bristol Channel. There is a huge amount of energy in the channel, and it is only right that we should be seeking the best ways of extracting that energy. Any proposal or set of proposals will have strongly to demonstrate, as with Hafren Power, that they are viable, good value for money for the consumer and environmentally responsible.
I agree with my noble friend Lord Cope that a barrage would produce intermittent energy. Despite its intermittency, the highly forecastable nature of tidal energy could provide strong system-balancing benefits. However, as my noble friend made very clear, these need to benefit the overall scheme including climate change, energy and economic, environmental and cost impacts.
Baroness Verma
My Lords, I swiftly resume my position in responding to the questions raised by noble Lords. I see that the noble Lord, Lord Hylton, is not in his place, but I will respond to a question that he asked about developing other technologies in place of the proposed barrage. We are committed to looking at all types of marine energy technologies. We have provided sustained and targeted support for the development of the wave and tidal stream sector, enabling it to move from initial concepts to prototypes, and are now looking to support the first array of support packages for the programmes.
My noble friend Lady Miller asked about support of lagoons. I think the noble Lord, Lord Whitty, also alluded to them. Lagoons were a subject of the Government’s 2010 study. Our position remains the same. We are considering all credible privately funded proposals. The department is aware of the proposal to build a 250 megawatt tidal lagoon in Swansea bay. The project is in the pre-application stage in the Planning Act consent process. We expect a formal application for the consent to be submitted later in the year.
My noble friend Lord Courtown asked about the impact on wildlife. Whatever proposal we have—whether it is that of Hafren Power or any other proposal—the Severn tidal power feasibility study highlighted how little we know about the dynamic of the Severn’s environment. Therefore, we need a better understanding of the impacts that the projects will have on wildlife, and Hafren Power needs to provide further details of the proposal and the work it is going to do to mitigate any impacts on the environment, and particularly on wildlife and habitats. Currently, we do not see enough evidence to support that.
My noble friend Lady Miller also asked about the flood risks of the barrage. The Hafren Power proposal suggests that a barrage would create a positive effect by reducing flood risks, but we have not yet seen enough evidence to substantiate those claims.
The noble Lord, Lord Hylton, is still not back in his place but I will respond to a question that he asked concerning the need to build a barrage in order to meet our 2020 targets. Given that the construction of the barrage would not help us to meet those targets because the proposal is a long way even from concept stage, we need to look at other plausible pathways for low carbon energy, several of which do not include tidal or marine energy.
The noble Lord, Lord Grantchester, asked about our discussions with the Welsh Government. We have had discussions at an official level and I know that the Welsh Government would support a credible proposal. However, the key to all this is that the proposal has to be credible.
There are a number of questions that need to be answered. However, I see that my 12 minutes are up, so I shall close by reiterating that we want a more detailed proposal from Hafren Power. Any proposal that it puts forward needs to substantiate the claims of environmental benefits as well as good value for money for consumers and socioeconomic benefits. Should this power be harnessed, it must be done sustainably, as any plans going forward will need to take account of the unique ecology of the Severn estuary, its existing social and economic activities, and all the costs associated with harnessing its power.
This has been a very full and interesting debate and one that I suspect we will come back to as further proposals from Hafren Power come forward. I should like to end on a positive note. My noble friend Lord Cope, who introduced the debate today, has, through the tie that he is wearing, educated me a little further on the importance of knowing about Bristol port and its history. The tie illustrates the ship, “The Matthew”, which in 1497 sailed from Bristol port and discovered America.
Iraq: Chilcot Inquiry
(11 years ago)
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Lord Dykes
To ask Her Majesty’s Government whether they will hold discussions with the administrators of the Chilcot inquiry into the Iraq war to ascertain a date for publication.
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)
My Lords, the Government do not have any plans to hold such a discussion with the Iraq inquiry. Sir John Chilcot advised the Prime Minister last July that the inquiry would be in a position to begin the process of giving those subject to criticism in the report the opportunity to make representations by the middle of 2013, and that the inquiry would submit its report once that process had been completed.
Lord Dykes
With thanks for that Answer, can the Leader of the House reassure the House on a very important point—that high official circles in the UK and the US have not sought to interfere with the independent findings of the Chilcot inquiry, especially on the crucial decision to go to war together?
Lord Hill of Oareford
I can give that assurance. It is extremely important that this inquiry is independent; it was set up very deliberately to be independent and it must have that independence. It must consider the evidence that it has and reach its conclusions, which we will all be able to see in the fullness of time, but it must have a free hand to do that.
Lord Morris of Aberavon
My Lords, having been involved in the setting up of some public inquiries, I have noticed a tendency for them to be longer and longer. I understand the need to collect all the material evidence, and for all due processes to take place. In future, if any public inquiry is set up, should not a time limit be imposed and, furthermore, an extension granted only in exceptional circumstances?
Lord Hill of Oareford
I understand that point. However, with some of these very big inquiries it is difficult to be absolutely clear at the outset about what a suitable length of time is. It is right that the Chilcot inquiry on Iraq has been able to follow the leads that it feels it needs to follow, and had the time to do that. On the more general point about inquiries, I am sure the noble and learned Lord will know that one of the post-legislative committees that this House will set up in the new Session will look at the operation of the Inquiries Act 2005 and ask exactly these kinds of questions about whether we can learn lessons about the conduct of these inquiries, whether they can be done more quickly, their cost and so on.
Baroness Williams of Crosby
My Lords, I was one of those in this House who was perhaps most extensively and intensively involved in the whole of the Iraq issue—the invasion of Iraq and the situations that arose from the post-victory occasions, including the involvement of many contractors in the building up or otherwise of Iraq after the war. While I fully take the points made by the Leader of the House into careful account, it is also the case that the lessons to be learnt from an inquiry—and the lessons to be learnt from this are probably among the most important of all—depend a little on the passage of time between the findings of that inquiry and the use of those lessons to affect policy. I ask him to bear in mind, as he considers this, the gap between the necessary and right attempt to give people the right to respond, but also the importance of the conclusions for the future work of this Government’s policy as well as the policy of the Opposition.
Lord Hill of Oareford
I agree with the points my noble friend makes. To be clear, the timing of this inquiry is set by the inquiry itself. The Government have not set a timetable and we are not seeking to rush it. It must take the time. However, I take the point that we need to learn the lessons and that it has to be within a reasonable timeframe.
Lord Foulkes of Cumnock
My Lords, could the Leader of the House tell the House how the Government will take account of the conclusions and recommendations of the Chilcot inquiry on Iraq in deciding their policy on Syria?
Lord Hill of Oareford
First, we need the report to be concluded. Then, as the Chilcot inquiry has made clear, there needs to be a process whereby those people who are mentioned in the report have the chance to comment on it. Then the report will be published. Then everyone in this House, as well as the Government, will be able to draw the conclusions from the Chilcot inquiry, wherever that takes us.
Lord Hurd of Westwell
Could my noble friend inject a little urgency into this process? The furthest we got from him today was that we would have the benefit of the report in the fullness of time. In our experience, the fullness of time is fairly full.
Lord Hill of Oareford
We all know that certain formulations have a certain elasticity, and I take his point. The most recent pronouncement from the Chilcot inquiry itself is that it hopes to finish the report by the middle of this year. Then the process—the formal word is “Maxwellisation”—of giving individuals the chance to comment would follow. That is what the inquiry has said is its current expectation of the timetable to which it is working.
Lord Butler of Brockwell
My Lords, does the Leader of the House agree that the terms of reference of the Chilcot inquiry are so wide as to be almost infinite, and that the timing of the report’s publication depends not just on the handling of the representations but on the Government’s own clearance of what is to be included in the report? Will he undertake that that process will be done as quickly as the Government can manage?
Lord Hill of Oareford
I take both those points. On the Government’s co-operation with the declassification of documents as the process goes on, the Chilcot inquiry has said on the record that that process is working well. I know that the Government will co-operate as closely as they can to expedite that process of declassification as rapidly as possible.
Baroness Symons of Vernham Dean
My Lords, can the Leader of the House tell the House what is the period within which the people mentioned in the report have to respond to the report?
Lord Hill of Oareford
I am not able to give a precise timescale for that because that will, by definition, depend on what the findings of the report are, what the criticisms of individuals are and how long that process will need to take. However, I am sure that Sir John is as keen to publish his report, so that we can all see it, as everyone in this House is to get it done.
Female Genital Mutilation
(11 years ago)
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Baroness Cox
To ask Her Majesty’s Government what information they have on the number of instances of female genital mutilation carried out in the United Kingdom in the past 10 years.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the prevalence of female genital mutilation in the UK is difficult to establish because of the hidden nature of the crime. However, the Government are absolutely committed to tackling FGM and protecting the 20,000 girls who a 2007 study estimated were at high risk of being subjected to FGM in England and Wales each year.
Baroness Cox
My Lords, I thank the Minister for his sympathetic reply. Is he aware that in 1983 I supported a Bill outlawing female genital mutilation in this country, which was strengthened by further legislation in 2003, but that according to research currently as many as 65,000 women living in this country have suffered FGM? It is feared that some may have undergone the procedure here and others sent abroad for the practice, but there has not been a single prosecution. Therefore, what effective provisions are being undertaken urgently to protect the estimated 30,000 girls currently at risk in this country?
Lord Taylor of Holbeach
I congratulate and thank the noble Baroness for her support in tackling this abhorrent form of abuse. The law alone cannot eliminate this practice, as I think noble Lords will agree, but it needs to be properly enforced, of course. The Government welcome the CPS action plan to address barriers to securing a prosecution. They have also funded some front-line organisations to encourage communities to abandon the practice themselves, issued multi-agency guidelines to support front-line professionals and published a statement opposing FGM.
Lord Walton of Detchant
My Lords, is the Minister aware that in the 1980s, when I was president of the General Medical Council, that council decreed that any doctor registered with the GMC who was found to have carried out the operation of female genital mutilation would be subject to the full disciplinary procedures of the GMC and would be accused of serious professional misconduct? Just as there have been no convictions, as far as I am aware there have been no references to the GMC of doctors accused of carrying out this procedure. How can that be explained?
Lord Taylor of Holbeach
It is difficult to explain except in terms of the very secretive nature of this crime and the unwillingness of victims to come forward. The noble Lord has rightly pointed to the key role that health and social services can play in providing support for communities in seeking to rid this country of this abuse.
Baroness Rendell of Babergh
My Lords, some months ago the Director of Public Prosecutions undertook to appoint a committee to produce a report on female genital mutilation, in all its aspects, in the United Kingdom and to publish it in the summer. May we know when that report is likely to appear because, as has been mentioned, there has never been a prosecution and the practice continues as it has done for about 25 years? Is it not time that we had this report so that we could look forward to something being done to put an end to this horrible practice?
Lord Taylor of Holbeach
I am sure that I reflect the sentiment of the whole House in thanking the noble Baroness for her interest in this matter and her engagement with it. The Government are not happy with a situation in which there have been no prosecutions. We are pleased that the Director of Public Prosecutions is engaging with that. We are working closely with the Crown Prosecution Service and we hope that the report of which the noble Baroness speaks will be made public and that we can build our strategy on it.
Baroness Trumpington
My Lords, this was the first work that I had to do when I held the office that the Minister holds today. When I tried to talk about this subject to the people involved, they said, “If you try to stop us, we’ll do it on the kitchen table”. Am I right in thinking that this kind of thought still exists among the people who wish to continue this horrible practice?
Lord Taylor of Holbeach
We know that there are some strong feelings on this issue. Indeed, yesterday there was a report of a campaigner being abused by people who disagreed with her. This is not an easy subject. It is a hearts and minds issue, so we have to influence these communities and encourage them to recognise that there is no religious or medical basis for this abuse of young people and it should stop. I can assure the House that the Government take it very seriously.
Baroness Gould of Potternewton
I am pleased to hear how seriously the Government take this issue. How much funding are they initiating in order to train teachers, nurses, health workers and carers to recognise when there is a possibility of FGM happening and when it has taken place? Also, how is that funding being distributed across the country? I declare an interest as the president of FORWARD.
Lord Taylor of Holbeach
I am very grateful to the noble Baroness for her involvement with FORWARD, which presented a key report that identified the 66,000 possible victims of this abuse. The amount of money spent is within individual department budgets, but there is a specific £50,000 budget dedicated to ensuring that this matter is fed across departments and that leaflets are produced. The Government are spending £35 million in countries where this practice is prevalent, in seeking to change the cultural background against which the abuse occurs.
Lord Chidgey
On that very point, my noble friend is possibly aware that, since 1997, DfID-supported anti-FGM education and empowerment programmes have led to some 5,500 communities in Senegal abandoning FGM. What discussions is the Minister’s department having with DfID to establish the impact of the success of those programmes on British African communities in the UK, particularly with regard to Somalia, where 98% of young girls are still mutilated, placing thousands of Somali girls in this country at risk?
Lord Taylor of Holbeach
My noble friend has identified Somalia as a particular area of concern. We are working very closely across all government departments. I think it is clear to noble Lords that the only way we can achieve progress is by using all the levers available to us: government departments; communities; and, through DfID, the overseas cultural base of this practice.
NHS: ECMO Machines
(11 years ago)
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Baroness Gardner of Parkes
To ask Her Majesty’s Government whether extra-corporal membrane oxygenation (ECMO) machines that are capable of restoring heart functions some hours after an apparently fatal heart attack are in use in any NHS hospitals; and, if not, what consideration is being given to their installation.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the equipment and facilities to undertake cardiac ECMO support are available in all five NHS adult cardiothoracic transplant centres in England and in the five national respiratory ECMO centres, three of which share a location. Provision of cardiac ECMO support is a complex intervention with significant risks attached to it. A cardiac ECMO service requires a fully trained team to be available around the clock and does not consist of simply purchasing the medical equipment.
Baroness Gardner of Parkes
That is very good news and I thank the Minister for it. It is desirable to have these facilities available. Does he agree that the group which would benefit most of all from this would be young people who die suddenly and unexpectedly, often in the sporting field? This is a much greater tragedy for families than the more usual cardiac attack at a later age. Should not more publicity be given so that people involved in those activities know that such facilities are available? You could get a young person by helicopter to one of those centres within the number of hours that your life would be prolonged for.
Earl Howe
My Lords, there is, I understand, no intervention capable of restoring heart function some hours after a heart attack. The only exception is not applicable to heart attacks but to people who have had circulatory arrest due to hypothermia—for example, people who have been buried in avalanches or immersed in very cold water. That area is currently being researched. It is only in a very limited number of circumstances that ECMO support can improve a patient’s chances of survival following cardiac arrest—usually in patients who suffer in-hospital cardiac arrest following surgery.
Lord Patel
My Lords, as the noble Earl indicated in his opening remarks, a typical facility required in the provision of a service such as ECMO for adults who suffer acute myocardial infarction would include a perfusionist, intensive care facilities, an intervention cardiologist, a cardiologist expert in cardiac failure, a cardiac surgeon, together with specialist nurses. Preliminary results of studies suggest that the survival rate might be less than 30%. Does the noble Earl agree that more research is needed before such a treatment can be made available routinely?
Earl Howe
I fully agree. The noble Lord is quite right. ECMO cannot be provided by just any ICU team. It is a highly specialised treatment with significant potential for serious complications, and considerable expertise is therefore required, including having a multidisciplinary team of the kind that he outlined. In general, capacity has much more to do with having suitably trained staff than with having the equipment itself.
Lord Hunt of Kings Heath
My Lords, I refer noble Lords to my health interests. On the question raised by the noble Lord, Lord Patel, about evidence, would the noble Earl consider referring this to NICE for its expert advice?
Earl Howe
I shall certainly take that idea away with me, but I think that there is broad consensus among the medical community that the key to success with ECMO is getting the patients connected to the equipment quickly. Although it is a moving scenario, all the evidence so far suggests that ECMO confers no benefit if some hours have elapsed since the cardiac arrest.
Baroness Jolly
My Lords, services that need ECMO machines would currently, in the new world, be commissioned by NHS England. Will my noble friend explain to the House what role, if any, the department now has in commissioning such services?
Earl Howe
My Lords, the department itself no longer has a role in commissioning highly specialised services. NHS England is implementing a single operating model for the commissioning of 143 specialised services. That replaces the previous arrangement whereby 10 regional organisations were responsible for commissioning specialised services and, to be frank, there were wide variations in the standard of those services. The new operating model represents a significant change to the previous system and should result in better outcomes.
Baroness Masham of Ilton
My Lords, is the Minister aware that Glenfield Hospital in Leicester, which has ECMO, saved many lives in the swine flu epidemic last year and does more than just hearts?
Earl Howe
I am fully aware of that. Glenfield has been leading the development of ECMO services. It is one of the biggest ECMO centres in Europe. It is currently the largest provider of children’s ECMO in the country, treating about 70 paediatric ECMO patients a year, and now provides an adult service.
Baroness Knight of Collingtree
My Lords, can my noble friend clear up a point of confusion that may have arisen about his first Answer to this Question? It was reported in the Times newspaper by the science editor that people could be brought back from the dead up to seven hours after their hearts had stopped. Is that a report on which we can lay much credence?
Earl Howe
My Lords, my advice is that in most cases of cardiac arrest that is not possible. Where there has been circulatory arrest in the particular conditions that I described, such as immersion in very cold water, the heart can in some circumstances be restarted, but I would not wish to excite noble Lords’ interest in this technique without proper evidence. I am afraid that the article, which I did see, raises people’s hopes perhaps unfairly.
Earl Howe
My Lords, as the noble Lord knows, that decision is interdependent with the decision around the Safe and Sustainable review of children’s cardiac services. Until that issue is determined, it is not possible for me to say what will happen to the children’s ECMO service at Glenfield.
UK Industry: Competitiveness
Lord Haskel
To ask Her Majesty’s Government what steps they are taking to improve the competitiveness of United Kingdom industry.
Lord Peston
My Lords, on behalf of my noble friend Lord Haskel, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
Lord Popat
My Lords, the UK economy is recovering from the most damaging financial crisis in generations. The Government are putting in place the right policies to deliver balanced and sustainable growth in the UK. That will take time. We are already seeing some progress. Between 2010 and 2012 the UK climbed from 12th to 8th in the World Economic Forum’s global competitiveness index.
Lord Peston
My Lords, noble Lords are stuck with me because my noble friend is in hospital and I hope that they will join me in wishing him a speedy recovery.
Lord Peston
My Lords, given the massive size of the current account deficit—almost unprecedented—would it not be to the advantage of our country to improve the competitiveness of UK industry if the external value of sterling fell drastically?
Lord Popat
My Lords, the external value of sterling fell from 2007 to 2009 and led to modest growth in exports. The impact may have been negated somewhat due to global demand weakness, especially in the European Union, which is our largest export market. Evidence suggests that export growth is driven more by changes in foreign demand than by price competitiveness or other factors.
Lord Bilimoria
My Lords, would the Minister agree that we are all very proud that a British university, Cambridge, has won more Nobel prizes than any other university in the world? However, would he also agree that that is in spite of this country underfunding research and development expenditure as a proportion of GDP? We spend less than both the EU and OECD averages. We spend half of what a country like South Korea spends. Do the Government not believe that we should be targeting to spend a proportion of GDP at least equivalent to the EU or OECD average to maintain our competitiveness? Otherwise, we are going to be penny wise and pound foolish.
Lord Popat
My Lords, this issue has been raised by the noble Lord in the past. Education is our fourth largest export earning. I agree with the noble Lord that we need to spend more money both on research at universities and on further investment in training provided by businesses. I will take the noble Lord’s point into account and will be happy to ask my colleague in the office to write to him to see what investment we are making in research at our universities.
Lord Forsyth of Drumlean
My Lords, could my noble friend explain why there has been a dramatic fall in the value of the pound and yet our export performance is pretty poor? What is the explanation for that and what can be done about it?
Lord Popat
My Lords, the value of the pound is determined by the international market. The fall in exports is mainly due to the current economic crisis, not just in the UK but in Europe as a whole. Half our exports are to the European Union and there are real issues in the European Union. The currency changes that take place quite often have a limited impact due to the very high import content in our exports. Hence any depreciation or the value of the pound going down will not have real impact on our exports.
Lord Barnett
My Lords, as competitiveness is not going to be helped in any way by the Chancellor changing his fiscal policy, despite the strongest advice from people he depended on until recently, such as the IMF, can we take it that he will now be totally dependent for improving anything at all on help from the new Governor of the Bank of England through increasing monetary policy, even though it may hurt current inflation?
Lord Popat
My Lords, the Chancellor has the right policies in place to reignite our economy, growth and competitiveness. We are supporting SME exports and have allocated a huge amount of money for infrastructure investment, including some for regional growth. We are encouraging the free flow of funds from the Bank and fiscal consolidation. With regard to the International Monetary Fund, we cannot recover or be competitive without addressing the huge debt that we have incurred over the past 10 years. Our most important priority is to see how we reduce our national debt.
Lord Hamilton of Epsom
Does my noble friend accept that the key to competitiveness is competition, and that this therefore makes it extremely difficult to improve competitiveness in large nationalised monopolies such as health and education?
Lord Popat
My noble friend raises a very important issue. In both health and education, there is very much a monopoly. We use the private sector in areas where it can deliver real value for money for taxpayers.
Succession to the Crown Bill
(11 years ago)
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Lord Cormack
Lord Cormack
My Lords, this is the third time that I have raised this subject on the Floor of the House and I hope that my noble and learned friend will feel that this amendment is more modest and more acceptable than the two previous ones. The background is that the monarch in our country is also the Supreme Governor of the Church of England. Whether we use a modern or—as I personally prefer—a traditional liturgy on Sundays, and whenever we pray for the monarch, we pray for the Queen as the Supreme Governor. Because of the importance of this, and of establishment in our country, many of us feel that this Bill, to which we do not take exception in its main provisions, ought to have in it a recognition of this basic fact.
This modest amendment seeks to make explicit what is already implicit. When he replied to my amendment on Report, my noble and learned friend Lord Wallace of Tankerness—with whom I have had a number of discussions on this matter, for which I am extremely grateful—made quite plain that the monarch could not be a Roman Catholic, even though this Bill allows for successors to the Crown to marry Roman Catholics. This amendment does not in any sense cut across that and does not make any reference at all to the gender issue, which has been accepted throughout the House and in another place. What it very modestly seeks to do is to insert the following few words before Clause 2:
“Notwithstanding the continuing statutory requirement that no Roman Catholic can succeed to the throne”.
Then, of course, the clause continues, as in the Bill, stating that,
“a person is not disqualified from succeeding to the Crown or from possessing it as a result of marrying a person of the Roman Catholic faith”.
Therefore, there is absolutely no alteration to what is in the Bill. The amendment merely seeks to tackle what the right reverend Prelate the Bishop of Guildford said in his speech on Report about ambiguity. He gave an encouraging account of ecumenical relations and we were extremely grateful to him for that. Towards the conclusion of his speech, he also recognised that there was a continuing degree of ambiguity and expressed the hope that that could be tackled, either in the Bill, in an exchange of letters or in some other form.
The Lord Bishop of Guildford
My Lords, the noble Lord, Lord Cormack, has made generous and kind reference to my contribution on Report and I do not intend to labour and repeat the detailed comments that I made to the House on my understanding both of Roman Catholic canon law and realistic pastoral practice in the case of mixed marriages. I thought afterwards that here was a Church of England bishop getting up with the temerity to talk about what the Roman Catholic Church teaches and does. Therefore, I thought that I had better write to Archbishop Vincent Nichols and ask whether my contribution, as recorded in Hansard, was the case.
I have a letter in my hand from Marcus Stock, general secretary of the Catholic Bishops’ Conference of England and Wales, on behalf of the Archbishop. Speaking in that capacity, as well as in a Westminster capacity, Marcus Stock gives me full permission to share this letter with the noble and learned Lord the Minister. I have indeed done that; he may wish to make reference to it himself, and to earlier conversations with the Cabinet Office. That will presumably come out a little later.
I simply say that the exposition of what I understand to be Roman Catholic official teaching in canon law, and the pastoral and flexible practice in terms of the Roman Catholic rules over the upbringing of children in mixed marriages is completely confirmed in the letter that I have received. It was also his clear indication that this should be passed on to the Minister, which I have done. So I will not take up more of your Lordships’ time but say simply that what I said on Report is indeed the case in terms of Roman Catholic law and practice. I believe that should give some assurance with regard to the important matter raised by the noble Lord, Lord Cormack.
Lord Cormack
Of course, the right reverend Prelate and I have discussed this privately and in the company of others. Does he accept that the incorporation of this amendment into the Bill would in no way cast any different doubts or cause any problems with what he has just referred to?
The Lord Bishop of Guildford
I do not believe that that would be the case. Of course, it is up to your Lordships’ House to reach a decision on the amendment should the noble Lord, Lord Cormack, press it.
Lord Lea of Crondall
My Lords, is it not the case that when the right reverend Prelate the Bishop of Guildford made his statement previously, one or two of us asked whether that could somehow be put on the record in a more secure form? Is this not exactly the sort of way in which it could be put on record? Surely that sort of gloss, understanding or undertaking—however one wants to express it—by the Roman Catholic Church is worth more than an amendment, and I hope that the noble Lord, Lord Cormack, will perhaps consider that to be the case.
Lord Deben
My Lords, I hope that my noble friend Lord Cormack will think again about this amendment. It is a very difficult situation—we are where we are—but if you read the Act of Succession, you see words which none of us in this House would like to see applied today to Her Majesty’s Roman Catholic subjects, all of whom pray for Her Majesty every Sunday and every Mass. It is very difficult for us to take what is a piece of rampant discrimination. Frankly, for many of us, particularly the ex-Anglicans, the whole concept of a secular monarch being Supreme Governor of the Church of England is very odd, but we are where we are.
I merely ask my noble friend not to rub this in by adding yet more to it. Let us accept that both sides have come to what is an uneasy compromise in a world which thinks utterly differently. If you read the Act of Settlement, you have to wonder what the rest of the world must think about us tinkering with something that frankly ought not to be part of the constitution of the United Kingdom because it does not have anything to do with our view about equality and difference in a society such as ours. It is because of our history and we understand that and do not want to raise that, but please let us accept where the Government are.
I urge my noble friend not to press this. It is bad enough anyway. This merely makes it worse, and it would be helpful for my noble friend to recognise the degree of reticence on the Roman Catholic side on this issue, for many years and again now. Following the great wisdom that we have heard from the right reverend Prelate, this seems to be the moment to let it lie and to withdraw this amendment.
Lord Trefgarne
My Lords, I take a slightly different view from that of my noble friend Lord Deben and indeed have some sympathy with the amendment proposed by my noble friend Lord Cormack. As I see it, the Bill in its present form paves the way, possibly, for the heir to the Throne and hence the occupant of the Throne to be a Roman Catholic—although I know that there are other provisions that prevent that—and at the same time Supreme Governor of the Church of England. That seems to be an absurdity which has not been addressed by the Bill although it was pointed out in earlier stages.
I am happy to be told that I am entirely wrong in all this, that I have misunderstood that it will not happen and that there are ways and means of preventing it, in which case that is a good thing. That said, the position of the Roman Catholics as described by my noble friend is an important one, which likewise needs to be taken into account. I shall have a little bit more to say when we get to the Motion that the Bill do now pass, but for the mean time I address my remarks only to the amendment of my noble friend.
Lord Janvrin
I declare an interest as a former member of the Royal Household and I pay tribute to the desire of the noble Lord, Lord Cormack, to see this important point discussed in this House. What has just been said about making explicit what is implicit is important, but this amendment is not absolutely necessary. There are three reasons for that.
First, as has just been stated, we are where we are, clearly, with the Act of Settlement and the law of the land that the monarch must be in communion with the Church of England. Secondly, we have heard on several occasions that whereas there is legal certainty about where we stand in terms of the Church of England, the Catholic position on mixed marriages is more flexible and nuanced in its term that it is a pastoral matter. That is important. Thirdly, there is a precedent. There is a mixed marriage in the Royal Family where the children have been brought up as members of the Church of England.
My concern is that if we in the United Kingdom start introducing amendments that are not absolutely necessary, there may be desires in other realms to do the same and to start unravelling what is a most important piece of legislation that will strengthen the monarchy. I hope that in considering whether to go ahead with this amendment we can bear in mind that we must not allow a compromise across the realms to be undermined for the sake of something that is nice to have but not absolutely necessary.
Lord Fellowes
My Lords, in the light of the reassuring words of the right reverend Prelate the Bishop of Guildford, I wish to speak only for a moment on the subject of this amendment. I find very little fault with it. The fault that I do find is not in the amendment but in the effect it may have in reopening debate on others of the Queen’s realms. That may possibly give rise to other amendments that we would find less welcome. I have sympathy with the amendment and the motives behind it but I must say that I am not able to support it in this instance.
Lord Luce
My Lords, I am sure that the Minister will have concluded that raising the legislation with the other realms would create considerable complications. If I understood the noble Lord, Lord Cormack, aright, he was making it plain that the purpose of this amendment was to try to remove any misunderstandings that may still exist about the position of the Roman Catholic Church in connection with the children in line of succession arising from a mixed marriage.
In the debates that we have had over past few weeks, not least on Report, there has been considerable clarification. The Minister has said a lot more since the Second Reading and above all the right reverend Prelate the Bishop of Guildford has set out very clearly what he perceives to be the position of the Roman Catholic Church. The only thing that is missing is a clear endorsement of its position, as expressed by the right reverend Prelate, by representatives of the Archbishop of Westminster, or by the Archbishop himself. Given the remarkable progress that has been made in relations between the Church of England and the Roman Catholic Church it would be helpful to have that endorsement. I hope that the Minister can help us in that regard.
Lord Stevenson of Balmacara
My Lords, like several noble Lords who have just spoken, I take the view that this would insert into the Bill an unnecessary recital with no legal force. It would have the complication, as has been mentioned, of making it more complex and difficult to obtain agreement among all the 16 realms that need to agree to the proposals.
The intention of the noble Lord, Lord Cormack, is to seek further reassurance that despite the removal of the ban on Catholic marriages, no Catholic could ever succeed to the throne. He and others have made this point with some force throughout our debates. However, I wonder, as the noble Lord, Lord Deben, said, whether we are not pushing too hard on this point. Obviously the case has been made in an attempt to ensure that the Anglican supremacy is preserved. However, all that it serves to do is push our attention further toward the fact that the removal of the ban on Catholic marriages—obviously a welcome measure in itself—exposes the religious discriminations that remain. That is, no one who is a Catholic or who is not in communion with the Church of England can succeed to the throne.
It has been said that we are where we are, and I have some sympathy with that. However, we as a Parliament will need to return to some of these points in the not too distant future.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I understand that in tabling the amendment my noble friend Lord Cormack sought to put beyond doubt the requirement that the sovereign be a Protestant and in communion with the Church of England. I readily recognise the concerns expressed by my noble friend; at every stage of the Bill, he has clearly sought to find a means of addressing them. I readily acknowledge that this amendment is, to use his words, more modest than those that he moved in Committee and on Report. However, as has been indicated in our short debate, the Government believe that it is unnecessary as both the Bill of Rights and the Act of Settlement are unambiguous with regard to the requirement that the sovereign be a Protestant and in communion with the Church of England.
The Bill does not pave the way to change that. No one who is not in communion with the Church of England may ascend the throne. That rules out Roman Catholics as well as many other people. I have concerns that by attempting to reiterate this, and to single out the peculiar and particular prohibition on Roman Catholics, one risks causing offence. I am sure that that was not intended, but one does risk causing offence to many of Her Majesty’s loyal subjects when there is no good reason in law to do so. I do not believe that we should put into a Bill words that could cause unnecessary offence and reopen wounds. It has also been said that the amendment is unnecessary in law and could therefore lead to other jurisdictions that have responsibilities in this regard putting forward amendments and unpicking an agreement that has been very carefully constructed across the realms over a considerable time.
As the Supreme Governor of the Church of England, the sovereign must be both Protestant and in communion with the Church of England. For this reason, we are not removing the bar on Roman Catholics acceding to the throne, as set out in the Act of Settlement and Bill of Rights. Of course, we have heard expressed in a number of our debates the perceived problem of the heir to the throne marrying a person of another faith. That problem exists under present law; it is not one created by the Bill. Clause 2 merely provides parity of treatment between Roman Catholics and people of all other non-Protestant faiths.
Nevertheless, I have recognised and understand the profound concerns that have been expressed. As the House knows, following a commitment made in Committee, I met Monsignor Stock on behalf of Archbishop Nichols and the Catholic Bishops’ Conference of England and Wales to discuss this matter. As the right reverend Prelate the Bishop of Guildford indicated, Archbishop Nichols indicated that the wording had been discussed with the Cabinet Office. I have the specific consent of Monsignor Stock to say that he was speaking on behalf of Archbishop Nichols as president of the Catholic Bishops’ Conference of England and Wales, and can inform the House that the view taken by the Catholic Church in England and Wales is that in the instance of mixed marriages the approach of the Catholic Church is pastoral. It will always look to provide guidance that supports and strengthens the unity and indissolubility of the marriage. In this context the Catholic Church expects Catholic spouses to sincerely undertake to do all that they can to raise children in the Catholic Church. Where it has not been possible for the child of a mixed marriage to be brought up as a Catholic, the Catholic parent does not fall subject to the censure of canon law.
Lord Trefgarne
Would it be possible for a copy of this letter to be placed in the Library of the House?
Lord Wallace of Tankerness
My Lords, this was not a letter, it was a form of words that was agreed between Monsignor Stock and the Cabinet Office that I have placed on the record. There was a letter to me from the right reverend Prelate the Bishop of Guildford that enclosed a copy of a letter that indicated what I have just said. I do not believe that it is in my gift to say that it will be placed in the Library, but I reassure my noble friend that I have just used the words that were in that letter. I thank the right reverend Prelate the Bishop of Guildford for his contribution to our debates, both today and on Report, and for what he did following Report in engaging further with Monsignor Stock and the Catholic Bishops’ Conference of England and Wales. Indeed, on Report the right reverend Prelate, in a speech that I believe was very helpful to the House, concluded that the teaching of the Catholic Church on this matter,
“bears out the Government’s assurance that the Roman Catholic rules are not a block to the smooth functioning of the proposed succession rules”. —[Official Report, 13/3/13; col. 282.]
As I have stated both in Committee and on Report, we have a very clear signal that the overriding concern in Catholic pastoral guidance to couples in mixed marriages is the unity and indissolubility of the marriage. We have an equally clear signal from the Church of England, included in their briefing note to Members, that:
“The present prohibition … is not necessary to support the requirement that the Sovereign join in communion with the Church of England”.
Again, I recognise the concern with which my noble friend moved his amendment. I reiterate that the requirement that the sovereign be a Protestant remains as solidly placed in law as ever. In this context, I invite him to withdraw his amendment.
Lord Cormack
My Lords, I am grateful to those who have taken part in this brief but, I think, important debate. I listened with particular care to the speech of the right reverend Prelate and, of course, to what my noble and learned friend said. I believe that we have gone some distance in our three debates. We now have certain statements on the record that I believe are helpful to those of us who have concerns but are in no sense anti-Roman Catholic. My noble friend Lord Deben knows that when he left the Anglican Church to become a Roman Catholic, I honoured him for that decision. A similar decision was made by Miss Ann Widdecombe. I myself agonised at that time although in the end, instead of joining the Roman Catholic Church, I found myself elected to the General Synod to take the place that my noble friend had vacated.
I believe very much in the importance of our established church. However I may die, whether as an Anglican or as a Roman Catholic, I hope that the Church of England will continue as the established church of England. It is because of that, and because our constitution, as has often been said, is like a beautifully constructed watch, in that if you take one little piece out the whole thing will fall apart, that I have expressed my concern in three brief debates. The last thing I wish to do is to cause offence to anyone, particularly Roman Catholics, as I hold the Roman Catholic Church in high regard and always have. I very cheerfully pray, as we do frequently in Anglican churches, for the Pope. I would have liked to have seen something in the Bill that made explicit what is implicit, but I understand the points that have been made, particularly by the noble Lords, Lord Janvrin, Lord Fellowes and Lord Luce. Because I think that we have moved some distance, I will spare the House the exercise of going into the Division Lobbies.
On a final note, I hope that something can go into the Library of the House, as requested by my noble friend Lord Trefgarne. When I concluded my speech at the end of Report, I expressed the hope that at a fairly high level there could be an exchange of letters, and I hope that that is still possible.
I thank my noble and learned friend for the concern and sympathy with which he has listened to the arguments advanced. I beg leave to withdraw the amendment.
Lord James of Blackheath
“Union with Scotland Act 17066 In Article XXV, Section 2 of the Union with Scotland Act 1706, for “preserve the foresaid Settlement of the true Protestant Religion with the Government Worship Discipline right and Privileges of this Church as above established by the Laws of this Kingdom in Prosecution of the Claim of Right” substitute “preserve the declaration, uphold and maintain the rights and subject specified therein”.
Accession Declaration Act 19107 In the Schedule to the Accession Declaration Act 1910, for “according to the true intent of the enactments which secure the Protestant succession to the Throne of my Realm, uphold and maintain the said enactments to the best of my powers according to law” substitute “according to the true intention to the declaration, uphold and maintain the rights and subject specified therein”.”
Lord James of Blackheath
My Lords, this is in the nature of being a semi-probing amendment. I want to test the extent to which we have arrived collectively at answers to each of the four questions that I have developed through the currency of this Bill, and see whether my noble and learned friend the Minister can satisfy us, in his conclusions, that each of the tripwires and pitfalls that we have seen are now capable of being avoided. I come to this very much in the spirit of the finest executive I ever had the privilege of working with, who used to say, “Don’t give me people around me who know all the answers. I want the people who know all the questions”. It is in that spirit that I come, even though I stand here as somebody without any shred of qualification. I do not even have an 11-plus pass. Given that circumstance, it might be said that I have a right nerve to stand up here and ask these questions today in such an intensely legal affair but then, on the other hand, somebody has to.
In all this, I start by expressing my appreciation to my noble and learned friend the Minister for the considerable time, and the enormous patience and care, that he has given to answering each of the questions that I have raised directly with him. He has been absolutely splendid. My noble and learned friend will not be surprised to hear that while I have read every word he has written with great care, that is not the same as agreeing with every word I have read. It is clear that the principal point of difference between us is that he believes that I am relying on the entrenched status, as such, whereas it is the status and ordinary meaning of the statute law as it now stands, and as it relates to our duty and the Crown’s duty, that concerns me. I repeat: our duty and the Crown’s duty, which I do not believe are the same thing.
I was grateful to the Bill Office for agreeing to write to the Clerk of the House of Commons to ask what basis of interpretation it had placed on the use of a delegation of the royal prerogative in addressing its own debate on this subject. If I understand the very complicated answer correctly, it is along the following lines. The Crown cannot delegate something that it does not posses; it can delegate only the authority that it has, in which case it can delegate the power to us to give an opinion as to whether we want a Bill to pass and say “Content”, but it cannot delegate to us the authority to give it assent. That is retained by the Crown in all cases.
However, the Crown has to adhere to that in strict accordance with the coronation and proclamation oaths which precede it. Those oaths, passed through the Declaration of Rights in 1689, relate to all the powers that the Crown rightly held before the revolution. It ensured that the Crown could no longer deny that it was bound by the statute law with explicit changes to the coronation oath, made by enacting the Coronation Oath Act 1688. The settlement has been said by Her Majesty, on the occasion of the 300th anniversary of that great document, to be the sure foundation of our constitution. I am sure that Her Majesty would take that same view without any amendment today. It will be interesting to see, when and if the Bill passes to her for Royal Assent, how she will interpret that obligation in the context of those oaths.
The vulnerability here would arise if the passage of the Bill was deemed to represent a precedent by which to justify far more draconian changes than could be permitted to the established laws of this land under the Bill of Rights and to the detriment of the rights and liberties of the subject. By relying on such a precedent, in theory it is possible to introduce arbitrary power with a Bill of no greater apparent significance than this, to reintroduce the use of judicial torture or repeal the principle of “no taxation without representation”. These are, clearly, highly undesirable outcomes.
If this Bill is enacted with the addition of the amendment that I have proposed, from the next accession and beyond we would have the satisfaction—albeit that there may be a vulnerability prior to that accession —of knowing that the fundamental rights and liberties of the subjects have been restored absolutely. As such, I commend my measure as an opportunity that we ought to take. It is like a deep third man, in cricketing terms, by sweeping up all the bits that might otherwise trickle through. I commend my measure as an opportunity that we ought to take to hope, and later ensure, that no precedent might arise from this to the detriment of the rights and liberties of the subject. If we pass the Bill we risk setting a precedent with the potential for the worst possible outcome in the fullness of time, not knowing what future Governments and future authorities might wish to be brought to bear.
Lord Eden of Winton
My Lords, this is a bit of a minefield, so I tread with care and trepidation. I will make a very brief intervention, primarily to say to my noble friend how much I recognise the concerns he has expressed and the care with which he has followed these matters through. I know that he is extremely anxious, not only on his own behalf but on our collective behalf, that the legislation now going through the House is correct in so far as it seeks to affect the role and rights of the sovereign and sovereign succession and that it in no way undermines the position of any Member of your Lordships’ House, let alone that of any citizen outside the House.
I believe that the main answer to the questions that my noble friend raises rests in the sovereignty of Parliament. It is, as I perceive it, the right of Parliament to make alterations to legislation, even including the Bill of Rights. As I interpret it, the primary purpose of the Bill of Rights was to protect the interests and the rights of the people. The rights of the people are currently preserved in the powers and obligations of the Houses of Parliament and of the Government of the day. It is for us to make such amendments as we feel are necessary or desirable. In this particular case, a narrow amendment is being suggested which in a way underlines what was required of the sovereign at the time of the Bill of Rights; namely, that the heir to the Throne shall be a Protestant. There is nothing more to it than that. It therefore seems to me that we are exercising a traditional and constitutional right of Parliament to make amendments and alternations as we think proper. We are not in any way going against the obligations or commitments of the Crown. In carrying these matters forward, we shall be preserving the constitutional requirement in this country that the future monarch shall be a Protestant and a practising communicant member of the Church of England.
I do not think that the worries and anxieties my noble friend has expressed so profoundly are justified and, as he himself said, my noble and learned friend the Minister has given a great deal of care and attention to these issues and has written a letter of some considerable length to him that certainly satisfied me in the arguments put forward.
Lord Wallace of Tankerness
My Lords, I certainly understand that my noble friend Lord James of Blackheath has had serious, profound concerns about this Bill which he expressed even before Second Reading. I recognise the persistence and diligence with which he has continued to raise these issues. I am grateful for his kind comments and I think he would recognise that the comments and concerns he has raised have been given proper consideration.
It appears to me that my noble friend is concerned that, in allowing an heir to the Throne to marry a Catholic, this Bill would contravene the promises that each sovereign is required to make to maintain the established Protestant religion and in some way subvert the Bill of Rights or the Act of Settlement. It will come as no surprise to my noble friend that I disagree with his view, as I have made clear on a number of occasions in your Lordships’ House. Again, I want to make it quite clear that we are not amending the provisions of the Bill of Rights or the Act of Settlement which say that the sovereign has to be a Protestant.
My noble friend Lord Eden of Winton put his finger on the point. Indeed, I wrote at some length in my letter to my noble friend Lord James about the sovereignty of Parliament in the case of Jackson v Attorney-General in which the House of Lords considered the Parliament Act 1911. The late Lord Bingham said:
“The bedrock of the British constitution is, and in 1911 was, the supremacy of the Crown in Parliament … Then, as now, the Crown in Parliament was unconstrained by any entrenched or codified constitution. It could make or unmake any law it wished”.
With a former Lord Advocate, the noble and learned Lord, Lord Hardie, present, I had better say that there has been some question about that in some respects in Scotland following the dicta of Lord President Cooper in MacCormick v Lord Advocate. Nevertheless, Lord Bingham expressed that view very clearly in the Jackson case.
Given that the prohibition on the sovereign being a Catholic remains, we do not believe that there is any conflict between the Bill and the Accession Declaration or the promise made by the sovereign to preserve the Presbyterian Church in Scotland. I do not think I can really elaborate on it. My noble friend and I are going to have to agree to disagree because we believe that there is nothing in this Bill which subverts the Bill of Rights, the Act of Settlement or the oath which Her Majesty made on her accession. In the circumstances, I invite my noble friend to withdraw his amendment.
Lord James of Blackheath
I thank the Minister for his reply. I reassure him immediately that my concern here is not about the religion of the monarch. I gave up religion at the age of 19 when I was studying for ordination to the Church of England. I discovered that while the Catholics burnt people because they thought it released the soul to go to heaven quicker in order to plead for mercy, the Protestant church was allowing hanging, drawing and quartering on the forecourt of St Paul’s Cathedral—where we all walked last week—to be able to discharge the secular crime of treason under the guise of being a religious crime against the church. At that point my faith crumbled very rapidly and was never restored.
My concern here is not primarily those factors. It is that we are putting Her Majesty in a position where we are asking her to breach the coronation oath, which I would not do under any circumstances. I have provided a suggestion as to how we may circumvent that by borrowing an initiative of the Duke of Wellington from 120 years ago, but none the less we need to be sure that it would work and that is my concern. If the noble Lord will answer that, I will be happy to withdraw my amendment.
Lord Wallace of Tankerness
My Lords, I indicated on Report that I would report to the House once the necessary steps in each realm had been completed and we were in a position to commence the legislation simultaneously. I reiterate that commitment. As it may be of interest to your Lordships, I can inform the House that since our debate on Report, Royal Assent was given to the Canadian Succession to the Throne Act on 27 March. We received confirmation from the Government of Antigua and Barbuda that, based on the nature of their constitution, they will not need to legislate to give the changes effect, and that the Council of Australian Governments agreed on 19 April, last Friday, to a process to change their laws.
As I have indicated on a number of occasions, the provisions in this Bill have been carefully worked out in agreement with the realms, and it is important that we now proceed to pass this Bill and show that we have been able to fulfil the task asked of us by the realm Prime Ministers in Perth in 2001. It is an important piece of legislation that has its roots in securing better equality, and certainly we await with great expectation the birth of a child to their Royal Highnesses the Duke and Duchess of Cambridge. We wish them every health, in particular the Duchess as she proceeds towards the birth of her child. In doing so, we know that if this Bill passes, and if the required processes take place in the other realms, that child, irrespective of whether it is a boy or a girl, will take its place in line to the throne ahead of any subsequent siblings. Therefore, I beg to move that this Bill do now pass.
Lord Trefgarne
My Lords, I do not intend to delay the passage of this Bill for more than a few moments. It is sad that this Bill has been driven through with such speed. Many of us would have preferred a Joint Select Committee, for example, to consider some of the important constitutional implications that it raises, and indeed changes. However, that has not been the case, and therefore that, for now at least, must be that. This Bill has also set running the hare of what happens to the hereditary peerage with regard to the succession arrangements for hereditary peers. I must tell your Lordships that those arrangements are, as I understand it, a great deal more complicated even than they are for the Crown. I dare say that if Bills come forward for that purpose they will delay the noble and learned Lord very much longer than this Bill has.
Growth and Infrastructure Bill
19:10 - Division on Motion B1 - Ayes: 260 / Noes: 191 - Motion B1 agreed.
“Development orders: development within the curtilage of a dwelling house
(1) Section 61 of the Town and Country Planning Act 1990 (development orders: supplementary provisions) is amended as follows.
(2) After subsection (3) insert—
“(4) Any development order or amendment to an existing development order made after 1 January 2013 that grants planning permission for development within the curtilage of a dwelling house shall not apply within the jurisdiction of a local planning authority if that authority has resolved that it shall not.””
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 7 for the following Reason—
Baroness Hanham
“(2B) Without prejudice to the generality of subsection (1), a development order may include provision for ensuring—
(a) that, before a person in reliance on planning permission granted by the order carries out development of land in England that is a dwelling house or is within the curtilage of a dwelling house—
(i) a written description, and a plan, of the proposed development are given to the local planning authority,
(ii) notice of the proposed development, and of the period during which representations about it may be made to the local planning authority, is served by the local planning authority on the owner or occupier of any adjoining premises, and
(iii) that period has ended, and
(b) that, where within that period an owner or occupier of any adjoining premises objects to the proposed development, it may be carried out in reliance on the permission only if the local planning authority consider that it would not have an unacceptable impact on the amenity of adjoining premises.
(2C) In subsection (2B) “adjoining premises” includes any land adjoining—
(c) the dwelling house concerned, or
(d) the boundary of its curtilage.””
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, at Third Reading this House made an amendment to provide local authorities with further powers to disapply planning permission granted by a development order. As the House will be aware, the Commons noted the commitment made by the Secretary of State when discussing these issues to give further consideration to the concerns of both Houses, and it disagreed with this amendment.
Members of both Houses will have received from the Secretary of State a letter, which I forwarded to them, giving the result of his review of the situation, which has resulted in the amendment that we laid on Friday, and which we will now discuss. It may be helpful if I briefly outline again the thinking behind our proposal on extending the existing permitted development rights for homeowners wishing to extend their property. As I said at an earlier stage of the Bill’s consideration, these changes will make it easier for thousands of families to undertake improvements to their homes. In bringing forward these changes, we have looked across England and recognised that many people want to enlarge their homes. They want to do so not by much but sufficiently to create more living space, perhaps to care for elderly relatives or because of a growing family, and without the cost of having to relocate.
However, we have been clear from the outset that it is important to ensure that any impact on neighbours is acceptable. Concerns on this issue have been set out in this House by noble Lords in previous statements, by Members in the other place and in responses to our consultation. As I have said, the Secretary of State made a commitment in the other place that we would respond to these by bringing forward a revised approach.
I have tabled an amendment that delivers that commitment. This amendment makes it possible for the Government to put in place protections for neighbours where adjoining homeowners seek to use our proposed extension to their permitted development rights. We have reflected on the concerns raised by noble Lords. The noble Lord, Lord True, raised the issue of the rights of neighbours to protect the amenity of their homes eloquently on Report; the noble Lord, Lord Tope, expressed concerns that our proposals would set neighbour against neighbour; and, as the noble Lord, Lord McKenzie, put it, neighbours can impact dramatically on their neighbours’ quality of life. The amendment that we are proposing responds directly to this important issue.
In drafting our amendment, we have drawn on the principles outlined in the 2007 report Blueprint for a Green Economy from the Quality of Life Policy Group, which was chaired by the noble Lord, Lord Deben, in his previous life and Zac Goldsmith MP. Indeed, the noble Lord referred to this very report when arguing against the amendment that was made to the Bill at Third Reading. The Quality of Life report states that:
“Too much planning has become development control”.
It goes on to say that,
“the time and trouble that has been spent on dealing with planning applications for extensions and additions, porches and garages … cannot be seriously said to have been cost-effective”.
We agree with that, and with the report’s message that protecting neighbours’ amenity is important.
We are therefore introducing a light-touch neighbourhood consultation scheme. This recognises concerns that larger extensions could be built without offering neighbours any opportunity to express their views. Adjoining neighbours—not just the ones on either side but those who adjoin the rear of the property as well—will now be consulted where a homeowner wishes to use the new extended permitted development rights to build a good-sized extension. If neighbours think that the proposed extension will have an unacceptable impact on their amenity, they can ask the local planning authority to consider this—for example, if they think that it would totally overshadow their living space or that they would lose their privacy due to overlooking windows. Where neighbours raise concerns with the local authority, it will then consider the impact of the proposals on the amenity of those neighbours. It will make an objective decision on whether the development is acceptable or if the impact on neighbours’ amenity is such that it should not go ahead under permitted development rights.
We recognise that neighbours will have very different views on whether an extension impacts on their amenity, and that similar proposals on the same street may therefore have different outcomes. If a local authority is asked to consider the impacts of a proposal it will look at this on a case-specific basis. The outcome will not necessarily be the same as for other extensions in the street.
As the Secretary of State has made clear, local ward councillors will, in the usual way, have the opportunity to put forward their views on the desirability or otherwise of a proposed extension. The process for dealing with an indication that an extension is proposed will be that a homeowner wishing to build an extension will notify the local planning authority and provide plans and a written description of the proposal. The local authority will notify the adjoining neighbours—that is, the owners or occupiers of properties that share a boundary, including those at the rear. We will set out the details in secondary legislation but the intention is that neighbours will have 21 days in which to make an objection. If no neighbours object, the local authority will notify the home owner that they are able to proceed with the development. If any neighbour raises an objection, the local authority will then consider the case on the single issue of whether the impact of the proposed extension on the amenity of neighbours is acceptable.
It will be up to individual councils to decide how they handle the consideration of these proposals. We would expect it to work in the same way as for planning decisions: that is, for the council to decide whether the decisions are delegated to officers or made by a planning committee. If approval is not given, the home owner will be able to appeal against a refusal or may wish to submit a full planning application. The home owner will be able to appeal against a refusal of consent but, as with normal planning consents, neighbours will not be able to appeal against a grant of permission. This approval process will not be onerous and we do not expect that it will impose significant costs on local authorities, but we will discuss this and other implementation issues with the Local Government Association.
These proposals should remove the need for local authorities to feel that they have to resort to using Article 4 directions to remove the new permitted development rights. I assure noble Lords that we have listened very carefully to the concerns raised about the operation of Article 4, and we will work with the Local Government Association to update our Article 4 guidance as part of the review by the noble Lord, Lord Taylor of Goss Moor. This will make sure that the process is as clear and straightforward as possible.
The noble Lord, Lord True, clearly set out that he was concerned that our proposals took away,
“a neighbour’s right to have a say on a big and potentially overbearing extension shoved up outside their back door”.—[Official Report, 26/3/13; col. 982.]
As the Secretary of State made clear, we have listened to Parliament and responded directly to these concerns. The amendment gives local authorities a role where neighbours ask them to make a judgment while allowing home owners across the country equal opportunity to make use of the new permitted development rights. I look forward to hearing the views of the House. I hope that I have explained as clearly as I can how our amendment addresses the concerns raised about the impact of our proposals on neighbours and why, therefore, the House should agree with the other place that the amendment made here at Third Reading should not become part of the Bill. I beg to move.
Motion A1
Lord McKenzie of Luton
As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 7”.
Lord McKenzie of Luton
My Lords, I should explain that we tabled this Motion, which insists on the position originally taken by your Lordships, as the clock was ticking on Friday without our then having sight of the government amendment. The Secretary of State, in announcing an uncharacteristic conversion to the spirit of consensus, gave neither us nor the Commons a clue as to what this revised approach to permitted development rights for home extensions might be. We have to continue to deliberate on these matters without the benefit of the results of the consultation on extended permitted development rights that concluded some four months ago. It is difficult to believe that they would not have some relevance to the matter in hand, yet still the information is withheld from us. However, I hope that the Minister might at least confirm one point for us this afternoon. The consultation included the proposal that changes to permitted development rights, including those relating to the curtilage of a dwelling house, should be in place only for three years and that developments would have to be completed within that three-year period. Does the consultation support that proposition?
We now have sight of the government amendment, and the benefit of correspondence from Ministers, and have to assess how far it addresses the concerns prompted by the amendment moved so comprehensively by the noble Lord, Lord True, an amendment that found favour around your Lordships’ House and that clearly had considerable support in the House of Commons. I do not propose to restate in depth the points made by the noble Lord, Lord True, and others with which we agreed, other than to say that the amendment reflects a demonstrably localist approach, scepticism that the extension of these particular permitted development rights would make a meaningful contribution to kick-starting growth, concerns that an unamended Article 4 direction process was not inevitably a secure or speedy route for local councils to override inappropriate centrally set permitted development rights, an acknowledgement that individuals can pursue planning permission in the absence of permitted development rights and, in the words of the noble Lord, Lord True, that the Government’s proposal,
“takes away a neighbour's right to have a say on a big and potentially overbearing extension shoved up outside their back door. What is more, it removes that vital process of moderation and conciliation that the local planning system provides in these matters”.—[Official Report, 26/3/13; col. 982.]
Baroness Gardner of Parkes
My Lords, I noticed that many of the views expressed by the spokesman for the Opposition agreed with points that I think are important and on which I therefore wish briefly to comment. The most important thing of all—from my own experience I found this very unsatisfactory—is that you cannot rely on getting notification. In cases in the past 12 months where I have been the immediate neighbour, I have twice not received notification. Secondly, clever people always put in their applications on Christmas Eve or at some time when they know that no one is around. It is important in those circumstances that extra time is allowed for the consultation based on the number of working days, not just days. The unprincipled policy is used regularly by clever people, even under normal planning regulations. Those two matters are important.
On other issues, I have been satisfied by discussions with the Minister that the Government really are thinking about these matters. The sunset clause is good but, for notification, the system that has been in use for years should be continued whereby a notice is posted on a lamp post, a hedge or something like that, so that some friend or neighbour passing by would say, “Did you see that they are building something next door to you?”. Even if you are away on holiday, you can ask your friend to let you know. However, if you come back from a three-week holiday, which is not unusually long—particularly if you go to Australia; it is hardly worth going if it is any less than that—it is important to be sure that nothing underhand is going to be slipped through in your absence.
Lord Shipley
My Lords, I should declare my interest as a vice-president of the Local Government Association. I have had many concerns in recent months over the proposals on permitted development. However, I am grateful to the Minister for these proposals, albeit that they were revised at the last moment. They go a long way towards improving the proposals on permitted development.
It would have been wrong to deny neighbours the right to object to an extension that might impact on the amenity of their property, particularly given the significant increase proposed in the scope of permitted development. While I am conscious that some 90 % of current planning applications are approved and only 10% are turned down, clearly the increase in the proposed permitted development level will produce a higher proportion of applications that are going to be challenged by neighbours. I agree with quite a number of the points made by the noble Lord, Lord McKenzie, who has asked a set of questions about precisely what detail the Government propose.
The Minister wrote to Members of Parliament explaining what the Government were proposing to do. It would help our understanding of the Government’s amendment if the Minister could clarify some of these details. First, it is stated that home owners wishing to build extensions under the new powers would notify their local council with the details. It is spelt out in some detail in the amendment, but I hope it will be absolutely clear that there should be a covering letter that explains all the detail that a third party might be interested in reading, that there should be a copy of the plan of the architect’s design, and that all details of design and materials should be submitted at that stage. Because of costs, this is not just a matter of planning permissions: it also impacts on building control.
The council is then to inform the adjoining neighbours that a letter and application have been received by a home owner. What does the word “inform” mean? That information should include every single detail that is known about the application so that neighbours who might be affected can make a rational contribution to the application and their views can be properly considered.
The question of who is an adjoining neighbour is defined in this amendment as someone who abuts the curtilage of the property. I suggest that that does not go quite far enough. I think it should be anybody who can see the proposed development site from any point on their property, because it will impact on their amenity if they can see it. But if they are at the diagonal point—in other words, not immediately adjacent to the side or to the bottom of someone’s garden—they may well be able to see the proposed development. Those people should have a right to object as well.
I agree entirely with the suggestion that three weeks is not adequate, partly because there is a tendency for the three weeks to start at the date on which the letter is sent. It seems to me that 28 days would be a better period by which a neighbour should be able to respond.
On the question of objections being received from neighbours, I heard on a news broadcast at the weekend, but perhaps I misinterpreted it, that ward councillors would have a role in making the decision, in arbitrating. I understand that that is not what is being proposed, but I would appreciate the Minister’s confirmation of that fact, because in my view it should go to the council’s planning committee.
Statutory consultees should also have a right to be consulted. I am thinking particularly of parish councils, because they have an existing role and it is important that that role is clearly identified.
On the issue of the fee, I had thought that the planning system was supposed to be financially self-sufficient: that is, that the expenditure on the planning system and planning officers was to be funded from fees received. I am not certain that it is right that someone who has applied for planning permission should not pay a fee. There is a case for saying that if there are no objections to what is a very simple matter, and with the council operating as a post box only, it would be legitimate for there to be no fee. But if it is more complex than that and takes up significantly more of the planning officer’s time, this ought to be looked at again.
Lord Deben
I rise only because my noble friend, like my right honourable friend, has drawn into consultation the Quality of Life report, which I chaired. I declare an interest as a vice-president of the Royal Town Planning Institute and an honorary fellow of the Royal Institute of British Architects. I think it important to rise simply because I would not like the House to believe that what is here in the amendment was what the Quality of Life report actually recommended. The reason for saying that is not because I wish to undermine what the Government have done but because the Government have been less radical than we suggested they should be. We said that in most of these cases it is not a matter of planning but of neighbours. It is a matter of sorting out what is fair dos, based on the principle that we believe in the rights of property. I ought to be able to do whatever I like with my property but I cannot do that in a world as closely knit as we are without taking into account what my neighbours feel about it. We said that it was ridiculous to tie up the planning system of the local authority to do this.
What should happen is that you would have a duty to tell your neighbours what you intended to do, with a plan and the rest of it. They would then have a month—28 days—to tell the local authority that they did not like it. The local authority would then have the right to do three things. First, it would have the right to say, “Well, this is a load of old rubbish and we’re not going to take any notice of it”. That seems perfectly reasonable, as you have to have a judgment in the first instance as to whether people are merely being difficult. We all know there are some people who can be difficult in any circumstances about anything, and anybody on a local authority knows that better than I do. The second thing that the local authority could do would be to say, “We think that this is a serious planning matter”—in other words, it was not a matter of neighbours, but something very fundamental, and it would therefore call it in, in effect, for a planning decision.
However, it would most likely say that this was a matter of neighbours and that they were going to appoint an arbitrator. Local authorities would have a panel of arbitrators, who would be very ordinary people, whose only job would be to go and see what the fair deal or reasonable thing would be in the case. Having decided that perhaps a slightly smaller extension would be fairer as far as the neighbour was concerned, they would say, “We will agree to this, if this change is made”. Alternatively, they would say, “We agree to it entirely”. They would start from the assumption that they would want to agree to the development; in other words, there would be an assumption in favour of development, because that seems to be reasonable given the nature of property.
The Government have taken this up. It is a huge improvement on the previous suggestion and a generous way of moving forward. I think my noble friend Lord True will probably feel that it is not quite what he wanted but we have gone a long way. However, there are three bits to it which I hope that my noble friend will think again about. In no spirit am I complaining about what she is doing—I am very pleased about this—but there are three things. First, I think that 28 days was probably a better period, simply for the reason that it is helpful for people over holidays and the like. Secondly, I wonder whether she could look again at enabling the local authority, even if it were not in the statute, to decide that this kind of thing was done by an arbitrator, not through the planning committee. I wanted to remove from the planning department questions such as, “Can I have a car port? Can I build a room in the already present roof of my garage? Can I put up a bit of an extension which seems quite sensible as my neighbour has exactly the same?”. All those things are really neighbours’ issues, and, frankly, when you consider the time spent and the shortage of planning officers, it is much more sensibly done by having a sensible man or woman looking and saying, “That seems perfectly reasonable”.
Thirdly, I hope that my noble friend will look at the one series of protections that we specifically put in, which is that this would not apply in an area which had been designated as a conservation area. In that area there should be a wider consultation than merely with one’s neighbours. I say to the Minister that I entirely support that it should be one’s contiguous neighbours because frankly, if we are going to go out to everybody who could possibly see the house, we are in real trouble. The idea that I could say that I ought to be able to complain because if I stood on the top of my house with a telescope I could see this house is just nonsensical.
We are trying to have a proper balance, and I think this amendment achieves that. I hope that the Minister will look at those three things, not least because I believe that our original proposition was an easier, simpler and ultimately more radical concept. However, I am pleased that we have had not merely half but three quarters of the cake and thank her very much for that.
Lord Cormack
My Lords, I agree entirely with what my noble friend Lord Deben says about conservation areas. I would like to make one point and ask one question of my noble friend the Minister. Like others, I thank her for the movement that has been made. I enthusiastically supported the amendment of the noble Lord, Lord True, either on Report or Third Reading. It seems that the Government have moved between half and three-quarters of the way.
Does the Government’s movement, which we welcome, take into account the time that it takes to build an extension? We have talked about loss of views and all that sort of thing, which are the obvious points, but some extensions seem to take an unconscionable time to build and the disruption of neighbours’ lives during the building can be not just an aggravation, but in some cases a real health hazard. I would like my noble friend’s assurance that permission to extend does not extend indefinitely.
Lord Beecham
My Lords, I join others in welcoming the Government’s partial, if deathbed, conversion to doing something about these proposals. I certainly endorse many of the comments that have been made about the problems that remain apparently unresolved. I particularly join the noble Lord, Lord Deben, in strongly urging the Government to look again at the issue of conservation areas, unless it is capable of being clarified that the proposals will not apply to conservation areas.
I draw particular attention to the wording of Amendment 7B, where in the preamble it says to insert:
“Without prejudice to the generality of subsection (1), a development order may include provision for ensuring”,
the safeguards to which the Minister referred. Why is that “may”? Why is it not the case that the development order will include these provisions rather than there being an option? It seems to me that it would be all too easy to evade the consequences of the partial progress that the amendment produces if it remains an option simply not to provide that in the subsequent development order.
Lord Phillips of Sudbury
My Lords, very briefly, in my 26 years as legal eagle on the “Jimmy Young Show” on Radio 2, there was no issue more sensitive and more repeatedly brought up than neighbour disputes relating to the extension of premises. It causes immense angst among our fellow citizens. People have mentioned rights of view and rights of light; there is no right of view, of course, and rights of light are notoriously difficult to judge and adjudicate on. I am entirely in favour of my noble friend the Minister trying to ensure that what comes out in the wash—I am thinking particularly of the subsidiary legislation—leaves minimum room for aggravation and disagreement.
For example, can anything be done about defining,
“the curtilage of a dwelling house”,
and the boundary of this? Those sorts of details may not seem important to us here because, I suspect, most of us live in rather spacious houses with gardens, but in terraced accommodation par excellence these issues are of huge importance. I am delighted to hear that the notice period is going to be 28 days but, to be honest, it needs to be 56 because these things can move very slowly and it takes less sophisticated mortals a long time to find out how to deal with some of these matters.
Lord True
My Lords, in rising, I feel rather like the ancient prophetess who went to see King Tarquin with the Sibylline Books and saw six of them promptly burned, only to have them accepted at the last minute. Like her, I am grateful for that. I thank my noble friend Lord Tope, the noble Earl, Lord Lytton, and the noble Lord, Lord McKenzie, for their support for this proposal at an earlier stage.
Of course, I thank my noble friend the Minister for her amendment. Unlike some in this debate, she has always understood the practical, human issues that are involved in seeking to end the rights of objection to developments which, as some have pointed out in this debate, may take more than half of a neighbouring back garden. Crucially, these may also create precedents in local planning in relation to character and new lines of building, which may well affect the person next door but one, who, under the proposal before us, still has no right to a say.
Parliament has secured some movement and I think many householders will thank goodness for your Lordships’ House for the role it has played in securing that. My view has always been—and remains—that faced with potentially overbearing developments, neighbours should have the right to defend the value and amenity of a home. For most of our population, that home represents the focus of all their lifelong work and aspiration and the bulk of their family’s wealth. That is the fundamental point. With the help of colleagues in another place and many of your Lordships, people in the Local Government Association and the local government world, and so many other people—ordinary people—this has finally been vindicated. I am very grateful to the Government for laying an amendment to protect these rights.
The question is: what do we do now? The noble Lord, Lord McKenzie of Luton, to whom I pay tribute for his role in not only this but all our local government debates, says that we should insist on the amendment for which I secured your Lordships’ support at an earlier stage. It is true that the Government’s amendment was laid before the House at the last possible moment last Friday. I might agree with him that it would have been better if it had come sooner. I myself suggested a way forward in which both sides would withdraw their amendments so that more timely discussion might take place on an agreed draft regulation specific to this issue, which could be debated later in both Houses after proper consultation. I actually think that would have been a better and more orderly course in Whitehall terms, but that is not where we are.
The Earl of Lytton
My Lords, I will not detain the House for long. My interest as a practising chartered surveyor in matters to do with planning is well known. The concern about this area of the Bill is not to prevent development from taking place but to ensure that the community should have some input. There is a serious and objectively important issue here. It is that the density of development is a construct, particularly in urban and suburban areas, that needs constant review and monitoring. Filling up open space with development—perhaps “filling up” is a rather pejorative term, but noble Lords will get my drift—touches on and concerns that issue, and produces long-term, quantifiable effects on value, amenity and the general sense of space. That affects not only the public perception but individual neighbours. It is very easy for someone with a very short-term agenda who simply wishes to have further space for whatever reason to try to construct something that is less than worthy in the context of the locality. I pay tribute, as I have before, to the way in which local planning authorities have protected this construct, this facet, of our built environment. It is important that there should be oversight. Policies to protect amenity space, light and air should none the less still have house-room here.
There are a couple of issues that I hope the Minister will be able to clarify. Another qualitative consideration that risks being lost is to do with materials—things like colour, finish and texture. They risk being lost under the process of prior notification where the principle of development is enshrined in a permitted development context. I appreciate that design guidance in supplementary planning documents may overcome this if it is sufficiently up-to-date and all-encompassing, but it is not always.
It has been mentioned already that the local planning authority will receive no fee, whatever the length and breadth of its administrative role may be in dealing with something under a prior notification regime. I think that that is probably an injustice, other than in circumstances where, as the noble Lord, Lord True, and others have said, it is a straightforward in-and-out issue.
We have heard about the issue of too much planning and overconcentration. I believe that I made a comment earlier in the course of the Bill about the colour of people’s front doors or the design of their windows. We need to try to distinguish between removing the overconcentration on the particular and the wholesale removal of scrutiny, because the two are not the same.
Comment has been made on how the service of notice would work. That must wait for another day, but I would instinctively prefer 28 days rather than 21.
A further area, that has already been pointed out by the noble Lords, Lord McKenzie and Lord Shipley, is the question of definitions—back garden as opposed to side garden, curtilage as opposed to plot area, setting as opposed to something else—and the basis of identifying the proportion of the plot actually built upon if you want to get some sort of absolute measure. I remember a situation where I made an application for a tenant’s garage. It was turned down because, although it was in a rural road, the planning officer decided that it was offensive to the “streetscene”. Anyone walking up the “streetscene”, where they saw one house every half-mile, will realise what I mean when I say that I did not think that “streetscene” was a concept that applied to something that was stuck behind a hedge up above a high bank. This occurred because, needless to say, the building was not built with a frontage onto a highway, as you might normally expect, but was built end-on to the highway, so front and back gardens had a boundary with the highway. It is this sort of muddle that needs to be sorted out, because for every plot that is governed by the standard criteria of an urban street, there are other ones that are not so governed because they are corner plots or otherwise different and individual. We need to somehow disentangle that.
The noble Baroness, Lady Gardner of Parkes, asked what the sanction will be for not complying with a scheme as prior notified. Indeed, that is something that we need to be very careful about.
On the whole, though, I believe that the Minister and her honourable friend have gone some way to try to deal with this business through this halfway house of prior notification. Prior notification is not an unusual construct, despite what the RTPI may wish to say; it is commonplace in agricultural permitted development, so I do not have any particular worries with it as such. If the Minister is prepared to give some sort of undertaking that the detail of this will be subject to consultation, not least consultation via the processes through this House, then I will be inclined to take the side of the noble Lord, Lord True, and be prepared to draw a line under this—to take half a bun or two-thirds of a bun, even if it is not the whole bun that we wanted to start with.
Baroness Hanham
My Lords, I thank the noble Lords who have spoken, particularly my noble friend Lord True, for the tenor of this debate. I accept that there is not everything that everyone would want here, judging by the questions, but the House seems to accept that we have moved a long way since we started on the Bill.
I want to reiterate that the revised approach that we are taking responds in a targeted and direct way to the concerns that have been raised. As noble Lords have said, there are already existing permitted development rights that have operated effectively for a number of years. The change is that those permitted development rights are extended with regard to the size of buildings. This is not new, although I well understand the concerns that noble Lords have raised. Our revised approach will now ensure that under the new rights, in the case of larger extensions, any objection from immediate neighbours will be fully taken into account before permission is granted. I will come back to “immediate neighbours”.
Lord Cormack
My noble friend has not yet reached this point, but will this also include the time that will be taken to build the extension? The disruption factor is very real in people’s lives.
Baroness Hanham
The noble Lord has jumped in ahead of me: no. Planning permission currently has no timescale of how long it should take people to do a development once they start. Indeed, I am sure that many noble Lords have torn their hair out at something that seems to be going on for a very long time indeed. Of course, the district surveyor or building regulation enforcers might begin to get worried about why progress was not being made, but I do not think that we can expect to put details of that in legislation. That also goes for the question raised by my noble friend Lady Gardner about enforcement. There will be the normal enforcement procedures of local authorities, which they are able to implement when they have concerns that something is being or has been built outside what has been approved. The problems with enforcement are much the same with any planning development as with our new, light-touch proposals.
I hope that I have covered most of the points on which I wanted to pick up. The noble Lord, Lord McKenzie, in particular, gave us a very long list of things that he was concerned about. If I have not addressed something that anyone has a burning question about and they want to ask me quickly now, then I am happy to pick it up, but I think I have covered everything that time allows me to. I am grateful to all those who have spoken. I look forward to hearing, as I think that I have, that this has moved a long way, which has helped with this aspect of the Bill.
Lord McKenzie of Luton
My Lords, I start by thanking the Minister for dealing extensively with the queries that were raised and all other noble Lords who have spoken in this debate. There are two strands to it. Most noble Lords believe that sufficient progress has been made by the amendment to be able not to stick with the amendment of the noble Lord, Lord True, if that is where they originally were. The noble Lord, Lord Shipley, said that it had gone far enough to be supported. The noble Lord, Lord Deben, said that it was a huge improvement, even if it was not as radical as he would have wanted, based on the Quality of Life report. The noble Lord, Lord Cormack, was thankful for the movement. The noble Earl, Lord Lytton, believed that it had gone some way. The noble Lord, Lord True, himself, believed that there had been real progress. The other strand is how much still needs to be consulted on, and some of the details still need to be fleshed out, notwithstanding what we have heard today. The noble Lord, Lord Phillips of Sudbury, the “legal eagle”, said that there should be minimum room for discretion, effectively, because this generates a lot of angst among people.
The key issue seemed to be about the period. We heard 21 days but the noble Baroness, Lady Gardner, and several other noble Lords, did not believe that was sufficient. On fees, bearing in mind the state of local government finance, the lack of support from central government, given the imposition, is a real issue. I also believe there should be further discussion and movement on the limitation of these arrangements to the immediately adjoining properties.
As I hope I said at the start, we tabled our amendment because we had not seen what the Government were then proposing and wanted something against which to benchmark what did come forward. However, on the basis of what we have heard and this debate, I beg leave to withdraw the amendment.
Viscount Younger of Leckie
That this House do not insist on its Amendment 25, to which the Commons have disagreed for their Reason 25A.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, I am grateful for the full and wide-ranging debate that has taken place during our consideration of the Growth and Infrastructure Bill. Last week the other place disagreed with the amendment to remove the employee shareholder clause from this Bill. In today’s debate I will explain why the Government support the position of the other place to retain it in the Bill.
I intend to focus my initial remarks on the announcement made by my right honourable friend the Minister for Business and Enterprise who gave an important assurance about jobseeker’s allowance claims. I will also explain to the House why I believe it is important to support greater choice for companies and individuals with the creation of a new employment status.
Last week, my right honourable friend the Minister for Business and Enterprise announced in the other place that jobseeker’s allowance claimants will not be mandated to apply for employee shareholder jobs. This means that individuals receiving jobseeker’s allowance do not need to worry about their benefits being affected if they do not wish to apply for, or accept, an employee shareholder job. This is an important point. The Government will not compel jobseekers to apply for these jobs even if the job fits within their job search specification and we will leave it up to jobseekers themselves to choose whether to apply or not.
During the Third Reading debate on the Bill we discussed the guidance that will be made available for jobcentre staff to help them understand the new employment status. We have now updated the draft guidance for DWP jobcentre advisers. It now states explicitly that a jobseeker cannot be mandated to apply for an employee shareholder job. A copy of the draft guidance was placed in the Libraries of both Houses on 16 April.
We are debating a wholly voluntary new employment status. As I have said throughout the debates, we do not want people to be coerced into accepting these new contracts and it is worth us considering other protections that this clause provides. On Report in the other place the Government amended the clause to give strong protections for existing employees, enabling them to turn down an offer of an employee shareholder contract by their employer. First, we created a new unfair dismissal right that applies from day one of an employee’s contract. This means that if an employee turns down an offer to change their contract to an employee shareholder one and they are dismissed because they said no, this would be considered an unfair dismissal. Secondly, we created a new right not to be subjected to a detriment from day one of an employee’s contract. This means that if an employee turns down an offer to move to an employee shareholder contract and they then suffer a detriment, such as being passed over for promotion or for a pay rise for no good reason, they may be able to make a successful claim at an employment tribunal. These two protections allow employees to turn down an offer of an employee shareholder contract if it does not suit them and they can do this with the knowledge that the law protects their decision.
The clause has further protections. The shares, which must be worth at least £2,000 when given to the employee shareholder, must be fully paid up by the employer. This is an important point because if the company became insolvent and the shares were not fully paid up, the employee shareholder would otherwise be liable to pay any outstanding amount against the value of the share. It is important that we consider the context in which the new employment status fits. Employment law offers a choice of different employment contracts.
Lord Lea of Crondall
I am most grateful to the Minister for giving way at this stage. However, he has rattled through the circumstances in which someone could apply for a job: he says there is no compulsion and that there are options. I want to put a question absolutely clearly and directly. It arises from the guidance, which post-dates where we were last time in this House; in fact, it post-dates where the Commons were a week ago. The guidance refers to the circumstances where the vacancy is an “employee shareholder job vacancy”. Where, therefore, is the option for the jobseeker who does not want to be an employee shareholder? There is none. Is it not disingenuous to suggest that there is an option?
Viscount Younger of Leckie
I thank the noble Lord for his intervention. This currently remains an entirely voluntary procedure and jobseekers will not face a detriment if they are due to apply for a position.
Lord Lea of Crondall
I am sorry; it is very unusual to intervene twice. However, where is the option? The Minister has said that there is no coercion. Of course there is none in the sense of having a whip, but where is the option to get a job if it is solely an “employee shareholder job vacancy”?
Viscount Younger of Leckie
I am not sure I entirely understand where the noble Lord is coming from. If a jobseeker is seeking a job there are various options for him or her to look at in terms of roles, and the employee shareholder role will be treated equally alongside any other option. The only difference is that there will be absolutely no detriment to that individual if they apply for an employee shareholder role, and if they decide to turn it down. On the matter of guidance, I clarify that it remains in draft form. If this is an issue concerning the way that the guidance is written up, I am more than happy to listen to the noble Lord if he has any comments to make.
Lord Monks
My Lords, I am grateful to the Minister for giving way. Is he therefore confirming in that reply that it will be possible for an employer to advertise employee shareholder contracts only? Is that what the Minister is confirming?
Viscount Younger of Leckie
The answer is that if an employer wants to recruit an employee shareholder, he or she will decide how to advertise for that. They may decide not to advertise. They have a range of options which include advertising nationally. They may choose to send the advertisement into a jobcentre locally or to spread it nationally. That remains open just as it is if they want to recruit for any other position.
Lord Monks
My apologies for coming in again. What is voluntary about that for the jobseeker in those circumstances—the applicant for the job in an area of the country where there may not be many jobs and that is the only status available?
Viscount Younger of Leckie
It remains the case that an employee looking for a position can decide for himself or herself whether to accept an employee shareholder role. It is a separate status compared to other statuses. There is no difference in terms of them deciding themselves whether they want to accept or turn down that particular role.
Employers and individuals are free to agree to the type of contract that is suitable for the job. We are not moving away from this principle; rather, we are enhancing it by offering a further option which will be right for some, but as I have made clear in previous debates, not right for all. There are already three established employment statuses in the labour market, all of which have different rights associated with them. The employee status has wide-ranging rights, including unfair dismissal, statutory redundancy pay, TUPE, maternity leave and pay, and adoption leave and pay, to name a few. The worker status has none of these rights. However, both employees and workers have a right to the national minimum wage, paid annual leave, a right not to be discriminated against, and rest breaks.
There is a further option for people seeking work. They may wish to become self-employed. If someone chooses to be self-employed, they must accept that they have very limited employment rights, such as the right not to be discriminated against. This clause offers both employers and individuals a further option: employee shareholder. This is likely to be a long-term relationship. I would not expect anyone to enter into an employee shareholder contract without carefully considering the implications. This new employment status, with share ownership and favourable tax treatment, will provide small growing companies with a new option to attract high-calibre candidates.
Lord Myners
The Minister says that he does not expect employees to enter into such contracts without careful consideration, and he thinks that this will be a long-term commitment. However, the articles of association of most companies place restrictions on the sale of shares. Will the Government require that there be no restriction on the employee’s ability to sell their shares for the highest price they can achieve, as opposed to having to sell the shares back to the employer at whatever price the employer might justify as being fair in those circumstances? Otherwise I do not see how the employee can form a view on the value of the consideration that they are being offered in exchange for giving up valuable employment rights. Will the Minister give us a clear answer on that question? I feel that he did not offer an entirely clear answer to the previous question from my noble friend.
Viscount Younger of Leckie
The noble Lord makes a good point. The matter of what types of shares and what shares are offered is very much left to the employee and the employer. That is a negotiation between the employer and the employee. The Government will not prescribe how that will come about because there are different types of shares, as the noble Lord will know only too well from his experience. It will very much depend on the type of company, the wishes of the individual who may be looking at an employee shareholder role, and the employer.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. When he says that the valuation and the convertibility of the shares will be a matter of negotiation between the employer and the employee, it is hard to see what the employee’s negotiating position would be. At the very least, should not the employee be given independent legal advice as to the valuation and the nature of the transaction he is entering into, which, after all, applies under existing employment law for compromise agreements and things of that kind? If it is to be a negotiation, surely the employee has to be informed, and not all employees will be particularly financially literate or employment experts.
Viscount Younger of Leckie
The matter of advice is very much applicable to settlement or compromise agreements, as my noble friend has pointed out. This concerns entering into an employment agreement, and therefore we do not see this as being appropriate. On the issue my noble friend has raised concerning share valuation, as he well knows, there are established means through actuaries whereby shares are valued. That is done all the time and it is a straightforward process. Again, that is very much a matter between the employer and the employee.
Lord Myners
I think the Minister has confirmed—but perhaps he could avoid any doubt about this—that it would be possible for the employer simply to say, “You can sell these shares only to me and only at the valuation that I judge appropriate, and without any reference to arbitration or a third party”. If that truthfully is the case, this policy is shambolic.
Viscount Younger of Leckie
I disagree entirely with the noble Lord because the employee shareholder will decide for himself. If he does not like the terms of the shares being offered, he does not have to enter into this particular agreement. It is wholly voluntary. He may be well advised to get some advice. He may decide himself to get some advice. That is not an issue.
Lord Adonis
My Lords, could the noble Viscount explain to us how jobseekers, who may have no resources whatever, will be able to get the advice that he has just told the House they would be well advised to get because of the very complex nature of the agreements and shareholding options into which they will be obliged to enter?
Viscount Younger of Leckie
Yes, I can answer that. However, the issues may not be that complex. It depends entirely on the agreement between the employer and the employee shareholder who is considering the new job. As the noble Lord well knows, a variety of sources such as lawyers and accountants can give this sort of advice to a prospective employee shareholder.
Lord Adonis
How do these jobseekers pay for this advice? Does the noble Viscount have a special fund which will be available to them? I know that plenty of people offer this advice but I am not aware that many of them offer it for free.
Viscount Younger of Leckie
To clarify what I said to my noble friend Lord Forsyth a minute ago, legal advice is clearly available for settlement agreements and compromise agreements. However, we have made it clear that it is not available at this time for those entering into a new employment contract.
Lord Deben
I wonder whether I can help my noble friend. When my companies give shares to our employees, not in return for anything but because they have worked for us for some time and we want them to be involved in the companies, we still find it difficult to explain the terms of those things, even though the terms, whatever they are, are a plus rather than a minus. I wonder whether it is right to suggest that this would not be a difficult thing for people to understand. That worries me considerably. I am very pleased that the Government have moved on the big thing for me, which concerned making it impossible to continue to have jobseeker’s allowance. That for me is a crucial matter. However, I wonder whether my noble friend does not underestimate the difficulty of explaining to somebody even the simplest of share options and share sales.
Viscount Younger of Leckie
I very much note my noble friend’s point. He has experience in this field. I say again that some negotiations may become complicated, but the employer and the employee shareholder will go into this with their eyes open. On the other hand, it may be a very straightforward and simple process. Indeed, the employee shareholder who is looking at this new role may decide that he is entirely comfortable with what he has seen, heard and, indeed, read. I clarify again that this is very much a matter between the employer and the employee shareholder.
Lord Myners
The Minister has just said that legal advice is available for settlement and compromise agreements but that it will not be available to an employee considering one of these contracts. Will he explain why legal advice would not be available? Will he then answer the question from my noble friend on the Front Bench on how a jobseeker seeking employment on the national minimum wage will be able to cope with the complexity of law and the articles of association and afford to take separate legal advice, which at a minimum would probably cost in the case of most lawyers the equivalent of close to a month’s wages on the national minimum wage?
Viscount Younger of Leckie
I can only reiterate that it entirely depends on the role on offer, the type of company and the type of employer as to how the discussions will go. An individual taking on a normal role, if I may put it that way—an employee role or a worker role—may find that sort of contract complicated, in which case they may have obtained their own advice and are still free to do so. This is a wholly different—
Lord Forsyth of Drumlean
I am most grateful to my noble friend for giving way and I shall try not to interrupt him again. However, can he explain to me why employment law as it stands requires employers entering into a compromise agreement to provide legal advice in order to make that agreement stand? They usually provide a reasonable amount of the cost of independent legal advice. If that is appropriate for a compromise agreement where people are surrendering certain of their rights, why should it not be appropriate where people are giving up their employment rights and entering into what may be a complicated and major financial decision, given the proposed levels of tax relief with capital gains relief of up to £50,000? What is the Government’s logic in saying that advice should be paid for by the employer in one case but not in this case?
Viscount Younger of Leckie
I know of many employee contracts—not those for an employee shareholder—where serious advice is required. However, the status of being an employee shareholder is wholly new. The individual concerned may well require advice but noble Lords are talking about the circumstances of entering the employment phase and the proposal we are discussing would set a new precedent. As we know, often very difficult discussions take place towards the end of the employment contract. That is where it has become the custom and practice for companies to pay fees. That is the difference. I hope that I may be allowed to move on.
The recruitment of skilled personnel is normally taken very seriously. It takes time and commitment and involves searching for suitable candidates, sifting applications and interviewing. This will be no different with the new employment status. In fact, companies will need to take time to consider whether this type of contract is right for them. The owner of a company offering the status should think about the impact of giving up equity in the company. This is a decision that is not easily reversed, as once you have given away your shares it may not be easy to get them back. We must remember that the owner is giving away a stake in the company. Companies will need to be sure that the person to whom they offer the contract is right for the company. An employee shareholder may be able to influence the decision-making of the company and take a share of the profits. This is not something a company would do without being sure that it was the right move for them.
The new status will not be applicable or suitable for all companies or all individuals but it might be right for some. This new employment status represents more choice for individuals and companies. I have been clear throughout our debates that the status is voluntary. Indeed, it may well be used only by a minority of companies, but what is important is that we allow them to choose what is right for their own personal and commercial circumstances.
Viscount Younger of Leckie
I hope that I may be allowed to finish. I urge the House to keep this innovative proposal as part of the Bill. We should not deprive individuals or companies of choice that may lead to more jobs and better company performance. Above all, it is good for growth in the UK. I beg to move.
Motion B1
Lord Pannick
As an amendment to Motion B, leave out from “House” to end and insert “do insist on its Amendment 25”
Lord Pannick
My Lords, on 20 March, your Lordships’ House voted by a majority of 54 to exclude Clause 27 from the Bill. The reasons of principle and practicality as to why your Lordships’ House so voted remain valid. They were not altered by the vote of the House of Commons last week. Indeed, the debate in the House of Commons, which was limited by a timetable Motion to 45 minutes, barely addressed, let alone answered, the concerns which were expressed on all sides of this House on Report.
I remind your Lordships why your Lordships’ House voted to exclude Clause 27. I want to do so because the noble Viscount’s speech conspicuously avoided, if I may respectfully say so, all the concerns which the House expressed on Report. I commiserate with him because he has been asked to defend the indefensible.
The first point is that Clause 27 frustrates the very purpose of employment rights. We can, and do, disagree around this House and in the other place as to what the content of employment rights should be. That is entirely proper. They are debated and amended from time to time as we see the balance between employer and employee and as we perceive the public interest. However, over the past 50 years all Conservative and Labour Governments have recognised that an employer and an employee cannot be allowed to contract out of those employment rights which Parliament has seen fit to guarantee. That is because it would defeat the very purpose of conferring those employment rights. They are conferred precisely because freedom of contract—a voluntary agreement, as the Minister describes it—does not protect the worker or the job applicant who lacks basic bargaining power. To allow basic employment rights to become a commodity to be traded in the way that Clause 27 proposes would frustrate their very purpose. We would not envisage for a moment allowing a manufacturer of goods to contract out of his, her or its obligation to the consumer simply because the latter chooses, voluntarily, to pay a lower purchase price.
The need for protection in the employment context is most obvious in the case of the person who is seeking employment. The Minister in the House of Commons, Mr Michael Fallon, emphasised last week that a Clause 27 agreement is voluntary. The Minister repeated that statement today but, as he accepts, the employer may under Clause 27 advertise the vacancy on the basis that it will be filled only on Clause 27 terms. In the real world, outside the House of Commons, a person who is offered employment on Clause 27 conditions only is not voluntarily accepting such conditions. In the current economic climate, he or she will have no practical choice. I welcome the fact that the Government have removed one aspect of the unfairness of Clause 27—that is that a person refusing work on Clause 27 terms would have lost jobseeker’s allowance; a quite extraordinary position—but the fact that the Government have removed the most outrageous aspect of this proposal does not mean that what remains is acceptable.
The first objection is that the clause proceeds on a theory of voluntary agreement that frustrates the very purpose of conferring employment rights and is wholly unrealistic. The second objection is the damage that this clause will cause. A number of noble Lords from the government Benches—I repeat, from the government Benches—made this point on Report and in Committee far more powerfully than I could hope to do. The noble Lords, Lord Forsyth of Drumlean and Lord King of Bridgwater, both of whom served as employment Ministers, the noble Baroness, Lady Wheatcroft, the noble Lord, Lord Deben—all of whom I am very pleased to see in their places—and other noble Lords on the government Benches explained, from their extensive business and political experience, just how damaging it would be to industrial harmony to allow employers to buy off basic employment rights, how no sensible employer would consider this to be beneficial and how Clause 27 would do enormous damage to the cause of promoting employee share ownership. I am very sorry indeed that the Government have chosen not only not to listen to this House but not to listen to the wisdom and experience on their own Benches. The Minister must know that there is not just a lack of enthusiasm for this measure on his own Benches, there is a positive hostility to it that makes the Government’s insistence on pursuing this cause and this clause, in the word used by the noble Lord, Lord Deben, in Committee, “mystifying”.
The third objection to Clause 27 is that even the case which was advanced by the Government in the House of Commons last week does not begin to justify the broad scope of the clause. The Government’s case, as expressed last week by Mr Fallon, is that Clause 27 will encourage new and small high-tech companies which will be more willing to employ people with special skills. Even if noble Lords were to accept that assumption—and it begs a large number of questions —it would justify only a specific and narrowly drawn statutory provision tailored to the specific circumstances which are said to justify its enactment. The generality of Clause 27 inevitably means that it will be used and it will inevitably be abused by the Gradgrinds of this world. This concern was expressed on Report by the noble Lord, Lord Forsyth of Drumlean, in his powerful speech against Clause 27.
Lord Forsyth of Drumlean
My Lords, I hesitate to follow the noble Lord, Lord Pannick, who has set out very clearly and persuasively the points that we discussed before and which are causing concern to the House. I share his concern about the Commons debate, which, as he indicated, was guillotined. All the serious points that were raised in this House have not really been addressed by my noble friend. I exonerate him from any blame in that respect but they are important points. Many of them may be slightly peripheral to the substance that we are discussing here, which is about employment rights, but, for example, I remain concerned as to whether the estimate made that this could result in more than £1 billion disappearing in tax-avoidance schemes is correct. It is not clear to me whether the Treasury has found ways of ring-fencing this scheme, which provides for up to £50,000 of capital gains tax to be relieved, and whether this could not be used as a great tax-avoidance scheme.
I got a call this afternoon from a Mr Mark Florman of the British Venture Capital Association, who wanted me to know that all his members were absolutely behind this scheme and very much supported it. I said to him, “Why are they concerned about a scheme that enables people to give up, in effect, only their rights against unfair dismissal if they have been employed for more than two years and can have £2,000 worth of shares, tax-free? What conceivable interest can that be to the membership of the British Venture Capital Association?”. He said that it was keen to encourage share ownership and for employees to be involved in share ownership. I am sure that people on all sides of this House are keen on that concept. That is why I would strongly support any schemes that encouraged share ownership. However, this proposal mixes up two things—one is employment rights and the other is share ownership. It is not at all clear to me how it would be beneficial to either employers or employees to embark on this scheme.
Being a reasonable, moderate sort of fellow, I looked at where we had got to in this debate, and I looked at the vote in the House of Commons, where the majority was actually somewhat less than the Government’s majority. I looked at the short-term nature of this matter and thought, “Is it possible to find a way of making this look not more sensible but more practical?”. It seemed to me that the Government could have done two things. One was, as the noble Lord, Lord Pannick, pointed out, to ensure that people who were embarking on an employee shareholder contract were given independent legal advice that the shares were worth what the employer was telling them, on what the arrangements in respect of the valuation of the shares would be at the end of the period, and on what employment rights they were giving up and the consequences of that. That seems to be an entirely reasonable suggestion. Regarding the idea that people on low incomes can go and get legal advice on these matters or that issuing and putting values on shares in private companies is straightforward, I have to say to my noble friend that the entire investment banking industry is based on the premise that the valuation of shares is not straightforward.
There is also the idea that by giving people shares in return for employment rights the employee is in a negotiating position. However, they want a job and are not in a position to say no. Even if the provision was that the employer may provide legal advice at the request of the employee, that would not be enough because the thought would be, “It’s going to cost the employer £1,000 and if I say I don’t need the advice, I might have a better chance of getting the job”. The fundamental point was made by the noble Lord, Lord Pannick: the reason that we have employment rights—while I think they go too far in some respects—is that they even up the position between the employer and the employee. I am not particularly persuaded on this.
However, I thank the Government for at least taking up one point, which is to alter the guidance in respect of the jobseeker’s allowance. I was grateful to my noble friend for the letter that he sent us, but I have to say that amending the guidance to say that people who refuse to take up this voluntary agreement would not be found to be intentionally refusing employment is not a concession; that was just a mistake by the Government that they have now corrected. It is not right to present this as a concession. The concession that is needed is to protect the position of the employee against the unscrupulous employer, and independent advice is part of that.
My other thought was that the Government say that this proposal will be of interest to small firms. Some people suggested to me that there could be an exemption stating that the measure would apply only to small firms. However, on reflection, I do not think that that is the issue at all. This is a general provision for employees, and whether it is a big firm or a small one is not the key issue here.
I am also worried that my noble friend said in his opening remarks that it will not be easy for employers to get the shares back, but in his own guidance he makes it clear that these schemes can include a provision that requires the employees to give the shares back. What is the deal here? It is: “You give up your right to be protected against unfair dismissal. We will give you some shares that we tell you are worth a certain value, but you have no idea whether or not we are right, and when you get those shares you have to pay tax and national insurance on them if their value is more than £2,000. Then at the end, I, as your employer, if I decide to sack you, can take them back at a valuation that may be less”. That does not seem to be a scheme that will set the nation alight with people wishing to participate in it.
I have to say to my noble friend that this thing is not thought through. Not only that, but to those of us who have tried to be constructive—I was prepared to go along with this today if the Government showed some sensitivity to the concerns that have been so elegantly expressed by the noble Lord, Lord Pannick, and others—the Government seem determined just to railroad this through and not deal with the arguments. I, as a Conservative, perhaps a Thatcherite Conservative, am not identified particularly with employment rights, but I am proud that it was a Conservative Government that first introduced them because we recognise that there has to be a fair balance in the labour market.
I therefore say to my noble friend, can he not think again and at least offer us a concession in respect of the right to have independent legal advice paid for by the employer whose initiative this is, so that the employee is in a position to know exactly what they are being asked to sign up to?
Lord Flight
My Lords, I cannot match the advocacy of either the noble Lord, Lord Forsyth, or the noble Lord, Lord Pannick, but I feel that there is a saddening negativity towards these proposals. I am glad that everyone agrees.
A lot of the issues raised in this House have been addressed—in particular, the concern, which I completely supported, that it would be a nonsense if people were forced to give up the ability to claim their jobseeker’s allowances if they turned down the offer of an employee shareholder job. That is the most important issue of the lot. But there are other important issues where the proposals have been improved. I see the situation in the context of a half-way house between self-employment and standard, typical, large-corporation employment.
An interesting survey has been published by the RSA which finds that more than 30% of people in their 20s now want to be entrepreneurs, self-employed individuals who will have no protection rights whatever. In terms of giving up rights, there are three important areas, including unfair dismissal rights—which are not given up as regards improper grounds such as discrimination—rights to statutory redundancy pay, and certain rights to request flexible working hours and time to train. People retain a whole lot of other employment rights and the issue is not, by a long chalk, about giving up all your employment rights.
Of the concessions that have come from the Commons, the most important is that the Secretary of State will have power to regulate the buy back of shares. That does not amount to legal advice, which would be nice, but it does afford a protection there. I suggest that, in practice, what will happen if any businesses embrace these schemes is that there will be the usual sort of standard formula. If there is a buy back by the company, then there will be a prescribed price earnings multiple, or such like, on which to value them. That will unfold as time passes.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. I agree with his point about the tax allowance. If someone is awarded shares in the way that he has described and the value of the shares is, say, £20,000, will they then be liable to pay the tax and national insurance on that? Where will they find the money from?
Lord Flight
That is the very point that I made when we last debated the issue in this House. That is why I think the £2,000 limit is too low. The response to that is that it obviously depends on their tax rate. If people are accepting £10,000 worth of shares they may be able to find the tax which might be of the order of £2,000 to £2,500 on that award. It entirely depends. I also make the point that in more traditional entrepreneurial circumstances, which was my own experience, I had to put up the money myself and I had to remortgage my house to raise the money to start a business. I would like to see the limit raised, and I think for the scheme to work it will need to be raised, but we should not overstate the tax burden.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. Does that not then mean that the value of the employment rights you are giving up depends on how much money you are able to find in order to buy the shares?
Lord Flight
First of all, it depends on what is on offer. It is broadly for the company to decide the amount of employee shares that it is going to offer under this scheme. To repeat the point, the employment rights which are being surrendered, particularly as viewed by ambitious entrepreneurial types, are not perceived as of particular value. The grant of free shares is of value and, to the extent there is a tax bill, I wish it were lower, but the tax bill is not entirely outrageous. I suspect that the tax limit will be raised in due course.
It is easy to be negative and to pick holes in what has not yet been fully addressed. I would like to see some of the improvements that noble Lords have suggested. But I think to take a rather superior view of, “Oh, no, we really don’t want this”, is wrong. I think it should be given a try and the issues that need sorting out will be sorted out. There are substantial numbers of ambitious young people for whom the objective is not to work for the Civil Service or to work for Shell or Unilever and to have a secure job with a generous pension, but to have equity in the businesses they work for, to make that business work and to make their equity worth a considerable amount of money.
Lord Monks
My Lords, unfortunately, I was unable to be present at Report stage, but I was struck when I read in Hansard that the House of Lords was doing its job like it perhaps does not do enough in an admirable and exemplary non-partisan way, looking at the practicalities of this proposal, not looking for negativity but simply giving it some forensic examination, which has clearly not been done by many in the Government and many who supported it in the other place.
This proposal about shares for rights is implausible. It is difficult to see too many people showing any significant interest in it. If we want to abolish red tape, well, just look at this proposal. It is full of red tape. I believe it is also objectionable—the idea that somehow you can sell your rights or trade in your rights. It is very clear which rights you will lose. It is a lot less clear, for all the reasons that have been stated, what employees will get and how those shares will be valued.
The proposal is also perverse. In the Report stage debate the noble Baroness, Lady Wheatcroft, set out one example. If matters do come to redundancy, will the employer decide to get rid of those with shares who have given up their redundancy pay or those to whom the employer will have to pay redundancy pay? It could well be the employee shareholder who is first out of the door.
The advice that the House of Lords gave to the Government has been treated with contempt. It has just been brushed aside. That includes the advice given by distinguished former Conservative Employment Ministers who are loyal on nearly all occasions, but not on this one. That is not being negative. That is not looking for negativity. It was good advice that was given, it is good advice that is being given now and I hope that this time, if the vote goes the right way from the point of view of those of us who are critics, it will be listened to with a little more concern and consideration than it got last time.
The noble Lords, Lord Pannick and Lord Forsyth, have ably pointed out the fallacies and flaws in the proposal and I will not repeat those. However, I do not think that many employers will give it much of a second look unless there is some tax advantage which will no doubt come to light in due course. Some unscrupulous employers will do so and that is where the individual worker would need some source of independent advice about what they agree to and what they do not.
I find the position of the Business Secretary in this matter intriguing. He fought a battle against the Beecroft proposals, but let us remember—I am no fan of the Beecroft proposals—that he did not propose taking away rights to compensation for redundancy. He was talking about a single payment. It seems to me very strange and disappointing that the Liberal Democrats and the Business Secretary have let this clause slither through the processes of government in the interests no doubt of a deal with the Chancellor of the Exchequer. I hope for the Liberal Democrats’ sake that it is a good deal which compensates for their disgraceful agreement on this matter. I hope they will think again in the time that we have available and put this clause where it really belongs, which I believe is in the nearest recycling bin.
Baroness Warnock
My Lords, noble Lords may be somewhat surprised that I speak on this issue, but it so happens that I have spent a great deal of the past few months looking into employee shareholding and employee ownership and have had long discussions with Charlie Mayfield, who, as noble Lords know, is chairman of the John Lewis Partnership. He was consulted about this proposal and simply regarded it as laughable.
What kind of firms did the Government really have in mind when they invented this farrago—it seems to me—of nonsense? I believe that they had in mind the smallish high-tech firms that set up outside Cambridge, Oxford, Bristol and so on. They thought that all the people employed by this kind of firm were going to be high-tech experts and graduates of their local universities and that the company would be inventive and innovative and, when it got bigger, would probably sell itself off, having made a profit. I do not think, when this was invented, that the Government had in mind that large companies would really have any interest. In fact, I remember that on Report the Minister was reduced to saying, “Well, the good thing about this is that not very many people will take it up”. That seemed to be an extraordinary argument in favour of it. Does the Minister really think that this will be an option open universally to businesses, including retail and manufacturing ones, or is he still thinking, as I am sure the Government were at first, of these very small businesses where everyone starts off more or less equal—equally well educated, intelligent and able to get legal advice—and is anyway probably in it for the interest of the thing and its short-term life? Can the Minister answer that question?
Lord Deben
My Lords, the noble Lord, Lord Pannick, very kindly reminded the House of my words at an earlier stage, in which I used the expression “mystification”. My concern is that I start from rather a different position. I think that a kind of package could be put together that would represent that midway point between someone who was self-employed and someone who was fully employed, particularly in dealing with the kind of company that the noble Baroness, Lady Warnock, has just pointed to; indeed, I thought that was the intention. I am dismayed because I do not want to remove the possibility of a sensible experiment that would enable small firms, in return for shares, to recognise that, to use a phrase, “We are all in it together”. That seems perfectly respectable.
I could not go along with what was being proposed, as a matter of principle, until the change that has now taken place. I thought it unacceptable that someone should lose their jobseeker’s allowance because they had not entered into what ought, right from the beginning, to be a different kind of arrangement, which would have to be voluntary. I do not agree with the noble Lord, Lord Pannick, that, because the job would be advertised in this way, somehow or other it was not voluntary. There are lots of jobs that people decide they are not going to take because of the terms under which they are presented. I do not find that objectionable.
What I find so difficult with the Government’s proposition is that it seems that it will not work. Frankly, it does not matter much what we decide on this because I do not think anyone is going to take it up and I do not think it is going to happen. That makes me sad—not for the reasons of the noble Lord, Lord Monks, but because I actually think that there is a place for a system that would enable a partial involvement in the beginning of a small company, which would of course mean that you took some cognisance of the fact that it was a pretty rocky position and in return you got some sort of special advance. However, at every turn, we find that it does not quite work like that. All along the line, the sort of things that we might have liked do not seem to work out—not least, as my noble friend Lord Flight described, when it comes to the problem of how you pay for things and how you organise that. You begin to realise that this does not have the enlivening, enlightening and opening effect that the creators of this idea obviously thought it would have. I am not driven to the extremes of feeling that this is ghastly and awful thing, because I just do not think it is going to be taken up.
Lord Woolf
I apologise for interrupting and thank the noble Lord for giving way. However, does not everything he has just said, which I have listened to with great care, indicate that this is one of those situations where legal or financial advice from somebody competent is critical?
Lord Deben
The noble and learned Lord, Lord Woolf, puts me in the most difficult of positions. I have spent my whole life congratulating myself on being the only politician from Cambridge of my time who was not a lawyer, and therefore complimenting lawyers, or suggesting the need for legal advice, goes against the grain in a big way—but I have to say that he is right. However, that is not the only thing. The issue is how we make this a creative contribution to the development of small businesses rather than something that has become an argument not about that at all but about giving up employment rights, the need for legal advice and all those things. We did not start from the basis that we ought to have, which is what puts me into this huge position. I apologise therefore for not being enormously supportive. I still have to listen very carefully to decide quite how unsupportive I am going to be, but I say to my noble friend that I wish we could have turned this good idea into a good idea instead of turning this good idea into what seems to me to be largely not an idea at all.
Baroness Turner of Camden
My Lords, there are already in existence what I suppose you could call partnership schemes, where people can of course have shares and a partnership with a company without the necessity for the abandonment of employment rights. As this legislation stands at the moment, one cannot help feeling that this is a way in which the Government want to get rid of employment rights without appearing to do so by introducing a scheme under which the employee can be persuaded to voluntarily give up an employment right where they normally would not consider doing so because that would not be required.
I do not think that we can judge this on the basis that “We ought to have a scheme where people do participate”. Schemes like that are available. What is difficult about this is that the basis seems to be the abandonment of employment rights before the employee can get involved in any sort of share or partnership scheme. I think that that is what we object to very strongly; I, at least, have done so from the very beginning. It has always seemed to me that the Government themselves are not keen on employment rights. This is a way of getting rid of those rights without appearing to do so, simply by offering an employee something that really does not compensate for the loss of the very important employment rights that we have been discussing today. It is that sort of basis which is why I oppose this clause and why I fully support what the noble Lord, Lord Pannick, has said with great clarity. This is the situation that I take now, and I hope that the Government will be disposed to accept what we have said on this side of the House—indeed, on every side of the House—which is: do not proceed with this scheme. Not only will it not work, but it is not right and it does no good at all to employment and employment rights.
Baroness Brinton
My Lords, I want to start by thanking the Government for the concession on jobseeker’s allowance candidates and the fact that they will be not penalised, but I have to also agree with other colleagues on both sides of the House who have admitted that this is really the rectification of a mistake rather than a major concession. However, it is essential. It is critical because before it, any of the guidance to the DWP and Jobcentre Plus offices would have been unusable and unworkable for this system, and would have put candidates for such jobs at complete peril.
I am also pleased—I will not go into detail about this, but want to refer to it—that throughout the passage of this Bill we have consistently talked about the necessity of independent legal advice. That is not just for those who are currently unemployed and are being sent to interviews by Jobcentre Plus; it actually applies to anyone. I think of a young 23 year-old that I know who has just joined a high-tech company in Cambridge where I think hardly any of the employees do not have at least one degree and most have at least two. However, if you asked that 23 year-old about the way shares work, he would not understand them at all and would clearly need advice as well. Helpfully, the firm that he has joined has made sure that any new employee who gets access to the share scheme gets that advice, so there are some good examples around.
However, if this scheme does not offer that advice where there is an element of two tiers of employment, that means that such advice must be made available. Frankly, I agree with the noble Lord, Lord Pannick, and others who say that it is on a par with the formal legal advice required for compromise agreements.
Following the debate in the Commons last week, I shall focus on the Minister’s referral yet again to this being suitable for small high-tech companies, particularly in university areas and high-tech areas. Confession time: in the 1980s I was a venture capitalist, spinning ideas mainly out of universities, although not only Cambridge University, and that is one of the reasons why I have quite a lot of experience and knowledge of what is happening in those companies now.
It is quite clear that good, small high-tech companies already use employment share schemes, or share schemes for all their employees who come in right at the start. The reason why they do this is that they know it is going to be a very hard road to make the product successful, particularly if it has not even been developed yet. They know that as time goes on further rounds of money will be coming into the company, and that they will be diluted not just once or twice but to a very minimal amount. Therefore, £2,000-worth of shares on day one, which for argument’s sake might represent 10% of a brand new company, might actually end up being a tiny percentage once you have had three, four, or five rounds of venture capital and hedge fund money going in. As a result, an employee will have to wait a very long time before they see any benefit.
Again, having to pay for those shares up front is not just an issue for those who come from unemployment; it is an issue for those coming in at a very low starting salary who, in addition, have to give up their employment rights and are being told, quite frankly—in Cambridge, which I know quite well, everyone freely admits this—that it is extremely unlikely that you will see any return on any investment in the first 10 years of a high-tech company. If you do, then it is a real star and is to be applauded. However, the vast majority, 95% of firms, do not do that, and 90-plus% of the firms do not actually provide a return to shareholders because they are often sold at the point at which the shares are virtually worthless. So please can we stop deluding ourselves that small high-tech companies are perfectly suited to this? The good ones do it already, but why on earth would they then want to give up employment rights in return for an extra part of this very risky journey? It just does not add up.
I was slightly concerned when the Minister referred to self-employment for these sorts of firms. I understood from the chart that we have received with the Minister’s letter, for which I thank him, that they are outside employment law, and I think that the House would accept that. The references being made implied that self-employment might be an option for those working for the firm, and I think that would definitely be against HMRC guidance; if somebody is working principally for a firm then they should not be self-employed. I am concerned that we are perhaps beginning to develop a dialogue of a third tier of employment, and I hope that the Minister will be able to make it absolutely clear that self-employment is only for those who actually have a range of clients and customers and do not work for just one firm.
The noble Lord, Lord Deben, talked about how this might be a point for experimentation, but I think the experiment is already happening and has been happening through the examples that I have been giving, without the need to give up employment rights. In summary, I believe that this legislation is unloved, unnecessary, unwanted and, frankly, likely to be unused. I am concerned that this is not the best use of Parliament’s time. I am in the same position as the noble Lord, Lord Deben; I do not like voting against my own Government, but I just feel that there are too many flaws in this. It is not a hopeful scheme for the future; they are there working at the moment. Please, let us not compromise employment rights in return for shares that are very unlikely, for the vast majority of employees, to be worth anything at all.
Lord Forsyth of Drumlean
Before the noble Baroness sits down, I wonder if she could help us with the question that the noble Lord, Lord Monks asked: what exactly is the nature of the deal that has meant that the Liberals have taken a position that is well beyond Beecroft and which they were previously opposed to?
Lord Bilimoria
My Lords, when I first heard about this scheme, my initial reaction was to give the Government the benefit of the doubt because it encourages share ownership and enterprise—all good intentions. However, I have listened to the arguments of the noble Lords, Lord Pannick and Lord Forsyth of Drumlean, and to the noble Lord, Lord Deben, who has great relations with his coalition partners, summing it up by saying, “It won’t work”. The noble Baroness, Lady Brinton, has said the same.
I cannot understand this. I have started businesses and run businesses at different levels and I have given shares to my employees, so all this about £2,000-worth of shares—even the figure itself is baffling. Who on earth is going to go through all this for something as incentivising as £2,000-worth of a share incentive, although I know that that is a minimum figure, and then to have to get legal advice? Do people understand the practicalities of offering legal advice if every time someone applies for a job they have to get legal advice to go for the share scheme? Then the question was asked: what if these jobs are offered and the Government say that they are voluntary only? If a job is offered as an employee share job only, though, that is not voluntary. As an employee you either take that job on those terms or you do not. I think that the Government have the best of intentions, and they say that there will be no compulsion, but I cannot see this being taken up.
What research did the Government do before they came up with this scheme? We have heard from the noble Lord, Lord Forsyth, that Mark Florman says his members think that this is a great scheme. Did the Government check with Mark Florman before they proposed this scheme? Now the noble Baroness, Lady Warnock, tells us that Charlie Mayfield, who I respect greatly as one of the most successful chief executives in this country, running the John Lewis Partnership, says that this is laughable. That is the reaction of serious business to this.
Lord King of Bridgwater
My Lords, I think I am not the only Member on this side of the House who feels some embarrassment at finding ourselves in this situation. As has been said, particularly by the noble Lords, Lord Pannick and Lord Monks, this House passed a pretty categorical vote to suggest the omission of Clause 27. It included, among others, a previous Chancellor of the Exchequer—his name has not been mentioned here but he voted against it—and a former Cabinet Secretary. It was not the usual suspects causing trouble in the back reaches of the parliamentary process.
I thought that there was not much new to be said but I credit the noble Lord, Lord Bilimoria, for bringing a few additional points into this debate that I think are very relevant. I join in the recognition of what has been described, rightly, as a correction of a previous mistake; none the less, the Government have corrected the position over the jobseeker’s allowance. However, some of us were waiting to see the Government’s serious response to the very major criticisms that were made a month ago on Report. This House’s duty of revising, amending and inviting the other place to think again was carried out, and the Government were given time to consider how best to respond.
My good friend Mr Michael Fallon, who had the responsibility of introducing this determination to disagree with the Lords in their amendment, said that it really was entrepreneurs on one side and employment lawyers on the other—not just the noble Lord, Lord Bilimoria, but a few others of us have had some small involvement in industry, employment and entrepreneurial activity over the years. I was interested that the noble Lord, Lord Forsyth, referred to the director of the British Venture Capital Association. I was the director of a leading venture capital investment trust for a number of years and I do not think that a single person I knew in that industry would support it or think that it might be a good idea.
I understand entirely why the noble Lord, Lord Flight, made the comments that he did because they bore out and illustrated the point made by the noble Baroness, Lady Warnock: who is this really intended for? The noble Lord, Lord Flight, will recognise that he has a background in and vast experience of a world where people do not think first when they go into employment, “What are my rights?”. They are thinking, “What are the opportunities for me here to really earn a substantial reward?”—as we know, a number of them earn very substantial rewards indeed. I have to say to him that it is quite difficult to stand up, in the ping of a ping-pong, when we are meant to have finished our revision and amendments, and say there are a number of things that now need to be sorted out. That is not acceptable.
I disagree with one point made by the noble Lord, Lord Pannick, that this will do great damage to industrial relations. I do not think it will at all, on the grounds that the noble Lord, Lord Deben, mentioned. I do not think that a single major company will touch it and it seems absolutely inconceivable that you could try to introduce this status into any major company. If some of your employees are entitled to redundancy pay and some are not, and then you get a downturn in trade and you are determining who should be kept, and if one of those people who does not get redundancy pay then gets dismissed and is told that he does not have a claim for unfair dismissal—as I understand it; like my noble friend, I am not a lawyer—he would immediately have a claim under discrimination. The idea that you ease the employer’s burden and prevent it being drawn into the courts is of course not so.
I certainly support the Government’s ambition to see what we can do to reduce unnecessary and undue burdens on employers, which certainly on occasions prevent the growth of employment. There is no higher objective at the present time, in our very difficult economic situation in the world when jobs everywhere are in very short supply, than doing everything we possibly can to encourage employment. However, that does not mean that we must lose our good sense and go for a scheme that someone has dreamt up if we see that at the end of the day problems will arise.
I had hoped that we would see some new approach to the issue. If the Government are absolutely committed to this idea and trying out this new approach to employment and the creation of jobs, it seems without question that people will be asked to address questions that would test quite sophisticated advisers in this field—the noble Baroness, Lady Brinton, was absolutely right about small start-up companies full of incredibly clever young men and women who have particular technical or other skills but no financial experience. Has my noble friend got nothing to say about whether independent advice, which would be paid for by the employer, should be available to people who find themselves in that situation? If the Government are not prepared to move in that direction, I will find it impossible to support their position.
Baroness Wheatcroft
My Lords, my noble friend Lord King mentioned a degree of embarrassment at finding himself in this situation, which I certainly share. At least those of us who are opposed to this legislation are not alone. The Financial Times, that great bastion of employee rights, ran a leader the day after the last debate in this House in which it said that this legislation contained,
“little to like and a lot to fear”,
and it advised strongly against progressing with it, saying that if this clause went ahead,
“employee share ownership may begin to be perceived as a shortcut to strip workers of their rights”.
That is not what any of us in this House want to see. We know that employee share ownership is a good thing. We want to support the Government in everything they can do to spread it, but this clause is not the way. The number of ways in which this clause could backfire has been enumerated this afternoon. Not much attention has been paid to the potential tax avoidance involved. It has been mentioned, but the Office for Budget Responsibility itself put a label of around £1 billion on the costs that might be in there. Is that really what the Government want to see happen? How is that compatible with the current agenda of trying to cut back, quite rightly, on tax avoidance?
It is the way in which this clause could detrimentally affect the idea of share ownership that causes me the biggest problem. It might not be big companies that will use it, and it is a very strange defence of a piece of legislation to say that hardly anybody is going to use it. I have heard that rather often and it seems an odd way to go about government business. There will be unscrupulous companies below the FTSE 250 that see this as a way of getting the labour force that they want on the least good terms. That is not going to encourage good employee relations. We want to do what my noble friend Lord Deben referred to and encourage the feeling that we are all in this together. If we are to go for growth, getting that sort of motivation will be important. Depriving people of basic rights is not the way to do that.
There is a potential exception for start-ups, where everybody starts off in the same boat and you do not risk this idea of a two-tier scheme of employees. Small companies probably need a bit more flexibility. They already have two years in which they do not need to worry about tribunals or redundancy, but they might need a little longer than that. In that case, perhaps we might ask my noble friend the Minister once more to see whether he can persuade the other place and the Government that this clause should be very narrowly restricted in its implications and application. As a clause that creates something open to any business it is potentially very dangerous.
We have also heard about the problems of valuing the shares. In his valiant attempt to defend this proposal, my noble friend Lord Flight said that we might well reach a stage where the Government have to stipulate the price-earnings ratio on which these shares would be sold. This is not the role that I wish to see my Government undertake. It is fraught with problems. This entire clause needs another rethink, even at this late stage.
Lord Adonis
My Lords, the noble Viscount has been a Minister for a short time only, but I think I speak for the whole House in recommending that he be promoted to an earldom for services to masochism. We have now debated this proposal for twice as long as the House of Commons saw fit to devote to it last week. In the hours of debate in this House, there has been one Member only, besides the Minister, who has wholeheartedly supported this proposal, and we pay great tribute to him: the noble Lord, Lord Flight. Even he sounded a note of equivocation today, saying that he hoped that the many problems that there were still with the scheme could be “ironed out” while it was being implemented. This is not good advice to legislators on how we should conduct our business.
However, I am grateful to, or perhaps sorry for, the noble Lord, Lord Flight—because it weakened his case—that he did not repeat the argument that he used last time, which was that we did not need worry about the £1 billion of potentially lost tax revenue, to which the noble Baroness referred. He said:
“The Treasury will therefore not lose tax revenue as a result of the tax arrangements; it will merely not get as much as it might otherwise get”.—[Official Report, 20/3/13; col. 622.]
I am sure that is hugely reassuring to HMRC and to those of us who are loyal taxpayers and who do not need to worry about the fact that there is no money to pay for anything, because it is simply revenue that the Treasury might otherwise not have got.
Viscount Younger of Leckie
I thank noble Lords for their contributions to this debate. I reiterate that the Government would like to give individuals and companies more choice in how they discuss and agree employment contracts. The employee shareholder status provides this additional choice. I will start by addressing the issue raised by the noble Baroness, Lady Warnock, about who the policy is aimed at. She asked, in effect, whether anybody would want this employment status, and who would want to employ an employee shareholder. These themes were raised also by my noble friends Lord Forsyth and Lady Brinton.
I clarify again that we understand that the new employment status will not be appropriate for all companies and will not be taken up across the board. It will simply add to the options and flexibility available to companies and individuals in determining their employment relationships in the same way that workers or employees, part-time or permanent staff, are not suitable for all companies. We expect that the new status will probably appeal mainly to fast-growing, small, start-up companies and individuals, as this is the level where employment rights are seen to impact the most. We have never said that the take-up will be widespread. We have always said that it would apply to a small number of companies, should they wish to take it up.
My noble friend Lady Brinton again raised the issue of who this might apply to. She cited the Cambridge example. She is quite right that companies that are likely to take this up are those that are new. They are likely to be making products that they want to be successful in the long term. She is right to say that this can be an extremely long road. However, she is taking a particularly negative view of the opportunity for employee shareholders. If I heard her correctly, she said that employee shareholders would have to pay for the shares up front. That is not the case. They will be given the shares, which will be free, even though, clearly, they will have to pay tax on them.
My noble friend Lord Forsyth raised the issue of tax, and the cost of the new status. The Office for Budget Responsibility has stated that in the long term the policy may cost up to £1 billion, but that relates to periods beyond the 2020s. It is simply not possible to be certain about costs so far in the future. The noble Lord, Lord Adonis, also raised this issue. Moreover, the tax rules will contain protections to prevent abuse—again, this issue was raised by several noble Lords—such as serial use of the scheme, and rules to ensure that those who have a material interest in the company and who thereafter can influence decision-making will not be eligible for the tax advantages. The Government will keep the rules on tax under review. I hope that provides a measure of reassurance.
The noble Lord, Lord Monks, who is in his place, raised the issue of Beecroft. This familiar story was raised in Committee and on Report. A number of noble Lords suggested that this was Beecroft by the back door. It is not. The new employee shareholder status is different from the no-fault dismissal proposal. Individuals will become shareholders of the company at the start of the employment relationship. This is an important benefit conferred by employee shareholder status. Unlike in the case of no-fault dismissal, the employee shareholder status will be agreed between employers and individuals in contractual negotiations. Employers will also be free to offer improved contractual terms such as contractual redundancy payments in an employee shareholder contract.
The noble Lord, Lord Myners, raised the issue of share buyback. He asked whether in effect a company could force an employee shareholder to sell back their shares. A company may require an individual to sell back their shares as a condition of the shares. However, this type of restriction will affect the value of the shares, which the company must assess when granting the shares and attaching restrictions. This comes back to what I said earlier about negotiations needing to take place in advance of the contract being signed by both the employee shareholder and the employer.
The noble Lord, Lord Pannick, raised the issue of independent advice, as did a number of other noble Lords, including my noble friend Lady Brinton. We do not require a person who is moving from employee status to worker status to be given legal advice before becoming a worker. Therefore, it is not clear why we should require legal advice to be given when an individual moves from employee to employee shareholder status—a status that carries far more employment rights than that of the worker. Companies are not required to provide independent financial advice to people who are thinking of becoming employees or workers, and employee shareholder jobs are just like worker and employee jobs.
The Government will provide guidance on gov.uk about the new status in the same way that they provide guidance about employee and worker employment statuses. Using this information will help individuals to determine whether the employee shareholder status is right for them. I say again to my noble friend Lord Forsyth that the situation of individuals taking up employment with employee shareholder status is distinctly different from the often challenging and difficult discussions that can take place, and sometimes need to take place, to determine settlement agreements at the end of an employment.
The noble Lord, Lord Myners, raised the issue of general advice on complex articles of association. Our guidance will make clear to both employers and employees the sorts of issues to consider before making a decision. The guidance, as I mentioned earlier, is in draft form and we continue to welcome views to improve it.
Lord Forsyth of Drumlean
On this point of the valuation of shares, could my noble friend deal with the point that was made by the noble Lord, Lord Bilimoria, about liquidity? It is all very well to reach a theoretical value of shares, but the value is actually in what people are prepared to pay for them. In small private companies where there is no liquidity, how will you deal with that?
Viscount Younger of Leckie
It remains the case that these are discussions that must take place between the employer and the employee. Again, it is not for the Government to prescribe or give advice in this respect. That is a consistent theme that I have taken.
On the same theme of shares, as raised by my noble friend Lord Forsyth, we recognise that there may not be a market for private company shares and therefore it is important that, where appropriate, a buyback clause will be useful to both the employee and the employer. This is an issue that the noble Lord, Lord Myners, raised as well. We introduced in the other place a power to bring forward the regulations that would govern these buyback clauses in the event that employers were behaving unscrupulously. This would prevent employee shareholders being forced to sell back their shares at an unnaturally low price.
The noble Baroness, Lady Turner of Camden, made an assertion, or perhaps it was an accusation, that the Government want to remove employment status. I reiterate what I mentioned both in Committee and on Report, that this is not about removing rights, it is about creating a new employment status that offers a different set of rights and a mandatory share ownership. The status, I say again, is not compulsory for companies to use, and it will only be suitable for those companies that want to share ownership with their workforce. We must remember that employee shareholders will retain the majority of employment rights, including, for example, automatic unfair dismissal rights and the right to be paid the national minimum wage. We have consistently said that the new status will not suit all people or all companies. This is very much a common theme. However, for those who choose to use it, the employee shareholder status offers more flexibility and allows greater risk- and reward-sharing between people and companies.
My noble friend Lady Wheatcroft and others raised the issue of whether the employee shareholder scheme is open to tax avoidance, an issue that I touched on slightly earlier. It is a key aspect of the policy to allow employee shareholders to share in the success of their employers without paying capital gains tax on at least some of their gains. However, to guard against abuse of the tax exemption, there are several rules that limit the number of shares that can be exempt. For example, the rules will prevent repeated consecutive use or multiple simultaneous use of employee shareholder status to get around the limit. In addition, anybody who controls, alone or with other connected persons, 25% or more of the voting power in the company, will not be able to receive exempt shares. We will not allow people such as spouses or children who are connected to individuals who control 25% or more of the company to benefit from the exemption.
We have listened to the concerns and, as was mentioned earlier, we have acted to ensure that jobseeker’s allowance claimants will not be penalised if they decide not to apply for or accept an employee shareholder job. Together with protections for employees, our announcement about jobseeker’s allowance policy means that no claimant or employee can be forced to accept this status. I thank many noble Lords for their support in this particular respect.
The new employment status gives ambitious, talented individuals with entrepreneurial spirit an opportunity to share in the risks and rewards of being part of their employing company. I want to say something important in these closing stages. I have clearly listened this afternoon and I have heard the strength of feeling in the House towards this particular clause. I ask the House to support the Motion to agree with the Commons’ position that Clause 27 be retained. If the House does not support that Motion, I will ensure that the strength of feeling in the House today is conveyed to my ministerial colleagues.
Lord King of Bridgwater
Can the Minister confirm that the Government have not felt able to move towards a clause on the issue of availability of independent advice?
Viscount Younger of Leckie
That is correct. I did not make any movement in that direction. I reiterate again to my noble friend that I am not immune to the strength of feeling in the House this afternoon. I have clearly listened and I will be conveying all comments back to the other place and to my ministerial colleagues.
Lord Pannick
My Lords, I am grateful to the noble Lord for the skill and courtesy with which he has presented the Government’s case. I am also very grateful to him for his frank acknowledgment of the strength of feeling on all sides of the House in relation to Clause 27. Of course he will appreciate that only if this House stands by its previous decision and asks the Commons to think again will the Government and the Commons do so.
Your Lordships can rarely have heard a debate in which so many noble Lords with business experience and political experience on all sides of the House have carefully and eloquently explained why a Government proposal is either wrong in principle, or damaging in practice, or unworkable, or misses its target, or unbalanced, or all of the above. Noble Lords clearly have a variety of reasons for criticising Clause 27. It is striking indeed that no speaker this afternoon apart from the Minister was supportive of Clause 27 in its current form. Even the noble Lord, Lord Flight, who complained of what he described as “negativity”, said that the clause could not work if the shares were worth only £2,000 at the date of issue and accepted that other problems needed to be addressed.
The noble Lord, Lord Deben, asked rhetorically for advice on what the noble Lord should do, given his belief that a positive proposal in this context could be brought forward. It is not for me to advise the noble Lord, Lord Deben, but if I were doing so I would suggest to him and to other noble Lords who may be in the same position that the answer is clearly to reject the half-baked scheme currently before the House in the hope that the Government take this idea back to the drawing board—or perhaps, to use the expression of the noble Lord, Lord Forsyth, on Report, back to the bath in which he suggested that this idea was dreamt up—so that they can reconsider whether in this Bill, or in some future Bill, a more thoughtful and workable scheme could be brought forward.
The concern about Clause 27 is not politically partisan. The noble Lord, Lord King of Bridgwater, and the noble Baroness, Lady Wheatcroft, referred to a measure of embarrassment in their position. They should not be embarrassed. It is to the great credit of their Benches that so many noble Lords have spoken out and voted in favour of deleting Clause 27 or abstained on Report. I of course appreciate that it is not easy to do so, but it is in no one’s interest for this proposal to be enacted in its current form.
The Government and the House of Commons have so far given the most cursory consideration to the concerns expressed on all sides of this House. They should be asked to think again. I wish to test the opinion of the House.
Enterprise and Regulatory Reform Bill
(11 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:23 - Division on Motion A1 - Ayes: 210 / Noes: 180 - Motion A1 agreed.
22:11 - Division on Motion C1 - Ayes: 181 / Noes: 168 - Motion C1 agreed.
23:08 - Division on Motion agreed. - Ayes: 112 / Noes: 170 - Motion D1 disagreed.
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 35 for the following Reason—
Baroness Stowell of Beeston
That this House do not insist on its Amendment 35, to which the Commons have disagreed for their Reason 35A.
Baroness Stowell of Beeston
My Lords, in moving Motion A I will speak also to Motion B. We are now discussing the provisions in the Enterprise and Regulatory Reform Bill, which seek to reform the remit of the Equality and Human Rights Commission. I will turn in a moment to the specifics of the Motion and the amendments before us. First, let me remind the House why we are discussing the EHRC, or what we often more commonly refer to as the commission, Britain’s designated equality body and “A-rated” national human rights institution.
In May last year, we set out our plans to support the commission to become the valued and respected national institution that we all want it to be. Even the commission’s many supporters in this House have acknowledged that the first few years of its existence were anything but trouble free. I am not going to go into the detail of these problems again today, but I do want to be clear that the Government’s motive in making changes was and is to secure a successful future for the commission so it is in the strongest position possible to do its vital work.
We are already making progress. In the past three months alone we have agreed with the commission a new governance framework document and budget, both of which ensure that the commission is able properly to fulfil its important duties and protect its operational independence. The new chair, the noble Baroness, Lady O’Neill, and other members of the new board have now been in post for several months and are building on the work of their predecessors. We believe that the commission is going from strength to strength. Indeed, the working relationship between this Government and the commission is marked by a mutual respect and clear understanding of the distinct roles that each is there to fulfil and how we can work together towards a fairer society. I believe that this will be evident when we come to the next debate on caste discrimination.
Having given that introduction, let me move to the Motions in front of us. In the ERR Bill, the Government originally put forward two legislative changes that we believe will underpin the positive changes which our non-legislative reforms have already helped to bring about. This House rejected the Government’s amendments on Report, but the other place has disagreed.
First, we are asking noble Lords not to insist on their Amendment 35, which would remove from the Bill the repeal of Section 3 of the Equality Act 2006, what is otherwise known as the commission’s general duty. Section 3 imposes a general duty on the commission to perform its functions with a view to “encouraging and supporting the development” of a fairer society and it sets out five ways in which it should do this. As I have made clear during all of our debates, the statement included in that general duty is one we can all support because we all want a fairer and more equal society. However, it is this Government’s view that making this a statutory duty for the Equality and Human Rights Commission, in addition to its specific responsibilities to promote and to protect equality, diversity and human rights, dilutes the clarity of purpose necessary for it to be effective and successful.
The Government are clear that the commission’s core purpose is what I have just said—to promote and protect equality, diversity and human rights. That purpose is underpinned by the detailed duties contained in Sections 8 and 9 of the Equality Act 2006. The repeal of the general duty does nothing to affect the commission’s ability to fulfil these duties. It is our view that its focus on them will enhance its performance.
Baroness Campbell of Surbiton
As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 35”.
Baroness Campbell of Surbiton
My Lords, it is with great sorrow that I find myself here at ping pong, seeking to reinstate Section 3 of the Equality Act 2006. I really do not do this lightly. I know that a challenge to the Government at this stage should be made only when it is absolutely necessary and all other routes have been exhausted. I had hoped that the Government would listen to the many and exceptionally well considered arguments made by all but two noble Lords on Report. I expected something more than a blanket no. That is why, having explained my reasons to the Minister last week, I have retabled the amendments that were overturned in the other place.
We have yet to hear of a single example of how the commission’s capacity to act as the guardian of equality and human rights in Britain will be improved by repealing the general duty in Section 3, a duty which gives a holistic direction to the commission based on principles of dignity, respect and fairness, and takes it to, but not beyond, legal enforcement in helping society change for the better. The Equality and Human Rights Commission itself has said that it now has sufficient focus and, in the absence of robust reasons for removing it, Section 3 should remain.
I ask your Lordships to recall where the duty came from and to consider where its repeal may take us in the future. Twenty years ago today, Stephen Lawrence was murdered by a group of young men for no reason other than the colour of his skin. The Metropolitan Police made a catalogue of errors in the investigation into his murder. Our criminal justice system failed Stephen Lawrence, and it failed his family in their quest for justice. It is a sad truth that it took this tragedy to create a moment of enlightenment. The inquiry, led by Sir William Macpherson, identified that racial discrimination could not be seen as the lone action of a few bad apples. It was part of the institutional culture of the Metropolitan Police.
That insight led to the sea-change in our approach to equality law and the structural support to promote and enforce it. The general duty embodies this shift in thinking. The role of the commission is not simply to seek compensation for those who experience discrimination. As Age UK has noted, it is to pursue cultural change to prevent such discrimination from occurring in the first place. This is not only about racial discrimination. It is about institutional discrimination and violations of human rights in all their guises and across society—for example, in parts of the NHS and our care system, as the EHRC demonstrated in its inquiry into older people’s treatment at home. It is also widespread in the criminal justice system and local authority practice, as the disability hate crime inquiry revealed. It is rife in the exploitation of migrant workers, exposed by the inquiry into the meat processing industry.
Ministers have argued that the general duty is symbolic and aspirational, as if this were enough to dismiss it out of hand. The general duty symbolises our commitment to preventing the kind of injustice faced by the Lawrence family, or the routine abuse of disabled young people in institutions because of indifference and cruelty. It aspires to a society founded on dignity, respect and equality—notoriously absent in these cases. However, contrary to what Ministers claim, the general duty is not, in fact, merely symbolic. Its repeal could have major implications for the commission’s role in monitoring equality and human rights. In the other place last week, the Minister told MPs:
“We are also changing the commission’s monitoring duty to ensure that it reports on its core functions, rather than on the state of society generally”.—[Official Report, Commons, 16/4/13; col. 217.]
At present the commission is required to monitor Britain’s progress towards the aims of the general duty. In so doing it holds up a mirror to society, as it did in its seminal report, How fair is Britain?. As the Minister indicated, if the general duty is repealed, the monitoring duty will be fundamentally changed—it will be limited to holding up a mirror to itself and asking only, “How effective is the commission?”. This is why Amendment 35 relating to Section 3 and Amendment 36 relating to Section 12 of the Equality Act 2006 are inseparable and must be considered as one.
The Minister went on to say that changing the monitoring duty,
“will also enable the EHRC to gain the respect hon. Members want it to have as our equality body and national human rights institution”.—[Official Report, 16/4/13; Commons, col. 217.]
This suggests a dangerous misunderstanding by the Government of the requirements of European Union law and the United Nations standards on the status and mandate of national human rights institutions. The likely effect of these proposals would be to prevent the commission, and therefore the UK, from complying with the requirement for equality and human rights bodies independently to monitor the national situation.
This could have very serious consequences. In the light of the Government’s package of reforms the international accreditation committee for national human rights institutions has announced that it will re-examine the commission’s status next month. I do not need to spell out to my noble friends the impact on the UK’s moral authority abroad if, as a direct consequence of these reforms, the commission were to lose its present A-accredited status. Such a development would no doubt be seized on by countries such as Zimbabwe and Iran. At a time when the UK is seeking a seat on the Human Rights Council that is not a risk we should be taking. I am sure noble Lords would agree that we must practise what we preach and lead by example.
The commission’s role as an agent of change matters to millions of people in this country, whether they are an elderly person in hospital, a woman fleeing a violent partner or a black teenager and his friend waiting for a bus. In a civilised society such as ours people in these vulnerable situations should feel confident that our institutions will accord them dignified and fair treatment as equal citizens. Justice is poorly served if our commitment to equality and human rights extends only to offering compensation after an event. For many, it is simply too late.
Today, of all days, we should remember why we put these measures in place and not be so foolish as to believe that it could never happen again. That is why, for the second time, I feel we must send these urgent messages to the other place that the general duty and the duty to monitor its aims must be taken very seriously and must stay. I beg to move.
Lord Low of Dalston
My Lords, I was sorry not to be here for Report stage of the Bill but I have read the debate carefully. It left no room for doubt as to the strength of support right across your Lordships’ House for retaining Section 3. In addition to the powerful and principled advocacy of the noble Baroness, Lady Campbell, and others, I attach particular importance to the comprehensive demolition of the Government’s case in legal terms by my noble and learned friend Lord Lloyd of Berwick.
Your Lordships will be pleased to hear that I do not propose to go over again all the substantive arguments again, which have been so comprehensively crawled over in Committee and on Report, about the value of duties that cannot be enforced in a court, for example, whether there is a place for the declaratory in legislation, the value of a unifying link between equality and other fundamental human rights—I was rather surprised that the Minister sought to deny that one in her wind-up—the fact that there is nothing in Section 3 that suggests or implies that the commission is to be solely or uniquely responsible for encouraging and supporting the goal of an equal society, the negative message sent by removing the general duty and so on. I think that these arguments have been comprehensively won.
Baroness Thornton
My Lords, I will make some very short remarks because the noble Baroness, Lady Campbell, and the noble Lord, Lord Low, have more than adequately explained why we find ourselves in this rather unfortunate position—I agree with the noble Baroness, Lady Campbell—of asking the Government to look again and asking another place to take this back.
It is important also to say that one thing has changed since we discussed this in Committee and on Report. That is that the EHRC has given this matter some further reflection. I congratulate the noble Baroness, Lady O’Neill, because it is a sign of the maturity of the organisation that it has changed its view on this matter at least a small amount. I will read out a statement that was issued, and that is about the only thing I will say. The statement about the repeal of Section 3 on its website says:
“However, the debate in the Lords and commentary by parties have underlined the importance which is attached to the general duty. Many people clearly believe that, both in terms of the perceived mission and role of the Commission, and the coherence of the legislation, it is valuable to retain the general duty. Unless the government can provide additional robust reasons for removing the general duty in the current situation, our analysis suggests the case for removing the Lords’ amendment in the Commons has not been made. The Commission therefore continues to support retention of the general duty and maintaining the position established by the Lords”.
We know from the previous debates and from listening very carefully to what the Ministers in this place and in the other place have said that there is actually no robust case for the repeal of the general duty. Your Lordships’ House took that view by a majority of over 50 when this was discussed on Report. I put it to your Lordships’ House that the one thing that has changed is in favour of the retention of the general duty, and I hope that the Minister will now weigh this issue in the balance and agree to leave Section 3 in place. Indeed, if the Government wish to review Section 3 or any other part of the equalities legislation then that should be done with prior consultation and the involvement of the Joint Committee on Human Rights. We on these Benches do not believe that that is desirable or necessary, but if it were to be done it should be done in a proper way, not as part of a Bill that addresses regulatory burdens on business and enterprise.
Lord Lloyd of Berwick
My Lords, the Minister has not advanced this evening any of the arguments that she advanced at the beginning of January for repealing Section 3 of the 2006 Act. I will therefore leave those arguments on one side.
Instead I will turn to the arguments advanced by the Minister in the other place. He asserted boldly that Section 3 of the 2006 Act should be repealed because it was not a core purpose of that Act. With great respect, that is exactly what it was. Section 3 was in a sense the core purpose of the 2006 Act, that purpose being to bring together for the first time in legislation equality rights with other fundamental human rights. The specific duties under Sections 8 and 9 were to be the means of bringing about that core purpose. That was the very point made by Professor Sir Bob Hepple in his report. He said that Section 3 is important because it states for the first time what he called the “unifying principle”. It is most unfortunate that the Minister in the other place, when he came to his reply, did not reply to that argument or to any of the arguments advanced in the other place; sound arguments and convincing arguments, they were all, unfortunately, left aside because there was no time to deal with them.
There is a hint, elsewhere in what the Minister said, that Section 3 is undesirable because it would, as it were, take the commission’s eye off the ball to the exclusion of the important duties under Sections 8 and 9. There was never much danger of that. In any event, the commission has now made it clear, if I am right, that it would now welcome the retention of Section 3. If that be so, surely we should leave it at that.
It is not often on these occasions that we should resist the view of the House of Commons at this stage of ping-pong. However, the Government have not given one single solid reason why we should repeal a provision that both Houses were in agreement on as recently as 2006. As I have said, the Minister did not deal with any of these arguments in his reply. We should give him another opportunity of doing so, and another opportunity to the other place to see if they agree with those arguments or not. For that reason, I will vote for the amendment in the name of the noble Baroness, Lady Campbell.
Baroness Hussein-Ece
My Lords, I pay tribute to the work and the steely determination of the noble Baroness, Lady Campbell. She has been inspirational in her continuing support for what she believes to be an important principle and issue. Many of us share her passion and determination.
It is very poignant that today we are again debating the general duty of the Equality and Human Rights Commission and its principle on the 20th anniversary of the terrible racist murder of 18 year-old Stephen Lawrence, and on the day of the memorial service that was held this afternoon in his memory, which I understand was attended by the Prime Minister and others.
Last month at an event to launch a book about the Macpherson inquiry, Doreen Lawrence said that, as a mother, for 20 years she had not been able to grieve and find closure because she had been forced to fight for justice, year after year. There are still individuals out there today who were involved in this murder and who have not been brought to justice. She wrote to the Prime Minister last November asking that he does not row back or seek to water down hard fought equalities legislation that all political parties came together to put on the statute book so recently to protect those who need protecting.
Huge progress has been made over many decades, particularly since, for example, my own family came to the United Kingdom, when racism and discrimination was rife. However, there is still much to do to ensure that our society becomes more equal, and that we maintain and build on such positive work, particularly since the Macpherson inquiry and its findings. It is irrefutable that more than a decade later, the Macpherson inquiry can rightly claim to have led to an overhaul of Britain's race relations legislation which created much stronger anti-discrimination powers that can be found anywhere in western Europe. Attitudes towards racism and policing have now changed as a result. However, there are still very many people and communities who need to be protected and encouraged to achieve their potential and not be limited by prejudice or discrimination. We need the commission to have the tools, the ability and the duty to monitor the progress in our society.
Lord Cormack
My Lords, whether it is a runner wearing a black ribbon in a marathon or a coffin draped in the Union flag, there is a real and proper place for symbolism. If this is all that we are debating, why on earth are we removing this particular symbol? In our last debate at Report, I abstained, feeling slightly guilty, I have to admit. One reason I abstained was that the commission had not come out with a clear, unequivocal statement such as has been quoted by the noble Baroness from the opposition Front Bench this evening. If the commission believes that having this symbolic duty does not retard its work or its progress, and if it believes that it is a declaration—and there is room for the declaratory as well as the symbolic—and that this is helpful to its work, with all the respect that I have for the noble Baroness, Lady O’Neill, and all the belief that I have in her capacity and competence, I can think only that she and her colleagues can be helped.
I wish we had no need for such a commission; I am sure we all wish that. It is one body that we would like to see work itself out of a job. Unfortunately, society as it is means that there is a need. If there is a need, there is a need to define. If there is a need to define, there is a need to say, in broad and simple terms, what the commission should be for and what it should be doing.
I admire greatly the noble Baroness, Lady Campbell. We know it is not easy for her to address this House. She does so with courage and most articulately. The case that she made this evening and that was so ably backed by the noble Lord, Lord Low of Dalston—we are pleased to see him back from his recent operation—was frankly an unanswerable case. I have to say to my noble friend who will respond to this debate: why? What is the point? What is the purpose? There are occasions when a Government have to fight for something that may be unpopular. I have gone into the Lobbies supporting Governments fighting for things that have been unpopular for over 40 years. Nevertheless, this is asked for by those bodies with which the commission has regular dealings. It is not going to add to the sum from the public purse. It is not going to obstruct the commission in the specific duties which it has to follow. So what is the point and what is the purpose of doing this?
In following up a point made by the noble Lord, Lord Low of Dalston, I have also to say that the other place, of which I was proud to be a Member for 40 years, has not exactly examined this matter with critical care and scrutiny. It has given it a quick turnover and sent it back. Well, at the end of the day, the view of the Commons, as the elected House, prevails; that is my constitutional view. However, I think we have to say to it again, “Look, you have got this wrong. Including this section is not going to impede the Government in their work. It is not going to do any damage to your economic strategy. It is not going to do any damage to your social strategy. What it is going to do is to give the commission what it believes to be helpful and necessary on what those bodies which deal with the commission believe the commission should have”.
I did abstain last time; I shall not abstain tonight. I hope that we can send a clear signal to the other place that it should back down, come off it and do something sensible.
Baroness Stowell of Beeston
My Lords, I am grateful for all contributions to this debate, and I mean that quite sincerely. As I respond, I am very conscious of the strength of opinion that has been expressed in your Lordships’ House this evening.
I will start by responding to a point raised by the noble Baroness, Lady Campbell of Surbiton, in response to my remark about us all wanting the commission to be as effective as it can be so that it is respected by everyone. I want to clarify what I mean by that because I think there are two separate issues here. One concerns the ICC’s status, or the commission’s A status being conferred on it by the ICC, and any suggestion that that is at risk. I reassure the House that the Government have had ongoing discussions with the ICC. I know that the chairman of the commission—the noble Baroness, Lady O’Neill—is continuing her dialogue with the ICC. The non-legislative changes that we have made around the budget and the framework document all strengthen the situation with regard to its status. I do not think that that is at risk. In talking about respect, I was trying to get at a slightly different point in that I want the Equality and Human Rights Commission to be respected not just by those of us who automatically take very seriously equality and human rights but also by those who do not. In order for us to create the kind of society that we are talking about in this context, we need the commission to be supported by everyone.
That takes me to another point that the noble Baroness, Lady Campbell, raised, and was echoed by my noble friend Lady Hussein-Ece, on the origins of Section 3 and the general duty. Today marks 20 years since the tragic murder of Stephen Lawrence. I cannot express to the House how much respect I have for Doreen Lawrence, who had to suffer the murder of her son for progress to be made in this country on some equality issues. That is beyond words. I pay tribute to everything that she has achieved and wish that she had not had to suffer in the way that she did in order to achieve what she has. However, I say with the greatest respect to the noble Baroness, Lady Campbell, and others who referred to the death of Stephen Lawrence in the context of the general duty, that that tragedy resulted in the introduction of the public sector equality duties in the Equality Act 2010. That terrible event did not result specifically in Section 3 and it is important to be clear on that point.
The noble Baroness, Lady Campbell, referred to reporting and monitoring. It is clear that the general duty then becomes a practical issue because the Act states that the commission is required to monitor that general duty and report on it. The noble Baroness suggested that by changing the monitoring requirements the commission would no longer be able to hold up a mirror to society and would be able only to hold up a mirror to itself in terms of what was happening when it produced its reports. I absolutely disagree with that. In my opening remarks, I made it clear that the new monitoring requirements would allow the commission to continue to hold up a mirror to society. It is our view that the new monitoring requirements will lead to a much more focused report, which we hope will have greater value for Parliament and other bodies that may want to refer to it.
The noble Lord, Lord Low, asked whether, in the absence of Section 3, the commission might be more open to judicial review as regards its work under Sections 8 and 9. The commission has never raised this concern in its briefings on the duty. We have no reason to think that the detailed and clear duties in Sections 8 and 9 would be made any more vulnerable by the removal of the general duty.
The noble and learned Lord, Lord Lloyd of Berwick, mentioned the advice given by Sir Bob Hepple and the Government’s response to his view. I say two things to the noble and learned Lord. First, at earlier stages of the Bill, we heard from the noble Lord, Lord Lester, a contrary view to that expressed by Sir Bob Hepple about the role of Section 3. Further, in our view, there is no indication that Section 3 has any interpretative value in relation to any other legislation, including the Equality Act 2010 and the Human Rights Act 1998.
The noble Baroness, Lady Thornton, and others pointed to the commission’s recent briefing and its statement that it supports maintaining the position established by the Lords for retaining its general duty. In response, I acknowledge that that is what the commission has said publicly and I understand and respect that view. However, in the same briefing paper it has also made it clear that removing the general duty would not affect the commission’s ability to do its work. On those matters, it is worth making it clear again that by removing the general duty we are not preventing the commission doing any of its very important and good work. It will not lose any of its vital powers of promoting equality, tackling discrimination and promoting human rights. As I have already said, when it comes to monitoring, producing quinquennial reviews in future should lead to it providing something more analytical and of greater value to those who want to use it as reference.
As I said when I first stood up, I am very aware of the strength of views expressed around this House. This is an issue where the noble Baroness, Lady Campbell, supported by all those who spoke tonight, feels differently from the Government. I have tried to set out again why the Government feel that this change will lead to a stronger Equality and Human Rights Commission, which is what we really want. When we come on to the next discussion about caste discrimination I will be able to reflect how important the role of the Equality and Human Rights Commission is. I ask your Lordships to agree with the Commons in their disagreement of the Lords amendment and the noble Baroness to withdraw her Motion
Baroness Campbell of Surbiton
My Lords, I would like to thank the Minister for her reply and to thank noble Lords who have contributed to this debate, the last debate, the one before it and the one before that. I have never worked so hard to protect a piece of legislation which the majority of people want and about which so many noble Lords from all sides of the House have spoken in favour. I find it quite incredible that something so symbolic and so important to the proper functioning of the Equality and Human Rights Commission has been such hard work.
I do understand that there has been improved mutual respect between the Government and the commission and the quality of the work has been enhanced. That is to be celebrated, but I still believe it is critical to retain the general duty and the monitoring duty for all the reasons that we have given in these debates since last year. I would like to thank the noble Lord, Lord Low, and the noble and learned Lord, Lord Lloyd, for helping me tonight to expand the arguments for the general duty. It would be wrong to rehearse them again now: we have exhausted them. I was particularly pleased to hear the noble Lord, Lord Cormack, express his passion and his very clear understanding of why the general duty is necessary to the work of the Equality and Human Rights Commission and also to the messages that we send out to the Lawrence family, to disabled people who are undergoing considerable difficulties in situations where, without a culture change, they will continue to be abused in institutions, and to others that we have mentioned throughout these debates. For them, I ask your Lordships to agree with my amendment tonight and to send it back to the Commons saying, “Please consider these arguments”, because they were only looked at in a very cursory way during the Commons debate. In fact, I believe the debate suffered a guillotine in the winding-up speech only three minutes after the Minister stood up. I ask the House to send this amendment back so that a proper debate can be had and the arguments examined properly. I ask your Lordships to agree to this Motion. I wish to test the opinion of the House.
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 36 for the following Reason—
Baroness Stowell of Beeston
That this House do not insist on its Amendment 36, to which the Commons have disagreed for their Reason 36A.
Motion B1
Baroness Campbell of Surbiton
As an amendment to Motion B, leave out from “House” to end and insert “do insist on its Amendment 36”.
“Equality Act 2010: caste discrimination
(1) The Equality Act 2010 is amended as follows.
(2) After section 9(1)(c) (race) insert—
“(d) caste;”.”
37A: Because it is inappropriate to provide for caste to be an aspect of race for the purposes of the Equality Act 2010 without further consultation.
Baroness Stowell of Beeston
That this House do not insist on its Amendment 37, to which the Commons have disagreed for their Reason 37A.
Baroness Stowell of Beeston
My Lords, we come now to the issue of caste and whether it should be made an aspect of race and thus a protected characteristic under equality law.
The whole House agrees that prejudice and discrimination based on caste is wrong. It is unfair and unacceptable in a modern society and is certainly unacceptable in Britain. There is no place for it and we need to take the right action to ensure that there is no place for it. It was your Lordships’ view when we last debated this that caste should be directly and immediately included in the Equality Act as an aspect of race. The other place has taken a different view and said we should not legislate at all without further consultation. There has, as yet, never been a full public consultation on this issue.
I will be absolutely clear. The Government have listened to what your Lordships’ House has said. We acknowledge the widespread support among noble Lords for legislation and the strength of opinion that has already been expressed. Today, I will explain the additional steps the Government are taking in response to the strength of that opinion. Since we last debated this matter, significant concerns have also been expressed about the implications of legislation. These concerns have not come only from those we would expect to be against legislation. Her Majesty’s Opposition also raised legitimate and serious questions during the debate in the other place. As I said during our earlier debates, this Government are not against legislation as a way of tackling caste discrimination. However, we do not have all the information that we believe is necessary to decide that the power in the Equality Act 2010 should be exercised. We think a responsible Government should consider all relevant issues and the implications of legislation before going down that route.
During our previous debate, my noble and learned friend Lord Mackay of Clashfern suggested that having the provision for caste in the Equality Act had given the courts reason, which they might not otherwise have had, to doubt whether the existing legislation protects people against caste discrimination. This helps to illustrate a very important point. We must ensure that whatever we do next does not create new, unintended consequences which could make it harder for people to seek redress. However, at the same time, we must of course be conscious of the need to bring what we do next to a conclusion as quickly as possible.
If we are able, shortly, to reassure ourselves on these points and decide, after consultation, to exercise the power that already exists in the Equality Act, then an advantage of this power is that we can do so via secondary legislation. In other words, I want to reassure your Lordships that there need not be a requirement for new primary legislation and therefore any unnecessary delay. I should note, however, that the amendment brought before the House today would not permit any meaningful public consultation or allow any flexibility through secondary legislation in the way that the Opposition, among others, have been arguing. Caste would simply join colour, nationality and ethnic origin as an aspect of race in the Act, and that would be that.
In a moment I will explain what additional information and steps we think are necessary before the Government will decide, and what the timescale is for that decision. First, I shall summarise some of the concerns that have been raised. First, there are concerns about whether we are actually legislating on the right ground. Some organisations have suggested that descent is more appropriate than caste, and this is an issue that the Opposition have also raised in debates in the other place. I am aware that there are differing and strong views on the question of descent, which we cannot go into today. However, the fact that there is genuine uncertainty over the definition of what we are legislating about clearly suggests that we should not be adding further to the law before carrying out the sort of consultative process proposed by both the Government and the Opposition, although I acknowledge that the Opposition have a different proposal in terms of consultation.
There are also concerns about individuals having to indicate their caste in any monitoring. The NIESR report is clear that some people would not want to do this or indeed admit to caste existing at all. We all have to consider what business would need to do to comply sensibly with such a provision and, if so, what costs this would entail. Would there need to be a code of practice, and if so, would it be reliable in such sensitive matters? To take one important stakeholder in this area, the CBI has stated that,
“on this terribly complex issue time must be taken in order to craft the right intervention, rather than rushing the process in order to comply with the timetable of the ERR Bill”.
At the moment, I believe it is not clear that we have all the information that we need on these and other questions. A significant number of Hindu and Sikh organisations, including some representing people from the perceived lower castes, have expressed concerns that they have not had a chance to provide considered views and would be strongly opposed to immediate legislation on this. For example, the GAKM UK which represents the Mochi community, which is deemed one of the lower castes, believes that by enacting the clause in law, the Government could undo all the work done by our communities over the past 20 years to try to remove the differentiation by caste in all aspects of life.
I am, of course, aware that some noble Lords may say that this is the sort of argument that could have been used to delay the advent of race or indeed of any other discrimination law. However, there is a fundamental difference with caste in that not only do we wish to get rid of caste prejudice from British society, we actually see no useful value in caste itself, or of anyone defining themselves by their caste. In that sense it is not like colour or ethnic origin, or any of the other protected characteristics. We need to ensure that the action we take, particularly if in legislation, sets us towards this aim and not in the opposite direction of embedding caste as a concept in domestic law.
As your Lordships will be aware, on 1 March this year, the Government announced a programme of educational work within the affected communities. At that time we also said that the Equality and Human Rights Commission will investigate the right way of tackling the problem of caste prejudice and discrimination, using the evidence in the NIESR report and earlier material from ACDA and other groups as its starting point. In last week’s debate in the other House, the Minister for Women and Equality announced that in parallel with this work a public consultation will be undertaken on the use of the caste power in the Equality Act. As I have already stated, a full, balanced public discussion is something that has not previously happened, and we think it is crucial that it now does so.
Lord Avebury
My Lords, I, too, welcome the forthright statement by the Minister that caste discrimination is unacceptable, unfair and must be eliminated. However, I disagree with the diagnosis that she offered, which involves a delay at least until the end of the year before anything positive is done. I think that your Lordships will agree with the noble and right reverend Lord, Lord Harries of Pentregarth, that, having spent three years since the Equality Act waiting for the Government to declare their intentions on Section 9(5)(a), which they could have invoked at any time during that period, it is now time for your Lordships to make a decision on how we deal with this matter in law.
The basis of the argument about this proposal has shifted radically since your Lordships agreed to give the Government the power to extend by order the protected characteristic of race to include caste. At that time, the Government were not satisfied that discrimination on the grounds of caste existed in employment, education or the delivery of services. Now, three years later, from the Prime Minister downwards the Government accept that people in the United Kingdom do suffer discrimination on the grounds of caste, and that action needs to be taken against it.
They believe, however, that, unlike with discrimination on the grounds of any of the protected characteristics that are already dealt with in the Equality Act—age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation—caste is unique in being susceptible to treatment merely by education and conciliation. This is clearly a vain hope, as we see from the history of racial discrimination. The noble and right reverend Lord, Lord Harries, mentioned the repeated efforts of Fenner Brockway in the 1950s and 1960s, which, as I remember very well, fell on stony ground. Before the 1976 Act, introduced by my late friend Lord Jenkins of Hillhead, provided legal remedies for victims of racial discrimination in employment, education and the delivery of services, the Race Relations Board provided education and conciliation but those remedies were ineffective.
The Government say that there is no consensus for this amendment. I remember that the Conservative Opposition in the Commons, led by Mr Quintin Hogg as he then was, were against the 1968 Race Relations Bill on the grounds that it was unfair to private employers. As your Lordships know, many employers today would like to be able to discriminate on grounds of sexual orientation. There is no consensus there, but it did not stop us from legislating.
There is a consensus in favour of legislation among all the organisations in this country that represent the Dalits and other groups that are on the receiving end of caste discrimination, as we saw from the BBC “Newsnight” programme last week. Those bodies that have expressed concern draw their members from the higher castes. I challenge the Minister to produce a single Dalit who belongs to any of them.
Lord Parekh
My Lords, I oppose the amendment not because I disagree with its principle or disapprove of it, but because I believe that it is trying to go about achieving it in the wrong way.
The basic premise is that there is still a small amount of the practice of untouchability in Indian society in Britain and that it must be countered. I agree entirely. However, by using caste as a general category, you are going to catch too much at one end and too little at the other. The fact that there is untouchability is not only corroborated by some of the reports that have recently come out, but I myself discovered it in 1986 when I was deputy chair of the Commission for Racial Equality. I received a letter, sent from Birmingham, written by an Indian gentleman who said that his doctor had refused to examine him physically when he came to his home because he was an untouchable. In those days we used to have domiciliary visits, which sadly have stopped now. We wrote to the doctor and it turned out to be true. The doctor was reprimanded and I would like to hope that the practice had stopped. Of course, it does not stop just like that but a warning had gone out to the medical fraternity. This was in 1985 or 1986, and even after that there have been many cases of untouchability and therefore discrimination does occur. It needs to stop.
However, untouchability is only the egregious, extreme form of the caste system, because the system covers everybody. Although caste does not mean anything to me personally, you cannot be a Hindu without belonging to a particular caste, full stop. Talking about abolishing the caste system is extremely problematic because it could mean getting rid of the category, getting rid of the hierarchy among the categories or getting rid of the principle of heredity which determines the caste. Where do you start? I suggest that caste as a category of discrimination is therefore not in the same league as race, religion or any of the other protected categories. If we were to introduce this, there would be four major difficulties and I want to alert the House to them.
First, there will be frivolous complaints based on caste. I do not know how many of your Lordships are students of sociology or have Indian friends. However, let us say that I belong to a caste—whatever that may mean, since I have married outside my caste and my children have married outside their caste, race and religion. Nevertheless, technically I was born in the caste of goldsmiths because my father used to make gold and silver ornaments, so I am a goldsmith. Supposing that someone were to apply for a job in the university where I am a professor who happens to be a blacksmith, a shoe smith, a Brahmin or God knows what, and I do not appoint him because he is not terribly good. Supposing that he were go to the court and say, because I would be doing this not as a Lord but as a Professor, “Professor Parekh refused to appoint me on the grounds that I belong to a different caste”. We would belong to different castes, although he is not an untouchable. Since every Indian who is Hindu carries the caste mark with him, every action that he does with respect to another can be subsumed under one or another form of caste discrimination, so the first difficulty is that you will have an enormous range of frivolous complaints with no way of arguing for or against.
Secondly, once you take away the untouchability bit, there is no evidence of any kind to show that caste discrimination takes place. With respect to the untouchables, they do not have horns or carry any distinct mark of being untouchables. Sometimes, their surnames are a giveaway if you know Indian society but a large number of them—I have worked with them and I greatly admire them—have changed their surname so that it is not a giveaway. When somebody applies for a job, how would you therefore recognise that he is an ex-untouchable? That would be the second problem.
The third difficulty that one would have is that, as the Minister rightly said, we will be introducing the category of caste in our domestic legislation and once you do that, problems begin to arise. How do you define caste? Sociologists have tried for 200 years, ever since the Portuguese invented the word caste. It is not an English but a Portuguese word; when they came to India, they found that we were classified in a certain way and called it caste. In India, caste is very much in flux thanks to globalisation, urbanisation and so on, and in Britain it is even more so. Castes are therefore difficult not only to define but to distinguish. Once one introduces this kind of indeterminate, inherently nebulous category in law, one invites difficulties. One could easily pave the way so that in 10, 15 or 20 years’ time there might even be a pressure of the exact kind we have now, where people might be saying, “Let’s have a question on caste in the census”.
If my grandchild were to ask me today or 10 years from now, “Grandpa, what caste do I belong to?”, I would not know what to say. A category as indeterminate as that does not deserve to be enshrined in domestic legislation. For these and other reasons I would be opposed to the amendment, while making it absolutely clear—so that I am understood outside this House—that untouchability exists. It is an abominable practice; people are sometimes discriminated against and the noble and right reverend Lord, Lord Harries, at a meeting he organised, produced people who were able to give evidence.
Take for instance a bus driver who happens to be a Brahmin or whatever, and there is a person who works on the buses who he would not want to team up with because the guy is supposed to have a surname that indicates he may be an untouchable. It exists in small pockets in those places where people are recognisable. It is not a pervasive phenomenon, but even if it is not pervasive, it is still not acceptable. The point is that it is only one extreme form of caste. By introducing caste as a general category in this way one is trying to catch too much and will end up catching too little.
Lord Singh of Wimbledon
My Lords, I speak in favour of this amendment. I am particularly concerned about the level of misinformation and ignorance used in the other place to argue against legislation. The Minister in the other place made a statement, which was repeated today, that caste is a problem in the Sikh community as well as among Hindus. It is not only inaccurate, but frankly insulting to the Sikh faith. Guru Nanak, the founder of Sikhism, totally condemned the whole system of caste. Opposition to discrimination based on caste, birth, gender, race or religion or social status is an essential pillar of Sikh teachings. Sikhism emphasised equality of respect and opportunity for all members of our one human family centuries before these concepts were accepted in the West.
The Sikh gurus repeatedly taught the absurdity of caste, in which the shadow of a person of lower caste was said to pollute the food of a higher caste. Guru Nanak urged them to forsake all notions of caste and ritual purity and look to the inner worth of individuals. That tireless campaigner for human rights, the noble Lord, Lord Avebury, from whom we have just heard, commenting on the egalitarian teachings of Sikhism at the time of my maiden speech, rightly emphasised Sikh opposition to caste, quoting Guru Nanak’s observation that in his mother’s womb no man knows of caste. Let us get it right. The concept of caste is a hierarchical division of Hindu society into the Brahmins, the top or priestly caste, with Khatris or warriors below, followed by those in commerce and then at the bottom Sudras, cleaners or scavengers. Caste has two essential components: a hierarchy of importance and a notion of ritual purity. Both are rejected in Sikh teachings. When a person converts to Sikhism he or she is required to renounce any former allegiance to caste. By definition one cannot be a Sikh and have a caste.
Guru Nanak warned us about the negative cultural practices that over the years attach themselves to our different religions and distort underlying ethical teachings. It is true for all faiths and it is certainly applies to caste which has little to do with the ethical imperatives of Hinduism. As far back as the 1930s many leading Hindus condemned the iniquity of caste. While Gandhi felt education was the answer, Dr Ambedkar felt education was not enough and legislative action was also necessary. Later, as author of the Indian constitution, Dr Ambedkar successfully included prohibiting discrimination on grounds of caste.
Coming back to this country, we too find ourselves in a debate over combating the evil of caste by education or by legislation. In this debate we have had some widely improbable figures on the number of Dalits in the UK. No such playing with figures is necessary. Whatever the numbers, that which is evil remains evil and Dalits are fully entitled to protection against discrimination, whatever their number.
Many—most—Hindus reject caste discrimination, but without firm action its negative influence could continue for years. It has no place in our more enlightened 21st century, and those who suffer its worse effects should, like those who suffer racial discrimination, be protected by law. Here it is necessary to add that, contrary to misinformation being circulated, legislation will not require people to associate themselves with a particular caste, just as protection against religious discrimination does not require anyone to affiliate themselves to a particular religion.
In conclusion, I should like to emphasise my comment made when we previously discussed this issue. I firmly believe that without the debilitating influence of caste the uplifting ethical teachings of Hinduism will be much more to the fore. It is for these reasons that I support the retention of our amendment.
Lord Deben
My Lords, first, I am sure that the whole House has very much been touched by the words of the noble Lord, Lord Singh, which have clearly put this issue into a proper context.
I say to the noble Lord, Lord Parekh, something which I hope he will not find difficult. I am old enough to have been through all the discussions about discrimination against homosexuals and against people on the grounds of class, race and gender. I fear that the four reasons that the noble Lord presents are always presented in these cases. That does not take away from his own belief in it, but that is what people always say. They say that there are not very many. They say that it is very difficult to draw the distinctions. They say that the matter is being healed anyway because there is a great movement to ensure that it does not happen. They say that people will become more discriminatory if the law intervenes. That is what they always say. It may be more true about caste than about other things. I merely say that those are the same arguments, and I find it difficult to take those arguments in this case when I did not take them in all the other cases.
Secondly, the Government have rightly said, and I am proud that they have done so, that discrimination on the grounds of caste is unacceptable in any circumstance. We do now at least start this discussion from the same basis. That is not how it has been in the past, because there have been arguments that caste is somehow different, and that you should not say this because there are cultural and religious reasons why you may not make that statement. I think that we are now as one on that. I thank my noble friend Lady Stowell for speaking so clearly about that.
The Government have, however, put forward two arguments in the discussions that seem mutually contradictory. On the one hand, they have said that their legal advice is that the present law clearly covers caste. They have then gone on to say that they do not want to include caste because it would be expensive to employers. You cannot have it both ways. If the present law covers caste, that is a cost to employers anyway. If putting “caste” in merely clarifies matters, you do not increase the cost at all. You can increase the cost only if by adding “caste” you have a different category that was otherwise not covered.
I hope we will accept that the cost argument cannot be true or the Government’s whole case falls down. I really hope we will hear no more about the cost argument. If we do, we should not be saying that people cannot be discriminated against unfairly, wrongly and wickedly but that because it is expensive to deal with it we are not going to deal with it. I am sorry, but that is not the politics I entered into and I am not prepared to take that. Let us just get rid of the idea that, somehow or other, we can argue this case on the basis of finance. That is a totally different issue and nothing to do with the moral issue with which we are concerned this evening.
I turn now to the point raised by my noble and learned friend Lord Mackay. He will no doubt make the point himself, but it fits into my argument at this point so I hope he will not mind me referring to it. He said he believed that the legal advice that caste was already included in the law was right but that because the previous Government—and this is no criticism of them—had put into the law a triggerable mechanism that could say that caste specifically was referred to, the courts might find it suggested that caste was not covered by the present legislation. The Government therefore have a real responsibility to ensure that their opposition to caste is not befuddled or mixed up because of an odd circumstance that was meant to be helpful but that has this downside in the legal judgment.
That leads to this House accepting that we are now on all fours. We now all say that caste is unacceptable and that people who are discriminated against on grounds of their caste should have a legal remedy. We are also, I hope, saying that the reason for a legal remedy is not just to help the individuals concerned but to lay down a quality of our society that says that this is not acceptable. It is after all a quality of Indian society that it is not acceptable. It is a quality of Nepalese society that it is not acceptable, and the Bangladeshis are presently seeking to have exactly the same quality. The idea that passing this law would in some way be insulting to Hindus seems to me to be absolutely outwith sense, and we have to make that absolutely clear. All we are saying is that we would do in this country what other countries have already done. It has not been seen as an insult to religion there, so that is not a reasonable argument.
We have to distinguish, in what the Government have placed before us this evening, between our common view that this has to be done and the precise view as to how. The issue before us is therefore not whether it is reasonable to take action but the best way to do it. The noble and right reverend Lord, Lord Harries, made a powerful argument to say that we should take this decision now, that we have been arguing about it for too long and that if we take this decision now we can subsequently sort out the problems that may arise around it.
The Government say, “We accept that caste is totally unacceptable, but we have a problem because we think it is reasonable that some people who manifestly have something to say about this do not feel that they have had a proper time for consultation”. They also say that they are not sure that they are clear on a number of points. I disagree with the Government on both these issues, because first of all there has been as much consultation as was necessary. It is also quite clear how you deal with caste. That happens to be my view. However, this House has to take seriously the Government’s role in this. This is a very difficult thing for me to say because I have been thinking and fighting about it for some time. I try to think back to the time when I was a Minister.
The Government have to think about something that the noble Baroness has not mentioned: that you do not start a new policy—because making this a legal matter is a new policy, even though we have been talking about it for so long—in the best possible way if a significant number of people, with some justification, feel that they have not been properly consulted. I say to my noble friend that I am pretty suspicious of some of the people who asked for consultation, because they do not seem to me to be overwhelmingly representative. They seem to be pretty clearly directed by those whose own interests are not those of the Dalits, so one has to be very careful about this.
On the other hand, I believe that in a democracy we ought to make sure that everybody feels that their voice has been properly heard. Therefore the noble and right reverend Lord, Lord Harries, says, “That’s all very well; we can sort that out afterwards. We ought to pass the law now”. I would have agreed with him if I had not understood what I now understand: that you need only secondary legislation of an affirmative nature. It is not very difficult to pass such legislation.
I now have to say something pretty tough to the Government. My noble friend Lady Stowell has been absolutely exemplary in these discussions. I know of no one who has gone to such trouble to try to sort this through, and I do not say that in the usual House of Lords manner to be polite to everybody. I am not like that. I want to be polite to her because I believe it and I want to say that. However, I have to say something very tough to her, which is this. She is asking us to believe that the Government will go through consultation, that the noble Baroness, Lady O’Neill, and her team will investigate this, and that if they have a clear recommendation we have to believe and have faith in the Government that they will then legislate in this way. She cannot tell me that they will certainly do that, because that would be to put governmental power into commission, and I rather agree with her that you cannot do that in advance. I wish I could not agree, but having been a Minister I have to admit that.
If we accept the Government’s statement here—and we come to a time just after the end of this year and the Government have been presented, before the end of the year, with a clear indication from the equalities commission that legislation is necessary—I hope the Government will understand that we will never trust them again if they do not then legislate. I do not think the Minister is giving us weasel words, but let us just realise that this is not the moment to pass something through to get it out of the system and then come back and say “Well, we didn’t really mean that”.
Baroness Thornton
My Lords, do I sense that the House would like to move on? I think that is probably the right thing to do.
Baroness Flather
I would like to speak, and the noble Lord, Lord Dholakia, wants to speak. We have been waiting for our chance.
Lord Dholakia
My Lords, I indicated that earlier, but I gave way to the noble Lord, Lord Deben, because I thought he made a very important contribution.
I am delighted to contribute on this amendment and I support the point of view that has been expressed by the noble Lord, Lord Parekh. I served on the former Commission for Racial Equality and its predecessor bodies from its inception in 1965 until 1994, a period of nearly 30 years. Almost all Race Relations Acts made provision for the Commission for Racial Equality, the Community Relations Commission and all those bodies to review the legislation and, if it was inappropriate or lacking, to make recommendations so that the Government had the opportunity to amend it. As we saw in the Race Relations (Amendment) Act, this exercise was carried out by the previous Government.
I owe a special debt of gratitude to my noble friend Lord Avebury. He was elected in Orpington in the same year that I was elected to a county council in Sussex. He has been my mentor all these years, but sometimes friends disagree. My experience is based, like that of many people I meet on a regular basis, on the impact of one’s culture and faith, which to an extent shapes lives both here and abroad.
The first point I wish to make is that, like the noble Lord, Lord Parekh, and almost every one who has spoken, I abhor racial discrimination on any ground of treating people differently. Colleagues in your Lordships’ House will remember that I have in the past 15 to 16 years succeeded in moving amendments to secure equality in a number of legislative measures. Over the past two years, I have chaired a substantial number of consultations with communities and individuals on matters of caste discrimination. Let me make their point of view clear in case there is any doubt: they fully appreciate the need for equality legislation. Indeed, ethnic communities would not have a voice without such legislation. They are adamant that they would not want to deny any disadvantaged group the right to have recourse against discrimination on any grounds. Almost every one of them has made that position very clear.
Caste plays the least significant part in the lives of third and fourth generation youngsters from ethnic communities growing up in this country. We have moved away from the old days and old values of compartmentalising communities based on caste. A generation has grown up seeing no obstacle to crossing the caste divide.
The second point I wish to make is that race relations in this country have always been based on sound research. The work of the former organisation that some may remember, which campaigned against racial discrimination and was headed in its early days by the famous Lord Pitt who sat in the House of Lords, produced evidence which resulted in the first Race Relations Act outlawing discrimination in public places. The substantial evidence produced by the Street report in 1967 identified discrimination in employment, housing and general services and resulted in the introduction of the Race Relations Act 1968. Similar evidence on institutional racism resulted in the introduction of the 1976 race relations legislation. However, in essence, there is a lack of evidence on caste matters. The report produced by the national institute clearly acknowledges that there is no evidence to suggest the existence of large-scale discrimination in this country based on caste.
Communities feel let down that during the passage of the Equality Bill through Parliament, having acknowledged that the available evidence did not indicate that caste discrimination was a significant problem in Britain in the areas covered by discrimination legislation, Parliament proceeded to accept an amendment to the Equality Bill to include caste as an aspect of race by a ministerial decision. By doing so, the Act which was supposedly designed to simplify and streamline discrimination law in Britain seems to have defeated this very objective by including the concept of caste that has eluded clear definition in common parlance, let alone in legal terms—the point made by the noble Lord, Lord Parekh.
However, it would be a big mistake to extend the scope of the act to include caste in Britain without substantial evidence. Laws should be based on sound evidential research. The research by NIESR clearly acknowledges that there is no large-scale caste discrimination in Britain. The sample was far too small to reach a fair conclusion. Therefore, to yield to pressure groups and include caste within the scope of the Act will only rekindle the dying issue of caste.
I fear that we are still studying something that may be on the surface. A generation of people born here have broken the links with caste patterns and they find themselves engulfed in a practice that was prevalent in the early history of the subcontinent. I accept that there may be discriminatory practices—rightly described by the noble Lord, Lord Parekh—where caste may have played some role but there are ways of dealing with this subject. I had discussions with my colleague, Lynne Featherstone, when she was looking at the issue as government Equality Minister and I explained that there are other ways we can tackle this matter in the short term. I welcome the statement issued by Helen Grant, Minister for Women and Equalities in the other place, that education is the right step to take in this matter. I also welcome the contribution on this issue of the EHRC and the Government’s equality officers in examining the nature of caste prejudice and harassment as evidenced by existing studies. This will indicate if the matter should be addressed in future years either by legislation or by another solution. I am happy to assist those who have participated in consultation to set up their own formal structure which could be the basis for eradicating discrimination practices. A conciliation process must be at the forefront of such a strategy. The community can and must provide that. Since the EHRC is now involved, it is right that we reject the amendment until we are better informed.
Baroness Flather
My Lords, I seem to be the last speaker and I will take this opportunity to say what has been in my mind. It is very interesting that we have two Hindus speaking today against this amendment. On the previous occasion one of them was here but did not speak up, yet that was the time to make his points about why we should not have voted in favour of a caste discrimination amendment.
I have found that all Governments in this country have a great belief in so-called “community leaders”. Ever since immigrants first came to this country they have created this myth of community leaders: community leaders know everything about the community; they will tell us what the community wants; they are the important ones. They are not the ones to speak for all communities: they are the ones who shout the loudest. It has always been a big mistake to listen to people who say, “We are the community leaders”. Have you ever seen a woman as a community leader? Have you ever seen any women in any consultation? Have you seen any women among all these men who have been shouting outside the House of Lords about the caste amendment? The Hindus have come together for the first time ever, to my knowledge, to shout about the caste amendment because they feel that this dishonours them in some way. They dishonour themselves: caste is a fact. It is not created by us or in the minds of the British or other people; it is a fact that people discriminate on the basis of caste. It is endemic in social issues like marriage. As far as public things like employment and education are concerned, we have to watch out: we have to say, “No discrimination on the basis of caste”. It is no good our saying, “Leave it for next time”; that happens all the time. There will be more consultation and more evidence, but there is already plenty of evidence of discrimination. As someone has said, if there are six people being discriminated against, we should do something about it. We do not know how many people are discriminated against.
We have been told about the untouchables. Caste is not about untouchability but about someone of a particular caste not being accepted by a person of a higher or different caste. It is about not giving them the same treatment as you give to people of your own caste. In my parents’ house, we were from the merchant caste and had to have a Brahman cook, otherwise people in our house did not eat. None of us were allowed in the kitchen because we would pollute it. I have lived with caste all my life, from childhood.
Baroness Thornton
My Lords, I thank the noble Baroness, Lady Flather, for her remarks and I would not for a moment dare to have stopped her contribution to this debate.
The principle that we are discussing remains as simple and straightforward as it was when it was debated in 2010, in Committee on the Bill and on Report. The question is: how do we give legal protection to the victims of caste discrimination? That was reflected throughout the debates in the Commons and this House. It is the case that there is a lacuna in our equality legislation, and surely it is our responsibility to ensure that this form of discrimination, however few the cases are—even if there were only one—has redress under UK law. We do not need any more research to tell us that there is caste discrimination and that it needs a legal remedy.
On these Benches we have been doing what the Government until very recently had signally failed to do over the past two to three years. We have discussed the matter with and made ourselves available to all the groups that have an interest, including those who have reservations and are opposed. I remind the House that it is only because the noble and right reverend Lord, Lord Harries, raised this matter in Committee that the Minister agreed to meet the anti-caste-discrimination groups after refusing to do so for more than two years.
We accept that the Government have some ground to catch up on in the implementation of this legislation and, in the spirit of the cross-party support for this cause, we would like to help them to do so. I am particularly grateful for the constructive dialogue that I and my colleagues in the House of Commons have had with the Alliance of Hindu Organisations, the ACLC, the Sikh Council and the British Sikh Consultative Forum, among others, as well as the Anti Caste Discrimination Alliance and the Dalit Solidarity Network.
I know the House will agree that it is important to put on the record that this is not about vilifying an entire community. Caste discrimination is not specific to any one religion but to residual social and cultural practice, and I hope that the Minister will agree with that. We believe that it is vital that this amendment is carried today and sent back to the House of Commons, because if we do so I am sure that the next stage will be one of negotiation about how, not whether, we deal with caste discrimination.
There are two reasons for that. First, only if we pass this amendment again will the Government realise that the serious matter of caste discrimination has strong cross-party support led by distinguished parliamentarians from all parts of this House and the Commons. Secondly, there is evidence, as the Minister’s remarks revealed, that the Government are considering their position again. We believe that the House of Lords reaffirming its view on this matter will help in that process and permit a discussion on how to move forward. This is the invaluable role that the Lords can play in such matters.
Since the House last discussed this matter, we in the Labour Party have been addressing the matter of implementation with the wide range of different groups that I have already mentioned. We wrote to the Minister over the weekend with our views and offered support, help and co-operation in the implementation of this legislation.
Coming from Bradford, I know that the south Asian communities are among the most enterprising and fair-minded in the UK, and that those community leaders who first arrived in Britain in the 1960s and 1970s do not need any lectures from us on the evils of discrimination. Yet, just because discrimination is perpetrated by a very small number of individuals, that is no reason not to have legislation.
Although I start from a different position in relation to legislation from some of the organisations that I have mentioned, I believe that we are all united in the view that if legislation goes ahead, and we hope it does, we must ensure that the process of implementation is right so as to prevent the entrenchment, rather than the eradication, of caste distinctions in British society.
As soon as this legislation is passed, we think that before the clause is enacted the Government need to commit to conducting a consultation on the interpretation of the term “caste”, which should be set out in guidance or secondary legislation. This would allow time and space to deal with the genuine concerns that have been raised, such as ensuring that this is not interpreted as religion-specific.
The Government should commit to setting out guidance or secondary legislation that employers or public bodies should not seek information about caste identification, nor must there be any requirement on individuals to disclose their caste. We know that this is possible with sexual orientation and we suggest that that holds the way forward. The goal must be to eliminate, not increase, the number of people being identified by caste. Therefore, if the legislation proceeds, we ask that Ministers seek to underpin the guidance with that principle.
This consultation detail and guidance needs to be in place before the new law is enacted. We are therefore happy to support community suggestions that there should be a delay in the implementation of the new clause for perhaps one year, possibly two, after the Bill receives Royal Assent.
We have suggested that the Government should consider a timetable for a statutory review of the clause. There is a clear consensus and commitment across all communities to work to eliminate caste divisions in the UK and ensure that the UK remains, as one individual put it, “the great leveller that it is”. If it comes to a point where caste distinction has become a non-issue in the UK, we should recognise that legislation may not be needed any more, so perhaps there should be a review in 10 to 15 years from commencement.
I think the Government have not thought through their Talk for a Change education programme. It must not be a project that aims to better inform individuals about caste in a way that increases the awareness and use of caste as an identifier and divider. Will the noble Baroness clarify that the Government’s purpose is to facilitate initiatives within communities to address existing residual discriminatory practices?
The Minister will argue that the Government want to consult first on whether to provide legal protection, which I think is the point of her remarks. The Government have come a long way in thinking about this, but we part company from them because we believe that we need to pass this amendment now, to get the legislation on the statute book, and then to resolve the issues that flow from that. That is why we again support the noble and right reverend Lord, Lord Harries, from these Benches.
I regret that the noble Lord, Lord Deben, has, as it were, decided to cave on this matter, although I accept that he has made great threats to the Government, which I am sure they are taking on board. He is right that this is a question of trust. The Government have had two years, almost three, to deal with this issue and have done nothing at all until this moment. I wonder what guarantee can be given by the Minister, other than legal protection, about taking this issue forward; her remarks leave it open to doubt whether the Government are prepared to do so. If this House does not keep the Government’s feet to the flame on caste discrimination, we must fear that it will be kicked into the long grass again and that nothing will happen. I hope that the Minister will agree to this amendment today. If not, I hope that the House will again support the noble and right reverend Lord, Lord Harries, and a move to discuss implementation in a way that achieves the goal of eliminating caste-based discrimination.
Baroness Stowell of Beeston
My Lords, I am very grateful to all noble Lords who have contributed to this debate. There have been some important and powerful speeches tonight, as there have been at all stages of the passage of this Bill. I will do my best to respond to most of the points that have been raised but will try not to take too much time, so forgive me if I do not go into great detail.
First, in response to the noble and right reverend Lord, Lord Harries, I will just clarify something that I said which he picked up on. The Government are not suggesting that we should replace the word “caste” with the word “descent”. That is not something that we are proposing; I raised it purely to highlight that it that had been raised by others in the course of this debate.
Several views have been expressed in the Chamber this evening. The noble and right reverend Lord, Lord Harries, questioned a comment I made that some people do not want to be defined by caste. He argued that that should not lead to a decision that we should not recognise caste in law in order to protect against discrimination. I will make a couple of points in response to that. First, over the past couple of weeks in the discussions that the Government have had with different bodies, it has been made very clear to me while attending those meetings that some people do not want to be defined by caste and are worried that caste legislation would allow that. In response to the noble Baroness, Lady Flather, the person who made that point most forcefully to me was a woman from the Hindu community.
It was interesting and illustrative that the noble Lord, Lord Singh, made the point that caste is absolutely not a feature at all in the Sikh religion. The noble Lord, Lord Parekh, said that caste is something that can be recognised across a wide range of different faiths. Indeed, the noble and right reverend Lord, Lord Harries, talked about this being something that can be found in the Christian faith. There are clearly, just in the debate that we have had this evening, several views being expressed in this regard.
Lord Harries of Pentregarth
I thank the Minister again for the great care, thought and seriousness with which she has addressed this issue this evening and on other occasions, and the way in which the Government have clearly moved quite a long way in the direction of the supporters of the amendment. I thank all noble Lords for what they have contributed. I also pay tribute to those outside this House who believe that they are discriminated against, who have ensured that we have had this serious debate this evening.
In his thoughtful speech, the noble Lord, Lord Parekh, said that the issue of caste was so wide that ill founded complaints of discrimination would arise. He gave the example of himself from a goldsmith background perhaps not employing somebody from a blacksmith background and this being the subject of a complaint. But I cannot see that this would be essentially different from other areas of discrimination; for instance, a woman might complain that she is discriminated against because she is a woman and a tribunal would have to make up its mind whether it was because she was a woman or she simply was not up to the job. The situation is absolutely no different. The noble Lord then said that caste is such a wide concept that it really cannot be included in legislation at all. What about the example of India, which includes in its constitution the fact that caste discrimination is totally contrary to the legal system?
The noble Lord, Lord Dholakia, suggested that people in the third and fourth generations are not aware of their caste and, as it were, have outgrown it. I have to point out that that is not the evidence that the NIESR found. It found that there was bullying going on in school playgrounds on the basis of caste. The noble Baroness, Lady Flather, also mentioned coming across it when she was a teacher—sadly, it has not gone.
The noble Lord, Lord Gummer, rightly pointed out that even if there were only a few cases of discrimination, those people must be protected by law. What the noble Lord, Lord Gummer, said highlights the fundamental issue tonight.
Lord Harries of Pentregarth
I am sorry—we are old friends; we know each other from previous incarnations and go back to 1958, when I remember him this high. I apologise: what the noble Lord, Lord Deben, said highlights the fundamental issue of the kind of consultation that people have in mind.
The Government have in mind a wide-ranging consultation to decide whether legislation is necessary. Many of us are convinced that it is and that the consultation needed should be more sharply focused to ensure that the actual regulation that goes with it reflects what the communities most affected by it believe will be clear and workable in law. There is a clear difference between the kind of consultation that we have in mind and that the Government have in mind. We believe that it is important at this date to make it quite clear that legislation is necessary to protect people.
We have had such a serious debate tonight and the issues have been so thoroughly debated that I feel that it is right that the opinion of this House should be tested.
Viscount Younger of Leckie
That this House do not insist on its Amendment 38 and do agree with the Commons in their Amendments 38A and 38B to words so restored to the Bill.
Viscount Younger of Leckie
My Lords, this is an issue that has already been debated in some detail. Noble Lords will recall that the Government were nearly successful in persuading the House to accept the vote on Report, losing by the smallest of margins—indeed, by just two votes. Nevertheless I reassure noble Lords that the Government have listened to and carefully considered both the extensive arguments made, and the heartfelt concerns expressed, about the possible effects of this change. However, the Government feel strongly that a measure to reassure business is necessary, and the other place clearly endorsed that view by a majority of 75 when it voted on this issue last week.
This measure is one of a number of reforms designed to address the much wider issue of the perception of a compensation culture and the fear of being sued that this generates. It is a fear that drives employers to overimplement the law, incurring unnecessary costs, and that undermines their confidence to grow and develop their businesses. It is a problem that I believe we all recognise needs to be tackled, and one that we have not only considered in relation to this clause but, as many noble Lords will recall, debated in some detail in relation to my noble friend Lord Young of Graffham’s report Common Sense, Common Safety. It is because of this wider context and its detrimental effect that the Government remain of the view that it is not reasonable or fair that employers should be held liable to pay compensation when they have done nothing wrong and taken all reasonable steps to protect their employees.
We acknowledge that this reform will involve changes in the way that health and safety-related claims for compensation are brought and run before the courts. However, to be clear and to avoid any misunderstanding that may have arisen, this measure does not undermine core health and safety standards. The Government are committed to maintaining and building on the UK’s strong health and safety record. The codified framework of requirements, responsibilities and duties placed on employers to protect their employees from harm are unchanged, and will remain relevant as evidence of the standards expected of employees in future civil claims for negligence.
As I set out on Report, the clause provides for a power to make exceptions. It is already planned to make such an exception in respect of pregnant workers in order to comply with the terms of the relevant EU directive. We have thought carefully about whether there are more exceptions that should be made at this stage, but have not identified any other examples. However, I assure the House that we will seriously consider any further exceptions that are suggested.
To be successful in providing the reassurance that businesses need to overcome their fear of being sued, we need to take decisive action that will send a clear and effective message. The Government believe that the proposed single amendment to the Health and Safety at Work etc. Act achieves this by providing a consistent approach to civil litigation across all health and safety legislation, which will be simple for both employers and employees to understand.
To clarify a point of detail, I should also explain that amendments regarding the words “so restored to the Bill” have the effect of reinstating government amendments agreed without objection in Grand Committee. These amendments were made to comply with the Delegated Powers and Regulatory Reform Committee recommendation to remove a new regulation-making power that had been inserted as proposed new Section 47(2B) of the Health and Safety at Work etc. Act. The Government reflected on the committee’s comments and accepted that it was not necessary to take such a power, as there are no current plans to extend the policy to other legislation.
For the reasons that I have set out, I ask that noble Lords do not insist, as the noble and learned Lord, Lord Hardie, asks, on their Amendment 38. I beg to move.
Motion D1
Moved by Lord Hardie
As an amendment to Motion D, leave out from “House” to end and insert “do insist on its Amendment 38”.
Lord Hardie
My Lords, before addressing the main issue I should indicate that I have no objection to the amendments that the Commons introduced to reinstate the amendments that were agreed in Grand Committee, if the decision of the House is to refuse this amendment.
The main issue relates to Clause 61, which amends the existing law by removing a right of action that has existed for almost 150 years, permitting employees and their dependants to claim damages for injuries caused by an employer’s breach of statutory duties, which is designed to protect employees from serious injury or death. It is a separate common-law right of action and is distinct from the common-law action based upon negligence.
Baroness Turner of Camden
My Lords, the Government introduced at a late stage in the Commons proceedings, and with very little consultation, a clause to remove civil liability from health and safety offences. This would mean, as has already been explained, that a worker who is injured because their employer broke the law by failing to carry out a statutory obligation would find it much more difficult to claim compensation for the injury. It would also make the law much more complex. As a result, many workers or their dependants will lose out on compensation, causing further injustice.
The Government have claimed that they introduced this amendment to implement a recommendation from the recent Löfstedt report into health and safety regulations. However, Professor Löfstedt has since made it clear that this is not what he proposed and the government amendment went well beyond what he recommended.
We voted to remove the clause in a move that was welcomed by victims’ groups, the legal profession and health and safety professionals. The Commons, however, has voted to disagree with our amendment. I do not know why. We should maintain the position that we took up before; it is reasonable and fair. We have to remember that there are many industries anyway where there are inherent dangers to workers. Where there are statutory regulations, those should be applied and the workers should be able to claim if those statutory regulations are not complied with, which is what the present law provides for. We have been advised by lawyers concerned with these employment issues that if the amendment we are proposing is not carried and the Government’s position is maintained, we would be taking the law and the employment right consequent upon it way back beyond the beginning of the previous century. That really is quite unacceptable, and I hope therefore that your Lordships will agree to maintain the position that we took before as far as this clause is concerned.
Lord Faulks
My Lords, I was unable to attend previous debates on this clause but I have had an opportunity of reading what was said in your Lordships’ House and in the most recent debate on the amendment in the other place last week. I declare an interest as a practising barrister with experience in this area of the law and as a former special adviser to the last Government on an inquiry into the compensation culture.
Noble Lords, and particularly the noble Lord, Lord McKenzie, in a number of thoughtful contributions to the debate, suggested that to legislate on the mere perception of a compensation culture was to do so based on a “flimsy structure”. He accepted that there had been a problem of overcompliance with health and safety but he said that there was now a problem with undercompliance. I am unsure of the basis for this last assertion and it is not reflected by the report of Professor Löfstedt or by the report two years ago by my noble friend Lord Young of Graffham. Both identified a perception of a compensation culture, as did the report produced by Parliament when I was a special adviser. This cannot be dismissed on the basis that to respond to it is simply to pander to myths. There is a strongly negative effect on employers and indeed on schools and local authorities which feel the need to set up elaborate systems to combat largely hypothetical risks. Overcompliance costs time and money and makes it more expensive and less attractive to employ anyone, particularly for small and medium-sized enterprises.
The aim should surely be to ensure that all reasonable steps are taken to protect the health and safety of employees, but at the same time employers should not be overburdened with unnecessary and elaborate bureaucracy which can be the enemy of enterprise. I accept that this is a very difficult target to hit and I confess to being a little nervous about how much is left to regulation. However, I feel much more confident in saying that the debate, principally in the other place, was positively riddled with hyperbole. Both there and in your Lordships’ House the opposition Front Bench used the expression “a near impossible burden” when describing the prospects of a claimant bringing a successful action for injuries at work. I simply do not accept that. A breach of a regulation will be regarded as strong prima facie evidence of negligence. Judges will need some persuasion that the departure from a specific and well-targeted regulation does not give rise to a claim in negligence.
Many regulations are sensible, comprehensible and can be effectively interpreted both by employers and the courts, but this is not always the case. For example, the Management of Health and Safety at Work Regulations 1992 were revoked and re-enacted by similar regulations in 1999. Originally they did not give rise to a civil course of action—they now do. The regulations are extraordinarily wide and extraordinarily vague and seem to require extremely elaborate arrangements, ostensibly for health and safety purposes, in particular as to risk assessments. What a risk assessment is and how you prove you have done an appropriate one is problematic. It seems to require quite a number of employees simply to be devoted to compliance with the regulations rather than actually doing the underlying work.
It was said in the other place that this prospective change in the law was “not about compensation” but about “not being killed” and that the change was not simply a matter of red tape. I am afraid that I do not agree with the burden of those comments. Nor are the Government seeking to turn back the clock a hundred years. Rather, these provisions are a response to an overreaction to an entirely appropriate aim which is to ensure health and safety at work. The problem of overreaction is having a negative effect on enterprise. To borrow the title of the report of the noble Lord, Lord Young, the aim of this change in the law is to restore common sense and common safety. I support the Government’s position.
Lord Pannick
My Lords, I supported the noble Baroness, Lady Turner of Camden, and the noble and learned Lord, Lord Hardie, on Report, and I continue to do so. The Minister said earlier in this debate that we are considering cases where the employer has done nothing wrong. With great respect, that is a fundamental misunderstanding. The employer is liable only if the claimant can prove a breach of health and safety legislation. The employer is liable only if the claimant can prove that the breach has caused the injury. To require the employee also to prove negligence would impose an unreasonable burden. I take the point made by the noble Lord, Lord Faulks, that it is not an impossible burden. However, I suggest that it is an unreasonable burden because the relevant information will normally be information in the knowledge of the employer, and the costs and delay of the litigation—a point which the noble Lord, Lord Faulks, did not mention—would surely be disproportionate in all these circumstances to any legitimate interest, especially when the reality is that the employer can, and normally does, have liability insurance. For those brief reasons I will support the noble and learned Lord, Lord Hardie, should he divide the House this evening.
Lord McKenzie of Luton
My Lords, we remain steadfast in our opposition to the Government’s position, and fully support the case led by the noble and learned Lord, Lord Hardie, and spoken to in support by my noble friend Lady Turner and the noble Lord, Lord Pannick. We are dismayed that parliamentary process has allowed so little time for consideration of this matter in the House of Commons and that more than a century—in fact, nearly 150 years—of settled law is being overturned on the basis of such brief deliberation.
The arguments to remove Clause 61 from this Bill have not of course changed in the few weeks since we last debated the matter. Nor have the serious consequences which will ensue should we not carry the day. Removal of the existing right of an employee to rely on a breach of health and safety legislation represents a fundamental shift, and one which is to the detriment of employees.
We heard before, and again today, that having to prove negligence will provide a more difficult route to getting redress. The burden of proof will shift to employees, or to the family in the case of a fatality at work, there will be a requirement for more evidence-gathering and investigation, and the incurring of greater costs. In that respect there will be no lessening of the regulatory burden on employers. This change goes well beyond the issue of strict liability which the Government’s own impact assessment accepts is likely to give rise to only a small number of claims.
The issue of a near impossible burden referred to by the noble Lord, Lord Faulks, I think in our previous debate, was not applied generally but specifically to those circumstances where strict liability has hitherto been in force.
Lord Faulks
I am grateful to the noble Lord for giving way. The point is that there is always a claim, as I am sure he will agree, in negligence. Whether there is a breach of a regulation will be strong evidence of a departure from an appropriate standard of care. All that is changing is simply that it is not actionable per se. I would like the noble Lord to say why he adheres to his suggestion that there is a near impossible burden.
Lord McKenzie of Luton
The point I sought to make is that in some circumstances it has been accepted, I believe, that there is a near-impossible burden. That is not necessarily the case, but even the route to proving negligence is a greater burden than the route to proving breach of statutory duty, which is what operates generally at the moment. The “near-impossible burden” description was particularly applied to those areas where strict liability applies in circumstances related to the provision of equipment, where purchased, maintained and sourced by the employer, and the employee is in a disadvantaged position in seeking to prove negligence.
The impact assessment recites the belief in a compensation culture which is having an impact on the behaviour of business. However, even if true, why on earth should it be a justification for reducing access to justice for employees injured or made ill by their work? This cannot be a rational basis for acting. Why should employees bear the strain of tackling these perceptions? Where is the evidence that unreasonable claims are being made and indeed settled? If there are fewer claims, the beneficiaries, as we have heard, will be the insurance companies, the providers of employer liability insurance. Where the Government are particularly remiss is in failing to see this from the perspective of the individuals who are injured at work, because one way or another they and their families will bear an increased burden. They may be forced to place greater reliance on the health, caring and benefits system. What does the Minister say to those families whose circumstances may have been eased by receiving compensation but who face a life on benefits in the future? Health and safety impacts on the lives of millions of individual employees every day of the week. It is not some distant concept related to red tape.
There is undoubtedly some overcompliance with health and safety requirements, but there are ways in which this can and is being tackled. The register for consultants is one route that the HSE is seeking to apply. However, there is also undercompliance. The noble Lord, Lord Faulks, asks what my evidence is for that. Let us look at the data. People are still being killed at work and hundreds of thousands of people are injured every year. I spent three and a half years as Minister for health and safety. We know those sectors where there is a struggle to get compliance. It does not operate across the board. There are some very good employers who try to do the decent thing, but there are some who do not. This undercompliance has been made worse by restrictions on funding, by limiting the regulator’s role in proactive workplace inspections, and by the portrayal of health and safety as red tape and its undermining by myths that bear no relation to reality. Promoting the changes in Clause 61 will also send the wrong message to those employers who would undervalue health and safety and cut corners, safe in the knowledge that their chances of being held to account are diminished. This is to the detriment not only of employees but of those many employers who do the right thing.
The Government’s position is untenable. It is changing the settled legal position of over a century on the basis of anecdote and perceptions. It is making it harder, sometimes impossible, for employees to access justice when they are injured at work. It is undermining the cause of health and safety. The Government have failed to consult properly on this or make reference to the EU. They offer an inappropriate remedy to any perceived compensation culture which can and should be addressed by other means. Most of all, they are careless of the personal cost to those who are damaged by their work. That is why we support the amendment of the noble and learned Lord.
Viscount Younger of Leckie
My Lords, I have again listened with interest to the arguments made and thank noble Lords for their careful consideration of this very important issue. I start by challenging the noble and learned Lord, Lord Hardie, and the noble Lord, Lord McKenzie, on whether there is a compensation culture. The noble and learned Lord raised that point. I clarify again that my noble friend Lord Young and Professor Löfstedt underlined that health and safety regulations, more than any other area of regulation, suffer from misinformation and overcomplication in the media and elsewhere. I was grateful for the intervention by my noble friend Lord Faulks on this issue.
As Professor Löfstedt found in his independent review, these myths lead to confusion about what the law requires and a fear of being sued which drives employers to overimplement the law in an effort to protect themselves. This does not lead to better protection for employees but means that employers are spending significant time and resources on activities and services which are not necessary or far in excess of what the law requires. Concern about “getting it wrong” discourages employers from looking at ways to develop and grow their business and consequently from taking on new employees. I reiterate to the House that this is a real issue and that there is a perception in this regard. We believe as a Government that we should be tackling it.
The noble and learned Lord, Lord Hardie, referred to certain cases which were raised in the other place by the honourable Member for Middlesbrough. We have been able to check the facts of two of those cases. In both of them there is prima facie evidence of negligence on the part of the employer. We would expect that such cases would still be brought as negligence claims if brought after this amendment to the Health and Safety at Work etc. Act. It is important to clarify that point.
The noble and learned Lord, Lord Hardie, mentioned removing the right to compensation and depriving families of it in the event of an employer’s breach of statutory duties. The Government’s view is that it is fair and reasonable that this burden should be removed from an employer who has done nothing wrong. The fact that someone has been injured at work does not mean that they are automatically entitled to compensation. Ours is not a no-fault system. Many health and safety duties require the injured employee to show fault on the part of their employer. It is interesting to note that currently claimants do not recover compensation in about 30% of claims.
There can be cases of misfortune to which I alluded on Report, which cannot and should not be laid at the employer’s door. In order effectively to tackle the fear of being sued and of unjustified reputational damage, and the costly burdens on business this brings, employers need to know that they have a fair opportunity to defend themselves.
The noble Lord, Lord Pannick, spoke of the burden of proof shifting to the employee, as he put it, being unreasonable. However, the cases that will be most significantly affected by this change are those which would have previously relied on an absolute or strict liability duty. Under the existing system, employees have to prove that their employer breached the standard required in the regulations and that the breach caused the injury. In practice, the issues and evidence that will need to be examined in relation to a claim for negligence will be similar to those currently examined in relation to a claim for breach of a duty which is not a strict one and qualified by, for example, the wording,
“so far as is reasonably practicable”.
That point was raised earlier. Indeed, most cases are currently brought for both breach of statutory duty and negligence, so it is anticipated that most claims will still be able to be brought.
The noble Baroness, Lady Turner of Camden, said that a different approach had been taken to Professor Löfstedt’s recommendation. The Government agreed with Professor Löfstedt’s recommendation in principle, recognising the unfairness which results where employers are liable to pay compensation regardless of having taken all reasonable steps, and agreed to look at ways to redress the balance. Excluding civil liability only in relation to specific strict liability offences would mean making a large number of amendments to more than 200 regulations and could result in different approaches to civil liability being applied within a single set of regulations and across the regulatory framework. This would add a layer of complexity to the current system leading to greater uncertainty for both employers and employees about the duties that apply in respect of compensation claims. Making a single amendment to the Health and Safety at Work etc. Act has the significant advantage of delivering a consistent approach across all health and safety legislation.
I reiterate that this reform is not about reducing the number of claims made, but about establishing the important principle that employers should always have the opportunity to defend themselves against a compensation claim when they have done nothing wrong and have taken all reasonable precautions to protect their employees. By providing the reassurance that they will not be liable if an accident happens which is totally outside their control, this change will support responsible employers who take care to protect their employees by giving them the confidence not only to take sensible steps to manage health and safety risks but also to expand their businesses into new areas and activities and to take on new employees to achieve this. The Government believe this to be a fair and proportionate response to the impact that strict liability duties currently have in the civil litigation system.
Business is fully behind the need for action in relation to the perception of the compensation culture. More specifically, it is supportive of the approach that the Government want to take in relation to the issue of strict liability duties. I am most grateful to my noble friend Lord Faulks for his succinct intervention, backed by his experience in the field. This support was also reaffirmed by both the British Chambers of Commerce and the Federation of Small Businesses in correspondence received in the last few days. I therefore ask again that noble Lords do not insist on their amendment on this issue.
Lord McKenzie of Luton
Before the Minister sits down, can he just help us with one issue? If it is the Government’s position that the problem to be addressed is the perception of a compensation culture, why should that be addressed by making the reality of accessing compensation claims more difficult?
Viscount Younger of Leckie
I reiterate that the balance is not right. We have been much helped by the report from my noble friend Lord Young and Professor Löfstedt, who have provided this perception and provided the evidence to allow us to act. This is the right approach for the Government to take.
Lord Hardie
Does the Minister accept that regulations that have the qualification of reasonable practicability afford an employer the opportunity of defending himself against a breach?
Viscount Younger of Leckie
The noble and learned Lord makes a fair point. Employers will continue to need to have to defend themselves. The issue depends entirely on the particular case in hand but this government action redresses a balance that is long overdue.
Lord Faulks
Before the Minister sits down, I am sure he will agree that, while some of the regulations have the defence referred to by the noble and learned Lord, quite a few of them do not provide this defence at all and there can be automatic liability without any fault. Does he agree that one of the problems of the perception of a compensation culture—there was perhaps an inadvertent hint of this—is the fact that these changes are not welcomed by safety consultants or those who are concerned to gold-plate some of these regulations?
Viscount Younger of Leckie
I am grateful for the points made by my noble friend. That is a very helpful intervention.
Lord McKenzie of Luton
Can the Minister give us some examples of where there is gold-plating of regulations under health and safety provisions?
Viscount Younger of Leckie
I believe that I covered in Committee and on Report all the aspects that I need to.
Lord Hardie
I am grateful to noble Lords for their contributions to this short debate. I note that the Minister and the noble Lord, Lord Faulks, accept that there are a number of regulations which have the qualification of reasonable practicability. Those regulations afford the employer the opportunity of defending his actions by saying, “I complied with these regulations so far as was reasonably practical”. If he proves that to the satisfaction of the court then he will avoid liability.
That brings me back to a point that I sought to make earlier. Why should a right of action be excluded from those regulations? If the intention of the Government is that employers should not be blamed for something that they have not done and should have an opportunity to defend themselves, then the qualified regulations do precisely that. There is no justification in law or in logic for removing the right of action in those regulations, which, as I have said, comprise the majority of the regulations.
I am grateful to the noble Viscount for researching the cases mentioned in the other place by Mr McDonald. I accept what the Minister said—that two of the cases would have succeeded at common law, contrary to what Mr McDonald said. However, according to the Official Report, there was a specific finding by the court that there was no common-law liability in the case of the roofer and slater, Mr Hill, who,
“fell from scaffolding during the course of his work and suffered very serious injuries resulting in incomplete tetraplegia. The accident occurred as he came down the scaffolding on a portable ladder that was not fixed or in any way secured; he fell to the ground, causing the injury. His injuries were so severe that damages were agreed at just under £2 million. The court held that there was no liability at common law, but there was liability under the Work at Height Regulations”.—[Official Report, Commons, 16/4/13; col. 236.]
That is a specific example of a case where common-law liability was unsuccessful but the plaintiff managed to secure damages because the employer had failed to comply with regulations designed for the safety of his employees and that failure was the cause of the accident. If Clause 61 had been in force, Mr Hill would have received no damages because he would have failed to have established his common-law claim for negligence.
The issues have been well canvassed and I feel strongly that this clause interferes with a fundamental right. No justification has been put forward for it and the Commons has not really considered the Lords’ discussions on this matter and has given no reasons for disagreeing with Amendment 38. I would welcome the opinion of the House.
Viscount Younger of Leckie
My Lords, on Report we debated the amendment in the name of the noble Baroness, Lady Hayter, on letting and managing agents. I made it clear then that the Government could not accept her amendment but that we were giving most serious consideration to the issue of redress. The noble Baroness confirmed that it was a redress mechanism that she was seeking in her amendment.
The Government have given serious consideration to these issues. We have considered reports by the Office of Fair Trading, Which?, the Royal Institution of Chartered Surveyors and others, and we have listened carefully to the debate here and indeed in the other place. The Government recognise that the fact that not all agents belong to a redress scheme has been an issue of growing concern. We are satisfied that making this a requirement would provide both the means of addressing complaints when things go wrong and a means to improve service quality across these important parts of the housing sector.
Providing access to redress would deal with many of the failings that people are concerned about in their day to day dealings with letting and managing agents. At the same time, the existing consumer protection and leasehold legislation remains in place and is already available, and is indeed used for the more serious matters.
Having listened to the concerns raised most specifically in this House by the noble Baroness, Lady Hayter, and others, including my noble friend Lady Gardner, the Government have introduced in the other place an amendment in lieu of the amendment tabled by the noble Baroness, Lady Hayter. The government amendment gives powers to require letting and managing agents of privately rented and residential leasehold homes to belong to a redress scheme. It gets to the heart of what the noble Baroness, Lady Hayter, was seeking, but without subjecting letting and managing agents to the additional layers of regulation that are in the Estate Agents Act and on which her amendment was based.
I am pleased to say that, while clearly some would have liked the Government to have gone further than redress, this amendment has been warmly welcomed and was approved without Division in the other place. Indeed, the honourable Member for Streatham, shadow Business Secretary Chuka Umunna, described it as,
“a victory for tenants and landlords””.—[Official Report, Commons, 16/4/13; col. 229.]
The Government’s approach has also been welcomed by key organisations. For example, the National Approved Letting Scheme welcomed it as a common-sense approach to improving the consumer experience of renting and letting and a sensible alternative to the heavy-handed bureaucracy of a formal regulatory regime. Similarly, the National Landlords Association has endorsed the Government’s approach of meeting the challenge of regulating letting agents head on, rather than simply applying the standards of estate agency to a distinct sector with its own significant risks.
If these clauses are enacted, the next steps will be for the Department for Communities and Local Government to consult on the details of the measures and to go through the formal scrutiny processes so that the necessary orders can be brought forward for approval in both Houses. We would expect consultation to be under way by the summer.
In their consultations, the Government will wish to take account of a number of the points that have been raised in the other place, for example on how existing codes of practice will be reflected in the redress schemes. There were also questions in the other place about the residential leasehold sector, generally echoing concerns that have been raised by my noble friend Lady Gardner of Parkes. The Department for Communities and Local Government is taking forward work on these issues, following its recent round table meeting, which my noble friend attended. I know that it will continue to involve my noble friend and a broad range of other interested parties on these matters.
My honourable friend in the other place, the Housing Minister, Mark Prisk, has spoken to the honourable Member for Worthing West about the points that he raised on the Leasehold Advisory Service and has now written to him.
The Government consider that this amendment can make a real improvement to the operation of letting and property management agents, for a very modest and proportionate regulatory burden. I am grateful to bodies such as the Office of Fair Trading and Which? for rightly bringing attention to these issues, and to noble Lords who have worked hard to bring these measures within the current Bill, in particular the noble Baroness, Lady Hayter, and my noble friend Lady Gardner. I also acknowledge my honourable friend in the other place, the Housing Minister Mark Prisk, who has a long-standing interest in this issue and has worked hard to deliver a workable redress mechanism within the current Bill.
I therefore ask that noble Lords do not insist on their amendment and instead agree with the other place on its amendments in lieu. I beg to move.
Baroness Hayter of Kentish Town
My Lords, I welcome and support Motion E. I pay tribute to a number of key players who have brought us to this happy position. First, there is the coalition of those interested in the well-being of tenants and landlords, as the Minister has mentioned, such as Which?, Shelter and RICS, which have given me a lot of help not only in drafting but in the persuasion, if I may say, of this House and then the Government, who perhaps were a little reluctant to start with but have made a very large step forward. The coalition that came together included representatives of tenants and landlords, as has been mentioned, but also the British Property Federation, the Mayor of London and various London councils, as well as the professional organisations to which some of these bodies belong.
The amendments in lieu are not exactly the whole of what the House asked for in passing my original amendment, in that they do not include a role for the OFT in debarring agents who go seriously astray. However, I am confident that with the build-up of intelligence by the various redress schemes, evidence will come to light on which the OFT or Trading Standards will be able to take action.
Furthermore, as happened with estate agents and as has been suggested in the consultation, ombudsmen will develop codes of conduct for letting and managing agents—based, no doubt, on the professional codes that they have in place now—to give member agents guidance as to how an ombudsman will decide a case. That is perhaps a backdoor way to the adoption of a code, but is very welcome for all that.
In due course, I and consumer groups will no doubt be asking for further regulation of letting and management agents if this measure proves insufficient to protect landlords and tenants, and I have a feeling that the noble Baroness, Lady Gardner, is not about to let this wider issue drop.
For the moment, I conclude by thanking our Lords PLP staff, Beth Gardiner-Smith, Sophie Davis and Ian Parker, for their help, and saying a very genuine thank you to both the Ministers who are with us this evening. They took a lot of trouble to listen to our concerns very carefully and—I am sure at some personal risk to themselves—battled with their colleagues at the other end to win through. This House has brought some good home sense to an issue that is of great importance to thousands of our fellow citizens.
Lord Sharkey
My Lords, I want to say two things. First, I congratulate the noble Baroness, Lady Hayter, on her determination and persistence in pursuing the case for a redress system for letting and managing agents, and I thank the Government for agreeing to act.
Secondly, I want to ask the Government about timing. The Minister knows that the amendments are couched in terms of “may” rather than “must”, but I am sure that in this case that means “will”. The question really is: when do the Government expect to be able to bring forward the appropriate orders? As we have all said in discussions on this issue, the matter is urgent; people are suffering now. Can the Minister give some indication at least of the expecting timing of the orders?
If it were not getting on for midnight, I would also ask what on earth Commons Amendment 40A(6) actually means. But it is getting on for midnight, so I will not.
Baroness Gardner of Parkes
My Lords, I congratulate the noble Baroness, Lady Hayter. This is a great personal success on her part. She has been persuasive. She has managed to encourage us all by winning that important amendment, and without that we would never have got to this point where people have really looked at things and decided that something can be done.
As the noble Baroness said, this is not something that we are going to let die, or lie, because there is still so much more to be done. Another hopeful thing has been the new Minister for Housing. With experience and work in the field as a surveyor, he knows what we are talking about, and this has made a big difference, particularly when we have had various round-table meetings. People have adopted the attitude that they want to look into things further. We have been given hopes that that they will look into everything much further later in the year, and I will be pressing that in my questions. As you know, I am particularly interested in reducing the percentage of people required to have commonhold instead of leasehold, because that would solve a lot of problems, but everyone agrees that 100% is an impossible requirement.
I pay tribute to the two Ministers. My noble friend Lord Younger has done a great deal, and it is marvellous that he has allowed housing to come into this, which was such a BIS affair. I cannot speak too highly of my noble friend Lady Hanham, who knows the housing issue so well. It is due to her persuasiveness that we have managed to get things to this point and have received notice today of these amendments. As has been said, perhaps they do not deal with everything, but they go a long way and are a huge first step. That is what we need, and again I am delighted to welcome these changes.
Viscount Younger of Leckie
My Lords, I am grateful for the contributions to this short debate. We have heard a small number of contributions today on the amendment on the letting and managing agents. As we know, this is a practical measure that can be taken forward rapidly to make a real difference to the experiences of landlords, tenants, freeholders and leaseholders.
In an attempt to answer my noble friend Lord Sharkey’s question, although the timetable is unclear at the moment I am not out of step to say that we fully expect orders to be brought forward by the end of the summer. It might be earlier.
In conclusion, I commend this Motion to the House.