Vol. 739 Thursday No. 38 19 July 2012

PARLIAMENTARY DEBATES (HANSARD) OFFICIAL REPORT

ORDER OF BUSINESS

Questions Democratic Republic of Congo NHS: Health Workers Credit Unions Police: Working Conditions Late Night Levy (Application and Administration) Regulations 2012 Motion to Refer to : Motion to Take Note UK Border Agency Motion to Take Note EU Drugs Strategy: EUC Report Motion to Take Note British Council: Funding Question for Short Debate

Grand Committee Local Government Finance Bill Committee (5th Day)

Written Statements Written Answers For column numbers see back page

£3·50 Lords wishing to be supplied with these Daily Reports should give notice to this effect to the Printed Paper Office. The bound volumes also will be sent to those Peers who similarly notify their wish to receive them. No proofs of Daily Reports are provided. Corrections for the bound volume which Lords wish to suggest to the report of their speeches should be clearly indicated in a copy of the Daily Report, which, with the column numbers concerned shown on the front cover, should be sent to the Editor of Debates, House of Lords, within 14 days of the date of the Daily Report. This issue of the Official Report is also available on the Internet at www.publications.parliament.uk/pa/ld201213/ldhansrd/index/120719.html

PRICES AND SUBSCRIPTION RATES DAILY PARTS Single copies: Commons, £5; Lords £3·50 Annual subscriptions: Commons, £865; Lords £525 WEEKLY HANSARD Single copies: Commons, £12; Lords £6 Annual subscriptions: Commons, £440; Lords £255 Index: Annual subscriptions: Commons, £125; Lords, £65. LORDS VOLUME INDEX obtainable on standing order only. Details available on request. BOUND VOLUMES OF DEBATES are issued periodically during the session. Single copies: Commons, £105; Lords, £40. Standing orders will be accepted.

THE INDEX to each Bound Volume of House of Commons Debates is published separately at £9·00 and can be supplied to standing order. All prices are inclusive of postage.

© Parliamentary Copyright House of Lords 2012, this publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey, TW9 4DU; email: [email protected] 333 Democratic Republic of Congo[19 JULY 2012] Democratic Republic of Congo 334

previous co-operation with the Congo army and have House of Lords set up a mutineers’ group again. Have we offered, and has my right honourable friend offered, UK assistance Thursday, 19 July 2012. in the pursuit and capture of Bosco, who is of course indicted by the ICC? No, because it is the responsibility 11 am of the DRC itself to co-operate fully with the ICC, and that is what we constantly urge. Prayers—read by the Lord Bishop of Newcastle. Lord Boateng: Given the importance of the African Democratic Republic of Congo Union and South Africa and their good offices to the future of the DRC, would the Minister welcome the Question accession of the former Foreign Minister of South Africa, Mrs Dlamini-Zuma, to the leadership of the 11.06 am African Union? Her good offices are going to be absolutely crucial at this time if we are to bring peace Asked by Lord Chidgey and security to that area. To ask Her Majesty’s Government what assessment they have made of reports that mutineers in the Lord Howell of Guildford: The noble Lord is absolutely eastern part of the Democratic Republic of Congo right, and I certainly welcome that accession. The have received assistance from foreign military officials. African Union is playing an increasingly positive part in facing up to the regional issues in the centre of The Minister of State, Foreign and Commonwealth Africa and at the centre of its concerns. We certainly Office (Lord Howell of Guildford): My Lords, we have welcome that. Obviously the African Union has played studied the United Nations Group of Experts report a key part in the International Conference on the and believe it to be credible. We call on the countries Great Lakes, which was in the margins of the meeting named in the report to seek a sustainable resolution to of the African Union in Addis Ababa the other day. It the conflict, and one that breaks the cycle of violence. is a very good prospect that South Africa is playing a leading part, as the noble Lord describes. Lord Chidgey: I am grateful to my noble friend for that Answer, but is he aware that Presidents Kabila Lord Alton of : My Lords, was the Minister’s and Kagame have agreed that the 11-nation International reply to the noble Lord, Lord Chidgey, an acceptance Conference on the Great Lakes Region should work that Rwanda has been aiding and abetting not only with the AU and the UN to establish a neutral force M23 but the other six rebel groups that have led to along the Rwanda-Congo border? Has President Kagame 1.4 million people being displaced in the Kivu in discussed with our Prime Minister which countries are eastern Congo? That being the case, why are we not offering to commit troops while Rwanda withdraws its using the £344 million of aid which we have provided support from the M23 rebels? Secondly, the Tutsi to Rwanda as leverage to persuade Rwanda not to aid leader, Senator Mwangachuchu, claims that the M23 and abet these insurgent groups, and to do rather rebellion resulted from the ICC judgment against Thomas more to bring to justice people such as Bosco Ntaganda, Lubanga and the indictment of Bosco Ntaganda for who has been responsible for the recruitment of child recruiting child soldiers and other crimes. Has the soldiers, which has led to the deaths of countless Prime Minister offered UK assistance, or has any numbers of people—a haemorrhaging loss of life that other agency offered assistance in the pursuit and dwarfs even the terrible and tragic events in Syria by capture of Bosco Ntaganda? comparison?

Lord Howell of Guildford: In answer to my noble Lord Howell of Guildford: In answer to the noble friend’s questions, yes I am aware of the Great Lakes Lord, Lord Alton, no one questions the atrocities and conference agreement by Presidents Kabila and Kagame misery of these various armies. I have counted five and others that they should consider the idea of a different armies and groups involved in killing and border force, but it is still only at the thinking stage. fighting each other in the region, and there is an Did my right honourable friend the Prime Minister extreme danger of this spreading and creating mayhem discuss this with President Kagame when he saw him a more widely on both humanitarian and security grounds. few weeks ago? The answer is no, because the propositions That is certainly the case. of the Great Lakes group had not come forward at As to our leverage, our aid programme is not quite that point. The Prime Minister expressed extreme as large as the sum mentioned by the noble Lord. I concern at the Group of Experts report that Rwanda have a figure of £198 million a year to the DRC, and might be involved in backing the M23, but other £83 million a year to Rwanda. Certainly our judgment developments have taken place since. is that, through that aid, we have the authority and the Has the ICC judgment against Thomas Lubanga leverage to influence the situation. I spoke to the created an atmosphere in which the M23 rebellion and Foreign Minister of Rwanda, Louise Mushikiwabo, breakaway from the Congolese army has taken place? about three weeks ago, as did my right honourable I have to say that it may have played a part, but it is friend the Secretary of State for Development and my very hard to say. It may have been one of the reasons honourable friend Mr Bellingham. We all impressed why Bosco Ntaganda and others retreated from their on her and her colleagues the necessity of facing up to 335 Democratic Republic of Congo[LORDS] NHS: Health Workers 336

[LORD HOWELL OF GUILDFORD] month-old baby who was raped with a military-issue the reality, and of Rwanda’s activity, as reported in rifle and who then sustained terrible gunshot wounds. the Group of Experts, to cease and to make way for a Does the Minister agree that we need to hold Rwanda proper solution to the conflict. We are using our to account, and that we should also hold the Congolese leverage and influence in a very nasty situation, but army to account? Could he press for more military the way we do it obviously varies from country to tribunals so that we can play our role in ensuring that country. innocent victims such as that nine month-old baby girl get the justice they deserve? The Archbishop of Canterbury: My Lords, I am very grateful for the opportunity to ask a question in Lord Howell of Guildford: Yes. Obviously we encourage this particular context, because I think the plight of the bringing to account of the very evil people who are the Congo is well known to everyone in this House. committing these atrocities; there is no question at all The issue of regional co-operation has already been about that. Bosco Ntaganda has been indicted by the flagged indirectly in what has been said. One of the ICC, and Rwanda has its own tribunal and court for questions I would like to ask is to do with what Her assessing the horrors of the past. In all other aspects Majesty’s Government are doing to foster a broader of bringing those involved to account, we will certainly regional strategic engagement involving more than press as hard as we can in the ways I have described in simply the Governments of Rwanda and Congo. As detail to your Lordships over the past five minutes. part of that regional question, I am very concerned about a cross-border issue in the region: the plight of the indigenous peoples and indigenous minorities such NHS: Health Workers as the Batwa. Twelve months ago I met the Batwa Question community in Congo and was dismayed to find what little attention some local authorities, especially by the 11.16 am United Nations, give to their plight. Are the Government aware of this? Asked by Lord Crisp Lord Howell of Guildford: I am very grateful to To ask Her Majesty’s Government what steps the most reverend Primate for his question about the they are taking to promote changing the roles and regional aspects, which are vital. May I answer him in skills mix of health workers in the National Health this way? First, my honourable friend Mr Bellingham, to improve access and quality, and reduce the Parliamentary Under-Secretary concerned with costs. African matters, was at the African Union conference last week and talked to regional leaders in detail all the The Parliamentary Under-Secretary of State, Department time. Secondly, we have been promoting the idea of of Health (Earl Howe): My Lords, local healthcare regional dialogue between the countries concerned. providers must be free to manage the composition and Thirdly, we are the third largest humanitarian donor skills mix for their workforce so as to best meet the trying to grapple with the situation. Fourthly, there is demands of the communities they serve. We are working the matter, which my noble friend raised, of the Great together with the professions and partners on key Lakes group and its movement towards the idea of detailed initiatives that will help healthcare providers make regional co-operation and the involvement of all the more informed decisions on the shape of their workforce key players in the region in solving this problem to achieve better outcomes in both patient care and themselves. The regional aspect is very important, and value for money. I fully agree with the most reverend Primate that this is what we should concentrate on. Lord Crisp: I thank the Minister for that reply. As As to the cross-border issue, which was his other he knows, changing job roles in the health service can question— be done well to great benefit or it can be done badly Noble Lords: Oh! and be detrimental to services. Given that a recent report from the All-Party Parliamentary Group on Lord Howell of Guildford: I have been asked many Global Health has provided the evidence for what questions, which produces many answers. The cross-border works, can I ask him, first, how will the Government issue is very serious and we are looking at it very make sure that Health Education and other closely. national bodies give this a much higher priority and provide the support that local organisations need to Baroness King of Bow: My Lords— make this happen? Secondly, to avoid the problems of failure, how will the Government ensure that the Care Lord Avebury: My Lords— Quality Commission and other national bodies provide The Chancellor of the Duchy of Lancaster (Lord the leadership needed to make sure that failures do not Strathclyde): My Lords, the noble Baroness, Lady happen? King, has been trying very hard to get in. Earl Howe: My Lords, the noble Lord’s Question Baroness King of Bow: My Lords, I have visited the addresses the central issue facing the NHS, which is Great Lakes region on 10 occasions over a decade and how to deliver the best outcomes for patients and do I have never ceased to be amazed by the resilience and so in the most cost-effective way. He is right to single dignity of the local populations and the barbarity and out the role of Health Education England because I scale of the atrocities visited on them, such as a nine believe that, in conjunction with local providers who 337 NHS: Health Workers[19 JULY 2012] Credit Unions 338 will be feeding in their view of what the workforce Lord Kakkar: My Lords, how will clinical leadership priorities are in their local areas, together with the be developed to secure the appropriate culture and Centre for Workforce Intelligence, which has a horizon- values essential for delivery of safe, effective and dignified scanning capability, we can at last crack a nut that has care for all NHS patients? been so difficult to crack in the past, that of good workforce planning in the NHS to make the workforce Earl Howe: There is a clear role here for the professional as productive and effective as we can. He is also right bodies. Training should be done in the right disciplines to single out the CQC because in areas such as staff and numbers and in the right way. I am sure I do not ratios, the commission has a role in making sure that need to tell the noble Lord that in virtually all the providers have thought about the right way to deliver medical royal colleges and through the Royal College care in individual settings. of Nursing, there is an increasing emphasis on leadership backed by resources from the Department of Health. Lord Winston: My Lords, in order to produce a We are seeing a drive forward for innovation and the skilled workforce with wide diversity in the health breaking down of professional barriers, which is another service, one of the real needs is that of attracting more aspect of this issue. young people into this very large workforce. At the present time, as I think the noble Earl may be aware, Baroness Jolly: My Lords, we now accept nurse there is massive resistance to having young people on prescribing as perfectly normal and sensible, and these work experience in the health service. All sorts of changes were implemented when the NHS was the barriers are put up—risk of infection, lack of privacy major provider of health services. Therefore, what and so on—most of which are absolute nonsense. challenges or opportunities does the Minister think Could the Minister do more to encourage the university that the new diverse health economy will pose to task trusts in particular to ensure that more young people shifting? can gain work experience in our hospitals? Earl Howe: My noble friend poses an extremely Earl Howe: My Lords, the noble Lord has made an complex question. She is right that regulatory extremely creative and important point, and I will improvements such as nurse prescribing are making a gladly take it back to the workforce colleagues in the difference and we are looking to see what other professions department. can also share in that sort of freedom. As the NHS gets more plural, we are able to drive the consistency and quality of practice through the NHS standard Baroness Sharples: Can my noble friend tell us how contract, through regulation, as the noble Lord, Lord many matrons are in hospitals now? Crisp, emphasised, and also through the clinical leadership referred to by the noble Lord, Lord Kakkar. That Earl Howe: My Lords, I cannot give my noble applies not only in NHS settings, but in private and friend the precise figures for matrons, but what I can independent settings as well. tell her is that in all NHS trusts there is now an emphasis on nurse leadership, however defined, so that at ward level and indeed at board level the input Credit Unions from nurses is heard and taken into account. That is Question important if we are to achieve what I think everyone wants, which is to drive the quality of care at the 11.23 am bedside. Asked by Lord Kennedy of Southwark Lord Howarth of Newport: My Lords, as Ministers To ask Her Majesty’s Government what are the review the skills needs of the health service, will they next actions they plan to take in support of the take into account the significant contribution that can continuing development of credit unions. be made in healthcare settings to recovery and well-being by the arts—music, poetry and reading aloud, for The Parliamentary Under-Secretary of State, Department example? Will they signal to healthcare professionals for Work and Pensions (Lord Freud): My Lords, credit and commissioning bodies that it is legitimate to invest unions provide people on low income with access to certain resources in the arts and, of course, design in and loans. More can be done to order to promote good health? support credit unions to modernise, serve more people and become self-sustainable. Therefore, on 27 June, I Earl Howe: One of the features of the reforms that announced that we are going to provide £38 million to we have enacted is the ability for allied health professionals, fund a new credit union expansion project and that the including those mentioned by the noble Lord, to have Government will be consulting on credit union interest a say in the planning of services at a local level—health rates, as recommended in the credit union feasibility and well-being boards. The value of those activities, study published on 10 May. rightly emphasised by the noble Lord, will I hope in time be more greatly appreciated as the outcomes Lord Kennedy of Southwark: My Lords, in the UK framework takes effect, and the patient experience of today, 1.4 million people have no bank account and care becomes more prominent in the way that we 7 million people use high-cost credit, whether it is assess services. payday loans, home credit or pawnbrokers. My frustration 339 Credit Unions[LORDS] Police: Working Conditions 340

[LORD KENNEDY OF SOUTHWARK] Lord Freud: My Lords, that is something that we is that development is still very slow and more could need to look at closely. One of the things that we are be done to develop the sector. Will the Minister agree doing in the housing demonstration projects is tying to look at what contribution the high street banks the credit unions into the direct payment structure, could make towards developing the sector? In particular, and that has been very helpful. As we build out that could they be persuaded to second staff to work in the system, the role of credit unions can be used and sector to aid its development? I believe that our banks advertised in that way. As for the £38 million, that is should make a contribution to the sector to provide for the credit unions themselves to decide how to use, financial products at an affordable cost that they and we will be taking bids and working out that themselves will not provide. process over the next half year or so to find out how that money can be used most effectively. Lord Freud: My Lords, we have a procurement function going on with the credit unions, which will Lord Clarke of Hampstead: My Lords, welcome as start shortly, in terms of how they can modernise and the consultation is, it should include something about improve. It may well be that there are contributions children getting involved. In St Albans District Credit that are not financial but intellectual that the credit Union, in which I declare an interest, there is a nice unions can add. We are currently having a series of scheme going on where youngsters come in on a working parties with the retail banks as we develop the Monday, give their money and get that put in their requirements for universal credit and financial inclusion. book. Establishing the pattern of saving, which is one of the key principles of credit unions, could be an advantage if people were exposed to it nice and early. Lord Cormack: My Lords, I greatly welcome my Will the Minister discuss with his friends in the noble friend’s commitment, but can we accelerate things? Department for Education the possibility of getting In this age of rapacious loan sharks, credit unions into schools and working with credit unions in that could be of real help to many people who are struggling way? on very low fixed incomes. Could we please have a little more expedition? Lord Freud: My Lords, something over 10% of members of credit unions are youngsters—over 100,000. Lord Freud: My Lords, the whole point of this That is useful and valuable for youngsters. However, I exercise is to expedite the growth of the movement. emphasise that what we are looking at now is trying to There are currently 1 million members of credit unions. build an industry that can sustain itself. That must The target that we have set is to double that within five take priority, and that is what the money is for. to seven years and to make credit unions self-sustaining, which they currently are not. The Lord Bishop of Newcastle: My Lords, while I, too, welcome the Government’s support for the growth Baroness Sherlock: My Lords, I am very glad that of credit unions, and recognise that some changes in the Minister has given us that target of 2 million the regulations are going to come in this September, people but, in the light of the figures given by my what will the consequences be for the very smallest noble friend Lord Kennedy, if 7 million people are credit unions that are still serving some of the poorest using high-cost credit at the moment, with the extortionate and most vulnerable people in our society? interest rates of doorstep lending, is 2 million too unambitious a target? Should the Government not be Lord Freud: My Lords, what we are looking for in shooting for a far higher figure? the bids is substantial change. Smaller credit unions can take part in those bids in combination with groups Lord Freud: My Lords, we have to build an industry of credit unions. In fact, we are expecting consortia to that is self-sustaining. That is the vital priority. It is no form to use this money most effectively. good piling money into an industry that cannot effectively absorb it. It is vital that we get this right, and this expansion project is the right way to go. Police: Working Conditions Question

Lord Kirkwood of Kirkhope: My Lords, my noble 11.30 am friend’s announcement of the extra support for credit unions is immensely welcome, particularly because Asked by Baroness Quin after April 2013 the discretionary social fund will no longer be available to give community care grants or To ask Her Majesty’s Government what crisis loans. Will some of the £38 million that he has representations they have received about the case announced, which is extremely welcome, be used to for flexibility in police working conditions and practices. advertise the existence of the social enterprises that usually constitute credit unions? One of the biggest The Minister of State, Home Office (Lord Henley): problems is that people do not know about them. If My Lords, police working conditions and practices Jobcentre Plus and prime contractors to the work are discussed regularly by the police negotiating machinery, programme were made to advertise the availability of where the Home Office is represented, as well as in these services, it would help them enormously to make ministerial meetings with representatives of police staff in future. and associations. 341 Police: Working Conditions[19 JULY 2012] Police: Working Conditions 342

Baroness Quin: Has the Minister seen the recent hand, seem to be pursuing a policy of at least threatening findings released by the independent commission headed to downgrade the terms and conditions of police men by the noble Lord, Lord Stevens? The findings show and women. Are the Government not showing two an alarming level of morale among police officers, faces on this? with four out of 10 women police officers who responded saying that they had thought of quitting the force. Lord Henley: My Lords, I echo the noble Lord’s Indeed, over three-quarters of the respondents said praise for the police service, and thoroughly endorse that they were pessimistic about the future of the it. However, I should also say that it is quite right that service. Although the report focused specifically on we look at police pay and conditions, which have not women police officers, there is evidence to show that been properly examined for 30 years. That was the male officers are similarly affected by these issues, as point behind the Winsor report. We believe that that indeed are police couples trying to combine their report will provide a good basis for discussion and police duties with family responsibilities. Does the consultation. This area has not been looked at for serious nature of these findings not demand an urgent 30 years, and we think that it is right to look at it again and early response from the Government, so that now. these issues can be addressed and the situation can begin to improve, rather than deteriorate, as many police officers fear it will? Lord Mackenzie of Framwellgate: My Lords, in the light of the security debacle mentioned by my noble friend Lord Grocott, does the Minister agree that Lord Henley: My Lords, I have seen the report, when it comes to service, duty and commitment, public which was commissioned by the Labour party and is quite often far preferable to private? conducted by the noble Lord, Lord Stevens. I have to say that the statistics come from an online survey and so were somewhat self-selecting: we believe that those Lord Henley: My Lords, that is another question. I responding were more likely to be those who were praise the police force for all that it does. The noble disgruntled with their job. As regards the position of Lord is a fine exemplar of the police service and we are women in the police service, the noble Baroness ought proud to see him serving in this House as well. However, to recognise that the retention rate for female police there are some areas where it is often better to use the officers is something of the order of 95%, which is private sector, and that is why we make use of it for considerably higher than the retention rate for men in such things as the security around sporting events. I the police force. I would have thought that that indicates do not think that the noble Lord would think that that that women police officers are satisfied with their would be a good use of police time or manpower. terms and conditions and that there are suitable policies for flexibility in all of the police forces in the country. Lord Dholakia: My Lords, would my noble friend’s department be happy to give evidence to the Stevens commission on the recruitment and retention of women Baroness Harris of Richmond: My Lords, I declare police officers? an interest as a member of the independent police commission. I am sure that, when it comes out, the report will make very interesting reading. Women Lord Henley: If I heard my noble friend correctly, police officers have particular issues that they feel are he asked whether we would be happy to give evidence. not being addressed or considered seriously. Can my Of course we would. noble friend tell me how many forces have applied flexible working conditions and arrangements for women Lord Foulkes of Cumnock: Could the Minister make police officers? If he cannot tell me today, I will be it absolutely clear—I am sorry; the noble Lord, Lord happy to accept a written response. Elton, reminds me to keep my hands behind my back— that, where we have the Army, G4S and the police Lord Henley: I can give my noble friend an assurance working together during the Olympic and Paralympic that all 43 police forces have policies relating to flexibility Games, it will be the police chief who has ultimate in working. I repeat the statistic I gave earlier, that the responsibility for issuing orders and dealing with disorder, retention rate for women in the police service is over and not G4S or the Army? 95%. That seems to indicate that there is considerable satisfaction with the terms and conditions that are on Lord Henley: My Lords, as I made clear the other offer. day, security is ultimately a matter for my right honourable friend the Secretary of State. However, in the event of Lord Grocott: My Lords, if the Minister and the there being a major incident, it will obviously be the Government are under the impression that there is police who will take charge of operational matters at high morale in the police service at the moment, they that stage. are very seriously misjudging the truth of the facts on the ground. Police men and women fear for their terms Lord Rosser: My Lords, the Government’s approach and conditions and their pension entitlements. They to millionaires, which is a cut of 5p in the pound, is feel that, on the one hand, the Government are forever in stark contrast to their approach to the working praising our police service—in my view, quite rightly—for conditions of our police, on whom we all depend and the tremendous way in which it fills the gaps, most whose morale is at a low ebb, despite what the Minister recently in relation to the Olympics, but, on the other said. Do the Government still intend to introduce the 343 Police: Working Conditions[LORDS] Wales: Devolution 344

[LORD ROSSER] here. It was taken as a Written Ministerial Statement controversial Winsor recommendations on regional while I was asking an oral question. It really is quite pay and cut starting salaries for the police? Will the outrageous and I hope that the Leader of the House Minister give an undertaking that, for the rest of this will be able to assure us that it will not happen again. Parliament, the Government will not preside over compulsory redundancies among front-line police officers? The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, the noble Lord, Lord Barnett, Lord Henley: I am not sure what the point behind has been a Member of this House for a very long time the noble Lord’s first remark was, but I remind him indeed. The noble Lord knows that it does not have that millionaires are probably paying higher rates of points of order and that if he needs to raise a question, tax than at any point in the past 13 years—during a it has to be on a relevant Motion. It is a gross discourtesy large number of which the party opposite was in to the Lord Speaker for the noble Lord not to have put government. On the second part of the noble Lord’s down a PNQ if he felt it was appropriate. It is also a question, it would have helped if he had listened to my discourtesy to the House for him to break the rules in earlier answers, when I made it quite clear that the this way. If the noble Lord does not know what the Winsor report was a very good basis for discussion. rules are, then I urge him to take advice from the Clerk That is what we intend to do, because these matters of the Parliaments, who no doubt will provide an have not been looked at for 30 years. induction course for him.

Late Night Levy (Application and Noble Lords: Oh! Administration) Regulations 2012 Lord Barnett: My Lords, I have indeed been a Motion to Refer to Grand Committee Member of this House for nearly 30 years and have never, I hope, done anything discourteous in any way. I 11.37 am was putting an oral question on the specific issue and Moved by Lord Henley at the same time a Minister was putting down a Written Ministerial Statement. This was on something That the draft regulations be referred to a Grand rather important, to say the least, because the Prime Committee. Minister—and even his deputy was with him—was making this major statement about loan guarantees. Baroness Smith of Basildon: My Lords, I had The Leader of the Opposition asked specifically that understood from press reports and a Written Ministerial those kinds of statements should be made here; she Statement last night that, in light of a Supreme Court never said written ones. What is wrong with my asking judgment yesterday, immigration orders or regulations now that it should not happen again? would be laid today. Can the Minister enlighten us as to what form those may take and when noble Lords Lord Strathclyde: My Lords, what is wrong is that are likely to have sight of them? the noble Lord is breaking the rules of the House by not raising it at a relevant time on a Motion that is on The Minister of State, Home Office (Lord Henley): the Order Paper. My Lords, I issued a Written Ministerial Statement last night in response to that judgment from the Supreme Court. I can give an assurance to the noble Baroness Wales: Devolution that we will be laying orders later today and that they Motion to Take Note will be available in the Printed Paper Office. 11.42 am Motion agreed. Moved by Baroness Randerson Business That this House takes note of the progress being made by the Commission on Devolution in Wales 11.38 am chaired by Paul Silk. Lord Barnett: While the Leader of the House is here, I feel that I should bring to the attention of the Baroness Randerson: My Lords, first, I declare an House a very serious matter that has arisen. At Question interest as I am in receipt of a pension from the Time yesterday, I asked a question of the Treasury. National Assembly for Wales. I am also a member of The noble Lord, Lord De Mauley, who is normally the advisory board of the Wales Governance Centre, very honourable, told me that he could not reply to my to which I will refer later. question and would do so in writing. We did not know Since I entered this House 18 months ago, noble at the time that a Written Ministerial Statement was Lords have devoted many hours to Scottish constitutional being made by the noble Lord, Lord Sassoon. The issues. In putting down this Motion for debate today, I Leader of the Opposition asked a few days ago that, am hoping to start to redress the balance and shine a while this House is sitting as part of this Parliament, little light on Welsh constitutional issues. We recently any major Statement—this was a serious Statement on had an excellent debate on the Government’s Green infrastructure and loan guarantee schemes—be taken Paper on electoral systems, which demonstrated that 345 Wales: Devolution[19 JULY 2012] Wales: Devolution 346 we have plenty to say. In the 1990s, as a Liberal Centre, the Institute for Welsh Affairs and Tomorrow’s Democrat, I was a supporter and campaigner for a full Wales came together to produce a joint submission to Parliament for Wales, rather than the little fledgling the Silk commission in which they emphasise this we were given in 1999. However, I am a pragmatist anomaly. They labelled it, and long ago accepted that the Assembly we were “an aberration from international and British norms”, given, fashioned like a county council as a corporate body, was the best that the then Secretary of State for and expressed the view that such powers were needed Wales could persuade his party to accept. In my view, in order to increase the accountability of Welsh something is better than nothing. government. We then set about building the Assembly into a The commission, chaired by Paul Silk, formerly a proper legislature. First, the Liberal Democrat-Labour clerk to the National Assembly and, indeed, formerly partnership Government established the Richard a clerk to Parliament, in the other place, is modelled commission, which produced a radical and far-sighted on ’s Calman commission, but, significantly, set of recommendations, which I regret were not pursued it has even greater credibility because unlike Calman, by the then Secretary of State. Instead of a giant leap all four main political parties are represented on it. So forward, we were consigned to a series of short hops. far it has taken evidence on financial accountability One such short hop, in 2006, saw the second Government and we expect its report on this aspect early next year. of Wales Act, which introduced primary legislative It has had more than 40 submissions, the majority in powers—but only so long as MPs gave their permission favour of some element of fiscal powers for the Assembly. on a one-by-one basis. Hence, the infamous legislative Of course, the big question is exactly which competence order was born and with it a great deal of should the Assembly be allowed to levy. In a country resentment between the two institutions. It complicated with such a long border with England there are practical an already very complex system. problems to be addressed in order to ensure that devolution of tax-varying powers does not lead to It is worth noting that there is a fundamental increased tax avoidance. difference in how the original Government of Wales Act and the Scotland Act were written. The Scotland The foundations for the commission’s discussions Act gave power to the over wide were laid by the Holtham commission, which was areas of public policy, with specific and narrow exceptions. established by the in 2007. That By contrast, in Wales, the Assembly was given much looked at the as well as tax-raising more narrow and specific powers, which were added to powers. In contrast, the Silk commission is looking in a haphazard and lopsided way as and when the only at taxation, discussions on the Barnett formula Assembly asked for them, an issue I will return to being held between Governments. While that is later. The second stage envisaged in the Government understandable, as the Barnett formula does not affect of Wales Act 2006—full legislative powers—was pressed only Wales, it makes the situation more complex and I for throughout the third Assembly. However, there believe that it will be essential to reform the Barnett was little progress prior to the coalition coming to formula before we can have satisfactory devolution of power in 2010. any significant tax-varying powers. Discussions between the two Governments seem to be progressing and I The history I have outlined so far will tell you that wonder whether my noble friend the Minister, when he the people of Wales have got used to looking over replies to this debate, can give us an update on progress. their shoulder with envy at the powers enjoyed by the I am particularly interested in the concept of the Scottish Parliament. Just as resentment was building, introduction of a Barnett floor, which would ensure rescue arrived in the perhaps unlikely form of the that when public expenditure begins to rise again, coalition. A number of key developments followed Wales will not be subject to the Barnett squeeze suffered pretty quickly after the coalition came to power. There from so badly so far. are four pieces on the chess board at the moment and, just as in the game of chess, the movement of one I believe that it is more or less inevitable that the piece has a knock-on effect on all the others. final recommendations of the commission will include some which are dependent on Barnett reform for their A referendum was held on legislative powers, which implementation. Indeed, a large number of the responses was won resoundingly. Intergovernment talks have to its consultation concentrate on this issue. It is a started on the Barnett formula, which has been a happy coincidence that this week has seen the publication growing source of acrimony for the past 12 years. of the ICM poll commissioned by the Silk commission Recently the Secretary of State issued a Green Paper which gave a strong, if a bit confused, endorsement for on electoral arrangements for Wales which proposes proposals for the Assembly to be granted tax-varying some significant and, to me, very welcome changes. powers. Some 64% favoured powers to set The Silk commission set up in October 2011 is a and 80% agreed with borrowing powers. My view is long-burning fuse looking at two key aspects. Part one that borrowing powers are a vital first stage that can deals with financial accountability. The Assembly has be implemented quickly and easily. The Northern always lacked some credibility because, uniquely in Ireland Executive has used its borrowing powers for the UK, it has no responsibility for raising the money infrastructure and public service investment. There it spends. Even a parish council has more financial has been significant development in the borrowing credibility than the Assembly. The Welsh Assembly is powers of the Scottish Parliament. Wales needs this probably the only body in the world able to pass laws freedom as well if there are ever to be major infrastructure and spend money while having no power or responsibility projects, such as the badly needed improvements to over tax. Indeed, only last week the Wales Governance the M4. I accept that the Treasury has to place limits 347 Wales: Devolution[LORDS] Wales: Devolution 348

[BARONESS RANDERSON] wield the powers they do have as effectively as they on such borrowing, but if Wales were to be given should. Basically, the Government of Wales Act is similar powers—similar limits to those applied in Scotland chaotic and becomes more so by the year as additional and —we would be looking at something powers are tacked on like sticking plaster. In my view, in the order of a cumulative limit to borrowing over a the Act needs to be entirely rewritten on the Scottish period of 10 years of just over £1 billion. I am pretty model, which I referred to earlier in my speech. certain that the Treasury can cope with that. There is, in addition, a pretty long list of additional It is of course easy to agree in principle that some powers that the Assembly could justifiably claim should taxation powers should be devolved, but the difficult be devolved to Wales. Powers to deal with energy decision comes in agreeing exactly which taxes and to consents for projects over 50 megawatts would be what extent. The two most commonly cited proposals particularly welcomed in a country which is home to are for part of income tax and for corporation tax to so many large wind farms. Policing is a strong contender, be devolved. Corporation tax has the advantage of because the police nowadays work so closely with ensuring that the Welsh Government would benefit local authorities, and local government is devolved. from higher tax revenues as a reward for pursuing The gradual development of a body of successful economic policies. More prosperous businesses makes it logical that there should be a separate Welsh mean more tax revenue. The Welsh economy desperately jurisdiction. We are already, de facto, half way there, needs stimulation. I am a strong devolutionist, but I and that is important to recognise. Some aspects of fully recognise that the Welsh economy has suffered broadcasting, such as S4C, could sensibly be overseen badly in the years since devolution. It would be useful by the Assembly and there is a host of more minor for the Welsh Government to be able to attract new powers that would tidy up the settlement, such as business with the incentive, for example, of a slightly reforming the electoral arrangements for local government. lower rate of corporation tax. I am very pleased indeed to see the list of distinguished The Silk commission is looking at the devolution of speakers planning to take part here today. I have some powers over income tax, following the Scottish already referred to the noble Lord, Lord Richard, and model and as recommended by the Holtham commission, his report. I am pleased to see him in the Chamber. which said that half of income tax should be allocated I look forward to hearing all your Lordships’ views. I to Wales but with the ability to vary it by 3p from the regard this as our opportunity to make our voice English rate. But without a fairer funding formula, heard in this consultation and I ask the Minister when this could lead to a further drop in income, which he speaks to suggest how we can most effectively put would be simply unacceptable. Therefore, in my view, the points made in this debate on record for consideration the devolution of a proportion of income must be by the Silk commission. predicated on a reform of Barnett running alongside it. 11.55 am If not income tax, what other taxes could successfully Lord Roberts of Conwy: My Lords, I congratulate be devolved? Maybe , to help lower the cost my noble friend on securing this debate, which enables of homes in Wales. As waste management and recycling us, as she suggested, to have an input into the Silk are both largely devolved, both the and commission’s deliberations. , if devolved to Wales, would enable the Welsh Government to take a more strategic approach My comments today will be very preliminary and to environmental issues. There should be a greater tentative, because I hope that we shall have a further freedom to reform the local government rating system, chance to debate the Silk report when it is published domestic and non-domestic. The complexity of Welsh and before the Government make up their mind on the devolution is such that both business support and proposals. However, even as things stand, it is not local government are devolved, but the Assembly does difficult to make an informed guess about the not have the powers to change the rating system recommendations of the first part of the Silk commission’s beyond some control over the multiplier. inquiry on taxation and accountability in Wales; and, indeed, perhaps about the eventual outcome after Another possible candidate is the devolution of our public reaction to its proposals and the Government’s passenger duty. There is really no reason why the consideration of it all. I say this with some confidence, Assembly should not be allowed to create a new because we know what happened to Scotland after the tax—maybe a green tax—to stimulate environmental Calman inquiry and the subsequent Bill that came efficiency. Clearly, this is a complex area and there before this House. Unlike Scotland, Wales does not must be detailed analysis by tax experts before decisions have a Parliament of its own, but it has a National are made. It is clear to me, however, that control over Assembly and Government, and we can reasonably some tax levers would encourage the Welsh Government assume that developments in Wales will very likely to be more strategic in their thinking, and to concentrate follow a similar pathway to the one in Scotland. on the economic growth that Wales so badly needs. It The commission may well recommend that the would increase democratic accountability. revenue produced by certain UK taxes in Wales should Finally, and briefly, I will anticipate the second be assigned to the Welsh Assembly Government and a stage of the Silk commission and look at the issue of corresponding deduction made from the . I powers more generally. I have just cited an example see no insuperable difficulty with this, although there of complex powers over local government finance. may be some argument about the level of the taxes There are many more such anomalies, where a gap in concerned and the power to change them. I first powers makes it difficult for the Welsh Government to encountered this idea of assigning the product of 349 Wales: Devolution[19 JULY 2012] Wales: Devolution 350 taxation in a report produced by my noble friend Lord income tax levels should be determined in Wales. Steel of Aikwood when he presided over the Scottish However, as the Guardian put it on Monday, Parliament, which takes us back a bit. “other answers muddied the waters”. I also remember the conclusion of that report: It went on: namely, that even if the Scottish product of all the UK “Asked which level of government should have the most taxes he listed in his report—and it was a page full of influence over taxes that pay, the results seem to transfers—was transferred to Scottish coffers, Scotland contradict the bottom-line conclusion, with … 53% saying it would still need a subsidy from the UK Treasury to should be Westminster. The Welsh government was … second maintain the level of spending that it was accustomed with 35%”. to. That is likely to be the position in Wales as well. To There we have it. my mind, the real problems arise over powers to vary I agree in principle that borrowing powers, which rates of tax of one sort or another and if power is are already available to the Scottish Parliament and given to raise new taxes unique to Wales, as allowed in the Northern Ireland Assembly, should be granted to the recently passed Scotland Act, although it is a the Welsh National Assembly and its Government but power not yet used in Scotland. under strict Treasury control, bearing in mind the UK With regard to the power to vary taxes, we have deficit that the coalition Government inherited and seen the argument arise over the desire to vary corporation which has got us into so much trouble. The ultimate tax in different parts of the UK, particularly in the safeguard—we must never allow this to go—must be face of the low rate of 12.5% in the Republic of the overriding power of this Parliament. I sincerely Ireland. The rate is regarded as an all-important factor hope that it will be preserved for use in extreme in attracting inward investors, and of course we all circumstances if things go very badly wrong in Wales. want inward investors in all parts of the UK. The UK There are many other issues to consider: the transfer Government’s view is that it would not be right to of business-rate setting to the Assembly, which has allow one UK country or region a more favourable similarities to the transfer of corporation tax in that it rate of corporation tax than another. I do not see can advantage or disadvantage an area, depending on them changing their mind on this. the rate imposed. However, the key question is whether the product of any tax transfers is additional to the I am more perturbed by the possibility of new or block grant or a substitute for some part of it. I increased rates of taxes being imposed on businesses suspect that most transfers will be substitutes. and individuals in Wales. We have a Labour Government in Wales, with more of the flavour of old Labour than There is also the issue raised by the Welsh Government the new. They are convinced of the supreme importance in their evidence to the commission in the event of a of the state and of the primacy of its needs and transfer of power to vary income tax. They suggest requirements. Their views are not mine. Suffice it to that there should be a referendum. Incidentally, it is say: by their deeds shall ye know them. As the noble not a power that the Welsh Government have actually Baroness has just said, their record in developing the asked for. Much to my surprise, I see that the Welsh Welsh economy over the past 13 years is not one to be Conservatives, in their evidence, which is reproduced proud of. They have seen Wales fall as a favoured on page 7 of the excellent Library note, say that, destination for inward investment from being second “consideration should be given to the devolution of some aspects only to Scotland to being the lowest bar one among of income tax, because this could make the … Assembly more the UK regions. That, I dare say, was due to the accountable to the people it represents … There is considerable abolition of the . Let us merit in exploring this policy”. face it, Wales is one of the poorest regions in the Wonders never cease. and one of the least able to bear additional taxation. Extra taxes would drive out businesses 12.06 pm and individuals—of that we can be certain. If the Government were to lower taxes to incentivise people Lord Anderson of : My Lords, I congratulate it would be a different matter, but that is most unlikely. the noble Baroness, Lady Randerson, on choosing this debate. For me, the real problem is channelling more If the National Assembly and its Government do resources to Wales, and the issues of accountability not have taxation powers, how can they be held and the irresponsibility which comes from spending accountable to the electorate? Arguably, that could be without actually raising the taxes are secondary. The achieved through the National Audit Office, the Public issue of more resources for Wales is important and Accounts Committee and all the other parliamentary bristles with problems, so I am sad to see the lack of mechanisms here, but I do not think that they have interest in Wales in the Silk commission. For example, ever been applied. That is a dilemma that is being left the first public event in Wales, in Swansea in March, to the Silk commission, and I do not envy its task of was attended by but 11 people. deciding how that accountability can be created. Even I am not surprised at the findings of the ICM poll, within a democracy, there must be safeguards against published this month, in which those polled agreed the deleterious, deeply damaging and mistaken use of that, in principle, greater tax powers should be given powers. The trouble is that it often takes time for the to Wales. Sadly—or perhaps surprisingly—the most abuse and hurt to be felt and realised by the electorate. enthusiasm for the transfer of tax powers came from This possibly explains the somewhat conflicting those who do not pay taxes. More than 76% of the views expressed to the ICM poll, which was commissioned unemployed thought that there should be a transfer of by the Silk commission and published this week. We tax powers, and Paul Silk himself commented that it is are told that 64% of those questioned thought that clear from the poll that there is a limited understanding 351 Wales: Devolution[LORDS] Wales: Devolution 352

[LORD ANDERSON OF SWANSEA] recognise the danger of Wales losing out in interregional of taxation issues among the public as a whole. This competition and falling into the trap of seeking differences begs the question: how much weight we should then for their own sake, such as the variation of income tax attach to the findings of that poll? The most important or the so-called nudge taxes, such as the 5p we pay in finding is on page 13. It states that, Welsh supermarkets for plastic bags. But the more “the public subscribe to the view that in an age of austerity, public successful these nudge taxes are in altering behaviour, spending in Wales must not exceed revenue raised in Wales ... the the less revenue is raised. Thus it is done for social and Welsh public would prefer fiscal transfers from the rest of the UK not revenue reasons. than higher taxes in Wales”. If we follow the Holtham recommendations, and Surprise, surprise. This sounds very sensible indeed. the Welsh Assembly Government were to introduce I should like to raise one or two preliminary new taxes on goods or activities that are currently not considerations, if I may. In a unitary system of taxed at the UK level, it could be a serious disincentive government, and a small country, the problems of to inward investment at a time of increased competition. differential taxation are great, and the situation would Obviously, much of the debate centres on devolving be made easier in a federal system. There is, for borrowing powers, which I am certainly not against in example, the frequently raised problem of air passenger principle. The trouble with borrowing, however, is that duty. How would it help Airport if this were it has to be repaid. One sees the problem, for example, transferred? It would be taken into consideration in with the PFI scheme and the property bubbles in the block grant. If the were higher Ireland and . Clear limits have to be set by the in Wales and England, Wales would lose business. If it UK Treasury, as the noble Baroness readily acknowledges, were lower, let us imagine the cries from because otherwise the problem can get out of control, as of the incentive for people to go to Cardiff. Surely the happened in Spain with the degree of devolution of problem is poor access to . Therefore, I borrowing powers to the autonomia and the difficulty welcome the proposed new railway station there, which of the Spanish federal Government in dealing with was announced this week. their fiscal crisis. Our concern should really be justice within the UK; Where is the domestic revenue stream in Wales to hence the debate on the Barnett formula. There is an repay? How can we provide flexibility in the context of overwhelming case for the distribution of resources to block grant variations? To what extent will the problem be based on need but, realistically, that will not happen be met at the UK level by the new government guarantee before the Scottish referendum. What do we know scheme announced this week to underwrite private about need within the UK? Fascinating figures on sector investment? Perhaps the Minister could say regional unemployment were published by the European how relevant this scheme is to Wales, and what effect it Union on 4 July. There were two important conclusions. might have on the current debate. The first was that some regions in England are worse The starting point of the debate is surely that in off than Wales; and Scotland is better placed than Wales we are relatively poor, in the UK context. There Wales. So we should beware of interregional conflict. is a shortfall between the UK taxes raised in Wales In 2011, for example, the unemployment rate in Wales and the UK public spending in Wales of around was 8.6%; in Scotland, it was 7.9%; in the West , £15 billion, roughly equal to the total Welsh Government it was 9%; in Yorkshire and Humberside, it was 9.4%; expenditure. Taxes raised in Wales would be raised and in the north-east, it was 10.8%. from a weaker tax base, as Wales generates 70% of the The second conclusion from these regional statistics UK average GVA. Therefore, a penny on income tax relate to the divisions within Wales and, indeed, the raises 30% less in Wales, and Wales would lose if, for widening gap. For example, in and the instance, 10% of income tax were raised here. valleys the unemployment rate in 2010 was 9.2%, but If some of the tax raised were taken off the block in 2011 it was 9.9%. In east Wales, however, the figure grant, there would be a worse outcome for us than decreased from 7.8% to 6.5%. Surely this widening gap under the Barnett formula. The devolved borrowing should be addressed. It should be a major concern of powers could therefore be a distraction from the primary the Welsh Assembly Government and of this House. question of how much capital investment we need. In passing, I should say that I welcome this week’s What is our fair share of UK capital investment, and announcement of the extension of the electrification where is the continuous income stream to pay for the of rail as far as Swansea and the valleys. Without that, borrowing? Perhaps we could use the Severn Bridge the regional gap would be further widened. tolls? In passing, I must say that the Severn Bridge toll That obviously leads to a debate about the definition is a major tax on Wales, and a major disincentive for of devolution. Although that debate is not for today, inward investment. Perhaps the best way of helping one still might ask why devolution should stop at the Wales at the moment—certainly south Wales—would National Assembly level. Proper devolution should be be to abolish the toll, or at least make it cover maintenance extended to the lowest practical tier of government—in costs only. other words, subsidiarity. Currently, our local authorities I agree with Geraint Davies, my own MP for Swansea are weakened. I therefore welcome the debate about West, in his submission to Silk, that there may be a city regions promoted by the task force report published case for tinkering at the edges, or for experiments such on 11 July. as our plastic bag tax, but that to concentrate on these On taxation generally, I am not surprised that the may well divert attention from the main issue; that is, Welsh Affairs Committee in the other place, in its that our interests are best served not by flirting with January report, reached no conclusions. We should ingenious new tax devices, but by claiming more and 353 Wales: Devolution[19 JULY 2012] Wales: Devolution 354 ensuring that Wales obtains a fair share of the national If economic success leads to an increase in the cake based on our needs, which certainly does not Welsh budget, it should not follow that there should happen currently under the Barnett formula. be an immediate reduction in central government funding. These matters fluctuate in the short term and it is 12.17 pm important that the infrastructure of the economy should be underpinned and that problems such as the greater Lord Maclennan of Rogart: My Lords, I congratulate rurality of Wales are taken into account and a more my noble friend on initiating this discussion. I hope equitable solution is produced. that the House will forgive the intrusion of someone from the north, rather than the west, of the United I urge the Government to take note of the inquiry Kingdom. I promise that I shall be brief. in another place, chaired by Mr Graham Allen, into I can see that the problem of asymmetric devolution the possibility of a convention on a constitution for has not made life easier for Wales. It is my hope that the whole . There is much merit in the work of the Silk commission will feed the discussion that. Evidence from the Silk inquiry and of those who as to what tax arrangements are most suitable for the have been giving such careful consideration to these whole of the United Kingdom. We do not live in a matters as they affect Wales should be fed into such a homogeneous, single, . There are substantial convention. However, it should not be expected to variations in need, which have been alluded to by the deliberate and come up with immediate results but noble Lord, Lord Anderson, and others who have rather, in the manner of the Scottish convention, take spoken in the debate. However, it seems to me that our its time to come up with a solution that will satisfy the approach, nationally—by that I mean as part of the different parts of the United Kingdom, I know that United Kingdom—is somewhat too fractured. It would that goes beyond the ambit of this debate. be appropriate to pull together the thinking of Holtham, Calman, Silk, and all the other inquiries that are going Lord Wills: I am grateful to the noble Lord for on into these matters, with a view to taking the step giving way. He makes an important point. Can he that has been alluded to as the desirable end point by clarify his thinking about this constitutional convention? my noble friend of some form of federation for the Should it be literally along the lines of the Scottish country. I say “some form” because it is quite clear constitutional convention or should it have a more that the form has built imbalance into demographically representative element and therefore the prosperity of the different states. However, that be much more akin to a deliberative assembly, the need not be the case, as is made abundantly clear by conclusions of which would not be binding? Which the experience of the Federal German Republic. sort of model does he think would be preferable in this Looking at what is happening in Scotland is not case? necessarily the right way to approach what is to be done in Wales, because the Scottish situation is far Lord Maclennan of Rogart: I would hope that we from stable. The degree of satisfaction that may arise can learn from the experience of the Scottish convention: from the Scotland Act is yet to be determined. It is that it should not be confined to certain political certainly my view that equitability as between the parties; that it should be representative of varying and different nations and regions of this country should be discrete interests; and that it should be deliberative. a prime concern and one should not simply address The serious groundwork being done by Silk—and the local difficulties as though they were unique. earlier by Holtham, Calman, and so forth—should be It is time to ask some questions of the Government borne in mind and taken into account. This should regarding the Silk inquiry, and my noble friend Lady not be led by politicians who have come to it with a Randerson has done just that. In particular, I should defined end point; but rather, it should emerge as like my noble and learned friend Lord Wallace to something like a national consensus following a national indicate when he replies to the debate what the state of debate. the discussion is between the two Governments as regards borrowing. Is it confined to borrowing from 12.26 pm the Treasury or does it also encompass the possibility of private borrowing for public intentions? The urgency Lord Wigley: My Lords, I welcome today’s debate of that issue seems to have been recognised by virtually and thank the noble Baroness, Lady Randerson, for all those who have given evidence to the Silk inquiry facilitating it. However, I have no doubt that we will and it seems that that could be done without seriously return to this subject when the Silk commission produces upsetting the British economy. its report, which is expected in November. In addressing What has been interesting is the extent to which these matters today, I am conscious that Mr Ron there is an express desire within Wales for greater Davies once famously stated that devolution is a process control over taxation, although I noticed what the and not an event. Where are we in that ongoing noble Lord, Lord Anderson, had to say about the process? We can now fairly assert that the National down side. However, that could be rectified by making Assembly for Wales is here to stay. Fewer than 20% of sure that the distribution of public—United Kingdom— respondents, in a whole series of polls, say that they funds takes more account of need than is the case with would prefer to revert to the bad old days best typified the Barnett formula. I hope that the Government will when we had Mr as a governor-general. give some indication as to how they would wish to The two-to-one majority vote last year for primary progress. The postponement of decisions on Barnett is law-making powers has given the Assembly the law- definitely damaging to the coherence of our United making tools in those areas devolved to it. The model, Kingdom. however, as the noble Baroness said, is nothing like as 355 Wales: Devolution[LORDS] Wales: Devolution 356

[LORD WIGLEY] All but two of the countries within the OECD that transparent as in Scotland, where all functions not have devolved legislatures require those regional bodies reserved to Westminster come under the Scottish to raise at least 20% of their budget from their own Parliament. Wales should operate on a similar basis. taxes, which in Wales would be equivalent to some At some stage we are going to have to come back to £3 billion a year. One cannot begin to address the that. There is also a case, as the noble Baroness question of what tax-varying powers should be devolved asserted, for other portfolios to be devolved, most without at least reviewing the inadequacy of the Barnett notably those of police and prisons. There is wide formula in its application to Wales. The Holtham support for this within those services, and also for commission showed that Wales was being underfunded devolution of broadcasting, major energy projects and by up to £400 million a year if the settlement was the courts. supposed to allow the Assembly to maintain public How far should the process go? My party, Plaid services at a level comparable with England. Updating Cymru, believes that ultimately Wales should have its the Holtham figures to the 2010-11 situation shows a own independent voice within the European Union, widening gap, with a shortfall of up to £540 million. and for the present political union of these islands to The Secretary of State for Wales, Mrs Gillan, said in be replaced with a new relationship. It should be more the Assembly on 23 May that: like a social union, with a more confederal link between “The Barnett formula is coming to the end of its life and needs Wales, Scotland and England. I expressed my own to be looked at”. emphasis in my maiden speech in this Chamber. I Silk is not directed to review Barnett, but I cannot see want to see Wales as a nation taking all the decisions how it can reach conclusions without knowing the that can meaningfully be taken on an all-Wales level, Government’s intentions with regard to replacing Barnett, and to have an effective voice in other decisions that hopefully with a needs-based formula. have to be taken on a wider scale. There are models of Putting in a Barnett floor, as some have advocated, government short of independence that may warrant to limit the effects of the Barnett squeeze, is nothing consideration. These include federal, quasi-federal and like enough. To a large extent it is like closing the door confederal structures. As was noted by the noble Lord, after the horse has bolted. At a time of expenditure Lord Maclennan, a moment ago, I believe that when cuts it achieves next to nothing, and unless there is we debate the future of this Chamber, it would be a some backdating mechanism to take account of what missed opportunity not to consider the possibility of has happened since 1999, which would generate the it becoming a federal Chamber, particularly if devolution sum of £8 billion—the amount we have lost out on for Wales, Scotland and Northern Ireland moves towards because of the Barnett squeeze over the period—the the devolution-max model that apparently is very problems facing us now will not be answered. We need widely supported in Scotland. to replace Barnett with a needs-based formula, and we With regard to the appropriate fiscal powers, these need to do it immediately. If the Government wait will depend on the level of devolution that obtains. As until after the Silk commission reports in November the process moves forward, so too must the financial before indicating their intentions concerning Barnett, powers that correspond to the constitutional powers. they will totally undermine the Silk commission and So, at this point in time, I suppose that we can do two leave Wales suspended in mid-air with no inkling of things. First, we can lay down the principles that where we are going. The problem is that the finance should apply, and secondly, we can lay out the fiscal needs of Wales are distorted by viewing the Barnett powers that are appropriate to our current position on settlement through the Scottish prism, but that is what the devolution pathway. happens all the time. , in its evidence to the Silk commission What are the taxes which, within our current limited part 1 study, highlighted four core principles: autonomy, might be raised by the Assembly? If we are “Fiscal devolution is part of an evolving process by which to aim at, say, 20% of the Welsh budget being funded Wales will become more economically and democratically self- by taxes raised in Wales—some £3 billion a year—that sufficient; can come from one of only three major sources of “The Welsh Government currently has accountability over its taxation: from income tax, of which some £5 billion is expenditure without responsibility for its income. There are no raised annually in Wales; from VAT, which generates direct linkages between taxes paid in Wales and decisions taken £3.5 billion a year; and from by the Welsh Government; decisions taken do not impact its contributions, which raise a similar sum. Ignoring revenue. By creating linkages, the people of Wales would be empowered over decisions that affect their wellbeing; and non-domestic rates, all other central taxes raised in Wales amount to some £4.5 billion. The “The is underperforming. We want to see a more prosperous and more equal society. Fiscal powers provide EU rules make it difficult to devolve VAT in a meaningful levers towards achieving these goals; and way, and national insurance is directly associated with “The workings of government should be transparent, but non-devolved responsibilities around social security, current fiscal arrangements are opaque. Fiscal devolution would so my party’s evidence to the Silk commission advocated create greater clarity in terms of responsibility. This would enable that 50% of the income tax take in Wales should come more effective scrutiny”. to the Assembly. In this we prefer the Holtham model I would add that I find it astounding that our National to the Calman lock-step model, which makes it difficult Assembly should have less tax-varying power than to do more than maintain the status quo. does my own local Llanwnda Community Council. I My party also favours devolving other smaller taxes do not understand why Westminster did not insist at such as stamp duty, aggregate levies, landfill taxes and the very outset of devolution that tax-varying powers airport passenger duty. I personally believe that we should be part of the settlement. should look at alcohol and tobacco duties, and at oil 357 Wales: Devolution[19 JULY 2012] Wales: Devolution 358 duty. The argument that is always put forward is that The Barnett formula provides nearly 50% of public of cross-border distortion, but I think that it can be expenditure resources in Wales. It is comprehensively overstated. There is considerable variation in taxes discredited. This was stressed in the Welsh Government’s between the regions of other countries. One thinks of response to the Silk commission consultation, and a the huge difference in taxes between Zurich and Zug while ago a Select Committee of your Lordships’ in Switzerland, with just a lake between the two that House provided a comprehensive and devastating analysis people can cross. In the United States, the greatest of the inadequacies of the Barnett formula. The funding level of tax discrepancy is between two adjacent states, provided by the Treasury to Wales is computed on the New Hampshire and Vermont, with no insurmountable basis of changes to spending in England in policy problems. My party also believes that income arising areas that are devolved to Wales and the extent to from the Crown estates in Wales should also come to which they are devolved to Wales, and on the size of the Assembly, although that is not a massive sum, the population relative to that of England. So resources and we believe that we should have the same powers provided to Wales follow political decisions and events as Scotland to introduce new taxes. With regard that occur in England. Notoriously, the Barnett formula to corporation tax, we would like the £800 million to is not a needs-based formula, in contrast to the principles come to the Assembly, but we accept that because of on which resources are allocated to local government, European rules, there are restrictions on our scope to social security spending and health spending. The make this a meaningful devolved tax. Personally, I Barnett formula is bizarre and unjust, and it makes a believe that the tool we should be using should be that mockery of the principle of devolution. The effect of of providing greater investment allowances to trigger per capita funding under the formula has been what economic growth. At the moment they are available in the noble Baroness referred to as the Barnett squeeze. the enterprise zone in Deeside. They should be more Wales receives less than if it were an English region. widely available in order to ensure that there is an GDP per capita in Wales in 2007 was 77% of the incentive for those investing in Wales. UK average, but Wales received only 8% above the Finally, with regard to borrowing powers, there is UK average. Holtham, which examined these matters an overwhelming case for the Assembly to have these pretty definitively, found that Wales had relative need powers. Local authorities have them, the Northern of 115 per capita on a scale in which England was 100. Ireland Executive have them and, under the forthcoming Wales is poorer on all the significant indices: Scotland Act, Scotland will have them. Why on earth unemployment, child poverty, social security claims, does Wales not have them? My belief is that we need disability, housing, education, health and mortality. much more than the £1 billion referred to by the noble Poor people in Wales, including unemployed under-25 Baroness; it would be nearer £4 billion or £5 billion. year-olds in the Alway and Ringland estates in Newport, This should be brought forward immediately, and it whom the Prime Minister thinks ought, in due course, could be done through the use of the Welsh Development to cease to have housing benefit, are subsiding Scots Agency Act which allows such powers. It is not being living in wealthy suburbs. Holtham told us that Wales, used now because the Treasury insists that it should be which has less than 6% of the population of England, offset against the departmental expenditure limit figure is short-changed by a figure in the order of £300 million. for Wales. I cannot overstate the importance of this issue to What is the attitude of the people of Wales towards Wales. There is no statutory basis for the Barnett such a change? As we have heard, 64% believe that formula, which is opaque in its process and has no income tax should be determined in Wales, two-thirds independent audit—it is a disgrace. believe that the Welsh Government should have the The Government have hitherto set their face against right to change the level of tobacco and alcohol taxes change to the Barnett formula. Why? For reasons of in their budget, and when it comes to allowing borrowing, political cowardice? The Conservative Party had nothing a staggering 80% support it. What are we waiting for? to lose in 2010, when it was set on finding every means Can we be assured that, when Silk reports in November, possible to reduce the deficit, by tackling the problem the UK Government will immediately press ahead of the overpayment of some £4 billion to £5 billion to with its recommendations? That will create better and Scotland under the Barnett formula, but mysteriously more transparent government, which is a big demand. it did not do so. Was it because Liberal Democrats Democratic answerability needs it and the Welsh public representing Scottish constituencies held it to ransom want it, so let us get on with it. or is it simply a product of intellectual indolence in the Treasury? 12.37 pm Lord Howarth of Newport: My Lords, I welcomed Lord Forsyth of Drumlean: I agree with almost the establishment of the Silk commission, but the everything the noble Lord says, but in fairness he terms of reference given to it by the Secretary of State ought to deal with the point that the Select Committee are in some respects ill judged. The commission is report was to the previous Labour Government, who tasked to consider issues of accountability but not of were equally unwilling to address this issue. fairness. The block grant and the Barnett formula, along with the system and structure of democratic representation in Wales, are off limits. The commission Lord Howarth of Newport: The noble Lord has, as is required to consider fiscal matters before it considers so often, a telling point. I do not disagree with him at constitutional matters when the nature of political all. I am pleased that discussions are now taking place and legislative devolution should, I think, determine between the Government of the United Kingdom and the appropriate fiscal devolution. the Government of Wales. I hope that they will be 359 Wales: Devolution[LORDS] Wales: Devolution 360

[LORD HOWARTH OF NEWPORT] up against the problem that tax increases would be fruitful, because for Wales reform of the Barnett formula damaging to business and prosperity in Wales. The is more important and urgent than any fiscal devolution. Welsh Local Government Association is right to insist At a very minimum, as the noble Baroness said, there that there needs to be a rigorous examination of the should be a floor in the block grant so that it does not merits of devolving any one of these. fall below the level that would be provided under the Borrowing powers seems a much simpler issue, English needs formulae. Of course, we need a properly whether for capital or to offset the volatility of revenue developed needs-based formula for the block grant. that would be consequent on Wales setting its own tax The coalition is obsessed with cutting public levels, but this is also excluded from the terms of expenditure, deflating an already depressed economy. reference of Silk. It was not, however, excluded from These issues are hugely important for Wales. Silk’s consultation, nor from the responses. It is more It is right in principle that if legislative powers are attractive, but would Welsh Government bonds be devolved, then tax-raising powers ought also to be underwritten by the Government of the United Kingdom? devolved, including a power to vary levels of taxation. Is it realistic to suppose that there can be Keynesianism This satisfies the principle of accountability and will in one small country called Wales? How can fiscal make for more responsibility and better value for devolution be a reality within a meaningful money. It is appropriate that a Government elected by macroeconomic strategy for the United Kingdom? the people of Wales should have discretion to use The terms of reference of the Silk commission are resources as they judge appropriate for the benefit of very restricted on constitutional matters. I simply say the people of Wales. As the noble Lord, Lord Forsyth, that the constitutional matter that is most pressing suggested too, these considerations ought to have been and important for the people of Wales is the representation brought to bear at the very outset of the process of of the people of Wales in the Parliament of the United devolution. Kingdom. The coalition has legislated to reduce the What, however, would happen in practice if tax-raising number of Westminster constituencies for Wales by powers were devolved? Wales needs more public 25%. The voice and the votes of the people of Wales expenditure or, at any rate, a less drastic reduction in are to be very substantially reduced, as is the quality public expenditure. It needs that if it is ultimately to be of the representation of the people of Wales because able to reduce the disproportionate size of the public of the absurd exigencies of the redrawing of the sector in Wales. It needs to be able to invest in education boundaries. Therefore, I hope that Welsh Liberal and infrastructure and in a strategy to support the Democrat MPs will not hesitate to vote down the development of new leading private enterprise sectors proposals to reduce the number of constituencies. in Wales. What Wales does not need is more and extra I hope also that people in Wales will consider the taxes laid upon people and businesses. I do not think issue of an elected second Chamber because if there anybody in Wales ought to nurse the illusion that the are to be Senators for one vast Welsh constituency, block grant would rise to compensate for tax cuts that wandering round undermining the work of Assembly might be introduced under fiscal devolution in Wales. Members and Welsh Members of Parliament without any accountability, and they are to be Members of a So, which taxes ought to be considered? Income tax second Chamber that is going to be much more assertive is perhaps the prime candidate, but the power to raise in fiscal matters, then they will find that this reform is or lower income tax by 3p in the pound would be a travelling in the very opposite direction of the devolution poisoned chalice. The Government of Wales have not that they want. sought that power. No doubt they would not refuse it if it were thrust upon them, but would they use it? I The proper considerations are how to improve the think it no more likely that the Government of Wales accountability of the Welsh Government; how to provide would than the Government of Scotland. funding commensurate with the responsibilities that are devolved, having first defined those; how to ensure Then there is corporation tax, but there are problems a fairness of distribution of money across the United defining Welsh companies. Holtham found that the Kingdom; and how to strengthen, not weaken, the only realistic way in which one might be able to coherence of representative government across the devolve powers in relation to corporation tax in Wales United Kingdom. Is there any resting point for devolution? was by reference to the number of people employed by These are issues for everyone, not just for the people of Welsh businesses, but we do not want to create an Wales. incentive for Welsh employers to reduce the number of people that they employ. There is a broader principle. Competition between the territories of the United 12.48 pm Kingdom to offer a lower rate of corporation tax Lord Roberts of Llandudno: My Lords, I thank my might well not be in the interests of the United Kingdom noble friend Baroness Randerson for introducing this as a whole. debate. Secondly, how refreshing to hear from the I will not run over the whole litany of alternative Labour Benches a call from the noble Lord, Lord taxes that noble Lords have already mentioned, but if Howarth, to change the Barnett formula. The Labour there is to be fiscal devolution then choices have to be Government were there for 13 years, and they did made from among the options of business rates, council nothing at all about this revision, so I hope that his tax on second homes, stamp duty , capital voice will carry in the chambers of the Labour party. gains tax on land and property, landfill, aggregates I also suggest that in Wales it is not revolution; it is levy, air passenger duty, and so forth. If we examine evolution. We tackle things thoroughly. We might not the scope to use such devolved powers, we again run always be as incautious as others want us to be. Some 361 Wales: Devolution[19 JULY 2012] Wales: Devolution 362

120 years ago Cymru Rydd, Wales of Tomorrow, had The second area is water. I am sorry that my great people such as Lloyd George and Tom Ellis at the friend Richard Livsey, Lord Livsey of Talgarth, isjnot helm. They dreamt their dream, and that dream was with us. He dreamt a dream about water supplies in home rule for Wales. That did not come immediately, Wales. I remember debates in 2006 in the Welsh and even today it has not come to the extent that some Government about how we wanted more authority of them would have liked. I know that the noble Lord, over water in Wales. We have plenty of water in Wales Lord Wigley, and my noble friend Lord Thomas were at present but England does not need it today, although there on the night when the referendum result came in it might tomorrow. We have to decide who is going to from Carmarthen in 1997. There I was in the BBC regulate, distribute and charge for water in Wales. No studio in Bangor and we were losing, until all of a new agreement must restrict the ability to discuss with sudden the voice from Carmarthen said that we were our neighbours on every side of the border what we to have our Assembly. The dream of those people are going to do and how we are going to act in any 120 years previously had been realised. situation. There has been gradual development over the years. The Silk commission notes cross-border agreements, The distinguished Huw T Edwards, the first chairman which is the third area. This might be essential for us, of the Council for Wales and , who especially in north and mid-Wales. Over the years I was originally from Penmaenmawr but latterly of have dealt a lot with hospitals and medical centres on Flintshire, contributed so much. What a debt we owe both sides of the border. We appreciate Alder Hey to the first Secretary of State for Wales, Jim Griffiths. Hospital in Liverpool, which treats children’s ailments; Things have happened gradually, but they have been the Walton Centre, again in Liverpool, which deals made to happen by people who knew where they were with neurological complaints; the Christie Hospital in going. There were times when the waters were rather Manchester; and the orthopaedic hospital in Oswestry— still, but then we had Welsh disestablishment. and all of them are on the other side of the border. There are financial implications, and nothing that we Over the years we have had legislation dealing do must hinder the co-operation that has been a with courts, development, language, education and lifesaver for so many decades. There is much more to broadcasting—all of these came in time. We owe those be said. who fought for them—and I am sorry that I was not always on their side—a great deal for their efforts over Governments change. People even change their minds. a century to ensure that Wales remains an independent They think in different ways. We mature in different country with its own culture and its own contribution ways. We must always be ready to follow our dreams to make. I would love to mention them all. I heard a and think what the sensible way is to move ahead at sermon on Sunday that spoke of “a mighty cloud of that particular time. I thank my noble friend Lady witnesses”. In the history of Wales we have had just Randerson for introducing this debate. I hope—indeed, such a mighty cloud, and some of them are in this I am sure—that it will not be the last that we hear of Chamber today. We owe them and others a tremendous the Silk report in this Chamber. debt. 12.57 pm We must always search for the best and the most acceptable way forward. As I said, I well remember the Lord Elystan-Morgan: My Lords, I start with an first referendum, held on 1 March 1979. Four voted apology. I am desperately anxious to catch an early against for every one who voted for. Even though we train that will get me back to mid-Wales by this had headquarters ready in Cardiff, we did not need to evening. I have asked the noble Baroness, Lady Randerson, occupy them until the results came in 1997. I pay for her permission and she has graciously granted it. I tribute to the Labour Government at that time who, hope that the House will accept my apology. I, too, early on in their programme, kept their promise of a warmly congratulate the noble Baroness on having referendum on devolution in Wales. A few months ago secured this debate. we had another referendum that approved full Assembly It is essential not only that there should be a powers for the 20 devolved areas appertaining to the commission of this nature looking at the situation as it Welsh Government, and so the evolution continues. now exists and reporting in two parts—the second The Silk commission, deciding on future responsibility, part, if I remember rightly, by the middle of 2013—but is the next step forward—indeed, not just a step but a that the monitoring process should be a permanent milestone on the road. The full answer will not come process and not a temporary act. Devolution, after all, at once, but we will move ahead if we have tolerance in my submission, is a progressive process and endeavour, and retain our dreams and aspirations. and one should never regard it as something that is I shall mention three areas that will have to be kept limited to a single act or collection of acts and frozen in our sights as we move forward, because they have in time. I hope, therefore, that thought will be given to financial as well as cultural implications. Last year having some sort of monitoring body of this nature there was an agreement between the BBC, S4C and that will continue to monitor and survey the situation the DCMS about the funding for television broadcasting from time to time. in Wales. The time might come when the Welsh Assembly I take the point that has been raised by the noble says, “We ourselves want to be responsible for broadcasting Lord, Lord Howarth, and the noble Baroness, Lady in Wales”. We have to keep the door open so that no Randerson, about the sequence of the two parts of the financial agreements can strangle any move on the report. Logically, it would have been much better part of the Assembly Government to move in that the other way around: first, ascertain what powers the direction. Welsh Assembly should have and, secondly, decide 363 Wales: Devolution[LORDS] Wales: Devolution 364

[LORD ELYSTAN-MORGAN] in the hands of a Welsh parliament, and that we, the exactly how they should be paid for and who should Welsh people, should determine whether we want to be accountable in that regard. However, that is not the use all or any of them. end of the world. I make the point, though, that With regard to the Barnett formula, it is central to whatever the report might say about powers, it will be the whole situation. Whether the actual loss would be wholly essential to look at the situation post-October £300 million or £550 million, as the noble Lord, Lord 2014 when the Scots, in their referendum, will come to Wigley, has calculated—and I have every reason to a decision about independence and possibly one or believe that his calculation is a valid and proper one—there two other matters. Whatever the Scottish nation decides is no doubt but that a vast treasure of finances has or does not decide will certainly having a knock-on been lost to Wales over the years. If there is an effect and a substantial impact on Wales. adjustment that would on the face of it justify a I turn to the question of powers. The first matter I docking of the block grant to make up for it, I would will mention is of a cosmetic nature, which is that the argue very strongly that one should, at the same time, Assembly should be referred to as a parliament, and take into account what one would call the proper, should no longer be called “the Assembly”, because, restituted claim of Wales in this regard. Those who with the referendum in March last year, the last vestiges belong to the great vocation of the law will know that of that sort of subsidiary body disappeared. We have a in civil law the adage is restitutio in integrum—restitution full, legislative, home rule parliament. Remembering in full. That would mean that the money that Wales Gertrude Stein’s line that, has had squeezed out of it in the past 13 or 14 years should be taken fully into account. “a rose is a rose is a rose”, I turn now to opinion polls. We have had scripture we should say that a parliament is a parliament is a quoted by the noble Lords, Lord Roberts of Conwy parliament. It would be nonsense to call it anything and Lord Roberts of Llandudno. I will add the advice else. from the psalmist: “Put not your trust in princes”. On the question of the totality of powers that have been devolved to Wales, as more than one contributor I am talking about the princes of the 21st century, the to this debate commented, the situation is completely pollsters, who tell us exactly what we think, or should impossible for those who practise the great vocation of think or wish, in relation to everything on earth. Polls the law. In Scotland or Northern Ireland, there is a can change. There has been reference to the ill fated complete block transfer of each subject heading, subject vote of 1979. I had the responsibility of being the to some very specific and easily ascertainable exceptions. president of the campaign for a yes vote. I remember In the case of Wales, I do not know what the exact that, some nine months before the vote itself, the two figure is, but I would guess that, by now, there are voices were almost equal. Then, of course, as far as the more than 700 different pieces of legislation that have yes campaign was concerned, it went steadily downhill. to be traced, all of them like needles in haystacks. I very much welcome the Silk commission. It could Although of course I accept that tracing them is a be a path to a more wholesome and more complete monumental task—I am sure that the Minister, who Wales. Let us hope that it will not be a silk road—that will be replying to this debate, will accept that—it is institution of massive length in ages past. one that has to be tackled some day, by way of consolidation. In carrying it out one will discover various odd bits and pieces that one has assumed have 1.06 pm been devolved but in fact have not been. It will at one Lord Rowlands: My Lords, I had the privilege of and the same time be a very important and significant serving on an earlier commission, the one chaired by tidying-up exercise. the noble Lord, Lord Richard. The report that we I turn for a moment to the question of finances. I produced paved the way, first of all, for the transfer of believe that it is not merely one question, but, essentially, legislative competence and, secondly, for the full legislative two. The first is, what powers should a Welsh parliament powers that were then endorsed in a referendum. I am have over finances? The second, and perhaps even afraid that I disagree with the noble Baroness, Lady more important, question is, should it use all or any of Randerson, on her strictures about the gradual processes them? It is my respectful submission that there is no by which we have pursued devolution. One significant earthly reason why those powers should not belong to and fundamental benefit has arisen from the way in the Welsh parliament immediately. When the debates which we have processed devolution, which is that we about the establishment of the Assembly took place at have begun to build consensus. The noble Lord, Lord the end of the 1990s, a great deal of evidence was Roberts of Llandudno, reminded us of just how fragile tendered on the fiscal powers granted to some regional the referendum vote was. We were bitterly divided in parliaments, and how, in western Europe, it was almost Wales on the issue of devolution. The gradual nature inevitably the rule that they were never used. Dozens of the approach that has been taken has therefore of bodies, in fact, have those powers, but for one been very important in the process of building consensus. reason or another have decided not to use them. I am There is, now, a growing consensus around the devolution not an economist but I am a Cardiganshire man, and settlement. in Cardiganshire we are very careful about any decisions I am also therefore grateful for the thoughtful way that concern money. I can well imagine that there are in which we are approaching the issue of fiscal devolution. various pros and cons: there are possibilities and pitfalls. Although I understand the point made by noble Lords All I would wish would be that those powers should be that we should first of all decide on powers and then 365 Wales: Devolution[19 JULY 2012] Wales: Devolution 366 look at fiscal devolution, we have reached a rather and Rhymney communities of adding 2p or 3p to the constitutionally illogical position. We remember the basic rate? I could not say yes to the granting of such great cry of the American colonies: powers unless I knew what impact I was making. “No taxation without representation”. We all know of Chancellors who have brought in Budgets that have had unintended fiscal consequences. We have representation without taxation. There are I was a passionate fan of the 10p band, which benefited very few legislative bodies in the world that have full the constituents whom I represented. I therefore regretted legislative power but do not have any form of tax it bitterly when the previous Administration abolished powers. There is a compelling constitutional logic in that band. It has left us going from 0% to 20%. If we place that some kind of tax power should accompany were to add another 3% to that, one would be left to legislative power. ask where marginal tax rate issues kick in. We saw a The questions that arise the moment that we say Budget in March that had unintended consequences. that are: what and how? The Holtham report, which is The Chancellor completely miscalculated the impact very useful, is based on some interesting principles of abolishing, on grounds of simplification, age-related and made some observations that we would be foolish allowances. We should not embark on this kind of to ignore. The first, which I will quote directly from change without a full impact assessment. If I were paragraph 2.9 of the report, is that, make any recommendation to the Silk commission, it “tax devolution that leads to tax competition may undermine a would be to let us have such an impact assessment so tax base and lead to too-low levels of tax for the union as a that we can make a judgment on what taxes it would whole”. be would meaningful, reasonable and sustainable to I cannot believe that any one of us wishes to produce devolve. an arrangement that would lead to that kind of However, as many other noble Lords have said, the consequence. The second issue—I was particularly fundamental issue is not tax but the Barnett formula. struck by those passages in the Holtham report that Politicians can vie over this—it has been said that the deal with the relationship between the English and previous Administration ducked the issue and it will Welsh economies—is that the economy of Wales is be interesting to see whether this Administration do highly integrated with that of England. I was startled so, too—but it is not the politicians who drew it to our by the figures that the report produced: 48% of the attention but a very powerful recommendation of the population of Wales lives within 25 miles of the border Holtham report. Holtham argued: with England, while 90% of our population lives “Even if our proposals for tax devolution were implemented within 50 miles of that border. There is a corresponding, in full, the block grant would still account for around 85 per cent very large, population on the other side of the border— of the total resources … Ensuring that Barnett is replaced by a something like 30%. That is in very stark contrast to system that sets the block grant by reference to Welsh relative the situation around the border between England and needs therefore should be a priority for Wales”. Scotland. Our border overlap is some 30%; the English- I think that most of us would endorse that conclusion, Scottish overlap is 5%. When one says that one does and we sincerely hope that the noble and learned not want asymmetry but conformity or some sort of Lord, Lord Wallace, whom I have known for many symmetry, one has to recognise the very different years and who is not a man to duck an issue, will not arrangements and situations that apply. Clearly, if one duck this one, too. embarked on some tax variations, that border issue would become extremely important. We have therefore 1.14 pm to be very careful in the way in which we handle that situation. Lord Thomas of Gresford: My Lords, in the last Welsh Assembly election in 2011, , the Nevertheless, Holtham concluded that, shadow Secretary for Wales, introduced the Welsh “small differences in basic rates of income tax (up to around three Labour Party manifesto with a call to the voters to pence) … could be sustained … without being likely to induce vote for Carwyn Jones and , which was significant migration or changes to labour supply”. fair enough, but then added: I have, however, a different niggling question about “’But it is also an opportunity to send a message to the income tax-varying powers. It is not about migration; Tory-led Government in Whitehall: that Wales is being treated it is about the impact on communities where incomes unfairly and their deep and savage cuts are hurting but not are below the national average, which was certainly the working”. case with those that I represented. What would be the On 17 April this year, in the build-up to the local effect not only on families but on communities’purchasing , for which the Welsh Government power if you added 3p to the existing basic rate of are responsible, Carwyn Jones told a public meeting in income tax? The noble Lord, Lord Wigley, mentioned Newport: the experiences with regional taxation in the United “Vote Labour on the 3rd of May to tell Cameron and Clegg States. I have read quite a bit about those and know that their brutal cuts have been rejected in Wales”. that some of them are very regressive. You have to be Peter Hain at the same meeting urged voters to make very careful, because regional taxes can be regressive. 3May, We must be extremely vigilant in this respect. “a referendum on this unfair and disastrous budget”. Before I buy either the Holtham line or the 3p line, I He was not of course referring to the budget of the want a meaningful impact assessment to be made. Labour Assembly Government, a budget that was What would be the impact of such a change on the passed only with the assistance of Liberal Democrat internal purchasing power of, for example, the Merthyr Assembly Members. He was fairly and squarely passing 367 Wales: Devolution[LORDS] Wales: Devolution 368

[LORD THOMAS OF GRESFORD] reason that Barnett remains is that Scotland drags its the buck for the underperformance of the Welsh economy, feet—like the Cardis, Scots know the value of money, referred to by the noble Lord, Lord Roberts of Conwy, and they are getting an extra £4 billion out of it. That and the noble Lord, Lord Wigley. £4 billion might fire the English to vote for has indeed adopted my very useful family independence, if they ever had a chance to do so. motto, “Ar Bwy Mae’r Bai?”—“Who can we blame?” A needs formula for Wales would take into account Blaming Westminster for all the ills and inequalities in the higher levels of deprivation, the lower levels of Wales is only too easy. It illustrates that the Welsh economic prosperity, a much higher degree of rurality Government in Cardiff escape accountability for their and the quality of public health. In addition, Barnett spending decisions. They do not want the Welsh voter does not fulfil the requirements for accountability. to ask the questions that almost every elected body in There is no link at all between the spending decisions the world has to face: “How have you spent my made by the devolved Government and the revenue money? What have you done to my taxes?” Those are that is raised and handed over to them by the United the questions that I would ask of the Gresford Community Kingdom Government. How then do you build Council about its precept, which forms part of my accountability into the system, which is the declared council tax. purpose of the Silk commission? Those of us who have campaigned for devolution Holtham pointed out that there are only three areas for all our political lives hoped to see a Welsh Government of tax that raise significant revenue: VAT, national who had fiscal responsibility for both the raising and insurance and income tax. VAT is ruled out because the spending of people’s money within the policy Europe does not permit varying rates of VAT within areas devolved to them—I fought on that basis in the borders of a member country. Gresford roads 1964, which seems rather a long time ago. That has not would also be choked by smugglers heading across the happened; we got the Barnett formula. As the noble border to Chester, some eight miles away, as they used Lord, Lord Rowlands, has just admitted, Labour ducked to be choked by people struggling over the border for its reform. a drink in the dim and distant days when our part of The fundamental weakness of the Silk commission Wales was dry. I can tell the noble Lord, Lord Rowlands, is that the Secretary of State announced when setting that I know all about border issues. Increases in national it up: insurance would impact on jobs and, in any event, as it “The Commission will not consider … the Holtham Commission’s is linked to , it is not a devolved matter. The proposals for funding reform in Wales, including Welsh Ministers’ Welsh Government should be funded primarily by existing borrowing powers”.—[Official Report, Commons, 11/10/11; income tax and corporation tax. There are difficulties, col. 28WS.] of course, but they have to be worked out. The revenues Those powers were to be dealt with in a different way. I from those taxes would increase as the Welsh Government fail to see how the Silk commission can fulfil its remit succeeded in boosting jobs and industry. As my noble to, friend Lady Randerson—who must be congratulated “examine issues of fiscal devolution and accountability in Wales on introducing this debate—said, it would be the and … focus on building consensus”—[Official Report, Commons, reward for the Government pursuing successful job 19/7/11; col. 115WS.] creation and business-friendly policies. If the Assembly without an examination of the present system and the Government failed and the revenues decreased, the Holtham proposals for reforming it. How can it be answer would lie in the ballot box. It does not currently. possible to build a consensus in which powers to raise As the Labour Government said, “Send a message to funds by taxation of the people or of businesses in Westminster”. Wales are introduced to increase accountability without Another safeguard would be continued equalisation reform of the Barnett formula? funding. I agree with Holtham that United Kingdom Everybody agrees that Barnett is inequitable, even income tax should be reduced in Wales by 50% and the noble Lord, Lord Barnett. There is consensus, the Assembly given the responsibility of voting annually from the Richard commission, to which I gave evidence to raise the remaining taxes, with the safeguard that in 2004, to the Steel commission and the Calman the Assembly should set a rate of 3p either side of the commission in Scotland. The House of Lords commission UK rate, a matter to which other noble Lords have on the Barnett formula of the noble Lord, Lord referred. The excellent submission to Silk by the Changing Richard, of which the noble Lord was a member, said Union project, funded by the Joseph Rowntree Charitable that Barnett was “arbitrary and unfair”and the Holtham Trust, pointed out that the Holtham commission estimated commission of 2010 said that it lacked any objective that in 2007-08 total identifiable expenditure in Wales justification. Holtham’s conclusion was that the Barnett was about £25 billion, exceeding Welsh tax receipts by “squeeze”, £6 billion. It said: “has caused the funding of devolved activities in Wales to fall “This represented a fiscal deficit of 10% of Welsh GDP, below what Wales would receive were its budget determined by although he”— the various formulae that the UK Government uses to allocate resources to comparable functions in England”. Holtham— It is a formula based on crude population percentages “suggests this gap would have more than been made up with a and it takes no account of need. Noble Lords have possible revenue equalisation grant of £27.5 billion from the already referred to the figures. On the basis of need, Treasury based on 5% of UK population share”. Wales should get 117% of English per capita spending Other devolved Administrations have borrowing and currently gets only 112%—a deficit of £400 million. powers. In Wales, speedy investment in much-needed Scotland should get 105%, but gets 120%. Perhaps the infrastructure and capital projects will stimulate the 369 Wales: Devolution[19 JULY 2012] Wales: Devolution 370 economy in both the short and long term. The Welsh “a wide range of views”— Government cannot fund a long-term programme of as can be expected— investment out of their general expenditure. Borrowing “on what, if any, fiscal powers the NAfW should have”. powers are essential. The NFU also said that it felt that the Barnett formula In the 1960s, I was greatly influenced by the late did, Professor Ted Nevin, then of Swansea University, who attacked the policy of bribing companies to come to “not serve Wales … well”. Wales with cash subsidies. His view was that you invest Noble Lords have talked about the Barnett formula such funds as you have available in creating the and I am going to say a little more about it. If we do infrastructure of communications—road, rail, air and not address the Barnett formula, we will simply be —designating enterprise zones and playing round with the deck chairs. If we do not know customs-free zones, and investing in training a skilled the baseline, what is the point of talking about anything workforce. Business must want to come to Wales for else? We have no national accounts, and the tax take in the business-friendly environment that a Welsh Wales is not published at the moment. That has got to Government should create. That is what we hope for. be done. If we do not have a satisfactory baseline, we That was the policy of the Welsh Liberal Party back in will only be playing about with those deck chairs, as the 1970 general election—I know, because I wrote long as they exist. it—and it remains the policy of the Welsh Liberal The Barnett formula is the elephant in your Lordships’ Democrats. The Welsh Government need the funds for Chamber, in the Welsh Assembly Government, in these long-term aims to be realised. I fervently hope Wales and in Scotland. All your Lordships would that the Silk commission produces the right decisions. agree that Wales has suffered, as was amply illustrated by your Lordships’ Select Committee in its report published in July 2009, which has been referred to. I 1.25 pm was privileged to serve on that committee, which the noble Lord, Lord Richard, so ably chaired. Its first Lord Rowe-Beddoe: My Lords, I also thank the witness when we were taking evidence was none other noble Baroness, Lady Randerson, for securing this than the noble Lord, Lord Barnett. I will quote from debate—a debate on a highly pertinent and relevant the noble Lord’s opening statement: matter. “The system I decided to use at that time to change was that The Silk commission appears to be on track to any increase or decrease in the overall budget for public expenditure complete and publish part 1 of its work in the autumn for the whole of the UK should be divided amongst the regions of this year. I tend to agree with the noble Lord, Lord on a population basis which was roughly 85 per cent England, Elystan-Morgan, that parts 1 and 2 are the wrong way 10 per cent Scotland and 5 per cent Wales. Northern Ireland was round, but so be it. If the commission does reach the taken as the same at 5 per cent but of course in Northern conclusion of part 1 by the autumn, it will then have Ireland’s case they got a lot more than that for a variety of to be prepared to offer recommendations on a package reasons which will be fairly obvious”. of powers to improve the financial accountability of A few minutes later he said: the Welsh Assembly. I can well imagine that whatever “I thought it might last a year or two before a government those recommendations are, they will receive considerable would decide to change it. It never occurred to me for one support. However, part 2 of the commission’s work, moment that it would last this long”. reviewing the powers of the Assembly, is likely to be It is now 35 years later and it has lasted this long. It is much more contentious, and the linkage between part 1 a totally inadequate way in which to block-fund the and part 2 is inseparable. Businesses of all sizes and constituent nations of this Union. If we do not, as I shapes can be severely hampered by uncertainty, which said earlier, address the inequalities quickly and is disliked, and any question of tax-varying powers is expeditiously, I cannot see how any meaningful changes also disturbing. The Holtham commission, which has can be agreed and implemented to a baseline which is already been quoted today, recommended measures in demonstrably not fit for purpose. regard to income, property, land and minor taxes, but It is my belief that both the previous Government it also proposed exploratory discussions with the United and the current Government recognise—of course Kingdom Government in regard to corporation tax. they do—the grave seriousness of the problem, but I shall briefly highlight two or three submissions to there seems to be no political will to address and the Silk commission which are at variance with the resolve it. There are reasons why the previous Government poll—which has been quoted on all sides of your backed away and reasons why the current Government Lordships’ House this morning—showing that 64% back away. I am sure they do not have very much are in favour of tax-raising powers. I say that these thought to agree with what may happen in Scotland in submissions are at variance, but they represent quite a 2014, with the referendum. However, they are just body of opinion. The in Wales, putting off the inevitable. It has to be done. for example, said in its written evidence that its members feared that, All my life, throughout my education, I had impressed upon me—and I firmly believe and have upheld it—the “business could be seen as an easy source of cash for social or great virtues of an unwritten constitution. I have in environmental policy areas that the WG has traditionally favoured”. these past few years come to realise that the virtues CBI Wales said that, seem to be rather less than the obvious problems and “the retention of the unitary tax system for corporation tax”, faults that now emerge in the continuous way in which is necessary to retain “the status quo”. The National the constitution is added to, bolted on to and changed Farmers Union Cymru said that its members had, in this piecemeal way. It has been mentioned already, 371 Wales: Devolution[LORDS] Wales: Devolution 372

[LORD ROWE-BEDDOE] agree, is essential for any change. The Welsh Government but these continuing piecemeal changes are such that are the only elected institution in the UK, at any level, we are in urgent need of a national United Kingdom that do not have borrowing powers. As other noble convention to consider the governance of England, Lords have said, even community councils in Wales Scotland, Wales and Northern Ireland in the 21st century have that power. and where we have got to. Asymmetric devolution: so One striking result of the poll was the level of crazy when you think about it. Then we have the support for giving the Welsh Government the power problems of the north-, which I was to borrow, especially for capital projects such as schools, well aware of when I was on the Barnett Formula roads and hospitals. It seems that the Welsh people are Select Committee. The rest of England increasingly happy with the nudge taxes we have been talking feels that it is somehow missing out. It is not quite sure about, such as the carrier bag levy, which has proved what it is missing out on, but it is missing out. Federalism, such a success and has altered people’s behaviour, with in some shape or form, is becoming increasingly attractive an up to 90% fall in the usage of carrier bags. This was to me. It could address what I believe are the well-founded not a tax—the Welsh Assembly does not benefit financially concerns of the inhabitants of this United Kingdom. from it, as the money goes to charity—but we have benefitted environmentally. 1.33 pm In a statement on 17 July, in reference to the opinion poll, Paul Silk, the chair of the commission, said: Baroness Gale: My Lords, I thank the noble Baroness, Lady Randerson, for bringing this debate before us “A majority of people believed that if the Welsh Government is given responsibility for taxation and spending it would be more today. It gives us the opportunity to debate the important accountable, the economy in Wales would be stronger, and public topic of the Silk commission’s remit while we await the service would improve”. report on part 1, which I understand will be published It was also clear that people wanted to be consulted on in late autumn. I thank all noble Lords for their the devolution of taxes such as income tax through a contributions. It has been a typical Welsh debate, but I referendum. I think we would all agree that in those welcome the contribution of the noble Lord, Lord circumstances a referendum would be essential—many Maclennan, who is a non-Welsh Peer but all the more noble Lords have spoken about the difficulties of welcome. I thank him for his contribution. having an income tax in Wales. Many contributors have said that we are on a journey of devolution—it is an evolution, not a big In a Statement to the Welsh Assembly in June, the bang. We have had to take this step by step and, as my First Minister, Carwyn Jones, set out the Welsh noble friend Lord Rowlands said, it is about building Government’s position on financial reform and called consensus on the way. I was there on the night we for a comprehensive reform of Wales’s financial powers. awaited the Carmarthen result, holding our breath. He said that landfill tax, stamp duty, the aggregates We certainly got that result and it was, for most of us, levy and air passenger duty could be devolved to a great cause for celebration. Today’s debate gives me Wales as part of a new package of fiscal measures, but the opportunity of laying out Labour’s comments on that the priority remains the reform of the Barnett the progress that has been made by the Silk commission, formula, and that the Welsh Government should have as well as our priorities regarding the two parts of the the same borrowing powers as the other devolved commission’s remit: on the devolution of fiscal powers, nations. As the First Minister said in an earlier statement: which would improve financial accountability and the “We can’t go ahead with fiscal devolution without the funding powers of the National Assembly for Wales; and to being addressed otherwise we risk locking ourselves into the recommend modifications to improve current current Barnett formula which is to our detriment”. arrangements. This is the key question that needs to be addressed. The commission is due to report on part 1 in the In the mean time, we support the immediate introduction autumn and, so far, it seems that the commission has of a Barnett floor, as the Holtham commission been very well received across Wales. Individuals and recommended, while we await a long-term solution. organisations across the country have engaged This would stop any further escalation of Wales’s constructively via written or oral evidence, or through underfunding problem in future years. I understand attending one of the commission’s meetings—although, that there are ongoing intergovernmental talks with as my noble friend Lord Anderson said, they have not the Chief Secretary to the Treasury, Danny Alexander, all been very well attended. On part 1 of the commission’s and the Welsh Finance Minister, Jane Hutt, with the remit, we are clear that the Welsh Government should aim of finding a fair funding settlement for Wales have borrowing powers so that they are able to invest which includes discussion on the Barnett floor. Can in infrastructure. This is especially important given the Minister say how these talks are progressing? the 41% real-term cuts that the coalition Government On the devolution of tax-varying powers, we believe in Westminster have inflicted on the Welsh Government that there may be some value in devolving some of the in . taxes under consideration. As I said earlier, the First Many noble Lords have talked about the poll conducted Minister gave us the examples of air passenger duty, by ICM recently, in which eight out of 10 people stamp duty, landfill tax and the aggregates levy. supported the idea of granting the Welsh Government As for phase 2 of the commission, it is regrettable borrowing powers. I think that all noble Lords have that one of the key issues that the Silk commission said that that is where we should be going. The poll might have considered—the electoral arrangements suggests that this proposal is likely to have the wide for the Welsh Assembly—was considered not by the support in Wales that, as I am sure all noble Lords will commission but rather in the Green Paper on electoral 373 Wales: Devolution[19 JULY 2012] Wales: Devolution 374 reform which the Secretary of State for Wales published the constructive tone of my noble friend Lady Randerson, recently and was debated in Grand Committee on who herself had distinguished service in the Welsh June 18. In fact, the issue that we are debating today is Assembly, and in the contributions from noble Lords notable for being the one constitutional issue where in all parties and the Cross Benches. the Government have adopted a broadly consensual The Commission on Devolution in Wales, commonly approach. On other constitutional matters there has known as the Silk commission, was set up by my right not been such a consensus—such as the review of honourable friend the Secretary of State for Wales in parliamentary boundaries which, if the proposals go October 2011 to review the present financial and ahead, will see a 25% reduction in Welsh representation, constitutional arrangements in Wales. The commission 10 fewer MPs, a weakening of the Welsh voice in the has met nine times to date, most recently last week in other place and, of course, the proposed changes on Cardiff. how the Welsh people elect their Assembly Members. Far greater dialogue should have been taking place The noble Lord, Lord Howarth, queried the with the Welsh Government and the Secretary of State commission’s terms of reference. It is fair to point out on this matter, rather than the “top down” approach. that the Government sought to work collaboratively— Its seems that the coalition Government are far indeed, succeeded in doing so—with the party leaders more interested in these constitutional matters than in the Assembly to establish the commission. It is they are in addressing the real issues facing families supported by all four parties in the commission. The in Wales, such as the high cost of living, an economy terms of reference were agreed by all four party leaders in recession and high unemployment. So while we note in the Assembly. They are similar in many respects to the good progress that the commission is making and many of those of the Calman commission on devolution, that its voice is important, it is not our top priority. on which I was privileged to serve during the previous Jobs and growth are our priority. Today’s unemployment Parliament. However, the Silk commission has a figures for Wales stand at 9%, and an increase of considerable benefit over the Calman commission as it 2,000 more people without jobs means more heartache has buy-in from all parties in the Assembly. Rather for Welsh families. Commenting on these figures, regrettably, the Calman commission did not have buy-in the Secretary of State for Wales said that she was from the SNP Government in Scotland when it “disappointed but not surprised”, and urged firms to deliberated. seize the opportunity offered by rail electrification. As has been indicated, the first part of the commission’s While we welcome these announcements, it will take remit concerns improving the financial accountability time for jobs to materialise. In the mean time, what of the National Assembly. The commission is looking seems to concern the Secretary of State is the consultation at the case for devolving tax-raising powers to the on the electoral arrangements for the Welsh Assembly, Assembly and the Welsh Ministers. While Members of and the Commission on Devolution in Wales, neither the Assembly are accountable to the electorate via the of which will provide jobs for Welsh people now. ballot box every four years, the Welsh Government The Secretary of State for Wales met with the Silk and the Assembly as a whole are not accountable to commission this week to receive a report on what Welsh electors for the money that they spend. They progress is being made. Can the Minister tell your simply spend what they are given. This point was very Lordships’ House the results of that meeting? I hope graphically made by a number of contributors to the that there will be an opportunity to have a fuller debate, not least my noble friend Lord Thomas of debate when the commission completes its work. We Gresford and the noble Lord, Lord Rowlands, who can then see what the recommendations are, what the talked about representation without taxation. Government’s response will be and, more importantly, The public, it is fair to say, have placed their trust in what the Welsh Assembly and Welsh Government’s the devolved institutions in Wales in the 13 years since views are. I suggest to the Minister that if we do have they were established. During that time, the Assembly a debate on the recommendations—as we have had a has been seen to mature, culminating in the overwhelming two and a half hour debate today, and I think that we yes vote in the referendum on further law-making could have gone on longer, perhaps a lot longer—perhaps powers in March 2011. However, as my noble friend we could have a five-hour debate next time so that we Lord Roberts of Llandudno graphically reminded us, can explore everything and have the time to put our the original vote in 1997 was on a knife edge. I views on what we think of it. In the mean time, I look remember watching it on television in the small hours forward to the Minister’s response to our debate today. of the morning. The point made by the noble Lord, Lord Rowlands, is important: over time a consensus 1.43 pm has emerged. That is probably reflected in the fact that The Advocate-General for Scotland (Lord Wallace all four parties were able to agree on the terms of of Tankerness): My Lords, I start by joining others reference and the setting up of the Silk commission. who have contributed to the debate in congratulating However, the financial accountability of the devolved my noble friend Lady Randerson on securing it. It has institutions in Wales has not changed. That cannot be been a welcome debate with welcome contributions right. My noble friend Lord Roberts of Conwy drew from all sides of the House. I certainly know from attention to the fact that existing bodies such as the recent debates in the Moses Room that there has been National Audit Office and the committees of the an appetite among a number of noble Lords who have Parliament already exist. Obviously there is a role for contributed today for a debate on a Welsh issue in them, and perhaps it is a role that has not been your Lordships’ Chamber. I therefore welcome this developed as much as it could be in achieving greater particular debate, which is very timely. I also welcome accountability for the way in which money is spent. 375 Wales: Devolution[LORDS] Wales: Devolution 376

[LORD WALLACE OF TANKERNESS] I have no doubt that, in addressing its work, the With power comes responsibility. With the powers commission will take into account some of the very that the Assembly has acquired, Welsh Ministers should important considerations that have been raised during be responsible not just for spending the money but for our debate: issues such as tax competition and—as raising some of the money needed to pay for the mentioned by my noble friend Lady Randerson and decisions which they make. graphically illustrated with figures by the noble Lord, A number of comments have been made about the Lord Rowlands—the practical problem of the percentage survey carried out by ICM on behalf of the commission of the population living very close to the Welsh-English and published earlier this week. It appears that the border. This is much greater than the equivalent on Welsh public agree with the need for greater accountability. the Scottish-English border, which itself brings its I share my noble friend Lord Roberts of Conwy’s view own implications and considerations when looking at that it is not always clear precisely what was said, tax. Indeed, the noble Lord, Lord Rowlands, mentioned given that a number of the findings do not seem to the impact of using a tax-varying power of 3p in the quite add up. Nevertheless, there was quite a clear pound on the purchasing power of poorer communities. finding that 66% of those surveyed were positive about That is the sort of consideration that one would expect the Welsh Government having the right to change the that the commission might take into account. level of , and 56% believed that doing As I said, the commission is expected to report on so would make the Welsh Government more accountable. part 1 in late autumn this year, and the Government The commission itself has a wealth of experience, will consider its recommendations very carefully. The being chaired by Paul Silk, a former clerk in both the noble Baroness, Lady Gale, asked for a further debate. Assembly and this Parliament, and comprises nominees As she knows, that is not in the gift of Ministers, but from each of the four political parties in the Assembly: no doubt the usual channels will look at this. My own Sue Essex, the Welsh Labour nominee; Nick Bourne, view, and clearly that of the opposition Front Bench, the Welsh Conservative nominee; Rob Humphreys, and I am sure others in the Chamber too, is that it the Liberal Democrat nominee; and Dr Eurfyl ap would be useful. Once we have some concrete proposals, Gwilym, the Plaid Cymru nominee. In addition, there having a debate would be a useful part of considering are two independent members, who are equally them. experienced: Dyfrig John CBE, chairman of the My noble friend Lord Roberts of Conwy asked Principality ; and Professor Noel Lloyd about a referendum. We think that this is probably CBE, former vice-chancellor and principal of jumping the gun at the moment, given that we do not University. actually know what the proposals might be. However, As we have debated, the commission has been looking it is obviously an issue that would have to be considered at the possible tax and borrowing powers that could be in view of any decisions which the Government came devolved to the Assembly and the Welsh Government. to on the commission’s findings. Certainly at the moment, These include powers in relation to landfill tax, air we believe it is premature. passenger duty and stamp duty, but they are in no way After publication of part 1, the commission will limited to those taxes. The commission’s terms of begin work on part 2, which will look at the powers of reference require it to make recommendations that are the Assembly and modifications that may be needed likely to have a wide degree of public support. In to the boundary between what is devolved and what is announcing the commission, my right honourable friend non-devolved. The aim here is to simplify the settlement the Secretary of State for Wales acknowledged that it where possible and to make it work better. Again, the would have to consult widely to secure that support, commission will need to consult widely and make not just in Wales but throughout the United Kingdom. recommendations only where they are likely to have a The commission’s call for written evidence closed in wide degree of public support. As we know, the Assembly February this year and there has been a series of has powers in 20 devolved areas, and it is for the public meetings throughout Wales, starting in March commission to decide where there is a requirement to in Swansea, ending in Flint in May and including tidy up the boundary of the settlement. Any further every local authority in Wales in between. The commission changes to the settlement must be right for Wales and has received written and oral evidence from a number for the United Kingdom as a whole. In the course of of cross-border bodies—some referred to by the noble this debate, we have heard references to water, prisons, Lord, Lord Rowe-Beddoe—such as the Confederation police, local government finance and broadcasting. I of British Industry, the Institute of Directors and the do not think that there will be a shortage of matters Federation of Small Businesses. It has also held drop-in for the commission to consider, but it would certainly sessions to allow representations from Members of be inappropriate to comment on these at this stage. your Lordships’ House and of the House of Commons. My noble friend Lady Randerson also talked about Further afield, the commissioners have met legislators the structures of the different devolution Acts. There and interest groups in Scotland and Northern Ireland was a difference between the Scotland Act and the to discuss the implications of ongoing developments original Wales Act, subsequently the Government of in these countries on the commission’s work. These Wales Act; and a different settlement again in the included, in Scotland, Sir Kenneth Calman, Scottish Northern Ireland Act. I did not wholly agree with the Government officials, members of the Scottish Parliament’s noble Lord, Lord Elystan-Morgan, when he said that Finance Committee; and in Northern Ireland, the the reservations in the Scotland Act were all relatively First Minister and Deputy First Minister and the simple. Part of my job is to look at these regularly, and Committee for Finance and Personnel. sometimes it can be quite difficult to interpret them. 377 Wales: Devolution[19 JULY 2012] Wales: Devolution 378

Indeed, a case has recently been referred to the Supreme deficit. The Barnett formula, if it is changed, is simply Court on the extent of some of the reserved functions, about the distribution of existing resources. It does so it is not straightforward. not affect the deficit in any way. When the coalition agreement was drafted, what on earth was in the Lord Wigley: The Minister will have noticed that minds of the four people who did it? several noble Lords raised the issue of borrowing powers. He is coming to that in a moment, I gather. When he does, will he address the question of the Lord Wallace of Tankerness: My Lords, I am not Welsh Assembly’s existing powers to borrow via the a mind reader. It does not necessarily follow that it is a Welsh Development Agency Act? The problem is that zero-sum game, as my noble friend would consider. I the full sum is placed against the DEL allocation by have heard people make this case before and no one the Treasury. If that could be lifted, it would enable has suggested that it should be a “beggar my neighbour” that power to be used as it is now available in Scotland. approach, which could actually lead to an increase in expenditure. Lord Wallace of Tankerness: Almost on cue, I was In a debate on a commission that does not have the about to turn to a number of the specific points that Barnett formula in its remit, the Government’s position noble Lords raised in the course of this debate. What is not going to change. I have indicated the Government’s was described by at least one noble Lord as the elephant position, but there are intergovernmental talks, which in the room is the Barnett formula. This, of course, is have been referred to, and the Government indicated not part of the remit of the Silk commission, nor of that they would engage in them. I was asked a number the Calman commission. of other questions, initially raised by my noble friend Lady Randerson. The talks between the United Kingdom I know it will disappoint noble Lords, but the Government and the Welsh Government are looking Government made it very clear in the coalition agreement at all aspects of the Holtham reports, including the that the priority is to stabilise the public finances and extent of convergence between the trends of devolved that no replacement to the Barnett formula will be funding and equivalent funding for England, and how considered until the nation’s finances are back on need might be best measured. The commission is not track. However, I could not fail to hear the comments considering, as I made clear, the fundamental overhaul of everyone who contributed to the debate, I think of the Barnett formula. However, as I indicated, it is without exception. Someone pointed out, although looking at these issues, such as convergence—although admittedly not in the context of what appears in the at the present time it is divergence rather than coalition agreement, that the Secretary of State for convergence—and how the need might best be measured. Wales had said that the Barnett formula was coming to the end of its life. However, I reiterate that the My noble friends Lord Maclennan and Lady Government’s position is that the priority must be the Randerson asked about borrowing and the state of stabilisation of the public finances. discussions, as did the noble Baroness, Lady Gale. The Silk commission is looking at the case for borrowing powers for Welsh Ministers as part of its consideration Lord Anderson of Swansea: The Minister has said in part 1. The bilateral talks between the United that the Barnett formula will be reconsidered only Kingdom and Welsh Governments are looking at how when the economy is back on track. Recently, the the latter might best use their existing powers—I hope Prime Minister said that austerity will last until 2020. that this refers to the point raised by the noble Lord, Does that mean there will be no substantial revision of Lord Wigley—which were inherited by Welsh Ministers the manifest injustices resulting from the formula until on the abolition of the Welsh Development Agency. that time? They are, admittedly, relatively limited, but this is part of the ongoing discussion between the two Governments. Lord Wallace of Tankerness: My Lords, I have Indeed, my right honourable friends the Chief Secretary described what was said in the coalition agreement for to the Treasury and the Secretary of State for Wales this Parliament. I do not think that anyone would be have each met Jane Hutt, the Welsh Finance Minister, wise enough to predict the policy of any Administration, in the past fortnight, so these talks are very much alive of whatever hue, in a subsequent Parliament. My and active. noble friends Lord Forsyth and Lord Roberts of The noble Lord, Lord Anderson, asked how the Llandudno were right to point out that the previous recent initiative to encourage the banks to lend more, Administration did not address this either. Indeed, in announced by the Government this week, would impact their response to your Lordships’ Select Committee on Wales. The funding for lending scheme is designed report, they stated that the Barnett formula: to boost lending in the real economy, making mortgages “has a number of strengths”. and loans cheaper and more easily available to families and businesses right across the United Kingdom. Wales Lord Forsyth of Drumlean: There is unanimity will be as entitled to apply and take advantage of that throughout this House that Barnett has to be changed. as any other part of the country. The scheme opens on Will the Minister explain the logic of the coalition 1 August for 18 months. agreement? What on earth has dealing with Barnett Another important point, which was raised by got to do with dealing with the deficit? Surely the noble friend Lord Maclennan and then spoken to Government are capable of doing more than one by the noble Lord, Lord Rowe-Beddoe, is that there thing at the same time. I cannot see the linkage between have been a number of different commissions. They addressing the Barnett formula and dealing with the asked whether there was a possibility of taking a more 379 Wales: Devolution[LORDS] UK Border Agency 380

[LORD WALLACE OF TANKERNESS] UK Border Agency strategic look. Very recently, the Prime Minister indicated that there will be a need for an open, involved and Motion to Take Note comprehensive conversation about what kind of union we want to see, and—almost 15 years after the process 2.06 pm of devolution started in the United Kingdom—that Moved by Lord Avebury we should consider the best way of having such a conversation. However, the Prime Minister made it That this House takes note of the role and clear that that should await the outcome of the Scottish performance of the UK Border Agency. referendum, which is likely to be in 2013-14. That view was reflected in at least one speech in your Lordships’ House today. We will certainly be arguing for the Lord Avebury: My Lords, it is not before time that integrity of the United Kingdom and for Scotland to your Lordships examined UKBA, a service whose remain part of it. That is the first and foremost own officials said yesterday is “falling apart at the objective and focus of not just the Government but seams”. There are more than 150,000 people, including the Labour Party in Scotland and across the United 3,900 criminals, who have been refused an extension of Kingdom. The point is one that I suspect will feature stay but whose whereabouts are unknown. Nor is in more of our debates in the weeks and months to there a strategic plan to manage these cases. The come. location and removal of absconders is considered a low priority for UKBA and the effectiveness of the In conclusion, I indicate that in introducing the intelligence used to support arrest visits is not measured debate my noble friend asked how we might take to ensure an efficient use of resources. forward the comments made in it. I certainly undertake to write to Paul Silk, drawing the commission’s attention The Commons Home Affairs Committee to the fact that the debate has taken place and to the recommended that bonuses amounting to £3.5 million comments that have been made. It is also pertinent to should be withheld from senior UKBA staff but it say that not only to the commission but within seems that the banks are not the only enterprises government. Points have been made in this debate on where failure is rewarded. The Prime Minister told the which I am sure some of my colleagues in government Liaison Committee that he believed in, will wish to reflect. “a small bonus … that you only get if you meet some stretching targets”, so why are UKBA staff still getting bonuses? 2.05 pm The failure over the missing persons is not an Baroness Randerson: My Lords, I thank all those isolated case. Major organisational changes at Heathrow, who have contributed to the debate. Every noble Lord including the introduction of team-based working, a who has done so has made a very valuable contribution. new shift-working system and the amalgamation of In particular, I thank the Minister for his informative immigration and customs roles, were not effectively reply. planned and were introduced at Heathrow’s busiest A wide variety of opinions have been expressed but time of the year. In spite of deploying extra staff to I think there is consensus that the time is now right for reduce the scandalous queues at Heathrow, the delays the Welsh Assembly to have tax-varying powers. In were even worse in June, only a few weeks ahead of the some of our eyes, that time is well overdue. However, I Olympic Games. UKBA is bringing in volunteers who detect that some people are coming to this for the first will receive three days’ training instead of the six time. The debate has revealed the complexity of the weeks plus four weeks of mentoring that UKBA staff issues. However, there is certainly agreement across have to undergo before they are let loose on passengers the board that the Assembly needs borrowing powers. at our ports of entry. The independent monitoring Some very interesting ideas have been put forward on board was scathing about the short-term holding facilities the convention—for example, on the future of the UK for children at Heathrow, which it described as constitution. The idea that there should be a permanent “disgraceful” and “deplorable”. monitoring commission is very interesting. Then there was the fiasco of the so-called legacy Of course, you can never get a largely Welsh group cases, which were laid aside for a variety of reasons of people together without their discussing the Barnett until they reached an estimated total of 450,000, which formula. After today’s debate, the Minister is well UKBA promised had to clear by July 2011. It failed in aware of the strength of feeling on this. I shall make spite of repeated assurances given by Ministers, and just one quick point of clarification: when I referred to there are still 80,000 cases today. Mr Whiteman, the the Barnett floor, I was referring to it as a way in new head of UKBA following the abrupt departure of which we could quickly make some progress on this his predecessor, has said that all these cases will be issue. Something to which no noble Lord has referred resolved by the end of the year. But how can anyone today is how long it will take once the decision is made have confidence in this new promise when they consider to reform the formula. It will take years, rather than the broken undertakings of the past? months, to develop a new needs-based formula, and in Where cases in the new archive have been processed Wales we need that action quickly. since July 2011, nine out of 10 have been granted three Once again, I thank every noble Lord for their years’ discretionary leave, so that they have to reapply contribution. at the end of that period and yet again after another three years. Is this an efficient way of using UKBA’s Motion agreed. diminished resources? Staff numbers are being slashed 381 UK Border Agency[19 JULY 2012] UK Border Agency 382 by 22% in the five years from 2010 to 2015, which Where the decision to detain is based on the risk to the means the loss of 5,300 jobs. Asylum Casework is public, the agency should provide the evidence that already understaffed, so inevitably less time will be the migrant would reoffend. Perhaps my noble kinsman available for individual decisions and more applicants could say whether this recommended practice has will be wrongly refused. been adopted. The wrong way to reduce the workload is to take Some people are being deported with inadequate away the right of appeal against refusal of family visit documentation and are being returned here by their applications. The success rate of appeals in these cases countries of origin. As the Minister will be aware, rose from 19% in 2004 to 45% in 2010 so, in future, there are serious allegations of ill treatment during half of all applicants who are wrongly rejected will deportation, though G4S was replaced as the contractor have to reapply, at a cost of £78 for a single visit, to get following the death of Jimmy Mubenga on a flight to the decision reversed. By the time the second application Angola. Its successor, Reliance, admits that its staff is granted, the occasion for the visit, be it a wedding or are loutish and aggressive and lack respect for minorities an anniversary, will be long past and there will be a and women. On asylum, the Minister for Immigration stain on the person’s record, which is bound to affect has received two reports from the UNHCR about any of their future applications. It is contrary to errors in the detained fast track, a matter also raised natural justice to refuse an application on the grounds by the chief inspector, who points out that one in three that information has not been supplied, the requirement of those initially routed through the DFT is subsequently for which could not have been known at the time the released. application was made, as the agency is doing. It is up to the UKBA to explain clearly and unambiguously The treatment of women in the asylum system is what information the applicant has to supply. raised by Women for Refugee Women and in a recent The tribunal statistics for the year to March 2012 report for Asylum Aid on gender-related claims in the give a stark picture of the unreliability of UKBA EU member states, including the UK. Asylum Aid decisions on immigration and asylum applications says that although we are often in advance of other overall. Fewer than half the appeals made were dismissed EU countries, the UKBA rarely refers to the UNHCR and my noble kinsman may be able to confirm that the gender guidelines, and practice by the courts is variable. 36% of appeals allowed was an all-time record. These The Minister points to the revised instructions on figures show that the criteria being applied are too managing gender-based asylum claims and to a thematic harsh. In addition to the incalculable personal review of relevant cases, but he does not mention the consequences of faulty decision-making, there is also UNHCR guidelines. That review uncovered faults in an avoidable burden on the tribunals. The Government the decision-making process, such as a lack of investigation told the Home Affairs Select Committee that they are in cases involving domestic violence and whether an committed to driving up their appeal win rate by applicant’s gender would affect her ability to seek state improving the quality of decision-making and by protection. According to Asylum Aid, our own guidelines withdrawing cases that are no longer sustainable. Should are not well implemented and they do not include not the UKBA have a definite target for reducing important procedural aspects that are found in the decisions overturned by the First-tier Tribunal, and UNHCR gender guidelines. would my noble kinsman care to give an estimate of Women for Refugee Women says that under the the savings if it could be reduced to, say, 20%? LASPO Bill the withdrawal of legal aid in non-asylum In a high proportion of the cases where people lose cases will undermine the availability of vital legal an appeal for leave to enter or remain, the decision is representation in complicated and often ill-understood taken to deport them. As an official told the chief asylum cases and it asks whether the UKBA will inspector, the UKBA is operating as though, monitor the impact of LASPO to see whether its “a decision to deport equals a decision to detain”, apprehension is justified. Its also says that two-thirds despite the presumption of liberty in policy. A study of the women who participated in its research become by Matrix Evidence for the NGO Detention Action destitute during the asylum process, having to rely on shows that the UKBA is wasting £377 million over a charities for food. This needs to be pursued within the five-year period on the detention of migrants who are NGO. Our legislation requires that the special needs ultimately released. That rises to £390 million if the of asylum seekers and their family members who are persons who cannot be deported are given the right to vulnerable persons must be taken into account when work. No account is taken of the cost of treatment for providing or considering support, but there is no the mental and physical ill health of long-term detainees, obligation to carry out or arrange for the individual or of their loss of . evaluation of a person’s situation to determine whether she has special needs. This is a gap that needs to be About 27,000 migrants enter detention per year filled. and nearly 11% of them are detained for more than three months. Of these longer-term detainees, nearly Turning to LGBTI asylum seekers, the UKBA 40% are ultimately released on bail or temporary conducted a quality audit to assess the impact of the admission. The right way to deal with this unacceptable training. There seems to have been a definite improvement, situation would be to detain only migrants who can be with a higher proportion of these claims being accepted, deported within a lawful or reasonable period. This but the audit uncovered some concerns. I would be applies, for example, to prisoners who are detained at grateful if my noble kinsman could say why the audit the end of their sentences, even when it is known that has not been published nearly a year after it was their country of origin will not accept them back. produced. 383 UK Border Agency[LORDS] UK Border Agency 384

[LORD AVEBURY] “increasingly we will look for opportunities to use commercial Finally, I would like to mention torture victims, providers, overseas counterparts, voluntary organisations and who are routinely being held in immigration detention community involvement to supplement the services we provide centres in breach of the Immigration Rules. This is directly”. according to a Medical Justice report, The Second I am not at all happy to read that the “hubs and Torture, which details 50 such cases. Fourteen of them spokes” system that operates in regions overseas will have now been granted leave to remain in the UK, but reduce 70 hubs to around 25. It seems to me that that only one of the 50 was released from detention pending is a recipe for disaster and will exaggerate the problems determination of the asylum claim, as the rules provide. that have already arisen as a result of that system Two of the 50 were forcibly returned to their countries being put in place. Perhaps my noble friend the Minister of origin and endured torture for a second time. Both can shed some light on those two general points in managed to flee again, claimed asylum for a second particular. time, and were detained again in the UK. One of them My interest in the work of the agency is in relation now has leave to remain on the basis of the risk he to short-term visa requirements and student visas in faces in his country of origin. All but two of those 50 particular. I refer back to my short debate in January in the sample have now been released, underlining the of last year when I raised a number of concerns, failure to house them in the community when they complaints and horror stories. I also refer to the first made credible allegations of their torture. That debate introduced by the noble Earl, Lord Clancarty, would have cost £5,000 instead of the £23,000 bill for in March of last year. I will not go over that ground. keeping them in custody for 226 days. That was the It is still disturbing to read in the May edition of average length of time for which the 50 were detained. the Diplomat that obtaining a British visa is now so The effects of wrongful detention on these torture time-consuming, costly and fraught with bureaucratic victims were catastrophic, including attempted suicide, obstacles that potential investors are discouraged from self-harm and hunger strikes. Five of them have now doing business in Britain. Student visas, however, continue launched individual judicial review proceedings, claiming to give me the most concern. The British Council has damages for false imprisonment based on the UKBA’s researched this and lobbied hard for flexibility but so breaches of Rule 35. The UKBA’s response to this far with little success. Apparently, only last year 50 British report is to say that it is anecdotal and based on a Council scholarship students were turned down as a small number of cases. Obviously a small charity does result of the system. not have the resources to carry out an investigation of As a particular example, I should like to cite Mexico, every one of the thousands of asylum seekers detained which is the second largest economy in the Americas every year to see whether each one has made a torture after Brazil. During his recent visit to the G20, in one claim and been ignored. What is needed is an independent of his meetings with the Mexican authorities the Prime review by the chief inspector with help from independent Minister stated that he saw education as the main tool medical experts on torture. Rule 35 is not working and to increase co-operation with Mexico. He also undertook has not worked ever since it was first introduced. In to remove unnecessary obstacles. A new Administration the face of such an abysmal record of failure extending is about to take over in Mexico, so it is a good moment over many years, this survey by Medical Justice is a to review the situation. Currently, 3,000 students in wake-up call. the United Kingdom are financed by the Mexican Sacking nearly a quarter of the staff, taking away Government or their own families. They pay the full migrants’ appeal rights, refusing applications without overseas student fees and most are doing graduate and just cause, detaining people who are never going to be postgraduate studies. Mexico’s National Council for deported and ignoring torture claims are not the route Science and Technology, which is roughly the equivalent to sorting out the enormous problems that beset the of our British Council, sends students to the United agency. The cuts should be stopped before things get Kingdom and the United States to look particularly at even worse and the Home Office should address the scientific and technical areas. It has been a very successful many recommendations made by the UNHCR, the story because, happily, the United Kingdom’s academic chief inspector, the Select Committee on Home Affairs institutions compare very favourably with those of the and the many expert NGOs whose wisdom is freely United States. available. I beg to move. There is no pattern of students overstaying. They all return to Mexico where they are needed as high-flyers 2.19 pm to manage Mexico’s vibrant economy and to be the leaders of the future. Earlier this year, on an Inter- Baroness Hooper: My Lords, I am most grateful to Parliamentary Union visit to Mexico, we met a group my noble friend Lord Avebury for putting the spotlight of Mexican alumni from the LSE. On another occasion, on the work of the UK Border Agency. He has given we met students who had studied at other universities us a very thorough tour d’horizon of the many areas throughout the United Kingdom. We were very impressed that have been complained about. It is also interesting at their enthusiasm for the courses that they had to note from the business plan just produced by the undertaken and for their wish to continue to have agency that it recognises that, links with the United Kingdom in whatever work they “its management structures need to adapt”, do. and that, Yet Mexico does not have most-trusted-country “the Board is taking a fundamental look at the way they work”. status, as do Argentina and Chile in terms of Latin I am not sure what it means in the business plan when America. I understand that the system of being a most it says that, trusted country in some ways eases the formalities. I 385 UK Border Agency[19 JULY 2012] UK Border Agency 386 do not understand why something cannot be done there will be pressure for migration and considerable about this as regards Mexico. After all, we have only illegal migration. Obviously, people will follow resources about 100 students from Argentina. The scale is very and where they go, and economic activity where it different. What about the future as regards Brazil? We grows. have just signed up to a science-without-borders Of course, we have to think of the management of programme, which will bring 12,000 students from the situation in an international context. I wish that Brazil to British universities over the next few years. If, we would not drag our feet on European institutions. I after going through the whole process of applying and cannot begin to understand how we are going to look being accepted by our institutions, students are faced to the successful management of this issue without with this all-too-rigorous visa application process and co-operating as closely as possible with our fellow the costs involved, it can be very off-putting and members of the European Union and in ensuring that certainly can seem most unwelcoming. When will a the quality of the work they are undertaking in this thorough review of this important aspect of the agency’s respect is of the highest order. There is a big challenge work take place? there as well. This Government have been brave in reconsidering The UK Border Agency is in the front line of all and reversing some of the previous Government’s this. As politicians, we need to ask ourselves very often policies and decisions, such as the closure of embassies what kind of context we set for those in the front line in central and South America. I am delighted about handling this difficult issue. Do we set a context of the reopening of embassies in El Salvador and Paraguay. understanding, of wisdom, of concern, and of the But this is true also in other parts of the world. Will need at all times to preserve a commitment to justice? the Government therefore not also consider reversing Or do we allow ourselves to be tempted into a seaside the decision to use the UK Border Agency to handle auction about the unacceptability of people flooding visa applications in regional centres and revert to the in from abroad? I am not saying that there are not former practice whereby visa applications were handled great needs arising from people flooding in from abroad; with discretion and sensitivity in British embassies? I there obviously are. But we need to examine the political look forward to my noble friend’s reply. context we provide, in which the UKBA is expected to undertake its task. 2.26 pm I want to underline the fact that we are dealing with people who, frequently, are in the midst of the most Lord Judd: My Lords, I too thank most warmly the acute trauma. They are in mental and physical anguish. noble Lord, Lord Avebury, for having made this debate Think of children, who have been through terrible possible. There are few people in Parliament in either conflict, and have seen killing and maiming in their House who have a more intimate knowledge of the lives. Think of vulnerable adults, sometimes, travelling subject and who have more consistently throughout the world, who may have in their pocket a letter their distinguished political career contributed to the explaining that they are vulnerable but who, faced quality of debate and the quality of information available with the awe of the border authorities when they meet to us all. The noble Lord deserves warm appreciation them, may forget even to produce the letter. There is a from us all. need to have imagination and sensitivity in all we are We now are faced with acute pressure. I wish that doing. more time was spent on examining and analysing There is the issue of people who have suffered from pressures that are likely to develop and perhaps make torture. I have known at first hand too many cases of a grave situation now seem quite mild compared with people who, years after the torture, are still trying to what faces us in the future. I think about the implications adjust to a normal life and overcome what they have of climate change and the movement of people. I been through, but are harassed—as they see it and feel think about the issues of conflict, not altogether separate it—by the way that we administer our immigration from the issues of climate change and what will result policy in an absence of imagination and sensitivity. from it. We need far more of this analysis so that we I do not understand the new legislation on families. can be prepared and not always just reacting to situations. We hear from the Government on every possible occasion I always say that the first reality of life is that we are about the importance of family, yet for some people born into a totally interdependent global community. for whom family will be absolutely indispensable in We may like it or we may not but that is the fact. terms of their stability and ability to contribute to Unless we face up to that, and realise that as politicians society, we introduce these arbitrary rules. There needs the way in which future history will judge us is how to be much more imagination about who is a suitable far we make a success of that membership of an person to bring in as a relative, and who is not. There interdependent global community, we are failing the also needs to be much more clarity in the regulations nation. It is a huge challenge, which always should be about what is acceptable and what is not. before us. I particularly support the noble Baroness, Lady We also must face up to the consequences of the Hooper, in what she said about universities. Universities way in which we manage our economic affairs. There are going through a nightmare at the moment. There is great emphasis on market ideology and, therefore, have been no less than 14 major changes in policy on the free movement of capital and goods. But we are towards them in the past three years. We are part of an not able—I am not suggesting that it is possible—to indivisible international community, and we should have free movement of people. This of course is a ensure that our communities of scholars in universities great flaw in the whole market theory but it also leads are international. It is not just a matter of making to great pressures. As long as there is that contradiction, money from people coming in from outside but of 387 UK Border Agency[LORDS] UK Border Agency 388

[LORD JUDD] Government found piles of unattended and lost files enabling our own students to come to terms with the at Lunar House. The orderly queue of applicants world in which they live. The quality of their higher awaiting immigration decisions grew to the extent that education depends upon the presence of an international the process became unmanageable. All this happened community. You cannot have world-class universities because the number of immigration staff was reduced which are not international communities. There is an by 1,000 at that time. The impression given was that absurdity in putting up special barriers. asylum seekers were flooding the country, that and I am also worried that it is beginning to change the tough new measures were required to control the flow culture in universities. Good universities have operated of economic migrants, students and others who were as communities of mature, responsible, self-motivated seeking admission to the United Kingdom. people. Now we have to police attendance at lectures, I have said before that all political parties subscribe whereas in a good university, as we all know, a highly to a fair immigration policy and fair procedures. This motivated student may well say, “That is the lecture has never been in dispute. The policy is to admit those I’m going to, and that is the lecture I’m not going to”. who are eligible and to exclude or—subject to the There is a sort of police system that the universities appropriate humanitarian principles—remove those are being expected to apply, in being able to account who are not. But in any administrative system, questions for the overseas students in their midst. This is quite arise about priorities. The administration of the contrary to the whole concept of liberal education, immigration system is no exception. and is very worrying. It is also extremely expensive. The problem the UKBA faces is very simple. The When we are talking about the shortage of funds for need to exclude those who are ineligible means that higher education, it is disgraceful that this extra burden checks have to be made to determine who is eligible has been placed upon the universities. and who is not. The greater the emphasis on excluding I conclude by making this point: it is not a matter those who are ineligible, the more intensive the checks of fixing this, or fixing that. I am very glad indeed that have to be. The more intensive the checks are, and the the UK Border Agency has recognised in its business more complicated they are to administer, the more plan the issues that exist and is determined to do delay and expense accrues to those who are eligible. something about them. We should all fall in behind Again, if the objective of excluding those who are that and enable them to do it. However, it is a question ineligible is taken to extremes, in matters that are often of the culture. We read of the awful things that go not susceptible to documentary proof the risk of wrong—we know that they go wrong too often. We excluding those who are eligible to enter but lack the have seen the letters that, with a bit of imagination, resources to prove it becomes serious. When we add to could have been written in a more sensitive, firm, clear this the insatiable appetite by politicians to play the way, but have come out in the most officious, authoritarian numbers game, is it any wonder that a culture develops language, to people who are in the midst of uncertainty over time where administrators are expected to deliver and trauma. There is a huge cultural challenge here. results which often lack fairness and justice in the In encouraging the UK border authority to move process? The heavy emphasis on excluding those who forward with its business plan as stated, I hope that we are ineligible rather than giving prompt and sympathetic will stress that leadership is needed to ensure that we attention to the rights of the eligible has led to practices have a positive culture behind the organisation which that have an adverse effect on people from the New is in the front line of our relationship with the world as Commonwealth, and also on refugees and asylum a whole. We should be judged by this, as a member of seekers. Often the numbers seeking admission are the international community. Are we a good, decent exaggerated to an extent that asylum seekers bear the place, or a hostile, negative place? We need to ask brunt of public disgust. ourselves basic questions of that kind. We do not condone illegal immigration. Nor do we condone the entry of those who do not qualify to be 2.36 pm here. I suspect that genuine refugees seeking admission under the UN convention are few, and the sooner Lord Dholakia: My Lords, I thank my noble friend reliable statistics are produced, the better it will be for Lord Avebury for securing this debate. He is probably building a cohesive society here. We need our Governments the best qualified person to speak on border controls. to proclaim at the highest level the contribution migrants His tireless campaigning on behalf of refugees and make to the British economy. We need a shift in asylum seekers is legendary. A lot of people across the priorities towards greater emphasis on the rights of world are alive today because of his work on the rights those eligible to enter the United Kingdom. This has and liberties of the individual. been the principle on which Britain’s points-based Headlines in this week’s papers are unlikely to build migration system was introduced. The aim was to confidence in the way UKBA conducts its business. remove the subjective decision of immigration staff Performance has slumped after it lost 1,000 more and to establish objective criteria so as to avoid any workers than planned. The report from the National misunderstanding about how controls are applied. Audit Office is devastating. It talks of loss of focus However, if the final objective is to cut down on and poor performance, and of a tendency towards numbers, we are back to the starting point of differential optimism bias in planning, delivery and reporting that treatment offered to different countries, which is more has contributed to the current problems. likely to affect applicants from third-world countries. This is nothing new. Successive Governments The argument that often surfaces is about perceived must accept blame for this chaos. We have only to cast economic and social costs and benefits. We tend to our minds back to 1997 when the incoming Labour forget that, given that EU immigration is protected by 389 UK Border Agency[19 JULY 2012] UK Border Agency 390 the freedom of movement rules, successive Governments to come for a shorter period, but again they were have focused efforts on more tightly controlling non-EU rejected. I ask a simple question: what does it say migration. The positive contribution that we forget is about us that when it comes to raising people out of that those who benefit from education here also take the poverty syndrome and giving them experience back with them the soft diplomacy of democratic with a company based in this country that is prepared values which in our case is the envy of the world. No to help them, we turn them down and simply do not amount of overseas aid could compensate for this very believe them? The reasons provided for the rejection of important contribution towards democracy in many the applications was that the entry-clearance immigration parts of the world. officer was not satisfied that the girls were genuinely seeking entry as business visitors for the limited period, Another matter that I need to stress relates to as they had stated. headlines in the press this week, such as, “Immigrants drive biggest population rise in 200 years”. The figures I come back to the point I made earlier. It is simply published by the Office for National Statistics indicated this: in order to improve in particular the quality of that the population of England and Wales had surged asylum decision-making, the Home Office should show by 3.7 million in the past decade, and about 2.1 million leadership on the importance of breaking down the of that was the result of the number of immigrants culture of disbelief that is particularly obvious the outweighing the number of those leaving the country. treatment of women. There are many who live among The growth in population obviously presents social us in the UK who exist in a legal limbo and with the challenges, but the calls for an arbitrary population fear of forced removal. Many have fled persecution limit such as 70 million are sinister and, frankly, more that we would struggle to imagine. Let us give a lead so in keeping with a totalitarian dictatorship than Britain that every woman who comes to this country fleeing in the 21st century. persecution gets a fair hearing and a chance to build a new life. If the issue is immigration, the pace of change needs to be managed, but migrants bring major benefits I look forward to the day when I can travel through to the country. According to the Office for Budget immigration controls here with the Home Office Minister, Responsibility last week, while zero net migration my noble friend Lord Henley, and not have to wait would keep population down below 70 million, it and provide an explanation of why I am entering the would also lead to the national debt rising to 120% of country while he walks on through. GDP by the middle of the century. This would mean that the scale of cuts and taxes increases to be borne 2.46 pm by the UK population over the next 50 years would be Lord Ramsbotham: My Lords, like other noble Lords, tripled if we are to bring debt back under control at I thank the noble Lord, Lord Avebury, and congratulate 40% of GDP.The economic impact of cutting migration him on obtaining this important and timely debate. In in this way would turn the UK into a country such as doing so, I salute his tireless and determined championing Greece for most of the 21st century. We have to of the causes of those who seek sanctuary in this promote a simple message. Let us stop playing the country following torture or ill treatment in their own numbers game. Let us think about what makes Britain country. great. It is our people, irrespective of their origin, who will produce the wealth that will sustain the country’s I want to concentrate on one aspect of the UKBA’s health, welfare, social services and pensions for years performance with which I am currently engaged: the to come. enforced removal of those for whom entry has been denied. I declare three interests that will colour my Some years ago, I was involved in looking at contribution. First, as Chief Inspector of Prisons, I immigration control procedures. What became clear was given the responsibility of inspecting immigration was that there is an appetite by the Home Office to ask detention centres. To my surprise—but not entirely questions about the purpose of a visit to the UK, but surprising, given the number of Prison Service officers overall it puts very little faith in the answers provided in the then Immigration and Nationality Directorate—I by applicants. That culture seems to continue even found that immigration detention rules were not based now. I will give noble Lords an example. I was involved on UN and European Union detention rules but on with the then chief constable of Sussex, Paul Whitehouse, UK prison rules, which are wholly inappropriate because in raising funds for the Starehe project in Kenya. We immigration detainees and asylum seekers have not raised more than £1 million in this country. The girls’ been convicted of crimes. My inspectors and I spent centre opened in 2005 and provides the only free 18 months working with the IND, amending the rules education in that country, drawing poor girls from the to make them fit for purpose. My main concern was worst slums in and around Nairobi. The original the lack of a coherent strategy, or any leadership or pioneer class of 72 has swelled to 400 in just seven direction, in the immigration and asylum process. years. The success has been remarkable. The centre My second interest was as an independent asylum has a small farm that grows food and rears livestock. commissioner, a commission that reported in 2009. As There are also beehives and a small fish farm. I had done with detention rules, we deliberately gave Most importantly, the hub of the matter is that the UKBA the opportunity to comment on our findings International Produce Limited, the UK’s largest importer before we published our recommendations. In of fresh produce, which is owned by ASDA-Wal-Mart, commending the then Border and Immigration Agency has generously offered an internship for two students for making strenuous efforts to deal with asylum from the girls’ centre to come to the UK. They applied, claims more efficiently, we found what the noble Lord, but their applications were rejected. They applied again Lord Dholakia, has just described—the culture of 391 UK Border Agency[LORDS] UK Border Agency 392

[LORD RAMSBOTHAM] to G4S expressing these concerns; and I ask the Minister disbelief that persisted among decision-makers. The whether copies of these letters can be put in the adversarial nature of the asylum process and the lack Library. of access to legal advice for applicants led to perverse and unjust decisions. My belief in the culture of disbelief I have to say that in the face of all the evidence that was proved by the then Minister, Mr Byrne, the very we have gathered during our inquiry, quite apart from afternoon that we published the report. He was asked all the other evidence that was available, I find that on “World at One” about the remarks that I had made CPS decision, at kindest, perverse. Passengers reported on the “Today” programme. He said, “I have not read hearing Mr Mubenga cry out that he could not breathe the report but I disagree with every word of it”. and that the guards were killing him. There had been Home Office warnings to G4S in 2006 about the The year before, on behalf of Birnberg and Medical dangers of using positional asphyxia. There had been Justice, I had written the foreword to a report called stringent criticisms by the coroner in the case of Gareth Outsourcing Abuse, in which I said that if even one of Myatt, a 15 year-old who died in Rainsbrook Secure the 48 detailed cases from a list of nearly 300 alleged Training Centre following the use of similar procedures assaults by security guards employed by private security for restraint by G4S guards. He, too, had called out companies on contract to the Home Office is that he could not breathe before he died. As an inquest substantiated, is the only public forum in which this death can now “that amounts to something of a preventable national disgrace”. be scrutinised, I ask the Minister to confirm that this In 2010, my noble friend Lady O’Loan in her report will be conducted as soon as possible by an experienced on the dossier on behalf of the Home Secretary found coroner, and that public funding will be made available that although there had been no pattern of systematic to ensure full support for Mr Mubenga’s family. abuse by escort officers, it clearly happened, and that there was no management or training of guards. She The Home Affairs Select Committee in another recommended a review of the training provided for place has also investigated rules governing enforced the use of force, involving annual retraining to ensure removals, although in nothing like the same depth as that in any case in which force is used, officers are my inquiry. The Government’s response has not been trained to consider constantly the legality, necessity as full as I would hope. It confirms that all guards and proportionality of that use of force. must be certified by the Home Secretary, which includes This is where my third interest is: as chairman of an certification that they have received training in restraint independent inquiry into forced removals on behalf of techniques approved by the National Offender Citizens UK, the largest alliance of civil society Management Service. I believe that that is perverse. organisations in the country, which works on many Unfortunately, time does not allow me to cover all issues, not just immigration. I want to concentrate the points that I shall present to the Home Affairs particularly on the case of Mr Jimmy Mubenga, who Select Committee in the report in November because I died on 12 October 2010 from cardio-respiratory collapse want it to follow them up, but they include the after being restrained by three G4S detainee custody recommendation that the regulation of all detainee officers in an aircraft at Heathrow while being removed escort officers by the security industry authority is in to Angola. line with an amendment to the Private Security Industry Two days ago, Mr Gaon Hart of the Crown Act 2001, which currently excludes them. This must Prosecution Service concluded that there was, include not just initial licensing but annual top-up “insufficient evidence to bring any charges for Mr Mubenga’s training, connected to annual training on a physical death … Although counsel advised that there was a breach of intervention skill model. Frankly the current training duty in the way Mr Mubenga was held”. of security guards is not effective. If the UKBA had However, it was not enough to tell a jury what may bothered to look beyond the inappropriate NOMS have caused a person’s death, and there was, techniques, it would have found that special mental “insufficient evidence that the restraining methods used … were, hospitals have for years rejected them in favour of in themselves, illegal”. those that are non-pain compliant, except in extreme He added that, circumstances when removing a weapon. Unfortunately “experts suggested there were shortcomings in the training given the three special hospitals have used slightly different to the security guards”, techniques that have never been codified, and I have written to the noble Earl, Lord Howe, about this. and that the training on positional asphyxia—where the position of an individual affects their ability to I asked the UKBA to attend our evidence session, breathe adequately, causing death due to lack of oxygen— and we heard from the restraint trainer at Ashworth and the warning signs for identifying it, were both Hospital, who told us that not only had he done what flawed. he had done with non-pain techniques, but that the Moreover, although G4S had followed training Liverpool police had asked him to devise techniques recommended by the UKBA and the National Offender for getting people on and off crowded Mersey ferries, Management Service, which had been found to be safe and that he could do the same for aircraft. Last week, and fit for purpose after official review—an official the Minister of Justice announced the introduction of review that incidentally was carried out by the National new minimising and managing physical restraint, formerly Offender Management Service on its own techniques— known as control-restraint techniques, for use in juvenile was criticised by experts, as was the lack of specific custody, recommended by a restraint advisory board training for the use of restraint in aircraft. I understand set up for the purpose. This has now been reconstituted that the CPS is writing to the UKBA, to NOMS and as the Independent Restraint Advisory Panel. 393 UK Border Agency[19 JULY 2012] UK Border Agency 394

I asked the Minister whether the panel could be “Certainly, we would not want that to be the case”.—[Official charged with similarly examining restraint techniques Report, 19/6/12; col. 1658.] for the UKBA, independent of NOMS. We found that I am grateful to him for arranging a meeting of officials the measurement of successful returns passed to Ministers from the border agency with some of my colleagues is not a qualitative process but merely counts the from the Church of England. number of reports received from contractors. The only training received by the eight monitors who report on I am not here to make special pleading on behalf of a contractor’s performance and the conduct of individuals the church or to argue for any kind of special treatment was to watch a session of contractor-run training. Far at all, but that case illustrates some of the failings in from recruiting and training staff when contracts change, the system and in the role and performance of the old ones—no doubt bringing old habits with them—are UKBA. When the right reverend Prelate sent the merely TUPE-ed from one contract to another. The details of the case to the Minister, the response seemed Immigration Service Commissioner is prevented from to show a change in tenor. We were told that the regulating unscrupulous alleged legal advisers who applicants’ intentions and their personal circumstances, exploit immigrants, and so on. including their financial circumstances, are paramount. We have found good things, such as the Independent While the UKBA’s visa sections are able to take into Family Returns Panel, whose procedures we have account the support for an applicant’s case, they are recommended to the UKBA for single returnees as unable to accept assurances or guarantees made by the well, not least because the in-depth examination of the sponsor on the applicant’s behalf. That is because such appropriateness of return might avoid scandals, such assurances and guarantees are legal unenforceable, yet as reported by Freedom from Torture and others, of the UKBA has insisted in the past that, while the previously tortured people who, their case being disbelieved economic circumstances of the individual are considered, by the UKBA, were returned, tortured again, and they should not be the only deciding factor. escaped to seek asylum once more. We appear to be in a situation where the decision- My successor as Chief Inspector of Prisons, Anne making process is at best a muddle. A report published Owers, coined the phrase “the virtual prison”to describe in December last year by the independent chief inspector what Ministers were told by officials as opposed to on entry clearance decision-making touched on that what she saw on the ground. I fear that one of the very issue. He commented that in 16% of all sampled most besetting sins of the UKBA, and indeed of the cases there was evidence of an application being refused Home Office over the years, has been its continued for failing to provide information which had not been refusal to listen to facts from outsiders. I just hope that set out in the published guidance in the first place as Ministers will discard the former practice and listen, being required. Some applicants were refused entry as because it really does matter. The image of this country a result of failing to demonstrate a subsisting relationship is presented by the UKBA, and currently too much of with a UK sponsor despite that being neither a what we represent is being let down by procedures requirement under the rules for general visitors nor that, with good leadership, good management and cited in the visitor guidance provided by the agency. good training, could be avoided. Applicants have not always been informed of the requirement before they apply, and at the time of the 2.57 pm publication of the report, they were not given an Baroness Northover: May I remind noble Lords we opportunity to provide the extra evidence once they are in a time-limited debate with a couple more debates were informed. to follow. We appear to be in a double bind. On the one hand, 2.58 pm people are refused entry despite having ample evidence The Lord Bishop of Newcastle: My Lords, I am very of a strong relationship with a UK sponsor, and yet grateful to the noble Lord, Lord Avebury, for securing the Minister says that the UKBA cannot accept assurances this debate today. I would like to pick up on some of or guarantees made by the sponsor on the applicant’s his points about the UKBA’s faulty decision-making behalf. On the other hand, in cases cited by the chief and then go on to highlight a number of areas of inspector, people have been refused entry because they concern about the role and performance of UKBA. did not have evidence of such a relationship. As I say, this is a process and a system which is at best muddled On 19 June, the right reverend Prelate the Bishop of and confused, and at worst misleading. Either it is the St Edmundsbury and Ipswich raised in a supplementary case that the UKBA is not applying the rules sensibly question a concern from the churches about African or that the rules themselves are unable to cope with Christians responding to invitations to enter this country the actual situations of a number of those applying for on short visits. It seems that a new economic test was short-term entry into the UK for valid reasons, such being applied to them. Able well-qualified African as to further mutually enriching relationships between clergy were being invited to conferences in this country, dioceses here and overseas. or to visit dioceses for short periods endorsed by bishops, and were being turned down simply because I understand that a number of UKBA border posts their personal income was low. We all know that have been amalgamated into larger regional centres African clergy do not get paid very much, they are not with fewer face-to-face interviews and more reliance often paid regularly, and they may not have bank on documentation. Yet if the rules on which forms of accounts. In his response that day, the Minister said documentation are acceptable are as unclear as they that he could not believe that someone who was being appear to be, then the situation does not inspire confidence endorsed by a bishop could be turned away. He said: in the UKBA’s ability to make accurate judgments. 395 UK Border Agency[LORDS] UK Border Agency 396

[THE LORD BISHOP OF NEWCASTLE] are being detained for far longer than the stated timescale Nor do such cases appear to be the only areas of —for 13 days as opposed to the three to four-day concern in relation to the performance of the UKBA. period the UKBA aims to meet. The detained fast In his report last December, the chief inspector found track system also appears to have insufficient safeguards evidence of poor decision-making, with errors being to prevent people being incorrectly allocated to it. I found in over a third of the cases sampled, alongside look forward to hearing how the eight recommendations a failure to consider relevant positive evidence, of the chief inspector are being implemented. misinterpretation of supporting evidence, misleading I could say more about the evidence that there is information about an applicant’s right to appeal, concerns still child detention and about the real concerns of our about internal reviews and insufficient retention of universities, but in conclusion I acknowledge that this supporting documentation by the UKBA. In a later is a difficult and even fraught area for officials on the report, the inspector spoke of poor communication, front line, as it were, and I acknowledge that some poor managerial oversight and lack of clarity things are better than they once were. But when we about roles and responsibilities, together with poor add up the catalogue of errors, misjudgments, muddle communication between the agency, Ministers, managers and confusion, we are left with a system and an agency and operational staff. that is problematic. I long to see real evidence of the There are other areas of concern as well, the first of more compassionate and fair agency that the director which is the practice of dawn raids. We believed that claimed was the case a couple of months ago. It dawn raids made by the staff of the UKBA were a certainly does not look like it at present. thing of the past, but last week another case of a dawn raid being undertaken by UKBA officers was reported. A family of four, including children aged 10 and two, 3.08 pm together with their mother who was 31 weeks pregnant, Lord Marlesford: My Lords, I thank my noble were forcibly removed from their home. The result was friend Lord Avebury for giving us the chance to talk that the pregnant mother was hospitalised while the about the border agency. I pay tribute to the things he husband and children were removed to the Cedars said about asylum and to what the noble Lord, Lord detention centre in Sussex. That is not an isolated case. Judd, said about immigration policy and the philosophy In April, another family was subjected to a dawn raid, that should underline it. However, I do not intend to resulting in another pregnant mother being restrained deal with those subjects at all. I wish to put my by four officials and the family’s removal to a detention contribution on the UK Border Agency in a wider centre. Other examples can be given. A representative political context. There was a time when there were of the Scottish Refugee Council expressed grave concern two criteria that decided which political party won an about these matters: election in Britain: political ideology and competence. “After the UK Government promised to end child detention The divisions caused by political ideology have virtually in 2010, the Home Office undertook to improve the way in which children and families were treated in the asylum process. The new vanished, along with the philosophical struggle between Family Returns Processes (FRP) that they have put in place was socialism and capitalism. However, competence remains intended to treat families with children more humanely if their a deciding factor. In that, the opinion polls tell us that case had been refused. We have grave concerns about how this at the moment the Government are not doing well process is being rolled out in practice”. enough to stay in power, let alone win an election. It is absolutely vital that UKBA staff working on the There can be few areas where the failure of competence ground treat families with respect and care at all has been greater than in the management of the UK stages, particularly at the end of the process when Border Agency. There has been inadequate progress families may be at their most vulnerable. Indeed, that over the 26 months that the coalition has had responsibility April dawn raid took place within days of the director for the conduct of our affairs. We now have a state of of asylum at the UKBA telling a conference in the crisis, which needs emergency action to put it right. same city that the agency was “more compassionate” The United States took emergency action after 9/11. I with a process that was fair. had the opportunity to observe the homeland security A second further area of concern is the administration force that protects America’s borders—and the US of the legacy programme for those whose asylum has a far greater problem with its long southern border. cases have taken several years to be heard. In my own I also know Hong Kong rather well. It is another place city of Newcastle I know that asylum seekers in that that can teach us lessons in the efficiency of protecting scheme were told by letter that they would hear the borders. outcome of their cases by the summer of 2011, and I say at once that guarding our borders is part of they are still waiting. A number of those people have the defence of the realm and therefore of the highest been threatened with deportation despite their cases priority, especially for a Conservative-led Government. remaining unresolved. In the few cases where solicitors I will make some specific proposals to remedy the have been able to follow them through and press for a defects and will illustrate the defects by referring to resolution, some were granted leave to remain on the two highly critical reports on the border agency. The basis that it would be for a period of only three years, first is the report of 7 February 2012 by John Vine, the while those whose cases were dealt with before the independent chief inspector of the border agency. The summer of 2011 were in nearly every instance given second is the 26 June 2012 response of the Government indefinite leave to remain. to the 17 January 2012 report of the House of Commons There are other areas of concern, including the Home Affairs Committee. I shall refer also to some disparity between the published timescales for interviews Written Answers that I have received on the matter and decisions, and what is actually happening. People over recent years. 397 UK Border Agency[19 JULY 2012] UK Border Agency 398

The first question must be: why did it take 14 months leave the job in September. The border force should be for the Government to set Mr Vine to work? We all reformed as a highly trained, tightly disciplined uniformed knew well before the election that the thing was a force that is not allowed to take industrial action. It shambles. It was, after all, in May 2006 that the then should have a clear command and control hierarchy, Home Secretary, the noble Lord, Lord Reid, denounced as do the military and the police. Its staff should be the Home Office immigration department as “not fit closely vetted and in general should have only British for purpose”. What was the reaction of the Civil nationality. It should be under the close control of Service? The head of that department was promoted Ministers who represent the elected democratic to head the whole of the Ministry of Defence, which Government. he later left with an even more tattered reputation. At the moment I feel that far too much is left to the Mr Vine concluded that the border agency had, control and guidance of Home Office officials. The “poor communication, poor management oversight and a lack of commander of the border force should have the same clarity about roles and responsibilities”. link with Ministers that service chiefs have with Ministers You cannot get more damning than that. in the Ministry of Defence. At this time, when Britain’s A point highlighted by the Commons committee Armed Forces are being reduced, it should be possible was the failure to use available modern technology to to recruit some first-class officers who are experts in protect our borders. I will give only two examples. administration, logistics, planning and management Mr Vine pointed out that there had been no attempt to to fill some of these key roles. Whenever there is incorporate the verification of fingerprint systems—on criticism, Ministers claim—I hope that the Minister which considerable public money has been spent—to will not do so this time—“Oh, it takes time to get it identify any passengers trying to enter the UK using a right”. The Government have had over two years, and false identity. The Commons committee complained time is now running out. that the iris recognition system, on which £9 million I turn to the question of passports. For years I have had been spent, had provided only 12 iris gates. I urged that the Government should always know what should emphasise that in the US iris recognition and other passports UK passport holders have. There should other advanced biometric systems are widely and efficiently be a strict obligation to divulge full details to the used. British passport authorities, probably including a The response of the Government to the report was photocopy of any other passport held. One response breathtaking. They merely said that the iris gate was that I had from the Government was, “Oh well, people now “planned for closure” because, wouldn’t necessarily disclose the fact that they had a “the system is close to the end of its useful life”. second passport”. The answer to that is simple: anyone found deliberately to have concealed their non-British My God! In fact, the failure of the UK iris system was passport would be liable to have their British passport largely due to the ill disciplined, heavily unionised cancelled. border force being reluctant to use it. Meanwhile, the new facial recognition system also seems to be failing. That leads to the question of e-Borders, on which some £400 million has already been spent. This, too, I was impressed with the new chief executive of the has been a shambles. I quote the Commons Home border agency, Mr Rob Whiteman, with whom I had a Affairs Committee again: long chat. However, he has a huge challenge. The “As of July 2011, the e-Borders system was collecting details problem with the staff of the border agency is not just of about 55% of passengers and crew on airlines, with no coverage that they are of indifferent calibre; they have been of ferries or trains. The original target to collect 95% of passenger shown to be seriously and systemically corrupt. As the and crew details by December 2010 was missed, as were all other Minister knows, because he gave me the Written Answers, previously timetabled deadlines”. some 30 Home Office staff members have received To this deplorable situation the Government’s response heavy prison sentences for misconduct in public office. was: The great majority were from the border agency. It “We believe that the technical ability to collect data from the was a disgrace. rail and maritime sector can be delivered by December 2014 … There needs to be a much tougher recruitment Clearly our preference is to have 100% coverage of e-borders on policy, focused primarily on employing those most all routes”. suited to the crucial role of protecting our borders. I However, the Government concluded: have looked at the application forms for jobs in the “Some benefits of the system do need a higher level of agency.They seem more concerned with social engineering, coverage to be valid but not necessarily 100%”. for example ensuring that staff reflect diversity of I hope that the Minister will tell us that the Government sexual orientation, than with ensuring that those recruited expect to get at least 95% coverage on all routes—and have the necessary integrity, motivation and discipline. by when. If you do not know who left the country, you I believe that border force staff, who are not of the have not the slightest idea who should or should not integrity that we should demand, should remain state be here. It is clear that so far the Government have got employees. In my view there must be no question of their priorities wrong. They need to get a grip on this hiving off this crucial role to the private sector; we crucial aspect of our national security. have already seen enough disasters on that side. I am prepared to believe for the moment that the 3.17 pm Government were right to split the border force from the rest of the border agency, but it is a pity that Baroness Williams of Crosby: My Lords, I shall command should have been given as a temporary begin by asking the Minister a direct question, which I appointment to a retired chief constable who is due to shall come back to if he feels unable to answer it in his 399 UK Border Agency[LORDS] UK Border Agency 400

[BARONESS WILLIAMS OF CROSBY] leave to remain. I believe that the Home Office’s winding-up speech: will he ensure that United Kingdom decision to move from indefinite leave to remain to Border Agency staff are asked to read this debate in what is now called, in the Home Office’s own phrase, Hansard? Whenever I come to take part in or listen to discretionary leave is extremely foolish. Somebody discussions on the House of Lords, not least on issues who is given only discretionary leave, but who has of civil liberties, I am always struck by the extraordinary lived in this country for five years or more already, will level of commitment and expertise to be found here. be uncertain about his future and that of his family. Of all those who have contributed, like the noble He can make no long-term investment in his existence Lord, Lord Ramsbotham, my noble friend Lord Dholakia in this country, whether that be a financial investment and others, among the prime movers in this whole or a social and personal investment in his children and area is my noble friend Lord Avebury. Without going grandchildren. Discretionary leave is a very poor substitute on about him, I think that we all recognise that he is a for indefinite leave to remain. I strongly suggest that great credit to this country and the kind of person we need to look closely at whether an amnesty should who Parliament can be proud of because of the persistence be considered as a serious possibility for those who and commitment that he shows unreservedly, and with have lived in this country for five years or more with great dedication, day after day. no criminal record of any kind. Amnesties have been granted with good results in a number of other countries. I shall speak on several issues and be brief about all of them. One of those issues is the things that are A further short-term issue I would like to bring up patently and immediately wrong, and could be put is what is called the fast-track process. It is almost the right relatively easily without any great expenditure. exact opposite of what ought to happen. The whole Another is a good example of what could be done at asylum and refugee system cannot be built up soundly no great expense at all. Then there is what I regard as unless careful attention is given at the first stage. In the deep, almost impossible dichotomy in what we ask this country, we have an endless process of appeals UKBA to do between, on the one hand, the commitment and legal interventions, demands, requests and so on, to human rights and human decency and, on the which means that people live here for years without other, the overriding pressure on the agency to cut having the right to stay but without any pressure to go. down the number of people coming to this country for That is because our first stage processes of admission whatever reason, however good, that is brought to and refusal are so inefficiently, and, often, so inadequately, bear on it by the media and to some extent by those of advanced. We have to look again at fast-track procedures us who are politicians. In the end, we cannot blame and ask that thorough early-stage procedures be UKBA for things that stem from political dogma and substituted for them. Failing fast-track procedures, prejudice. We have to take considerable responsibility which open the door to appeal after appeal, are disastrous ourselves. if we want an inexpensive and efficient way to deal Let me first say that I strongly support what the with the process. We see that more and more at the noble Lord, Lord Marlesford, said about being very present time. cautious indeed about outsourcing. We have all read The third issue I want to mention very quickly—and the reports in the past day or two about the House of I have a close eye on the time—is that of the return of Commons Select Committee investigation of G4S. young people literally within a week or two of reaching However, G4S is likely to be given yet further the age of 18. Some of these young people, who had responsibilities in the next few weeks, not least because been protected by their minority status, are being sent of the Olympics. At a certain point, when an organisation, back, right at the present time, to Iraq and Afghanistan. be it public or private, clearly fails, there has to be a I beg noble Lords to give one moment’s consideration careful investigation of its contracts and a decision on to this: imagine you are an unaccompanied 18 year-old, whether to continue with those contracts. The chief who may have no contacts whatever in the country to executive of G4S, Mr Nick Buckles, has been described which you are being deported. What do you think you by the Select Committee as someone who has no idea do? You turn to those who are willing to befriend you of what is going on and has shown an extraordinary and, if they happen to be called al-Qaeda, well, bad ability to deny that he knows anything about it, which, luck; they are better than nothing at all. We are I note, has become a great characteristic among those returning potential terrorists to countries which are who are being subjected to investigation in almost any insecure and fragile. I cannot think of anything very area. I strongly suggest that one has to ask whether much more foolish to dream up in a bath on a dark such an organisation should be responsible for such night. sensitive issues as the deportation, or, for that matter, The fourth issue, in only five, was raised by my the admission, of people from other countries, many noble friend and put forward by Asylum Aid: a complete of whom have very profound histories of suffering failure to recognise the special position of women in a and torture. world where, tragically, rape has become a weapon of The second issue I want to raise very quickly is the war. I first encountered this when Dame Anne Warburton question of what are sometimes called legacy cases. produced a brilliant report on the way in which rape The issue has been raised by the noble Lord, Lord was being used as a weapon of war in Bosnia. Far Ramsbotham, and others, and also by my noble friend from disappearing, it has become ever more significant, Lord Avebury. What are legacy cases? They are cases yet when a woman comes to this country as an asylum that have been pending for five years or very much seeker, claiming that she has been abused and raped, more, in which people have been living in this country her case is very often dismissed. That is partly because as residents, but under the weight of a sword of there are no expert elements in the UKBA, such as Damocles, as they may at any point no longer have there are—thank goodness—in the Metropolitan Police, 401 UK Border Agency[19 JULY 2012] UK Border Agency 402 to consider the special cases of rape and sexual abuse. predominantly people from the subcontinent, including She usually ends up as a prostitute on the streets of a great number of families, many with young children, King’s Cross or Everton or somewhere else, because it and 17 desks at border control were unmanned. I is the only way in which she can raise the money to subsequently put down a Written Question asking the keep alive. That is a totally undesirable contribution to border agency to identify or estimate the average time the criminal community in our own country. in that queue. The agency came back with the suggestion Finally—before I give an example of something that it was one hour and 40 minutes. I am sure that better that can happen—there are those who are left estimate was given in good faith but I am deeply on their own with no means of keeping alive until sceptical of it. I myself, along with my wife, was in the their case has been heard. The instance of trying to UK nationals queue, which was very much shorter, take a very long time to decide an asylum case, with no but we still had to wait something like thirty or forty decent and legal means of support being made available, minutes before being let through. Even if it was only is once again an invitation for people to be degraded one hour and 40 minutes, that is far too long for and for others to exploit them and make money out of people who have been on such a long flight and then them. find themselves on arrival in such horrible conditions. As for a good example, I am very proud to express I have travelled, and still travel, a great deal, either to this House an interest that I share with my noble on business or for pleasure. I travel in the developed friend Lord Dholakia: we are both patrons of a body and developing world and have sometimes, as I am called the Gatwick Detainees Welfare Group. The sure many of your Lordships have, faced queues in group has managed to recruit no fewer than 100 volunteers other countries, particularly in America. However, from among the citizens of the region around Crawley generally speaking, border controls the world over and Gatwick Airport. They are paid nothing; they increasingly allow speedy and efficient entry. I have spend their own money to be able to go and sit with never seen, anywhere in the world, queues to rival detainees, befriend them, talk to them and give them a those that are now commonplace at Heathrow sense that, somewhere, there is a source of support, and which I saw that evening. This is profoundly trust and help. There is a waiting list to join the unwelcoming and uncivilised. We all know and understand volunteers, amazingly enough. Only a couple of weeks that it is damaging to the UK’s reputation and our ago, 450 people turned up at a theatre in Crawley to national interest, not least because of its impact on listen to what the refugees had to say about what they potential investors in the UK economy, many of whom had been through and about the songs and poems that I regularly meet in my work and for whom London had kept them going. This was a crowd of our fellow Heathrow is now a watchword for a torrid experience. citizens, not specially selected but men and women After I got through passport control on 14 January, who cared about the well-being of their fellow citizens. I asked to see the officer in charge, who was not close I suggest going down the path, at least to some extent, to the desks but buried somewhere in the offices at the of providing confident, human help to one’s peers, back. I questioned him about the reasons for this rather than following endless, complicated, inexplicable intolerable queue. He of course answered that he had and incomprehensible processes of immigration rules insufficient resources to man the many empty desks without recognising the human dimension. The latter and also told me that he thought the matter was only makes everything more expensive, more complicated going to get a lot worse. Other noble Lords have and sadder. mentioned the border agency’s own reports, from which I strongly endorse what the noble Baroness, Lady we know that 5,200 staff are to be dropped in the next Hooper, said by saying in one sentence that one of the four years. greatest investments that this country can make is in those who carry back to their own countries democracy, I recognise and support the Government’s drive to education and a commitment to the rule of law. We reduce public spending and the deficit. As somebody will not get that by making it harder for overseas who has managed in the public sector, I do not for one students to come here or by treating human beings as moment underestimate the enormous complexity of if they were so much fodder to become terrorists the task that the border agency faces, which has been tomorrow. exceptionally clear throughout this debate. Implementing government policies in all the areas we have been discussing—security, immigration and asylum—is not 3.29 pm trivial. These are very difficult and complex challenges. Lord Birt: My Lords, I, too, thank the noble Lord, Many noble Lords, including the noble Baroness, Lady Lord Avebury, who is one of this House’s treasures, Hooper, and the noble Lords, Lord Judd and Lord for not only prompting a debate of exceptional power Ramsbotham, gave us some very tough reminders of and authority but speaking so forcefully on so many how important it is for the border agency to get so of the shortcomings of the border agency. I want to many things right to maintain our civilised standards focus on another. with respect to the tortured and the brutally oppressed, to safeguard the vibrancy of our education system At 6 pm on 14 January this year, I landed with my and to husband and develop the skills of the UK wife at terminal 4 of Heathrow after a very long flight workforce. from India. I was shocked as I came close to the border controls to see the longest queue that I have I am also someone who has had to reduce costs at ever seen anywhere, probably 300 to 400 metres long. I many points in his life, both in the public and private am tempted to say it was longer, but that was my sectors, in a variety of organisations, and I am not one estimate at the time. As it was terminal 4, it contained who assumes that increasing costs is necessarily the 403 UK Border Agency[LORDS] UK Border Agency 404

[LORD BIRT] find it almost impossible to get in and out of the answer to all the challenges that we have heard about country without being obstructed in the endless queues during this debate. However, in respect of Heathrow, is so vividly described by the noble Lord, Lord Birt. the Minister satisfied that the agency deploys its resources I ask myself why there is this inconsistency and optimally? One obvious thing to note about international incoherence within government about whether we want travel is that it is very data-rich. We know where the people to visit or whether we want to keep them out. airplanes come from, how many people are in them We need to be clear about it. This country has never and when they are going to land. It must be possible to been able to survive and thrive by building a big wall give very precise estimates of the flow of passengers around itself. It has always been an open country; that through an airline terminal. Is he satisfied that we is why people want to come. In the past, other countries have such accurate forecasts of passenger numbers? Is have built walls to keep their people in. We ought to be he satisfied that we can flex what capacity the agency taking walls down to encourage the free movement of has to varying demand? Are the working arrangements people and the rich diversity of the country. of the staff in the agency sufficiently flexible? Can they be shifted easily on the basis of need from location If the first question is one of conflict within government to location? Can they be rostered flexibly? Are there about whether they want people to come, the second, enough part-time staff to deal with the inevitable frankly, is over the competence not only of the UK peaks? Border Agency but of the sponsoring department, the If the agency is underresourced, and it may be, it Home Office. I was astonished to find, when I asked must, like all organisations, cut costs in ways which the Bill team for the Crime and Courts Bill, which is to create, not destroy, value and which are hard-headed establish a border policing command, whether there about priorities—we have heard many of those in the had been any discussion between the Minister and the course of this long debate. There can be no excuse at Minister of Justice in the —the all for the UK having the longest airport queues in the only place with which we have a land border, where world. It is a national shame. there is no requirement for any border checks and nor should there be—that there had been at that stage no consultation despite the fact that the Bill was coming 3.37 pm to Parliament and we have institutions that bring these Ministers together on a regular basis, not just within Lord Alderdice: My Lords, like other noble Lords I Europe but directly. It seems to me that that is just one thank my noble friend Lord Avebury for securing this element of a raft of incompetences that have been debate. Other noble Lords have paid various tributes revealed in the debate in your Lordships’ House today. to him; I simply draw the attention of your Lordships It is not just that these things are difficult. It is that to the fact that Liberal International, the worldwide many of them simply are not being attended to. If we body of some 100 political parties, awarded him their are going to have an e-passport system, the one country highest prize, the Prize for Freedom. We all know why; we simply have to get it sorted out with is the Republic it is because of his extraordinary lifetime of sterling of Ireland. If we do not, people will be able to come service. When he raises this debate it is very much in through into Northern Ireland and the rest of the the cause of freedom—our own and that of those who United Kingdom, yet there seems to be no coherent would come to visit us. arrangement with the Republic. I shall touch on three areas in this brief speech. First, it seems to me that there is considerable conflict Many noble Lords have described other areas about within government over the question of people coming which there is a lack of confidence, but the most to our country. Everyone from the Prime Minister and serious issue seems to be the problem of the culture the Deputy Prime Minister down through ministerial within the whole department—within the Home Office departments, parliamentarians, NGOs, businesses and and within the UKBA. I remember, many years ago, universities spends a great deal of time travelling the organising for a senior member of what is now the world telling people what a wonderful place this country Police Service of Northern Ireland—it was then still is, how they ought to come and how beneficial it will the RUC, but many changes had taken place—to be for all of us if they do—for conferences, to study, to come to an international conference to talk about do business or whatever. However, I frequently wonder policing. He started his address by saying, “It is terribly whether we are being completely counterproductive, important to understand what the purpose of your job because when these people try to come to the country, is. I am a police officer. Our job is to maintain the they do not find the welcome that we describe; they human rights of all our citizens”. The jaws of a find endless barriers, which they would never have number of politicians who were at the conference found if they had not listened to us in the first place. dropped. They had expected the police officer to be talking about maintaining the rule of law, catching It becomes incredibly frustrating organising, for criminals and ensuring that people were brought to example, international political conferences. I find court to receive their due rewards. He said, “No, it is that even people at the level of Ministers and senior about maintaining the human rights of everyone”. If parliamentarians frequently cannot come to conferences we create a culture like that, we end up with a lot less in this country any more, because they cannot get criminal behaviour to deal with. visas and appropriate permissions; they have to travel to other countries in order to get them. Our universities When I look through the business plan of the have already been mentioned and it is also the case for UKBA on its website, I find that it is all about “securing business. Even businesspeople who live in this country borders”, “reducing immigration” and tightening down but have passports from other countries frequently on things. There is no kind of sense that it is, as the 405 UK Border Agency[19 JULY 2012] UK Border Agency 406 noble Lord, Lord Judd, said, the first welcoming face has also been reduced. It appears that the UKBA is for the rest of the world. I think that the noble Lord starting to do some things right, whatever its failings described it as the front line, but it should not be a may be on other fronts. front line as though it were the Maginot line. It should Will the Minister confirm that it is the Government’s be a welcoming agency that encourages people to intention to extend early legal advice to the whole come in and, of course, looks to those who might country as soon as possible? Will they balance the create trouble. extra costs against the rather considerable savings that My experience is that it is ordinary, legitimate travellers are likely to accrue? Will the Minister assure the that the UKBA strikes fear into—not organised crime, House that there will be full consultation about extension which knows how chaotic it is. Ordinary, decent people with all the agencies involved, so that all applicants end up in difficulties. I know this from my own family. may benefit? Extension should now be much easier One of my daughters-in-law is Brazilian and another than it would have been earlier because of the declining is German, and I know how difficult they have found trend in total applications. I should also point out that it, moving backwards and forwards to and from this legal advice does not usually require fully qualified country, even after they were married. There has quite lawyers. Advisers need a sound knowledge of the rightly been much talk, some of it extremely moving, refugee convention, together with a grasp of our asylum about the incredibly vulnerable people who are frequently statutes and relevant case law. I have given the noble left in great difficulties and distress; that, of course, is Lord notice of this question and I therefore look true. What is even more troubling in some ways is that forward to his reply. sometimes capable, qualified, professional young women—lawyers and so on—are left in tears. That 3.49 pm shows us just how abusive the whole culture has been. Lord Rosser: My Lords, I would first like to add my I do not say this out of speculation. I spoke recently to thanks to the noble Lord, Lord Avebury, for securing one of the most senior people involved with the UK this debate. In his highly impressive opening contribution, Border Agency and asked: “What is the problem?” He he referred to a wide range of issues of concern and I shook his head and said: “It’s the culture of the hope he will forgive me if I do not even try to make a agency. The whole approach within it is abusive and similar comprehensive contribution. it’s all about keeping people out”. In that case it needs to change. From April 2008 to February 2012, UK immigration, asylum and border operations were managed by the The noble Lord, Lord Marlesford, made an interesting UK Border Agency, which employs around 21,000 staff suggestion. He talked about the fact that we are cutting and accounts for around one-fifth of Home Office many of our services’ staff and that in many ways this spending. At the beginning of March this year, the is about defence of the realm. I know from my own Home Secretary made a decision to separate the UK experience that many officers in the forces are accustomed Border Force from the rest of the agency so that it not just to using hard force but to winning hearts and could report directly to her. The agency will be an minds. They are frequently much more capable of executive agency and the UK Border Force will be a making a judgment about whether the person coming directorate of the Home Office. The transition up to them is likely to plant a bomb or whether they arrangements to establish two separate organisations are a legitimate traveller than are some of the people will not be complete until this autumn, with the transition employed by the UK Border Agency. to being a directorate within the Home Office, which is We have a serious problem. People become like being managed by a transition board, set to be completed those with whom they live and work. The UK Border by December of this year. There must be a question Agency has not just employed G4S; it has become like about whether this summer, of all summers, is the best G4S and it has the same challenge. If G4S has been time to have the border agency and the border force in damaged—perhaps even irreparably—by its incompetence the throes of transition arrangements. Perhaps the over the Olympics, it may well be that the UK Border Minister will say why from March until the autumn of Agency will become another G4S over the next few this year was deemed the most appropriate time to weeks unless there is some radical change, which frankly implement this separation project. I do not expect without a massive change in the Since 2009, the agency has undertaken change with culture of the organisation. a view to delivering better services and reducing costs. Its workforce was reduced by more than 3,000 between 3.46 pm 2008-09 and 2011-12. A new IT programme, known as Lord Hylton: My Lords, I want to raise a single Immigration Casework, is being implemented in point concerning early legal advice for asylum applicants. conjunction with improvements in processes, with the It is an important point and one which I have raised objective of transforming immigration and asylum on a good many previous occasions when we have casework by 2015. However, the Government’s 2010 debated asylum and immigration Bills. I was therefore spending review imposed a duty on the UK Border pleased when an experiment in legal advice was started Agency to reduce its budget by at least 15% between in Solihull, which continued until 2008. Since then, it 2011 and 2015 and its workforce by approximately has been extended to the whole of the 5,000 staff, or some 22%, with the result that it has had region. I believe that this system now covers 17% of to look for additional cost reductions beyond its total asylum applications. The results have been fewer transformation initiatives. The result has been changes appeals against initial decisions and a reduction in the and staff reductions being forced through at a faster level of successful appeals. Public trust in the system rate than planned and at a faster rate than the organisation has been increased in this single region. Absconding can apparently properly handle. 407 UK Border Agency[LORDS] UK Border Agency 408

[LORD ROSSER] days of the week respectively. For the month of June A recent report by the National Audit Office, to as a whole the figures for Terminals 3, 4 and 5 were 13, which the noble Lord, Lord Dholakia, referred, found 21 and 18 days respectively when the targets were that caseworking and UK Border Force changes have exceeded, with the longest wait being over two hours. often been independent of head-count reduction plans. The Government’s Immigration Minister has previously The National Audit Office reported that in 2011-12 given assurances that all immigration desks at Heathrow the agency’s workforce was reduced by more than and other key ports and airports in the south-east will 1,000 more than planned, even though progress was be fully staffed during peak periods over the summer. slower than expected in the Immigration Casework Unless one takes the view that June is not a summer programme and workforce modernisation at the border, month those assurances have not been delivered. The and no agency-wide skills strategy was yet in place. figures show that all desks were not being manned at The result of this disconnect, says the National Audit peak times in June, hence the long queues and Office report, was, in some places, a dip in performance unacceptable waits. We have heard today from the and the need to hire new staff or increase overtime. noble Lord, Lord Birt, of his personal experience in For example, performance in London and the south-east queues at Heathrow and the non-manning of all desks. has come under pressure due to staff shortages. Two Long waits for passengers arriving in the UK give a of the three regions visited by the National Audit poor first impression of our country and our level of Office team reported that they now needed to recruit efficiency. Along with additional staff temporarily caseworkers, having allowed too many to leave. drafted in, special arrangements have been made to Continuing, the National Audit Office report says that avoid extended waits for Olympic Games personnel. achieving significant change in any organisation requires strong leadership and good communication, which The question, though, is what happens after the have not been evident enough to date. Apparently the Olympics. Will we be reverting back to waits of up to most recent Civil Service people survey results show two hours in passport and immigration queues once that only one-quarter of staff believe that the agency’s the additional staff drafted in have gone and the board has a clear vision for the future, and less than special arrangements no longer apply? At the moment one in five consider that change is managed well. that looks like a distinct possibility, with the Home The UK Border Force, which is in the process of Secretary intending to cut staff levels by 5,000 at the being separated from the UK Border Agency, has to UK Border Agency and UK Border Force by the end reduce its workforce by 10% over the 2011-15 spending of this Parliament. This is despite the long queues at review period—that is, by around 850 full-time equivalent our major airports; despite an increase in the number staff. During 2011-12, staffing declined by around of people absconding from Heathrow; despite the 350 full-time equivalents, which was much faster than Government deporting some 1,000 fewer foreign prisoners planned. We have seen the effect of this pressure from last year than were deported in the last full year of the the Government to make excessively quick and deep previous Government; and despite the considerable cuts in expenditure under the spending review in the concerns that a number of noble Lords have raised in length of queues and waiting times for many passengers the debate today over different aspects of the role and arriving in this country, particularly at Heathrow. In performance of the agency and the impact—as my that regard, the National Audit Office report has noble friend Lord Judd so eloquently articulated—that again drawn attention to a lack of transparency in this has had on some of those who come into contact how passenger clearance times are reported. That may with the agency. not have mattered too much before the spending review The Government need to get a grip on border staff cuts and lengthening queues but it certainly does control and security. It is not much good trying to when official figures—government figures—fly in the encourage new businesses, investors and more visitors face of what everyone can see is happening. to come to Britain if their welcome on arrival is a wait The UK Border Force’s stated performance target of up to two hours in a queue at the airport, or before is to clear 95% of passengers within published standards, departure a less than helpful, fair or speedy process for which are within 25 minutes for European Economic dealing with their application to come here. If that Area nationals and within 45 minutes for non-European continues some will simply be put off coming and the Economic Area nationals. According to UK Border potential loss to our economy, image and reputation Agency data, this target was achieved every month in will be considerable. I hope that the Minister can 2011-12. However, in his recent report on Heathrow assure us that we will not be reverting back to extended Terminal 3, the independent chief inspector highlighted queues and long waits for non-EEA nationals at our shortcomings in both methodology and reporting. He airports, particularly at Heathrow, and at other points found that measures were not taken frequently enough, of entry after the Olympic Games and that the target and were reported in a way that made no distinction times will be met. between the different experiences of EEA and non-EEA Although policy decisions and procedures are at passengers, particularly during peak arrivals periods. the heart of some of the concerns identified by noble The chief inspector reported that queue-measuring Lords who have spoken today, it is clear that government techniques did not provide an accurate reflection of decisions to reduce budgets and staff numbers at the performance. UK Border Agency under the 2010 spending review The true figures show that in the last week of June much further and more quickly than planned, without of this year, waits in immigration queues for non-EEA regard to the consequences, have contributed significantly passengers at Terminals 3, 4 and 5 at Heathrow exceeded to a number of the problems that have been identified the target time of 45 minutes on four, five and four today. The Government’s responsibility is to see that 409 UK Border Agency[19 JULY 2012] UK Border Agency 410 the agency, including the border force, is properly the UK—as well as ensuring those who have no right staffed to do the job that it is meant to do on our to be here leave, whether by helping them to return behalf on immigration and asylum work, ensuring the voluntarily or by enforcing their removal. Again, I will effective, fair and efficient control and security of our say a bit about that later. borders. If you cut too fast and too deep, as the figures I have to say that questions relating to the border show that this Government have done at the border force go somewhat wide of the scope of the debate. I agency, they should not be surprised at the outcome appreciate that my noble kinsman, my noble friends and should not try to suggest that all responsibility for Lord Marlesford and Lord Alderdice, the noble Lord, the problems that arise lies elsewhere. Lord Birt, and most recently, the noble Lord, Lord Rosser, all raised serious questions about the border 3.59 pm force. But in light of the debate and the number of The Minister of State, Home Office (Lord Henley): questions I will have to come to, those issues will have My Lords, the first question I should like to answer to wait for another day. I shall deal with just some of was put to me by my noble friend Lady Williams of the concerns that have been raised by noble Lords in Crosby, who asked whether I would make sure that all this debate before I say a word or two about policy and UKBA staff read a copy of this debate. I do not think where we wish to be. I appreciate that a large range of that I can ensure that that happens but I will certainly questions were asked and I imagine that in the end, as make sure that a copy goes from my office to Rob always, I will deal with only a mere tithe of them in Whiteman, the head of UKBA. It will be up to him to this wind-up. I hope that I can write to noble Lords decide on the most appropriate method by which he about some of their other concerns in due course. can disseminate the various words of wisdom that One of the first questions put to me by my noble have appeared in this debate throughout the entire kinsman Lord Avebury was about bonuses within United Kingdom Border Agency. UKBA and his regret that they were being paid when there were failures within UKBA. As he probably Baroness Williams of Crosby: I am most grateful to knows, only the top performers who have consistently my noble friend. worked to a very high standard are recognised through bonuses. We have significantly reduced the value and the number of payments made to senior manages. I Lord Henley: Perhaps I may say to my noble kinsman think that only a quarter of all staff—the overwhelming Lord Avebury, who introduced this debate and asked a majority of whom are front-line officers—were awarded very large number of questions—they were coming an average of around £500 last year and, I should out at the rate of four or five a minute at one stage and make clear, only after meeting very strict criteria. I am not sure that I got them all down or that I will be able to respond to all of them—that we accept that My noble kinsman was worried about the number scrutiny of all government agencies is crucial to ensuring of appeals allowed, and suggested that 36% was an that they deliver the appropriate government policy all-time record. In 2010-11 the Courts and Tribunals and offer appropriate value for money. Reports on the Service statistics recorded that some 36% of appeals work of the border agency have shown the Government were allowed, which was not an all-time record. Over that, as in all organisations, there is—how can I put the past two years, the figure for allowed appeals, it?—some room for improvement. based on the same statistic from HM Courts and Tribunals, has decreased both in percentage terms and I stress that today’s debate is about the role and volume. I think that in 2009-10 it was 41%, and 38% performance of the United Kingdom Border Agency. the year before. If I have got those figures wrong I will However, I will say a little about policy, which is a write to my noble friend. He seemed to say that it matter for the Government, because obviously it is suggested that the decision-making criteria were too important in this area. I think that it would be useful if hard. I start by clarifying the roles of the United Kingdom Border Agency, which this debate is about, and the Appeals are allowed for a variety of reasons, including UK Border Force, which this debate is not about. In evidence being submitted at the hearing that was March 2012, the border force was split from the United previously not seen in the decision-making process. Kingdom Border Agency. There are now two completely He will know about that in relation to the changes we separate organisations which work together to provide are making in the Crime and Courts Bill. Consequently border and migration control. The UK Border Agency the allowed appeal rate is not always indicative of is responsible for actions before people get to the whether the original decision was of poor quality or border, and once they are beyond the border and in too harsh. Certainly the Border Agency works hard to the UK. The UK Border Force is responsible for analyse the reasons for allowed appeals, in order to protecting the border itself through entry control and identify trends and implement improvements. customs functions at the border. My noble kinsman also asked about removal of Outside the United Kingdom, the UK Border Agency overstayers, and whether that was a priority of the is responsible for the visa system and an intelligence agency. As he knows well, enforcement is a vital part network that checks people travelling to the UK before of the agency’s operations, and it relies on intelligence they arrive and ensures that those who have no right to to identify and take action against those with no right enter the UK do not come here. In the UK, the UK to be here. The Government are certainly determined Border Agency carries out immigration casework—for to crack down on any illegal immigrants who are here example, asylum applications, which we will come to without any right to be, and anyone found living or in due course, and applications for people to settle in working here is liable to be detained or removed. We 411 UK Border Agency[LORDS] UK Border Agency 412

[LORD HENLEY] My noble kinsman Lord Avebury and the noble believe that illegal immigration, as we have made clear Lord, Lord Ramsbotham, raised the case of Mr Jimmy on all occasions, puts undue pressure on public services, Mubenga. The agency deeply regrets the death of local communities and legitimate businesses. This summer Mr Mubenga. We will very carefully consider any we have launched a UK-wide operation to remove issues that were raised by the CPS investigation and overstayers, and have already seen some 2,000 removals we will certainly decide whether any further action is since the campaign started. In addition, local immigration appropriate once the Prisons and Probation Ombudsman’s teams across the country continue to deal with migration investigation and the coroner’s inquest have been refusal cases. That brings me to the important question completed. The noble Lord, Lord Ramsbotham, also of how we deal with the removals, and whether we are asked whether certain letters relating to this case could doing them in the right manner. be put in the Library. May I look at that issue, write to The right reverend Prelate the Bishop of Newcastle the noble Lord in due course and see whether a talked about dawn raids on families, and whether they response is appropriate? were appropriate. We would always like people who However, that brings me to the question of restraint are here illegally—whether families or others—to leave and the use of force raised by the noble Lord. In the voluntarily. It is only our last resort to use an enforced majority of cases, we believe that the use of force and return. To reduce the risk of families who will not restraint when undertaking removals is unnecessary. remove themselves voluntarily absconding, it is sometimes Home Office-approved control and restraint techniques, necessary to visit them early in the morning when they including the handcuffing of detainees, are only ever are most likely to be at home. However, I can assure used in the removal process where they are deemed the right reverend Prelate that that process is overseen necessary to ensure the safety and security of detainees, by the Independent Family Returns Panel to ensure escorting and airline staff, and other passengers. If that the welfare of children is taken properly into handcuffs, for example, are used, they are always account. removed at the earliest appropriate opportunity, when My noble kinsman Lord Avebury, the right reverend it is considered safe to do so and when there is no risk Prelate the Bishop of Newcastle and others talked to others on board. I hope that the noble Lord will about the legacy cases and the problem of clearing the accept that assurance. archive. We are dealing with a controlled archive of legacy, asylum and migration cases. These are cases I wanted first to deal with some of the points that that have not been traced or concluded but continue to had been made. I now want to say a little about be reviewed and checked. We are confident that we government policy itself. The border agency obviously will close the controlled archive by the end of December deals with the operation of our systems but, in the this year. By that point, having checked cases a number end, as my noble friend pointed out, it is we, Parliament of times across multiple databases, including against and the Government, who are responsible for policy, financial records, the benefits system and HMRC’s and we should not blame the border agency for policy. systems, as well as our own, we should be satisfied that That is a matter for the Government and I am here to those individuals are no longer in the country. speak for them. The Government’s overall aim is to rectify an out-of-control immigration system by bringing The noble Lord, Lord Hylton, also asked about down net migration while still attracting to the United ELAP, the early legal advice project. As he will be well Kingdom those who we believe are the brightest and aware, we want to ensure the provision of high-quality the best. advice, including legal advice to asylum seekers—whether it comes from lawyers or others. He will be aware that We believe that a comprehensive set of policy reforms ELAP is a very important opportunity to improve our on work, students, settlement and family have set the understanding of what works. The project has run way to achieve that end. It is now for the border since November 2010 and has been extended until agency, which is building on those policy changes March next year. By then we will be in receipt of a through operational change, to deliver the reductions final report so that we can make informed decisions in long-term immigration that the Government expect, about the next steps, based on a fair and thorough while at the same time not preventing valuable and evaluation of front-loading legal advice services. Given genuine visitors coming to the United Kingdom. The that the evaluation postdates the next round of legal agency has recently implemented measures to control aid contracts, any decision on a national rollout may family migration and made significant changes to the not be possible straight away; it will take time to work visa routes for students, workers and those who wish out the detail of funding mechanisms. The United to settle in the United Kingdom. Across the board the Kingdom Border Agency will work with partners and agency has tightened up the requirements for those the Ministry of Justice to do so as quickly and practically who wish to come here, by increasing language as possible. requirements, salary thresholds and skills levels. My noble friend Lady Hooper raised questions relating to Mexico and asked whether we were meeting I turn first to students. I listened to what my noble criteria for how we should be performing on visas in friends Lady Williams, Lord Alderdice and Lady Hooper, that country. I can say that visa performance in Mexico and the noble Lord, Lord Judd, said about students is currently good. Short-term visas in Mexico are and universities. I have some sympathy with the points turned around in an average of 10 days, which certainly that all of them put, but the arguments put forward by matches the figure for other countries. It is something the noble Lord, Lord Judd, seemed to go somewhat of which the border agency can be proud. too far at times. What was the remark I put to my 413 UK Border Agency[19 JULY 2012] UK Border Agency 414 noble friend sitting next to me? I think it was, “What 4.20 pm planet is he on?”. He seemed to have gone so far away Lord Avebury: My Lords, I thank the Minister very from what we are doing, and what we are trying to do. warmly for his comprehensive winding-up and for his All we have done is to try to reform the student visa kind promise to write to those whose questions he route. The measures we are taking are to ensure that could not deal with. I am also grateful for the assurance students can be reassured that they are attending he gave to my noble friend Lady Williams that what genuine institutions that have been properly inspected. has been said in this debate will be drawn to the That is good for the country, the education sector and attention of the head of the UKBA, and I am sure the students themselves. The measures include: a tightening that it will not be difficult for the agency to find a of the regime for licensing colleges that sponsor foreign means of disseminating the Hansard report of the students; restrictions on the entitlement of students, debate to the whole staff. It is important that people in including the right to work; and the closure of the the UKBA should be aware of the widespread concerns post-study work route from April 2012. that have been expressed. No student who has an offer from a genuine, proper If I may say so, I thought that my noble friend was university, and who can speak English, is going to a little complacent about some of the issues that were suffer in any way at all. When the noble Lord looks, if raised. There was the failure to listen to criticisms he will, at the numbers of those coming from abroad made by the chief inspector, which were dealt with by to attend British universities, he will find the figures the right reverend Prelate and the noble Lord, Lord more or less as they have always been; the students are Marlesford, among others. We have heard repeatedly still coming in. What we have seen is a decline in the about the culture of disbelief that prevails in the number of those coming into very spurious and dubious UKBA. The noble Lord, Lord Judd, and my noble colleges that were really there just as a way of getting friends Lord Alderdice and Lord Dholakia raised that round the immigration system, and served no other point. The dangers of outsourcing were particularly purpose whatever. emphasised by the noble Lord, Lord Ramsbotham, and I agree with him entirely that the responsibility for I would give way, but I have only got two more escorting deportees needs to be thoroughly examined. minutes— Personally, I would take this function away from the sub-contractors who have dismally failed to look after Lord Judd: I thank the Minister for replying so the people in their charge and return it to the UKBA fully, but he asked me to look at the evidence of what itself so that we can see exactly where the responsibility was happening. Has he looked at the evidence of what lies. has happened to the number of students coming from My noble friend Lady Williams mentioned India? This is very grave in the context of our future discretionary leave to remain, which I do not think relationship with India and the world. was dealt with in the noble Lord’s reply. I am open to correction, but I think that the legacy cases, which she did mention, are nearly all being dealt with by giving Lord Henley: My Lords, I accept there has been a people three years’ discretionary leave, for which they decline in the number of students coming from India. have to reapply after three years, instead of giving Will the noble Lord also look at the increase in the them indefinite leave to remain. That surely cannot be number of students coming from other parts of south-east right. The detained fast track system was raised by the Asia? He will find that it easily compensates for the right reverend Prelate and my noble friend Lady Williams, decline from India. We are not seeing a decline in the but we did not hear anything from the Minister on overall number of students coming to universities. that matter. I raised the issue of the failure to have What we are seeing is a decline in the numbers of those regard to the special needs of women. My noble friend who were coming here allegedly to study but using Lady Williams also talked about this, and it has been that as a way of getting round the immigration system. comprehensively covered by Women for Refugee Women I think that what we did was quite right. I am proud of and Asylum Aid. it, and there has been no damage to United Kingdom Finally, this country’s reputation and the effect on universities as a result. our future prosperity and well-being will likely be I see that I am running out of time, so I will make harmed if we do not attract the people we need in my last few points. We want to see the border agency business, management and higher education because continue to move forward and to maintain its performance of the difficulties that are placed in their way. This was in removing foreign national offenders, in preventing mentioned particularly by the noble Baroness, Lady others from coming in who should not be coming in, Hooper, and my noble friend Lord Alderdice. I mention and in continuing to deal with the archive of legacy also, of course, the problems that have arisen at Heathrow, asylum cases that I mentioned earlier. As a result of its which were the subject of a powerful contribution work, the agency will be a more streamlined and from the noble Lord, Lord Birt. I hope that we shall efficient organisation in future. For that reason, I am hear from the Minister about these other matters. grateful for this debate. It will be a more efficient They are of equal importance to the ones that he dealt organisation in delivering its core objectives of a selective with in his winding-up speech. I hope that, as a result immigration system while also providing value for of the distribution of this debate to the UKBA, some money for the taxpayer. The work of the agency is attention will be paid to the forceful and legitimate crucial in controlling migration and protecting national criticisms that we have heard this afternoon. security. In this climate of change, we rightly expect the agency to continue to deliver. Motion agreed. 415 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 416

EU Drugs Strategy: EUC Report position on it. What we did was to urge forcefully that Motion to Take Note the formulation of a new EU drugs strategy offered a golden opportunity to widen the public debate on these different policies, in the hope of achieving a 4.24 pm better meeting of minds on the best way forward in the Moved by Lord Hannay of Chiswick EU in general and in this country in particular. We stressed that such a debate should be “informed”, That this House takes note of the Report of the “objective” and “dispassionate”—and we chose those European Union Committee on The EU Drugs words with some care. The press have an important Strategy (26th Report, Session 2010–12, HL Paper 270). role to play. However, I am afraid that some organs of the United Kingdom press are notoriously lacking in Lord Hannay of Chiswick: My Lords, the European objectivity on this subject. The noble Baroness, Lady Union Committee report on the European Union Meacher, in her evidence, singled out the Daily Mail. drugs strategy for 2013 to 2020 was published on The noble Lord, Lord Mancroft, told us that it had 16 March of this year, and I am glad now to have the behaved “grossly irresponsibly”. In the unlikely event opportunity to bring it to your Lordships’ House for that the Daily Mail reports this debate, I shall no debate in my capacity as chairman of the Home doubt be accused of seeking to have drug trafficking Affairs sub-committee that conducted the inquiry. I legalised. I hope not. Even the Daily Mail should thank the noble Lord, Lord Henley, for the Government’s recognise that there is an argument to be made that full and helpful response to the report. In his letter of imprisoning drug users is not necessarily best for 10 May, he described our report as “extremely timely”, them, best for society, or even the best use of our and so it was. prisons. That argument has nothing whatever to do On 8 June, just a month later, the Council agreed with the legalisation of drug trafficking. that the EU did indeed need a new drugs strategy for As I say, I hope that publication of the new EU 2013-20, and that it should be adopted by the end of strategy will trigger such a debate. I am not, however, this year. That in itself was a welcome development. overconfident of that. The Council has already, without Vice-president Reding, the commissioner responsible any public debate, agreed on 19 points that will shape for this area of policy, described the strategy in somewhat the strategy. None of them deals with national drugs slighting terms as, policies. Nor should they, because the Commission “a nice piece of literature”— and Council agree that this should remain within the and “wishful thinking”. We took a different view: that competence of the member states. However, EU drugs a new strategy was needed to show the direction in policy is an impressive instance of subsidiarity and which the member states wished to go. The Danish action, and we found no one who advocated changing presidency clearly agreed with that. The first draft of it. Somewhere in the document that the Council has the strategy has already been discussed in the Council’s shaped up so far, though, there could and should have working group, and I understand that it is to be been some recognition that member states can learn published shortly. So we got our views in ahead of the from one another in formulating their policies. game, which is what this House should aim to do Perhaps the Minister could tell us whether he agrees, whenever possible with its thematic reports. and if so what steps the Government can take to Our report made a number of recommendations, broaden the debate, both nationally and internationally. and I have time to refer to only a few of them. The In that context, I welcome the initiative by the UK’s point that I wish to emphasis the most, and to which Drugs Policy Committee to hold a public debate on we returned more than once, is the need for an informed 19 November, entitled “New Generation, New Problems, and objective public debate on the drugs policies of New Drugs: Time for a New Approach”, at which the the different member states as an integral part of the right honourable Oliver Letwin will make the keynote negotiation and adoption of the new drugs strategy. speech. I hope that that debate, including the Government’s We were struck during the course of our inquiry by contribution to it, will cover the international as well the paucity and poverty of any such public debate as the domestic aspects of the issue. anywhere in Europe. This should be remedied. I turn to the question of new psychoactive substances, In the course of our inquiry, we learnt about the or NPS, as they are known. The Government’s action policies of a number of member states, from the plan, published on 17 May, contained a commitment Swedish zero-tolerance approach to the experience of to ensuring that the new EU strategy includes activity Portugal, where the possession of drugs for personal to tackle the problem. To that extent we welcome it, use was decriminalised in 2001. Portuguese law also but it does nothing to counter our criticism of the greatly improved the harm reduction measures available current EU legislation: that it is slow, cumbersome to drug users. We took evidence from Jose Socrates, and ineffective. He pointed out that in the space of six the former Prime Minister of Portugal who introduced years only two substances have been banned using the that policy, and from the director of the Portuguese EU Council decision. It took the EU one and a half Institute for Drugs and Drug Dependency. years to ban mephedrone. By that time, 15 member What the committee did not do was consider whether states including the UK had already banned it under to make any recommendations for a change in the law their national laws. The Government have undertaken of this country towards the decriminalisation of possession to promote robust co-ordinated action at EU level to and use. That would have been outside the terms of tackle NPS. Does this include helping to design and reference of our EU committee, and we took no implement a rapid and effective EU planning procedure? 417 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 418

The reduction of drug trafficking and the destruction A failure to sign one of the major international of international criminal networks is, naturally, one of instruments for combating serious organised crime, the objects of the current strategy and will undoubtedly including drug trafficking, frankly does not give the be one of the objects of the next one. There is no impression of a Government who take the fight against doubt that the tracing and confiscation of the proceeds crime all that seriously. In the light of the issues raised of crime is potentially one of the most powerful by HSBC’s failure to enforce its own money-laundering weapons in the armoury of states, although it has yet procedures, that hardly seems to be the message we to fulfil that potential to the full. The role of Europol, should be conveying at this moment. Our failure so far which devotes something like one-third of its work to to sign and notify the Warsaw convention weakens our this field, is vital, and that is something that the hand in pressing other European countries, which may Government will need to keep in mind as they conduct well be a good deal less compliant than we are in this their audit of EU competencies and as they approach matter, to do so. the Protocol 36 decision in 2014. The Council’s conclusions state that, There are two additional steps that the Government “in formulating the new strategy appropriate consideration should could take on the confiscation of proceeds, and I hope be given to recommendations put forward by high-level scientific that they will. The first relates to the draft directive on societies”. the confiscation of the proceeds of crime. In a report The committee, alas, cannot claim to fall within that published in April the committee recommended that description, but we did take a great deal of high-level the Government should opt into the draft directive. I evidence on which to base our conclusions and repeated that when the report was debated on 22 May, recommendations. We hope that the Government will and the recommendation that we should opt in was not only respond positively to them, as they have endorsed without dissent by this House. The draft begun to do, but will help to persuade other member directive was debated in another place on 12 June, and states to do so too. in advance of that debate the Government announced that they would not be opting in at this stage. I believe I would not wish to conclude my remarks without that that was putting political expediency ahead of the paying a tribute to the work of the European Monitoring national interest. The key issue here is not whether we Centre for Drugs and Drug Addiction, in Lisbon. EU in this country already have in place all the measures agencies often come in for a good deal of flak, sometimes in the draft directive—we have. Rather, it is whether deservedly so. The EMCDDA seems to us to be we can shape the directive so that we can recover the performing a genuinely valuable function with modest proceeds of criminals who hold them in other member resources. It is important that it be enabled to continue states. I hope that the Minister can assure me that its excellent work. when the negotiations are concluded and the directive Our report raised a number of serious questions. I is ready for adoption, the Government will revisit that have by no means referred to all of them. I hope the decision and do so in a positive spirit. Minister will answer those questions, and I look forward The second step that the Government can take is to hearing his replies. I beg to move. one that they and their predecessors should have taken long ago: to sign and ratify the Council of Europe 4.37 pm convention on money-laundering, the Warsaw convention. The committee has raised this question time and again Lord Mancroft: My Lords, I congratulate the noble in this House in taking evidence from Ministers and Lord, Lord Hannay of Chiswick, and his colleagues officials and in correspondence with Ministers, and I on the Select Committee on what is a really thorough make no apology for returning to it yet again. The and incredibly useful piece of work—one which we previous Government undertook to ratify the convention have not had before the House for a very long time. It early in 2010. For this Government, the noble Lord, makes some extremely useful recommendations and Lord Henley, assured the committee that he was pretty comes to some very helpful guiding conclusions, and sure that the United Kingdom was compliant with the I am grateful for the opportunity to debate it today. I convention, but that the Home Office did not currently would add to that my congratulations to the noble have the resources to review that. I asked him when the Lord, Lord Hannay, on the way that he has introduced Government would sign the convention, to which he this debate. Were it not for the fact that my name is on replied, the list and so I had better say something, I would not “I would hope we would do so within the next year or so but I am be speaking, as the noble Lord covered his report not going to be any more precise than that”. extremely well, and certainly covered all of the main points that need to be addressed. It is late on a The response to our report was in fact even weaker. Thursday afternoon and we have a long speakers list, The Government are confident that the work required so I shall try to keep my comments as short as possible. to enable them to reach a fully informed position in respect of signing and ratifying will “progress significantly It is very helpful that the report emphasised, at this year”. What does that mean? Surely it would not paragraph 26, that member states should continue to take much more than a week—or, I would suggest, the decide and enact health policies in respect to drugs. amount of time that it has taken to write the brief for That is the position we have had for many years and the Minister and all the officials who came to our have now, and it complements the position of the committee—to check to see whether there are in fact United Kingdom’s own national drugs policy, where provisions of the convention not already implemented the Government would like to see such decisions go in our law. If any such provisions are found, steps can further down, even to a local level. That co-ordinated then be taken to remedy the situation. approach is helpful. 419 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 420

[LORD MANCROFT] has caused enormous problems in Honduras, which The report’s conclusions in paragraph 27 are also did not have any problems previously. The second extremely helpful. They concern the difficulty of amending example is the work being done by the Americans and a treaty signed by 180 countries, namely the United the Royal Navy in the Caribbean to stop that being a Nations conventions. This is important, because a lot drug route for South American cocaine. It has been of people and NGOs in this country and around very successful, but it has displaced the problem to Europe have been devoting quite a lot of time over the west Africa, which now has an appalling drug problem last four or five years on working to amend the which it did not have 10 or 15 years ago. We must be conventions, or get them amended, on the basis that it careful not to recreate those problems in Europe. It is is difficult to develop policies and strategies in this helpful that the report draws attention to them. difficult and complex area while the conventions remain My main point rather echoes that made by the as they are. If we read the report before us today and noble Lord, Lord Hannay, and is about differences in its conclusions, we see that that is not so. By way of a national policies and what they mean. I draw attention very helpful example, the committee draws attention to Sweden and the , two countries which in paragraphs 30 to 34 to the different national policies are often regarded as being at opposite ends of the in Sweden, the Netherlands, Portugal and the Czech spectrum when it comes to drug policies. I know both Republic. They are well worth looking at, because of them quite well and have spent quite a lot of time they demonstrate the flexibility within the conventions looking at policies in those countries during the past which many countries have not taken advantage of. 20 years. They are very interesting and very different. Nor, certainly, have we, and we might well think about Although Sweden is regarded as being hugely successful, doing so. it is the nature of the way that things happen there that The report refers to the EU strategy’s two “broad a degree of its problems is not visible. I would not say brush” objectives—which have been the policies of that it has been swept under the carpet, which would most nations, too—of restricting supply and reducing be unkind and unfair, but it is like an iceberg—it is demand. These are indeed very broad brush. Reducing below the surface. demand is left to subsidiarity and the individual member I do not necessarily think that the Swedish policy states. Where the European Union has played a significant overall is quite as overwhelmingly successful as is role is in attempting to restrict supply. There is great presumed. My background is in drug treatment, and co-operation between member states’ police forces although a lot is talked about the success of the and different agencies. Of course, one could always treatment system in Sweden, for a number of cultural say that it could be improved, but it is an area where and social reasons, that form of treatment, without the strategy has been successful. However, as the report going into the detail, would not be acceptable in this says, it is rather broad brush, and it would probably be country. Youcould not do it. Equally, in the Netherlands, more helpful if that broad brush were to become a their approach to life, the way that they choose to live, slightly narrower brush. and their morals and ethics, are very different from On reducing supply, I would make two points only. ours in Britain. Although what they have done is very First, the report makes a number of points on trafficking. interesting, and some people have asked why can we I noticed and read carefully the Home Office’s evidence not do in London what they have done in Amsterdam, about that. Apparently, it has had great success in one of the things I have noticed is that you can learn managing to stop drugs coming into this country and from other countries—I wish we would learn more other European countries, to the effect that, for example, from them—but you cannot pick up another country’s the purity of cocaine has significantly reduced and the policy and transpose it. We are not Los Angeles, price has gone up. Of course, this is good news and Amsterdam or Stockholm, we are different. We can the Home Office should be congratulated on it. However, learn from them but we cannot do exactly as they do. I have heard such statements from the Home Office That is an important thing to take on board. many times during the past 25 years. I am sure that Perhaps the most important part of this report for what it says is correct, but I note that it has had me was Chapter 5, which is devoted to Portugal. absolutely no effect on the amount of drugs that can Everybody in the drugs field has something to say be got on the streets of Britain and of other cities in about Portugal—that it has either been a huge success Europe nor on the ease with which one can do so. I or a great failure, depending on the position you wonder whether that is an effective use of resources. started from. The interesting thing about this report is That, too, has never been looked at. that it is so dispassionate and refuses to come to a The report also makes an interesting point about conclusion, but recognises the importance of what has displacement which has not been taken into account happened in Portugal, where there has been a reduction previously; namely, that if security forces, be they in the use of the criminal justice system, an increase in customs or police, adopt a strategy for getting rid of the treatment system and a resulting reduction in drug trafficking in one particular area, it has the undesirable use. There has been a complete change in what has effect of moving it somewhere else. Within Europe, happened in that country. Could we do that here? I do that could mean moving it to a part of Europe that has not know. Nobody knows, because we have not done not had a serious drug problem so far. There are two it. However, I fully support the noble Lord, Lord examples of exactly the same problem occurring outside Hannay, when he referred to the fact that we have not Europe. Only this week, we have heard that Honduras had that debate. One of the reasons we have not had has now taken over as the murder capital of the world. that debate is not only because of the irresponsibility The work that the Mexican and United States of the press, which scares politicians off from doing it, Governments have done to reduce trafficking in Mexico but because important social debates of this sort need 421 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 422 to be led by the political class, particularly by the When drugs emerged as a serious problem in the Government of the day, and successive Governments 1970s and 1980s the country first adopted a classical for the last 20 years have declined to engage in this repressive approach. The new strategy was implemented debate. They have not said whether it is right or wrong in laws passed in 2000 and 2001. These laws decriminalised but have just refused to engage. drug use; drug trafficking remained a criminal offence. What this report says to us more than anything else All this is well known. In place of criminal courts, is that there is a hugely important debate out there to dissuasion commissions were set up. These bodies seek be had. It could have an enormous effect, because the to turn people away from drug use. They have the single biggest cost of the drug problem—an economic power to impose civil sanctions for those who refuse cost in these difficult economic times—is the criminal to attend: for example, they can take someone’s driving justice cost, which we are told by the Government is licence away and there are even worse civil penalties about £18 billion a year. If there is any possibility that than that. we could save some of that money and save some of At the dissuasion commission a person’s history the people to whom that money is directed as individuals and his or her addiction issues are discussed and through healthcare—this Government are doing a treatment options proposed. The aim, essentially, is to great deal on healthcare and drugs—that is something avoid stigma but at the same time to lock the person we should be looking at. If there is one message that into a treatment pattern. It is rightly described by comes out of this excellent report for me, it is that we some of the contributors to this study not as a magical must have this debate and that it is worth while—but it formula but as a specific framework on which work is must be led by the Government. ongoing. The Government in Portugal also established a large number of outreach programmes with the aim 4.48 pm of limiting the spread of drug use in the first place. There are some 70 projects across the country, mostly Lord Giddens: My Lords, I congratulate the noble carried out by NGOs funded by the state but operating Lord, Lord Hannay, on his introductory speech, and locally.The evidence shows some clear positive outcomes, him and his colleagues on this very good and balanced which were briefly mentioned by the noble Lord. For report. In the UK, certainly in some sections of the example, the percentage of drug users among those media, we live in a sort of EU-bashing country, but with HIV dropped from 52% in 2000 to 15% in 2010: a there are so many areas where pan-European co-operation pretty large drop, but the numbers are not that great in is valuable, or indeed essential, and the fight against the first place. drugs is one of these. I agree with the basic conclusions All this is interesting, but Portugal is a small country, of the report: that the European drugs strategy has its experiment with a public health approach to drug been an important beginning but needs to be tightened use is quite recent and we know that drug use is often up and refocused. As the noble Lord said, the work of cyclical, so all the data we have might in the here and the European Monitoring Centre for Drugs and Drug now not be valid 10 or 15 years down the line. However, Addiction is rightly praised in all quarters and should in another report from the Cato Institute, published in certainly be defended for the future. April, the conclusions I have just mentioned are quite This report comes at a time when something of a forcefully backed up: sea change in drugs policy seems to be happening “Judging by every metric, decriminalization in Portugal has around the world. The so-called war on drugs has been a resounding success”. been declared a failure, not only by the United Nations Quite rightly, I suppose, the report does not ask drugs agency but by the leaders of some of the main the Government to comment on this, but I would be states originally propagating that war in Latin America interested to see what the Minister makes of the massive and elsewhere. interest which has attended the Portuguese experiment The reasons are plain to see: a punitive approach and whether he thinks that it is directly relevant to this to drug use often compounds problems of public country. The UK Drug Policy Commission says: health. In prison in many countries drug addiction is “The UK invests remarkably little in independent evaluation not treated, exchange of needles is not available and of the impact of drug policies”. other treatments simply do not exist. Diseases such as Speaking as a social scientist, it is crucial to make such HIV readily take hold. Many prisoners in different investments. Again, I would be interested to hear what countries who were not drug users before become so in the Minister says on this point. The commission also prison and, in fact, many overdose when they leave says, prison. “the United Kingdom remains at the top of the European ladder In the bulk of what I have to say I shall follow up for drug use and drug dependence”. what the noble Lord, Lord Mancroft, said and what In the light of Government policy, perhaps he would the report says about Portugal, since there has been so like to comment on that statement too. much debate about that country’s policies among those who follow these issues, and rightly so. We now have a lot more evidence about the consequences of those 4.54 pm policies than we had a few years ago. A good example is an in-depth study by a Polish author, Artur Lord Avebury: My Lords, I welcome this opportunity Domoslawski, called Drug Policy in Portugal.Asthe to say a few words about the report on the EU drugs report says, Portugal is traditionally a quite conservative strategy by Sub-committee F and, in doing so, pay country, marked by the strong presence of the Catholic tribute to the effective and experienced leadership of Church. our chairman, the noble Lord, Lord Hannay. 423 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 424

[LORD AVEBURY] province, Afghanistan, for supplying wheat seed to We need to be realistic about the competence of the 160,000 farmers, and they say they are working to European Union and the objective of its drugs policy. make alternative livelihood programmes sustainable It is not clear from the Government’s response whether for the long term. How can this be done, can my noble they agree that neither of the two main objectives of kinsman explain, after the UK has withdrawn from the 2005-12 strategy, the reduction of demand and Afghanistan? If my noble kinsman says the scheme supply, has been achieved. According to the independent does not require the British presence, why is it working evaluation by the RAND Corporation, although there only in Helmand? Why is this a specifically UK project, have been reductions in demand for cannabis and when we are talking about an added emphasis in EU recently a slight decrease in cocaine consumption, development policies? Can my noble kinsman quote there is little evidence on whether these successes can any large-scale agricultural diversification projects be attributed to the strategy and its action plans. It sponsored by the EU in Latin America, and is there goes on to say that if there are trends on the supply scope for co-operation between the EU and the US in side, there is no evidence that they can be attributed to this area which is so clearly of mutual benefit? the strategy or its action plans. That does not mean As the noble Lord, Lord Hannay, has already said, that the 2005-12 strategy was not of some value, but one alarming development which has occurred during that we need more focused objectives, as has been said the present EU strategy is the appearance of an ever- already, than the 158 actions in the strategy’s so-called increasing array of new psychoactive substances, the “wish list”. The Government say that while it is necessary NPSs. The EMCDDA, whose work, as the noble to articulate broad ambitions and guiding principles, Lord, Lord Hannay, said impressed the committee they should be, greatly during our visit to Lisbon, reports that in 2011, “underpinned by specific, and where possible, measurable objectives”. 49 NPSs were notified, compared with 41 in 2010 and The preparation of the next drugs strategy, which a mere 24 in 2009. The European Commission says has to be ready by the end of 2012, falls on to the that it will propose stronger EU legislation on these agenda of the Cyprus presidency over the next six products, which are freely sold on the internet and in months. With all respect to Cyprus, the APPG for clubs, taking into account scientific evidence on the Drug Policy Reform suggests that the Justice Directorate, risks that they pose. Mephedrone and BZP, for instance, which has the responsibility for drug control policy at are identified as potentially harmful, but how can we EU level, should be taking the lead. It would be useful or the EU satisfactorily assess the effects of substances to hear from my noble kinsman the Minister what coming on to the market at such a rate, particularly mechanism there is for the presidency to seek its input, when some of them may have cumulative or delayed-action and indeed that of the largest member states where consequences for the user? Would my noble friend say drugs are a huge problem, in formulating the draft. if we attended the EU-US meeting in June on new drugs, and what conclusions were reached there? On the Government’s refusal to sign and ratify the convention on money laundering for the second time As an aside, what is the Government’s current of asking, does my noble kinsman have anything to thinking on the drug khat? A thoughtful article by say about the scandal of HSBC’s dealings with Mexican Howard Swains in the Independent magazine suggests drug barons, revealed in a US Senate report published that banning khat would mean the imprisonment of on Monday, which was referred to by the noble Lord, more Somalis, damaging their job prospects and creating Lord Hannay? Here, as in the US, financial institutions a recruiting ground for al-Shabaab. However, regulating and their employees face civil and criminal penalties supply and applying health and safety laws to the for failing to properly file suspicious activity reports. mafrish where khat is chewed would help both legitimate What steps are being taken to ensure that the SARs suppliers and consumers. Probably the UK is the regime is not being widely flouted by HSBC here as it largest market in Europe for this drug and we could obviously was over there? Does he think that this pave the way for European regulation, perhaps also disgraceful conduct reveals a need for tightening EU for other relatively less harmful drugs as well as khat. legislation on money-laundering? The Government responded to the committee’s suggestion of exploring alternatives to banning new psychoactive One important recommendation by the committee substances—such as regulating them as we do alcohol on which the Government agree, for instance, is that and tobacco—by saying that they were going to publish greater use should be made of Europol’s databases. an NPS action plan in May. Will the Minister say The Government say that they are calling for more whether our proposal has been taken up and how the voluntary information sharing between member states, Government action plan dovetails with the Commission’s but this is an area in which there could be a specific report on the information exchange, risk assessment objective, to increase the proportion of information and control of NPSs, published on 11 July? routed through Europol’s liaison bureau which is cross- As has already been mentioned, the Committee checked with their central databases. There is no reason recommended prioritising the evaluation of harm why that should not become routine, with specific reduction strategies. The Government replied that there encouragement, such as the publication of the percentage must be caution in the absence of more robust and that is so cross-checked, broken down by member state. comparable evidence. It would be a mistake to neglect The Government agree that the EU could do far the Portuguese and Czech experience and similarly more to reduce the supply of drugs through encouraging other member states could benefit from the development producing countries to diversify their agricultural of an evaluation framework setting out the evidence economies away from illegal drugs. The Government base and assessing the value for money of our own quote the success of the UK-led project in Helmand 2010 drugs strategy. It should be a matter for discussion 425 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 426 whether this is best achieved by promoting a European committee’s report and agree with much of it. However, area network on illicit drugs to improve co-operation I shall put two particular issues raised by the committee in drugs research—as the Government suggest—or under the spotlight of further scrutiny: first, the adequacy perhaps by extending the remit of the EMCDDA. The of statistics and, secondly, the role of harm reduction EMCDDA already reports on drugs research, as for in public health. example on the use of supervised injectable heroin I start with statistics because the report calls for an treatment for a small group of heroin users formerly improvement in the quality and comparability of national thought to be untreatable. One thing is certain and statistics. It suggests the UK may need to change the that is that the problem of dangerous drugs is way in which it collects data so that EU-wide statistics international. The Committee and the Government are more consistent. It is difficult to disagree with this are agreed on the value of a comprehensive EU drugs wider European aim but we should not infer from it strategy and the framework it creates for practical that there is anything wrong with the accuracy or co-operation between member states. scope of our own national statistics. I declare another interest here: the NTA is responsible for running the 5.03 pm National Drug Treatment Monitoring System, one of Baroness Massey of Darwen: My Lords, I am very the most comprehensive data sets in the NHS. Its grateful to the noble Lord, Lord Hannay, for drawing findings are independently evaluated and validated by our attention to the report of the European Union the National Drug Evidence Centre at the University Committee on the EU drugs strategy and for introducing of Manchester and published as national statistics. A this debate with such vigour. I declare an interest as close study of the EU Committee report shows that it the chair of the National Treatment Agency for Substance is not criticising our statistics on drug treatment at all. Misuse—the NTA. It was set up as a special health Where the committee finds fault is in the provision of authority in 2000 to improve the availability, capacity figures on the prevalence of drug use, which is a and the effectiveness of drug treatment in England completely different matter. I welcome the opportunity and has had notable successes. Chief among them has to make this distinction and clear up any confusion been the doubling of the number of people in treatment that there may be. since its inception and the dramatic reduction of waiting In this country, the British Crime Survey estimates times. From April 2013, the National Treatment Agency’s drug use among the general population. It is notoriously key functions will be taken over by a new body with a difficult to measure drug use, not least because it is a wider remit, Public Health England. However, the covert, criminal activity. The British Crime Survey NTA, with its limited remit of treatment issues, has suggests that the trend in class A drug use is static, provided support in developing a drugs strategy in with about 3% of people admitting to using class A England. Today I shall draw on some of our experiences. drugs in the past year, mainly powder cocaine. The report before us recognises—indeed, emphasises To understand what is happening in more detail, —that drug policies and their remit should remain the Home Office and the NTA have commissioned within the competencies of member states, which is independent experts from the University of Glasgow surely right. As the noble Lord, Lord Hannay, said, to estimate the number of the most problematic drug and the noble Lord, Lord Mancroft, emphasised, we users—heroin and crack addicts—who would benefit cannot simply transfer policies from one country to from specialist treatment. The ongoing research suggests another. Countries are quite different in many respects. there has been a significant fall in the number of I hope that the report will not just be a nice piece of people in England who are addicted to these problematic literature but will inspire debate. The EU strategy touches drugs, from a peak of 332,000 in the middle of the on aspects that are of importance to drugs strategies previous decade to 306,000 at the last count. This across the world. Many of these aspects are covered by trend is echoed in the demand for treatment services, drugs strategies for England, although some of the as measured by the National Drug Treatment Monitoring concerns are beyond the remit of my agency, the National System. The number in treatment is falling, from a Treatment Agency. As a government agency, the NTA peak of 211,000 in 2008-09 to an anticipated 198,000 is bound by government policy and, as such, has no in 2011-12. In particular, we are seeing a steady reduction separate view on some of the substantive issues raised in the number of heroin users entering treatment for by the EU Committee’s report such as decriminalisation the first time. This has fallen from 48,000 in 2005-06 to and drug trafficking. I shall therefore limit my remarks a predicted—I emphasise that—estimate of 9,000 this today. year. At the same time, waiting times remain low. On One important issue that was touched on by the noble average someone can access a treatment programme Lord, Lord Avebury, is money. As the report points out, within five days of being referred. The proportion of tackling drug use effectively saves large sums of money. clients waiting more than three weeks to start treatment We in England have done extensive research on the is 2%: the lowest ever. economic aspects of drug treatment and it is estimated What all this means is that the drug treatment that for every pound spent on drug treatment alone, system in England continues to respond quickly to approximately £9 is saved. Savings to the NHS and demand, but that the nature of this demand is changing. savings from tackling drug-induced crimes are enormous. With fewer new clients coming into treatment, the The scale and quality of drug treatment and recovery challenge for the future is overcoming addiction among services in England, provided by not only the NHS an increasing proportion of older, entrenched ex-users but the voluntary sector, is admired by experts across already in the system, who by definition are more complex the rest of the world. I shall draw on that expertise to treat. Any drugs strategy in any country must take in sharing some observations today. I welcome the account of the realities of drug use at a particular time. 427 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 428

[BARONESS MASSEY OF DARWEN] The report appears to make some very powerful While it may be difficult to compare statistics about points and, to some extent, I am a novice in this area. drug use across Europe, we can be extremely confident It is novel but highly welcome that the report, at that we know what is happening about drug treatment paragraph 97, supports the, in England and we have a positive story to tell. “the exploration of alternatives to … new psychoactive substances, This brings me to the committee’s point about such as placing them within regulated markets similar to those harm reduction and decriminalisation. The report says that already exist for alcohol and tobacco, which attempt to that members were impressed by the evidence from control use through education and treatment rather than Portugal on the effectiveness of its public-health-oriented criminalisation”. national strategy. They noted that harm reduction and The report is also helpful in displaying the evidence public health policies were increasingly being adopted which was given by some of the most authoritative internationally, and suggested that EU member states voices about this subject, such as that of the UN Office should learn more from each other. As I said, the on Drugs and Crime in its 2010 report, From Coercion National Treatment Agency has no view on whether a to Cohesion. Its executive director, Mr Costa, said: policy of decriminalisation would be beneficial in this “Moving from a sanction-oriented approach to a health-oriented country. However, what is often forgotten in the debate one is consistent with the international drug control conventions”. on decriminalisation is that in England we already That seems to me to be a lesson that this country needs tackle drug dependency as a public health issue. to learn. What has happened in Portugal as a consequence of changing the law on the possession and use of drugs is I very much hope that this committee’s report will comparable with what already happens in England, within constitute a prelude to a discussion about the treatment a different criminal jurisdiction that makes illegal the of drug addicts in this country. Although we wholly use of and trade in dangerous drugs. In both countries understand the view of the noble Lord, Lord Hannay, treatment has been expanded. Portugal changed the and the committee that this was not part of their law in 2001 in order to expand treatment. In England, mandate to consider, none the less, when we get into treatment was expanded in the same period within an discussion within the European Union about what the existing legal framework. Unfortunately the benefits of shape of that European policy should be, we will our public health approach too often get lost in certainly be listened to if we are seen to be open to the controversy over whether we have lost the so-called arguments being deployed by those who are most war on drugs, or whether we should legalise particular knowledgeable and are sensitive to the possibilities of substances. The fact is that in England there has been development of this policy in our own country. a steady increase each year in the number of people It seems that cost of drug addiction is not properly overcoming addiction and embarking on the road to understood by the public in terms of the scale of its recovery. In 2010-11 the official statistics showed that impact on our economy, although it is perhaps understood 28,000 individuals successfully completed treatment, in terms of its impact on individuals. I found the an 18% increase on the previous year. Information given economic analysis of costs and consequence of treatment to the NTA board indicates the equivalent figure for of drug misuse from a National Treatment Outcome 2011-12 is anticipated to be almost 30,000, among them Research Study very telling. It reported that illegal an increasing group of opiate users, who are the hardest drug taking requires a workforce of 5,000 customs to support. officers and 18,000 police officers. More startling, it I agree with the view of the committee that the states that the victim costs of drug-related crime were EU drugs strategy should improve the collection of £9.7 billion annually. That paper was produced by information so that member states can learn from each Messrs Godfrey, Stewart and Gossop. others’ experiences. I also agree that the new strategy I have also found extremely compelling the arguments should use the EU’s public health obligations to further deployed by a very personally involved practitioner of the inclusion of harm-reduction measures in national drug treatment, Mr Max Rendall. He wrote a book, policies. In England, we are already successfully published in the autumn of last year, entitled Legalize: demonstrating the benefits of a public health approach The Only Way to Combat Drugs. The book is very well through our existing data. I welcome the opportunity researched and forcefully makes the case for diminishing to call attention to a track record in treatment and the attitude that drug abusers are criminals and recovery that many other countries would envy, and I strengthening the concept that they should be regarded hope that the Minister agrees. rather as patients. That is also the message that comes out of the report of the sub-committee. 5.14 pm The presumption I make in intervening in this Lord Maclennan of Rogart: My Lords, I am grateful debate is that this is a subject for non-experts as well as to the noble Lord, Lord Hannay, for introducing this experts, because the problem is of such a massive cost debate. Reports from his sub-committee of the European to our country that we have to get across the need to Union Committee have demonstrated a move in a positive deal with it. I am happy that in the Government’s direction. The debate which the noble Lord, Lord response to this paper the Minister included a reply Mancroft, has indicated is lacking in this country needs that the Government wish to combine their legislative to be accelerated and made more audible. Illegal drug approach with drug demand reduction, supply restriction trafficking is the biggest trade in the world. The harm and recovery-focused treatment approaches, to address it does is scarcely measurable because the victims do the complex issues that harmful drug use poses. It has not always come forward to indicate what has happened to be recognised—and it was by the report—that there to them. has been no appreciable decline in demand flowing 429 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 430 from the EU drug strategy of the past seven years. We The All-Party Parliamentary Group on Drug Policy must address that deficiency. The Government can make Reform, of which I am a member, held a conference a significant impact on public opinion in this country last autumn. Our group is chaired by the noble Baroness, and should look again at the possibility of legalising Lady Meacher, and I pay tribute to her for her remarkable the taking of drugs. That will enable regulation to be work in this field. I know how very much she regrets much more effective than it can be in the present that, because she is engaged in other public service situation. duties this afternoon, she is unable to join your Lordships’ debate. Our conference was attended by eminent people 5.23 pm from across the world, including members of the global commission, and politicians and officials from Lord Howarth of Newport: My Lords, I congratulate Latin America and Europe. Unfortunately, no Minister the noble Lord, Lord Hannay, and his colleagues, of the United Kingdom was able to attend. We agreed both on the substance of their report, which is informed at that conference, just as the Select Committee has and realistic, and no less importantly, on its tone, agreed, on the need for evidence-based, rational and which is reasonable and humane. proportionate policies to reduce harm and protect We should of course give praise where it is due to those who are susceptible to drugs. operational successes in dealing with drug traffickers, and acknowledge progress—for example the progress Let me emphasise, in case there should be any that the noble Baroness, Lady Massey, described—in misunderstanding, that I strongly believe that policy treatment. However, we should also recognise that we and enforcement should be implacable in relation to are considering here an area of colossal policy failure organised crime and systematic drug trafficking. We since the orthodoxies of policy were established across should give all the support we can to Europol, for the world in the UN’s Single Convention on Narcotic instance, to enable it to perform as it needs to do on Drugs in 1961, and President Nixon’s declaration of a money laundering—the revelations about HSBC war on drugs in 1971. underscore the importance of that—and to seize the Worldwide, there are 210 million users of narcotics, proceeds of drug trafficking and the drug themselves. vast numbers of whom are criminalised. There are Given that there is subsidiarity in this policy field in some 2.8 million drug users suffering from HIV and the European Union, let us at least learn from the AIDS. The Count the Costs website counts the costs diversity of policies among the member states. We need of drugs across the world in terms of health, crime, more research. The committee found that the work of the economy, development, the environment, security the European Monitoring Centre for Drugs and Drug and human rights. There is a useful paragraph in the Addiction is a bright spot. It is important that in the Select Committee’s report alluding to the situation in next European Union drugs strategy there should be Iran as reported by Amnesty International, where the sufficient funding for the monitoring centre to enable human rights of drug users or suspected drug users it to develop its excellent work so that it can produce have been violated in a programme of activity actually better data sets and more effective comparative data, supported by European Union aid. which does not imply that we need to discard the The United Nations calculated the cost of the longitudinal series of data that have been built up within global drugs problem in 2003 as $321.6 billion. SOCA the member states. The centre needs a capacity to evaluate in this country has estimated the social and economic and to make cost-benefit analysis, for example of the cost in the UK to be £17.7 billion a year. The Government Portuguese experience, which should be done, of course, tell us that more than 50% of perpetrators of property on a factual and dispassionate basis. I am glad that the crime are users of heroin and cocaine. Great swathes Government agree that that would be useful. of Latin America have been devastated by crime, The experience of the Czech Republic is an excellent military repression, corruption and the atrocities of example of evidence-based policy. In 1998, the Czech gang conflict—all associated with drugs. In Mexico, Republic decided to criminalise the possession of drugs between 2006 and 2011, there were 47,000 deaths. As for personal use. However, it wisely followed that the noble Lord, Lord Mancroft, told us, the displacement enactment by a two-year cost-benefit analysis of the as a result of reasonably successful interdiction of effect in practice—what we call in this House post- drug trafficking in some parts of the world has wrought legislative scrutiny. They found that the availability of havoc in Equatorial Guinea in west Africa. drugs had increased, that the use of drugs had increased, The report tells us that, that the numbers of new users of drugs had increased, “over the EU as a whole, and over the seven years of this Strategy, and that social costs had increased. Very rationally, in there has been no overall demand reduction”. 2010, it decriminalised the possession of drugs for It goes on to say that, personal use. Some 35 countries have decriminalised, “we have not seen evidence to suggest that there has been any including Spain, and a number of states of the measurable overall reduction in supply”. United States of America. Within the European Union, The report last year of the Global Commission on , Estonia and Lithuania are tiptoeing in that Drugs Policy stated: direction. I would like to emphasise, just as the report “Vast expenditures on criminalization and repressive measures does, that: directed at producers, traffickers and consumers of illegal drugs have clearly failed to effectively curtail supply or consumption”. “Decriminalisation needs to be distinguished from legalisation, As the report notes, policies across the European which is prohibited under the UN Conventions. Drugs are not legalised; instead, criminal penalties associated with the possession Union are inconsistent. EU efforts to reduce demand of small quantities of drugs for personal use, and the use of those and supply and to influence policy across the world drugs, are replaced by civil penalties such as requirements to are therefore ineffectual. attend treatment programmes”. 431 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 432

[LORD HOWARTH OF NEWPORT] treatment. It would enable control of the composition The experience of Portugal should be instructive to and quality of the substances that are consumed, and us, as the noble Lord, Lord Giddens, explained to us, there would be the benefit of tax revenue from that and other noble Lords. It took the decision in 2001 to consumption. No society has ever been drug-free and decriminalise drugs for personal use. Instead, there the strategy should be one of damage limitation. So I were to be civil penalties, and of course the work of am disappointed by the Government’s response to the the dissuasion committees; it made a commitment, sub-committee, which says that decriminalisation, on a large scale, to treatment and harm reduction. “fails to recognise the complexity of the problem”. Mr Goulão, who gave evidence to the committee, and Continuing with criminalisation fails to recognise also gave evidence at our conference, said, the failure hitherto, and no one who advocates “a drug addict is mainly someone who needs health and social decriminalisation disputes the complexity. support rather than criminal conviction”. The issue of new psychoactive substances, “legal Very importantly, the experience in Portugal has been highs” as they are popularly known, is an immensely that the commitment to treatment and harm reduction difficult, complex and important challenge. The New is cheaper. This matters at any time, but particularly in Psychoactive Substances Action Plan produced by the a period of austerity. The costs of treatment were, Government sketches elements of a sensible strategy “far outweighed by the savings to the criminal justice system”, and has good features such as temporary bans while the courts, and prisons; by the reduction in the incidence not criminalising users and only banning where the in HIV and AIDS; and by having drug users engaged harms are established. But this is a dangerous and in society and the economy, instead of being marginalised. massive challenge. The All-Party Parliamentary Group on Drug Policy Reform is holding an inquiry at the In Switzerland—outside the European Union, of present time, and I hope that our conclusions will in course—there has been a programme of injecting heroin due course be helpful. users with diamorphine, leading to improvements in health, less drug usage and less crime; and those findings I want to ask the Minister whether he considers are endorsed by studies here by King’s College London that we might do better if the Department of Health of differential treatments for chaotic heroin users. in this country and the directorate of the European Commission that leads on health were to lead on One of the difficulties in this country is that policy drugs policy, because drugs are, after all, primarily a has gone to and fro, and sent out conflicting signals; health issue. There are signs of movement in international for example, with the regrading of cannabis: first as a thinking. The UK’s own drug strategy lays considerable class B drug, then as a class C drug, and then again as emphasis on treatment and education. At the March a class B drug. I am encouraged by the evidence given meeting of the UN Commission on Narcotic Drugs by the Home Office to the committee that for every there was an Australian resolution calling for the UN £1 we invest in drug treatment, at least £2.50 is saved to consider a wide variety of evidence-based control in reductions in crime and other costs. My noble measures to tackle the emergence of new psychoactive friend Lady Massey suggested that the savings were substances and increase the use of consumer protection. even larger; so the question is, are we investing enough? It was agreed that all options should be on the table We are doing well, I understand, but could we do for addressing new psychoactive substances. UNODC significantly better? We do need rational public debate. Executive Director Fedotov said: Policy-making is made very difficult by the attitude of “We must restore the balance …Prevention, treatment, certain elements of the media. The editor of the Daily rehabilitation, reintegration and health have to be recognized”. Mail declined to meet the All-Party Group on Drug Will the UK Government play a full and willing part Policy Reform. It may make it easier to sell papers, but in that movement of opinion and policy, and will the it is not constructive to demonise drug users. I very new European Union strategy similarly assist that much endorse the finding of your Lordships’ committee process and that progress? that, “the formulation and adoption of a new Drugs Strategy by the 5.37 pm EU offers a golden opportunity to widen the public debate, to consider as dispassionately as possible the different policies and Lord Teverson: My Lords, I, too, congratulate the approaches, and thus to achieve a better consensus about the best noble Lord, Lord Hannay, on this report, which, given way of proceeding”. the number of people who are involved in this debate, But will the British media allow us to develop the shows how vital this issue is. During my short time as a argument in this way? practising economist, one of the things I learnt about markets was that while states can regulate them, they The committee noted that tobacco kills 5 million people certainly cannot abolish them; where there is demand, a year; alcohol 2.5 million people a year. These are there is always supply. That applies to the area of huge problems, but nobody is suggesting that we should drugs probably more than anywhere else. It is an irony criminalise the consumption of tobacco or alcohol. that the UN Single Convention on Narcotic Drugs They noted that drugs kill about 500,000 people a year. signed in 1961 and the subsequent war on drugs have The consumption of drugs in this country is criminalised. been pushed particularly strongly by the United States, It seems to me that the benefits of decriminalising the country we see as the bastion of capitalism and possession and using regulation would be to release markets, but there is an absolute contradiction here. users from the embrace of the criminals and cut the The convention was implemented in 1964 and in theory ground from under this vast and murderous criminal there should be no global drugs market at all because industry.It would make it much more possible to increase the convention was signed by the vast majority of the advice and help for users and get more of them into members of the United Nations. 433 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 434

As the noble Lord, Lord Howarth, has said, the When we clamp down in one area, it destroys another drugs market was worth $320 billion back in 2003, but without mending the societies where the problem has perhaps what is more important—and I suspect that I been solved from a consumer state’s point of view. am underestimating it—is that it represented 1% of I would probably disagree with noble Lords so GDP. In 2009 the market for cocaine was estimated to far—I disagree with the report in this regard—about be worth around $85 billion, which can be compared one area, which comes back to practical economics. with the income of Andean farmers at around $1 billion. One cannot decriminalise the consumption of drugs There is a huge market in South America. Of that and keep the criminalisation of the supply chain. laundered money, which at today’s value is something What happens in that circumstance is that one sits in excess of half a trillion dollars, under 1% is actually slightly more smugly as a consumer in your population, seized during its transit by authorities, so 99% of it is but you still lay waste to the developing world and the recycled into organised crime. The report is very clear— transit countries through which those supply chains and it has been mentioned by a number of other noble operate, because no difference is made to the way the Lords—that, in terms of supply and demand, the system operates there. existing EU strategy has had no noticeable effect whatever. That is why this issue is particularly difficult and I was also interested in the statistics at the beginning there are no easy answers. There are huge political risks of the report that suggest that almost one-quarter of —the newspaper issue in the UK has been mentioned EU citizens have admitted to using drugs, and one in by the noble Lord many times—but the system has 20 on an ongoing, annual basis. That suggests that failed, and now we have an international network of whether we like it or not, drug taking—I suspect mainly organised crime. so-called soft drugs—is a part of our culture and of life. However, simply because the law is transgressed, Lord Judd: I am impressed by what the noble Lord does not mean that we should endorse drug taking. I is saying, but could he help us by clarifying this issue? am sure many of us break the speeding limit, but that If he does not accept that you can decriminalise the does not mean that we should not have speed limits as taking of drugs while keeping the criminalisation of part of the rules of driving. However, there is an issue the trade in drugs, how does he compare that with the there about what we make legal and illegal. situation in which the illicit black market in tobacco is One of the results of this policy, and the area that I criminalised? will concentrate on, concerns consumer countries. We have black markets and we have health risks—because Lord Teverson: You will never completely take away there is no quality control, taking drugs is more dangerous criminalisation, but perhaps the least damaging under a prohibition regime. There is no consumer solution—again, I am not pretending that there are advice. The activity produces criminals—in the United any easy answers regarding the supply chain—is to States it is estimated that one in four imprisonments is have pharmaceutical companies becoming distributors drugs-related and in the UK maybe up to 50% of crimes of drugs like any other prescription drugs. Will you have some relation to drugs. We also have organised ever completely decriminalise something where there crime as part of our infrastructure. Perhaps more is high taxation or smuggling? The taxation-hedging importantly, in producer countries we have already that takes place is perhaps more the issue than the mentioned the 47,000 or 48,000 Mexicans who have question of VAT on drugs like alcohol or tobacco, and been murdered during the presidency of President is perhaps the area where you have to be more careful. Calderón over the past six years, and 95% of all There is an international network of organised murders in Mexico are drugs related. crime involving money-laundering; corruption; human I very much welcome the comments of my noble misery, of course; and a very large black economy. friend Lord Mancroft about transit countries. Honduras More than that, though, we have reduced liquidity has the highest murder rate in the world. I chair the within that black market which allows arms trafficking, all-party group of a country that is not well known— people trafficking and terrorism. You can regulate Guinea-Bissau, an ex-Portuguese colony in west Africa. markets but you cannot abolish them. I agree very It is a state that has failed in many ways and has become much with the report’s conclusions in general but I a main route for drugs from South America into would very much like to see the EU lead this debate Europe. As a result, that society has disintegrated even internationally into much more realistic waters for more; corruption is strong and the military within the the future. I particularly agree with this part of the country has become a state within a state and is largely Government’s response, which reads: financed through the drugs trade. In those countries, “It is vital that this debate is focussed on clear evidence and we have not only drug habits but much greater corruption. analysis and we will continue to champion the use of evidence at local, national and international level”. One of the most important paragraphs in the report, However, the track record of UK Governments on paragraph 64, quotes Youngers and Rosin in 2005, evidence-based drugs policy has been particularly bad. who say that, “international drug trafficking breeds criminality and exacerbates 5.47 pm political violence, greatly increasing problems of citizen security and tearing at the social fabric of communities and neighbourhoods. Lord Cobbold: My Lords, I join those who welcome It has corrupted and further weakened local governments, judiciaries the European Union Committee’s 26th report of Session and police forces…it can be extremely damaging to local 2010-12. It is an excellent document and I congratulate environments”. the noble Lord, Lord Hannay, and the members of This issue of displacement—I welcome its emphasis in the committee on its creation. I also congratulate the this report—shows the great difficulty of this policy. noble Baroness, Lady Meacher, and her team on the 435 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 436

[LORD COBBOLD] it will be important to evaluate the costs and benefits detailed response that they have produced and circulated of allocating resources to health-based policies rather to our meeting today on all aspects of the report. I am than to criminal justice responses. only sorry that she is unable to be with us today. She Will the Minister agree to an evaluation of the has, however, asked me to deliver her speech to the possible decriminalisation of drug use in the UK—which meeting today in her absence: is of course quite different from legalisation—as a “I, Baroness Meacher, am profoundly sorry not to be able to possible response to the growing evidence of the cost be present today for this important debate on Lord Hannay’s effectiveness of such policies? The noble Lord, Lord valuable European Union Committee report on European drug Hannay, rightly raises the issue of the location of strategy”. responsibility for drug policy within Europe. The report The noble Lord, Lord Hannay, is to be applauded goes further and says that the EU strategy, for the steering this inquiry through challenging territory “offers a golden opportunity to widen the public debate, to and for ensuring that the report says so many useful consider as dispassionately as possible the different policies and things. I hope very much that the Minister will feel approaches”. able to respond positively to the report, with some These are most valuable observations. The same issues concrete proposals for action within the UK. It is apply to individual member states. Again, it would be helpful that the Hannay report proposes that most most helpful if the UK Government would establish aspects of drug policy should remain within the an independent review committee to consider the competence of member states, rather than at this time appropriateness of the Home Office as the lead department attempting a pan-European reform strategy. European for drug policy in this country. There are alternative states like Portugal, Switzerland, the Czech Republic models within Europe and an evaluation of these and Spain have shown the way to the rest of the world would be helpful. Following the reasoning of the in developing and evaluating more health-orientated Hannay report, it would of course be wise to incorporate and cost-effective drug policies that seek to avoid this matter within a wider review of the Misuse of criminalising problematic drug users. Individual member Drugs Act. Again, I offer our congratulations to the states could learn from those countries and take action. noble Lord, Lord Hannay, and his committee. This would no doubt be more difficult at the EU level. Having said that, it would be most helpful if the EU would undertake a review of the best drug policies 5.53 pm across Europe, with a view to drawing up a scientific Lord Judd: My Lords, I speak as a member of document setting out the evidence of what works. Sub-Committee F of the European Union Committee The All-Party Parliamentary Group on Drug Policy chaired by the noble Lord, Lord Hannay. I would like Reform agrees with the Hannay report that the EU’s to pay tribute to his leadership and chairmanship, early warning system on newly developed psychoactive which is always outstanding. Indeed, I think that the substances within member states and beyond is of way in which the report has been welcomed, and the considerable importance. In our inquiry into possible plaudits that it has received, indicate how much regulatory controls over these substances, it has become appreciation there is for what he has done. apparent that speedy access to information about new I hope that those who are interested in this subject substances is a vital prerequisite to taking any appropriate will not only read the report but will read the evidence action. Our inquiry has highlighted the importance of that was submitted to the committee. A lot of work information for potential users of the new psychoactive went into much of that evidence and it should not just substances, and for their parents, teachers and other be cast to one side. It contains some very interesting influential adults, in reducing use. We particularly reflections of experience. I, for one—and it is not only welcome the support from the Hannay committee for, in this sphere that I have noticed it—found an interesting “the exploration of alternatives to banning new psychoactive difference of perspective between those dealing with substances, such as placing them within regulated markets similar the issue at a global policy level and those dealing with to those that already exist for alcohol and tobacco, which attempt it at the front line of people affected by drugs. I think to control use through education and treatment rather than that your Lordships would find it refreshing to read criminalisation”. the evidence given by the Reverend Eric Blakebrough, Our report, in the autumn, will be considering very who is at the forefront of working with drug addicts. carefully the pros and cons of different regulatory What he had to say was extremely illuminating. systems, as well as their implications for use of these As has come across in this debate, a review of substances among young people. An important issue global drug policy is clearly overdue. As some noble for all EU countries is whether banning the supply of Lords have emphasised, the Global Commission on specified new psychoactive substances should be linked Drug Policies has said this, too. It is significant, and to the banning of use, with all the negative consequences we would be remiss not to take it seriously, that states that that entails. such as Guatemala, Colombia and Uruguay, which Again, the All-Party Parliamentary Group on Drug face many of the consequences of what we are debating, Policy Reform warmly welcomes the positive comments are calling for an urgent debate of this kind. If there is of the Hannay report on the Portuguese public-health to be a debate, the European Union should certainly orientated national drug strategy and the encouragement take a lead in it. to member states to study each other’s policies and to Our report is an absolute reflection of the consensus be more willing to learn from one another. It also that was reached. I attach great significance to those welcomes the committee’s support for prioritising the sentences where we talk about the health dimension evaluation of drug strategies. At this time of austerity, being at least as important as the enforcement dimension. 437 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 438

I wish that the debate could move more into the role of agencies and others in some of the third countries was health. Since our report was published, the European totally unacceptable in terms of any basic commitment Monitoring Centre for Drugs and Drug Addiction has to human rights. We really do need to watch where our commended the Portuguese approach. The cost benefits money is going and what is happening to it in terms of of a health-focused, rather than a criminal justice-focused, whether it is upholding human rights, whatever the approach are particularly relevant at a time of so cause may be. We cannot deal with one problem by much economic stringency and cuts in public funds, transgressing very seriously in another area. because we must be certain that the money being spent I shall conclude my brief intervention by saying that is not being wasted and is being used as cost-effectively I have been impressed, in the context of the urgent need as possible. for a review, by a recent report produced by Count the As my noble friend Lord Howarth was sharing his Costs, which is a coalition of NGOs working in this thoughts on decriminalisation, my thoughts immediately area. It is a very interesting coalition that has produced an turned to the report. There in chapter 1—I hope that alternative report. The headings in that report include: the House will forgive me if I quote from it—we deal “Wasting billions and undermining economies … Undermining with exactly that, stating: development and security, and fuelling conflict … Threatening public health, spreading disease and causing death … Undermining “It is instructive to compare illegal narcotic drugs with two human rights … Promoting stigma and discrimination … Creating psychoactive drugs which are legal and openly commercially crime and enriching criminals … Causing deforestation and pollution”. available: alcohol and tobacco. Worldwide, one person in three uses alcohol, one in four uses tobacco, whereas fewer than 5% of The report also examines other options for controlling people declare themselves as using drugs at least once a year, and drugs, including health-led approaches—hence the fewer than 1% use drugs on a continuing basis. Tobacco kills five significance of Portugal—and legal state regulation million people a year, alcohol 2.5 million people a year, and drugs and control. It ends with a call to UN member states to about 500,000 a year. These are figures that need to be borne in count the cost of the war on drugs and properly explore mind when considering why some potentially harmful addictive substances are licit and some illicit. Prescribed drugs, whether or all the alternatives that might deliver better outcomes. not mixed with narcotic drugs, also lead to acute cases of addiction In the report, we hear the voice of people very often giving and withdrawal, but they too are outside the scope of our inquiry their lives to work in the front line of the consequences and are not examined in this report”. of this very serious issue. In our deliberations, we Perhaps I may say on a purely personal note that, after should take seriously what they are saying. undergoing an operation for which I had to take painkillers afterwards, I had a hell of a job coming off 6.04 pm one of the painkillers that was prescribed. My GP told me, “You do realise you are taking an addictive drug Baroness Hamwee: My Lords, I recall in my early and you are going to have a tough job throwing it”. days in this House the noble Lord, Lord Judd, telling The interfaces in this area are very important to face. me that just because I was sitting on the Bench for the A further issue is how we toughen up our approach first of a trio of debates, I did not have to speak in all to money-laundering. We have to take very seriously three of them. I admire his stamina. what has become clear in a big case in the United States This is indeed a useful and realistic piece of work—to at the moment. One of the difficulties in facing up to repeat just two of the plaudits that have been given. this is that it is sometimes very difficult to establish where EU or UK? As the chairman of the committee said, it the dividing line is exactly, if there is such an absolute is subsidiarity in action: it is not either/or. The two are dividing line, between illegal and legal business activity. complementary, just as it is not a matter of the Home This greatly complicates the tasks of the enforcement Office or the Department of Health—though, of course, agencies. if one is in the lead it affects both perceptions and actions. This involves health, law enforcement, education I referred to the urgent need for a review. It is fair to and, if you are Dutch, tourism. When I looked for say that, after 50 years of the current enforcement-led information about the new restriction on cannabis in international drugs control system, the so-called war Holland—the ban on foreigners visiting cannabis cafes—I on drugs is coming under unparalleled scrutiny. The did not expect to see quite so much about the tourist goal was, of course, to create a drug-free world. Instead, industry. It is too soon to see the impact on the use of despite more than $1 trillion, according to the UNODC, other drugs there, including alcohol, but I hope that having been spent fighting the war, illegal drugs are the UK is keeping an eye on that. used by an estimated 270 million people and organised crime profits from a trade with an estimated turnover The Dutch have not criminalised—or, perhaps, of $330 billion a year—the world’s largest illegal recriminalized—cannabis, but I agree with the conclusion commodity market. The UNODC has acknowledged of the report that the debate would benefit from a that choosing an enforcement-based approach was clearer understanding of what it would mean if we having a range of negative unintended consequences, decriminalised certain drugs. It seems to me that different including the creation of a vast criminal market, people mean different things by this. I also agree with displacement of the illegal drug trade to new areas, the report that member states should be more willing diversion of funding from health and the stigmatisation to learn from one another. of users. The noble Lords, Lord Mancroft and Lord The combination of the EU and drugs seems a Teverson, dealt with that point. What concerned us in particularly easy target for the—how can I put it?—less our deliberations in Sub-Committee F was not only thoughtful media. Some months ago I attended a this displacement and the drawing of third countries seminar that attempted to promote a sensible, measured into the whole affair but the human rights dimensions. debate on drugs. The politicians there blamed the Sometimes, what was being done by the enforcement media. I have to say that the media blamed the politicians 439 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 440

[BARONESS HAMWEE] I mentioned this work to a friend who told me that for not taking a proper lead. The drugs trade, as has some years ago her daughter told her that she had been said, is an international business and business, as taken an ecstasy tablet at a club. Her mother’s reaction my noble friend said, adapts to markets. If we are to was to say, “Whenever you come food shopping with achieve more than just displacement, there must be a me, you scrutinise every label for the e-numbers and lot of co-ordination and co-operation. The report other contents that you disapprove of. How could you makes the point about the displacement effect and possibly take a tablet when you have no idea what is in other possible unintended consequences when measures it?”. I believe that she has not taken any drugs since. against drug trafficking are planned. Like other noble Lords, I was pleased to see the 6.11 pm importance the committee placed on human rights. Baroness Uddin: My Lords, I thank the noble Lord, When the EU provides assistance to other countries in Lord Hannay, for his instructive contribution and anti-trafficking measures, it must make clear that resources leadership. I welcome this report on the EU drugs must be used in a way compatible with human rights, strategy. It is a comprehensive effort and will afford us and programmes must be monitored to ensure that an opportunity for further debate on the points relevant they do not bring about human rights violations, in to the UK. The report enhances our current knowledge particular the application of the death penalty. and enlivens us to the common challenges we all face. The issue of displacement—or, perhaps, replacement Mostly, it reinforces the need for co-operation within —is very much to the fore of the inquiry into new and between countries in order for us to deal with psychoactive substances by the All-Party Parliamentary matters of trafficking, supply and money laundering Group on Drugs Policy Reform, which has already as stated in Chapter 4, as well as sharing examples of been mentioned. It is chaired by the noble Baroness, good practice in Europe. Lady Meacher, from whom, I have to say, I am learning With your Lordships’ indulgence, I will concentrate an enormous amount. The ingenuity of manufacturers on the situation closer to home in the UK, more is staggering: for instance, using research undertaken specifically the experiences of those on the front line years ago to make substances that were not then in Tower Hamlets. As the committee is aware, according developed. In an age when science and manufacturing to the NTA there about 306,000 heroin and crack are so well developed there will always be another new users in England. We have high numbers who receive substance available to take the place of the one made drugs treatment in the community or in prison, suggesting illegal. We talk about the rate at which new substances a considerable impact on addiction. Although the UK come on to the market; the issue seems to be more is leading internationally on drug treatment, findings about replacement, as one is banned and another indicate that drug-related deaths are higher in England takes its place, than variety. Suppliers, of course, are than in most other European countries. I take this responding to demand. With modern communications opportunity to pay tribute to the work of the NTA and information, it does not seem to take very much under the leadership of my noble friend Lady Massey, effort to access the new drug. and bow to her and others’ experience, and that of I hope that there will be an opportunity at some those who have contributed to today’s debate. point to discuss new psychoactive substances when the Nationally, in the UK, a number of well respected group has finished its work. Like my noble friend voluntary organisations are providing a variety of Lord Maclennan of Rogart, I am a novice in this area, programmes, although there is clearly a need for greater but the inquiry is making me think hard about the co-operation between voluntary and statutory agencies need to unpackage drugs: there are so many different to minimise the risk of services and care provided substances within that heading. We need to understand being patchy or inconsistent. I declare an interest as I markets and fashions: different legal highs, it seems, was privileged to have led the “Breaking the Cycle” are the highs of choice in different parts of the country. three-year pilot project initiated by Addaction in We need to understand the impact of a ban; it partnership with the Zurich Community Trust. It provided seems that the use of mephedrone may have increased 400 families with a holistic response where families since it was banned. We need to understand the harms from Derby, Tower Hamlets and Cumbria were supported. of criminalising young people. We need to understand This service was based on the principle that most the psychology of recreational drug use; it seems that individuals want to change if support is available to people grow out of it very largely as they grow into them. It targeted the needs of the whole family, providing their mid-20s and their lives change. We need to put all a range of motivational and individual interventions. this in the context of how society deals with alcohol These included counselling, family mediation and and much more. therapies, with regular monitoring and home visits, It is also making me think about what we mean by working in collaboration with partner agencies including drugs education. Frankly—no pun is intended here; schools and others. So successful was the outcome for the point does not come from the Frank website, significant numbers of the families, that this model although I have looked at it—I wonder whether has since been implemented across many parts of the “education” is even the right term. It might say more UK by Addaction. about me than about its content, but it seems to have The work was begun in Tower Hamlets more than unhelpful tones of authoritarianism. What does it three decades ago by a handful of brave individuals take to persuade a young person—because they all when most of us felt that this was a taboo subject—while, think that they are immortal—that it is dangerous to in some quarters it remains prohibitive, as more families take a white powder or tablet the ingredients of which face the anguish, frustration, stigma, pain and isolation are unknown or unregulated? which characterises the experience of many families 441 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 442 with a member using drugs. There is more open discourse The role of GPs is also critical. They are in an ideal as well as demand for services; that conversation is position to promote and embrace a holistic approach, taking place largely due to organisations such as NAFAS, including controlling and limiting substitution drugs, the Osmani Trust and the Jagonari Centre, which I to which many become further dependant, as has been believe receives funding from the MoJ. alluded to by the noble Lord, Lord Judd, and others. The total number of people accessing structured drugs There ought to be consistency in practices, so that treatment in Tower Hamlets at the end of March 2012 someone living in Rochdale can access similar standards was 1,853 and 545 were Bangladeshis. There are growing of care as those available to people living in Redbridge. concerns among the community about the use of cannabis I understand that this is not the case. For example, by the under 20s, as has already been alluded to; and a some authorities in the south-west operate a system of rise in alcohol and drugs use among girls, who are “dry house”, which promotes total abstinence and sometimes coerced into prostitution to support their independent recovery. This support system means a habit. Organisations such as NAFAS, which has built higher rate of recovery. It seems logical that this should up 20 years of expertise, say that there is a need for be considered by other local authorities, if necessary further research as well as specialist provision to work by pooling resources, yet this is not the case in many with families where stigma is still a deterring factor in parts of London. Why the success rate of programmes seeking initial services. A website called londonstreetgangs such as Alcoholics Anonymous and SMART recovery describes Tower Hamlets as a “heroin capital”, though is higher than that of standard treatments should also that is not my personal experience. A film made by Rageh be looked into. Omar, of Al-Jazeera, refers to £300 million of deals I could go on listing the countless great services being done in a few days. This was a staggering sum. that have done amazing work over a long period and The total funding for both drugs and alcohol treatment others that sell families short and leave them crumbling. and drugs intervention projects in Tower Hamlets is a I speak from personal experience of watching a family mere £8.7 million. It is a frightening reality and the member with a severe dependency on drugs. I witnessed value of the fight we have on our hands. drug-induced psychosis, the cycle of recovery and The cost of family grief, suffering and loss is beyond relapse, hospital admissions and that family member words. Every parent whom I have spoken to has being systematically and repeatedly failed by institutions shared their fear, hopelessness, helplessness, trauma as as their choice of drug was simply replaced by an well as shame. While there are no apparent London-wide ongoing high dosage of anti-psychotic and anti-depressant targets to tackle drugs dealing on our streets, Tower drugs. These surely create another, equally dangerous Hamlets Council has led a local campaign, responding addiction, to which several noble Lords have alluded. to the community’s demands, called “Dealer a Day”. The programme successfully involved the community Drugs are the fifth column in many communities. and last year secured 400 arrests for drugs supply At a time of austerity, this may be the last priority for offences. Despite the efforts made by these and other funding. Given that resources are shrinking, we need a organisations, significant gaps remain in services, which more co-ordinated response to the devastating impact need further consideration by your Lordships’ House. on families and society in general. Currently, very few Frequently those seeking help have hidden their addiction structured daycare programmes address challenging from their families for years before seeking services, as addictive behaviour. Some have referred to structured is also known with survivors of domestic violence and daycare programmes as being almost like babysitting. child abuse. There is little or no sympathy for addicts I apologise; I do not intend to offend any particular seeking help, because drugs addiction is seen as a organisations or methods of work. lifestyle choice. Appearing before a Select Committee in the other There is clearly an enormous amount of progress place recently, Russell Brand called for, and information available, but there is still a long way “an authoritative, truthful, honest debate and some funding for to go in creating awareness of addiction and identifying abstinence-based recovery”. potential drugs use, particularly among family members. Many families that I have spoken to will testify that He claimed that this would help to, this is their initial barrier. Work by Addaction also “neutralise the toxic social threat”, suggests that addicts cannot just be treated medically, but require a holistic intervention involving a range of that addicts pose as criminals and to ensure that they therapies, support, counselling, housing, and family are not simply put on methadone programmes for involvement. Funding should and must be targeted to years at a time, which leaves them written off on the working with families of addicts to educate them, sidelines of society. The harm to individuals, families, although I take the point of the noble Baroness, Lady communities and society at large is all-encompassing. Hamwee, about education. However, it gives families The examination of drugs cannot be conducted the necessary tools to cope. During the work with dispassionately, as is suggested by the report. Collective Addaction, it became evident that many involved in responsibility to tackle this issue is a must so that this field are the least skilled professionals. Therefore generations of families are not destroyed in the process, professional training needs to be strengthened to equip leaving society to pick up the burden of our failures. those who deal with the most vulnerable in our society. Mitch Winehouse recently said that he needed help to They also need to be enabled to work in a multifaceted speak about the death of his daughter. This is borne and multidisciplinary way, which is now required by out by parents to whom I have spoken. I can say only social workers and police officers when dealing with that I am glad that he has done so and agree entirely crimes of domestic violence and child protection cases. with his assertion that a grass-roots response is required. 443 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 444

[BARONESS UDDIN] the problem. We are here to discuss the strategy of the Indeed, I would welcome it if parents, individuals and European Union, but that will naturally be informed organisations made contact to share their experiences by the individual experience of member countries. with us all. In this short debate I would like to discuss two Drugs have permeated our young and their social areas and base my comments on many years’ experience culture. The graveyards of our country claim many of of dealing not just with drugs but criminal activity the talented and those children whose names we will generally. The main thrust of illegal drug control never come to know. Surely it is time that we looked at should be the task of individual states, each with the suggestions detailed in the report, which refers to different problems and cultures. Subsidiarity in this the Swedish experience in paragraph 30. Here, I note area is the correct approach. How can the European that I am perhaps alone in this; none the less, I shall Union assist? Clearly, the fight against drug trafficking pursue the point. The report says that Sweden has goes wider than state boundaries. The various countries long been viewed as operating a relatively tough national of the EU should work together, pooling resources drug policy. The approach is one of zero tolerance, in and experience in the fight to prevent the movement of an effort to achieve the national aim of a drug-free illegal drugs within and outside the Union. society. While I acknowledge that there is no consensus One of the key weapons in the fight against drug on this, I ask the Minister how he views the suggestions trafficking is good intelligence. It is essential. Rather of zero tolerance and abstinence-based programmes. like prostitution and pornography, drug crime is often Also, will he undertake further work to establish greater described as victimless. You rarely have a complainant understanding of the plight and drug habits of girls reporting the matter. As the noble Lord, Lord Maclennan, and young women in inner-city areas? mentioned, the victim does not always come forward. There are victims, of course: the child in the pornographic 6.24 pm film, the trafficked girl now working as a prostitute, Lord Mackenzie of Framwellgate: My Lords, I also the drug addict and his family, and the society that has speak as a member of the sub-committee of the noble to fund his treatment. They are all victims. Good Lord, Lord Hannay. Can I start by thanking him for intelligence is critical. his chairmanship and for securing this very important The difficulty is getting police officers, police forces and interesting debate? and countries to share that intelligence. Before Some 12 years ago I made a speech early in my computerised databases we kept information on cards. membership of this House. It was on cannabis. I felt in The problem was getting detectives to put the information a lonely position. I fear tonight that I might repeat the on the cards. Officers had a tendency to keep the experience. My short speech will be informed by a information to themselves. When they were on leave or 35-year career in policing, part of which was in the away sick, that valuable information was lost. Now drugs squad of Durham Constabulary—which was that we have computerisation there is no excuse for then and I might add remains one of the finest police that. forces in the country. We saw from the inquiry chaired by the noble Lord, Illegal drugs are a scourge in modern society. I Lord Bichard, into the Soham murders in Cambridgeshire, think that we all agree on that. I have seen at first hand that one of the main problems for the police was a lack the misery, psychological damage and, yes, death, of sharing intelligence. For that reason, one of the caused to young, old, rich and poor by improper drug most important recommendations in our report before use. Only last week we read in the press of two tragic noble Lords today is paragraph 72. It states: but different cases. One was that of a psychologically “The Government should fully support the Director of Europol damaged 26 year-old woman, Hannah Bonser, allegedly in seeking to improve the use of Europol’s unique databases and addicted to cannabis, who for no apparent reason other facilities, and should urge other governments to do the attacked and stabbed Casey Kearney, a 13 year-old same”. stranger. It was for no other reason, it appeared, than Trafficking of course is the supply side of the that she was being told in her head to do it. This case problem. What about reducing demand? The criminal illustrates the damage that newer, more powerful cannabis law has a part to play, as has education. Treatment, of can inflict on the mind and should be compulsory course, is also essential, but it is a little late to go down reading for those who would relax controls on this that road when we should be trying to stop it happening mind-altering substance. Bonser was convicted of murder in the first place. In our inquiry, the evidence from the and sentenced to life imprisonment. Home Office was interesting in that our UK policies The other case is totally different. It is of two people seem to be working. We were told by the drugs director of mind-boggling wealth, Hans and Eva Rausing, that, living in a wealthy part of London in a £50 million “drug use is actually falling in a number of countries across house. They lived in squalor to indulge their addiction Europe”, to hard drugs and it resulted in the death of Eva, who and that England is, was only in her late 40s. “showing some of the biggest reductions of drug prevalence I mention these two cases to illustrate that the drug across the EU … the fall is almost entirely due to reduction in the problem affects all classes, professions and ages. If use of cannabis”. allowed to flourish it can eat away at the very fabric of To some extent, that was borne out in the speech of a normal, healthy society.As responsible parliamentarians the noble Baroness, Lady Massey, who mentioned the in a nation state or in a European union of states, we reduction in the number of people trying to get treatment have a duty to get right our strategy for dealing with for drug addiction. 445 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 446

It made me smile when I put to witnesses who had There is a role for comparing national policies and perhaps a more liberal view than I that we must be practices as a contribution to evidence-based policy, doing something right in Britain. I got the response but in order to do this properly the role of an agency, that we should treat the data with caution. Yet these such as the highly praised EMCDDA, is very important. are the very data used by that same lobby when drug Therefore, the first question I ask the Minister is to offences were increasing. Of course, it then criticised seek an assurance that the Government will continue the use of criminal sanctions. It is a classic case of to support the work of this agency and that Britain shooting the messenger and using statistics rather like backs its continued existence, and will support it in a drunk uses a lamp-post—more for support than future budget negotiations. illumination. More than that, there is an EU competence in this In conclusion, we need to change the culture of area. One would hope that the Government would society. It is not impossible; we have done it before. We endorse that. A lot of people think of Europe as did it with drink-driving. Those who were convicted simply a area or a common market, but of were punished and ostracised, and we increased the course one of the features of a common market with detection methods with roadside breath testing. I am its free movement is that a lot of things cross borders very pleased that we are going to do the same with drug- that we do not necessarily like. Drugs are the classic driving, which is the cause of a relatively unknown number example. It is a very proper issue for a union that is of deaths in this country. We also did it with smoking. about promoting free movement also to be about We made it illegal to smoke in pubs and restaurants, trying to deal with some of the adverse consequences and, I am pleased to say, in your Lordships’ House. of free movement, of which drugs, cross-border criminality Most people do not like to be seen infringing the and drug trafficking are good examples. law and, over time, the culture of society changes. Peer Most of the member states of the EU have accepted pressure starts to have an effect, and this is living proof that logic. It is a logic that is not driven by some that there is a place for criminal sanctions, which can mystical dream of a federalist project, but by the facts change society for the better. The European Union of life, and the need for co-operation to tackle these can assist in that endeavour. I commend the report to problems. During my time as an adviser in Government, the House. I always thought of the Home Office as one of the 6.32 pm most sovereigntist of the Government departments in terms of clinging on to national sovereignty. It is Lord Liddle: My Lords, this is another admirable interesting that its response to the report shows an report from our European Union Select Committee. I acceptance of the need for an EU role which is welcome. would like to praise the noble Lord, Lord Hannay, for his very forceful introduction, with which I think from The justice and home affairs agenda has grown this side of the House we wholly agree. I also thank enormously. In 1992 it was simply a question of the Home Office for a very detailed response to the intergovernmental co-operation and a separate pillar. All committee’s report. We do not always get that but this member states agreed at the time of the Lisbon treaty was an example of a department doing its job properly. that it should be properly brought into the community system of decision-making. Do the Government agree Most noble Lords in this debate have focused on that there is a proper role for the EU in drugs policy? drugs policy generally. We have had a lot of excellent Will that be one of the outcomes of the review of its expert contributions. As someone who is not an expert competences? When we are thinking about the balance in this field, I have learnt an awful lot. This is the sort of competences, it is not a question of whether they of debate that the House of Lords should have where, are for the nation state or for Europe. In most cases, as I hope, we can contribute to more intelligent public in this case, the primary responsibility will rest with debate on these issues. In my brief remarks, I shall the nation state, but there is a useful and important focus on the role of the European Union in drugs European Union supporting role. I should therefore policy and the Government’s view of what that role like the Minister to confirm that he agrees that the should be. It strikes me that this is an entirely proper European Union adds value in this area, and that this question to ask when, last week, the Secretary of State is not an area where the Government would seek to for Foreign Affairs, , launched a review repatriate powers, if indeed they are seeking to repatriate of the balance of competences between Britain and powers at all. The question is not one of competence the European Union. but of whether powers are exercised in conformity I suppose that there is general agreement that one with the principles of subsidiarity and proportionality. good thing about the EU is that it is a laboratory for policy experiment. While I agree with the noble Lord, Will the Government, in response, endorse their Lord Mancroft, that there are major cultural differences support for institutions such as Europol? Will they between the member states, there are also a lot of agree that there is a possible role for minimum legislative socio-economic similarities. We are all post-industrial standards? I see that the Home Office response offers societies. Europe is quite unlike the United States, in a pragmatic judgment on that, which is that it depends that trends towards social liberalism, secularism and on whether or not they work. Will the Government individualism are very much the social trend in Europe. support that view? What is the Government’s position Some of the problems that lead to drug use are very on measures to deal with the proceeds of drug trafficking common across our societies, such as the polarisation and to deal more firmly with money laundering? of skills that lead to a lack of prospects for young Today is possibly an important day in the history of people, which is where some of the most tragic instances Britain’s troubled relationships with the European Union of drug use arise. because, when we woke up this morning to read our 447 EU Drugs Strategy: EUC Report[LORDS] EU Drugs Strategy: EUC Report 448

[LORD LIDDLE] group, and will continue to work with the Cypriots as Daily Telegraph, we saw in that newspaper the important the strategies are developed before its planned adoption statement by the Prime Minister that he, “would never”—I in December. In addition, a number of our European repeat, “never”— partners have commented on the helpful way in which “campaign for an ‘out’ vote in a referendum”. the report has helped set the scene for discussions on Do the Government agree that the EU’s role in helping the new EU drugs strategy. I pay tribute to the foresight to tackle cross-border crime and drug trafficking is of the committee in undertaking this work, and for the one of those modern cases for the European Union in clarity with which the report has been written. the 21st century that this Government wholly endorse? As is obvious from the Government’s response, we agree in large measure with the committee’s analysis 6.42 pm and findings. Looking forward, there are a number of key areas that we would like to see the new EU drugs The Minister of State, Home Office (Lord Henley): strategy address. We are keen to ensure that the next My Lords, like all other speakers in this debate, I offer iteration of the EU drugs strategy maintains its balanced my congratulations to the noble Lord, Lord Hannay, approach, encompassing public health approaches and on producing this report and on the work of all the enforcement measures, working together to reduce members of the committee. If I may single out just demand and restrict supply. It is important that there one at this stage, it would be the noble Lord, Lord is a clear and consistent approach to prevent drug use Mackenzie of Framwellgate, particularly for his remarks and minimise drug misuse, and that there is a strong on the proper use of statistics, for which I was very focus on moving individuals with a dependency into grateful. If you accept the statistics when they go one sustainable recovery. It is important for the new strategy way and then denigrate them when they are going the to highlight the importance of reducing health harms—as other, it is not a proper way to behave. My estimation suggested by the noble Lord, Lord Giddens, I think—while of the noble Lord, which was always high, has gone supporting people to recover, such as preventing the considerably higher as a result of those remarks. transmission of blood-borne viruses and other infections, As always on occasions such as this, I ought to start if the prospects for recovery by drug users are to be with an apology. Yet again, as with earlier remarks I maximised. made in evidence to the noble Lord’s committee, I confess that we cannot answer what I will call the The new strategy needs to describe how pan-European Warsaw Convention question. I still hope that we will work will support and dovetail with activities which be able to produce something within the next 12 months, are best taken forward by member states, or their but I have to repeat that it requires quite a lot of legal localities. Drugs policy—as I think everyone agrees— and policy analysis. We are confident that we are should, and does, remain mainly the competence of compliant with the convention. In fact, in some areas member states. National strategies should continue to we go further. We will comply when we can, but more have primacy on approaches to domestic drugs issues. work needs to be done on that in due course. The EU drugs strategy should seek to complement the delivery of national strategies, particularly through I singled out the noble Lord, Lord Mackenzie of focusing on enhancing co-operation rather than on Framwellgate, but I should say that the speakers’ list developing legislation. Similarly, it should produce a has attracted a great many experts, and we are grateful framework within which statutory agencies and civil for the fact that the noble Baroness, Lady Massey, society can work together. with her experience as chairman of the NTA, could come forward. Other noble Lords who have taken part Like the committee, the Government believe that in all-party groups and served on committees have the EU drugs strategy can add real value in tackling brought their thoughts to this debate. drug trafficking. We believe that in order to tackle the Bearing in mind the hour and the fact that there is supply side effectively, we need to employ both traditional another debate to come, noble Lords would not want and innovative tools. By intelligence sharing—this me to repeat the entire response of the Government to brings us on to Europol; I refer the noble Lord, Lord the report because, as they will know—I have a copy Liddle, to our response—by raising policing and law- of the letter I sent to the noble Lord, Lord Hannay, enforcement standards, and by promoting best practice with the Government’s response—it goes on for some among external partners, we will help to destroy the pages. Some of the questions, particularly those put criminal networks that target Europe and its member by the noble Lord, Lord Liddle, are answered in that states. response. They are there on the record and deal with The strategy should also continue to build on lessons the points he made. learnt to date across the EU from our joint approaches I believe, as always, that the report was particularly on the new psychoactive substances mentioned by a timely because it has the potential to be influential in number of noble Lords. We should use the objectives relation to the drafting of the new EU drugs strategy, and commitments in the UN resolution, led by the which is taking place under the Cypriot presidency UK, with Australia and , on promoting international that ends in December this year. I welcome the co-operation in responding to the challenges posed by contribution that it will make to those discussions, new psychoactive substances, as a useful starting point. and I can give an assurance to my noble friend Lord I should say that we have made considerable progress Avebury that officials have already discussed the United in this country by speeding up the legislative machinery Kingdom priorities for the strategy bilaterally, with that allows us to deal with these so-called legal highs the Cypriot national drugs coordinator, and jointly in that we can now refer them to the Advisory Council with other member states at the horizontal drugs on Misuse of Drugs for a rapid response. We can 449 EU Drugs Strategy: EUC Report[19 JULY 2012] EU Drugs Strategy: EUC Report 450 process them fairly quickly while the ACMD looks at and EU co-ordination in external third countries is them in greater detail. Only recently a new drug which effectively targeted and aligned with overall EU drug I think I can only pronounce by its street name, which strategy priorities. We would like to see concrete actions is MXE—I can never manage to pronounce its proper intended to tackle drugs covering both action to enhance name—has been given a temporary ban while the local capability against the drugs trade and alternative ACMD takes a further look at it to see what its development. long-term damage could be. I appreciate that to some The noble Lords, Lord Hannay and Lord Liddle, extent this change means that we are often like a dog and others mentioned the European Monitoring Centre chasing its tail and it might be that in the future some for Drugs and Drug Addiction in Lisbon, which is new legal mechanism or machinery has to be set up to rather inelegantly known as the EMCDDA. I will refer make it easier to respond to new drugs or legal highs to it as the European monitoring centre. I was asked as they are developed. what our view is of this body. I agree with everything Lord Howarth of Newport: I am very grateful to that the noble Lord, Lord Hannay, said about its the noble Lord for allowing me to intervene. In the valuable work. We accept that it should continue and Government’s response to the committee’s report and that we should make increased use of it where possible, in the report itself, a favourable view is taken of and similarly of its early-warning system through the analogue legislation whereby the Government would use of intelligence gathering and forensic analysis via take powers to ban new psychoactive substances that Europol and Interpol. This will also help with our they consider to be analogous to substances that are collective understanding of the current EU drugs market. already banned. Perhaps I may counsel some caution There were those who took the debate further and before the Government go down this road. The asked that we look at alternative approaches. The American experience seems to show that analogue noble Lord, Lord Hannay, said that he was somewhat legislation provides a field day for lawyers who spend constrained because he was worried that the Daily a great deal of time and money arguing over whether Mail might be listening. I looked up at the Gallery and the precise molecular composition of a new substance I do not think that anyone from that paper was there is analogous to the already banned substance, and at that stage. We fully respect the fact that different of course it would be a wholesale extension of ideas and policies will be put forward in the ongoing prohibition, with all the difficulties involved. debate. We believe that policies should be discussed, challenged and reviewed. That is what we are doing in Lord Henley: We will certainly look at the American the United Kingdom through our annual review of the experience. We are aware that there are a great many drugs strategy that we produced back in 2010, and the more lawyers in America than there are in this country, development of our evaluation framework. We continue and that the Americans are keen on making use of to discuss efforts to tackle the drugs trade with our lawyers. However, obviously we would want to learn international partners. from their experience. While I am on the subject of the ACMD, I should also say to my noble friend Lord Similarly, within this country, the noble Lord mentioned Avebury, who asked about khat, that the advisory a conference that my right honourable friend Oliver committee is currently reviewing the harms associated Letwin will be addressing in November on these matters. with it. We will not prejudge that advice, but we will My right honourable friend, as a Minister in the look at it in due course. , is also part of the inter-ministerial group on drugs that I chair on behalf of the Home Lord Avebury: I am most grateful to my noble Office. There were those who said that it should not be friend. I also mentioned, in the context of the examination the Home Office that led on this subject and that this of khat, the possibility of applying regulation. The matter should be transferred to the Department of committee looked at regulation although it did not Health. However, we in government think it should express a firm opinion on it. However, it is another cover all the Government but be led by the Home way of tackling harmful drugs, and it may particularly Office. The inter-ministerial group that I chair also has apply to the use of khat. I would be grateful, given representatives from Health, Education, the Cabinet that the advisory committee is looking at khat, if it Office, Work and Pensions, the Ministry of Justice, would also examine the possibility of using regulation Communities and Local Government and, last—one to control it. should never say least—Her Majesty’s Treasury.Meetings of the inter-ministerial group are roughly once a month Lord Henley: I think that that must be a matter for and all those Ministers regularly attend. I think that it the advisory committee to decide. I want to make it is a very fine example of the Government being non- clear that we will not prejudge its advice. We will look siloised—if I can put it in those terms—and thinking at it when it comes and then make an appropriate across the board in these matters. decision. I understand that that is likely to be later this I will say a word or two about Portugal and year. decriminalisation. Again, we will continue to look at I want to try to make progress because the House what happens in all countries and we are determined wishes to get on to the next debate. One of our key to study the effects of the work they have done in priorities for the next iteration of the drug strategy is Portugal. There is an excellent policy review by the to ensure that we agree a principle of transparency EMCDDA of what Portugal is doing, which I commend that would allow greater oversight of the available EU to noble Lords. We will look at what it does and make funding streams and the actions they are driving. It is our decisions in due course. Lastly on the subject of vital that we ensure that EU funding for counternarcotics decriminalisation, I do not think that this is the time 451 EU Drugs Strategy: EUC Report[LORDS] British Council: Funding 452

[LORD HENLEY] under their new policy. That struck a chord with me; I or place to go on to that wider subject. However, the think that she is right. The big difference is that the legal framework that we have in this country—the Portuguese are proud of what they have done and go Misuse of Drugs Act 1971—allows the criminal justice around telling everyone about it, while in this country, system some flexibility to deal with the best way to although we have a much more humane policy—the reduce reoffending and gives both the police and the Minister referred to this—with much more emphasis judiciary discretion to take into account all the on harm reduction than in the past, it still remains the circumstances of the offence, such as when it involves policy that dare not speak its name. That is why the possession of a relatively small amount of some drug. best contribution that the report produced by my As noble Lords will be aware, government officials committee could make would be if it started a wider are closely involved in the development of the new EU thoughtful debate about these issues. I beg to move. drugs strategy. It is currently on course to be adopted at the Justice and Home Affairs Council in December. Motion agreed. I can assure the noble Lord and his committee that officials from the Home Office will keep the committee Arrangement of Business informed of progress with the new document as Announcement appropriate. 7.02 pm 6.58 pm Baroness Northover: My Lords, the previous item of business took longer than was originally anticipated, Lord Hannay of Chiswick: My Lords, I thank the and we have now reached our usual rising time for noble Lord for his response to the debate, which was Thursday. The Question for Short Debate from the helpful in many respects. I can assure him that I was noble Lord, Lord Bach, is time-limited to one hour not the slightest bit worried that the Daily Mail might and a half, with Back-Bench contributions of seven be up in the Gallery; I was merely worried that its minutes each. If Back-Bench Members were to restrict recording of anything I said might not be all that their contributions to four minutes, we would rise in accurate. If that paper is not there, the problem will one hour. There is of course no obligation to do so, not arise. though I remind noble Lords who decide to take seven The one point I still regret a bit is the Warsaw minutes that when the clock hits seven, they have convention. At the risk of banging on about this, I already had seven minutes. point out that it is not that we believe that the British Government’s money-laundering arrangements are not British Council: Funding consistent with the Warsaw convention—I accept what Question for Short Debate the noble Lord says, that they almost certainly are—it is the example that we set by not signing and ratifying 7.03 pm an international convention that deals with a matter of great importance to us, and where we want to encourage Tabled by Lord Bach others to see that we take it seriously and to take it To ask Her Majesty’s Government what is their equally seriously themselves. That is the basis on which policy towards the future funding and future expansion I continue to urge him to find the one or two man of the British Council. hours necessary to achieve this, particularly in the light of the not very pleasant story about HSBC. I do Lord Bach: My Lords, it is an honour to be opening not want to go into that as it is not proper to do so this debate today. I am delighted that, after not a little here, but one can see that we would not want the difficulty and with the gratefully received help of the impression that we are a bit sloppy about these things government Chief Whip, we have managed to secure to get around. I am sure that he does not want that, this debate before the long Recess. I only hope that all and neither do I. the other noble Lords who are to speak in this debate I shall not reply to the debate. I thank all noble agree with that. I am delighted at the quality of the Lords who have participated; it has been extremely speakers who have been good enough to stay late on a gratifying that so many people participated from outside Thursday evening to speak in this debate, particularly the narrow limits of the EU Select Committee and the the Minister, to whom I am grateful for answering this sub-committee that I chair. It was not, as these debates, Question. alas, quite often are, simply the usual suspects, and for I declare my interest as chairman of the All-Party that I am extremely grateful. We had a debate that can Parliamentary Group on the British Council, a position best be summarised in the single word “thoughtful”, that I am delighted to hold, not just because in my and that is as it should be. It was a thoughtful debate view the British Council is one of our country’s greatest with a lot of different views being expressed, and I institutions, a jewel in our crown, but also because hope that it will help the Government among others in many years ago I grew up as a British Council child. their formulation of policy. My father, having left the Army at the end of the war, I conclude with a point raised by the noble Baroness, joined up and had a distinguished and happy career Lady Massey, in her contribution; she has a lot of with the council both at home and abroad, working expertise and of course a specific role in this matter. I with such council legends as Dame Nancy Parkinson think that I understood her to say that she was not and Sir Paul Sinker. Abroad he served in Madras, now quite sure that there was that much difference between Chennai, and Tehran, and at home in Glasgow, Oxford what we did here and what the Portuguese now did and, as a senior officer, in the famous Home Division. 453 British Council: Funding[19 JULY 2012] British Council: Funding 454

I was proud of him then, and I am proud of him now, The 2010 spending review settlement—often described in the same way as I am proud of the 7,000 people in by that rather overused word, “challenging”—entailed 191 offices in 100 countries around the world who do a 26% real-terms reduction in the British Council’s such extraordinary things for our country, and who, in grant in aid from £185 million to £154 million by order to do that job, sometimes have to put themselves 2014-15. As the Foreign Affairs Committee of another in physical danger. All noble Lords will remember the place has said, that has put the British Council’s incident in Kabul last August, when lives were lost. budget under “great strain”, and, Thankfully, no British Council lives were lost, but lives “may well trigger some fundamental rethinking of the role and were lost, and these were people who had put themselves work of the Council”. in harm’s way for our sake. Public service is not always The settlement was indeed severe, and it is much to the properly respected in this country, particularly at the credit of both the chief executive, Martin Davidson, present time. I hope that this debate will reinforce this and—if I may say so without unduly embarrassing House’s high regard for those who serve in public him—the previous chairman of the British Council, service. my noble friend Lord Kinnock, that difficult economic It is worth reminding ourselves of the mission set times were anticipated, and a decision made to expand out in the British Council’s royal charter, first to, greatly the amount of what is described as earned “promote cultural relationships and the understanding of different income in relation to grant in aid. cultures between people and peoples of the United Kingdom and This has been done successfully so that, by 2015, other countries”; only one pound in five that the council receives will be secondly to, from grant in aid. We should commend this achievement “promote a wider knowledge of the United Kingdom”; but, at the same time, it is vital to sound a warning thirdly to, voice. The British Council is a public body; it belongs to all of us; it represents our country very successfully “develop a wider knowledge of the English language”; around the world. In my view, therefore, the present fourthly to, chairman, Sir Vernon Ellis, is surely right when he says “encourage cultural, scientific, technological and other educational in his introduction to the annual report for 2011-12, cooperation between the United Kingdom and other countries”; published earlier this week, that, and fifthly to, “the grant element in our funding remains vital … Further cuts in our core grant would make it more difficult to align our priorities “otherwise promote the advancement of education”. with the interests of the UK”. It is not as though life has ever been easy for the Without that grant in aid, how will it be possible for British Council. Anyone who has read about the long, the British Council to do its vital work in countries where drawn out beginning of the council itself, way back in there is very little or no earned income to be had? 1934, will know that, if it had not been for the persistence I hope that the message will come loud and clear and will power shown by some, particularly Sir Reginald from this debate that enough is enough. All Governments Leeper and Lord Lloyd, the council might never have —and this Government, I am afraid, in particular—are come into existence. The French and the Germans in guilty of not always seeing the treasures before their particular had years of experience of cultural diplomacy, very eyes. There is an official blindness to what is stretching back to the second half of the 19th century. palpably obvious to everyone else. There are some Now, nearly 80 years after the British Council’s foundation, services and institutions that make Britain a more I believe that those great countries sometimes envy its civilised and more respected country. A failure to success and influence in performing its soft power role support those services and institutions sufficiently by of cultural diplomacy. government demeans us both in our own eyes and in Having survived the enmity over many years of those of the world beyond. This Government have had Lord Beaverbrook and other powerful forces, the constant to face issues of this kind a number of times. On one, internal departmental battles within Whitehall and the forests of this country, they backed away; on innumerable reviews and reports, some of them another, to which I am almost embarrassed to draw recommending summary execution, the British Council reference, legal aid, they did not and they took it on. has emerged alive and flourishing as it nears its That is an excellent example of how short-sighted 80th anniversary.Of course, other obstacles have emerged, Governments can be. I urge the Minister and the some of them serious, but the British Council has Government not to make the same mistake that they learnt to adapt. It was born in an age of empire and made in abolishing legal aid for social welfare law, in a has successfully moved into an age of proudly independent very different context. countries, many in the Commonwealth, many outside. The British Council is a great institution and, as I For example, it has learnt to engage well with the have said, a jewel in our crown. It is incumbent on any development agenda, which it does to great effect. By Government, and this one at the present time, to way of brief example, the programme run for DfID to protect it, to cherish it and to ensure that it continues strengthen civil society in Burma—a crucial programme to serve our country well. —was evaluated as “outstanding”, and the British Council has won a £12.8 million contract to deliver the second phase of that project. 7.13 pm However, the British Council remains true to its Baroness Hooper: My Lords, I am most grateful to core purposes: the English language, education and the noble Lord, Lord Bach, not only for introducing the arts. The main obstacle, as I rather feebly described this debate so comprehensively but for his work as it, is the question of money, or rather, the lack of it. chair of British Council All-Party Parliamentary Group, 455 British Council: Funding[LORDS] British Council: Funding 456

[BARONESS HOOPER] I know about this from a young Swedish family friend, of which I am a vice-chair. The all-party group has an as well as from a young lawyer from Chile doing a important task in bringing to the attention of Members postgraduate course at the LSE. Both are delighted by of Parliament the role played by the British Council in their courses and the international friends they have extending its brand of soft diplomacy throughout the made, but they wish to meet more British people. world. In the past year, we have heard from Martin There are ways in which this issue could be tackled Davidson, the chief executive, as well as from directors with the British Council in a co-ordinating and leading and regional directors in Afghanistan, the Middle East, role. There are organisations, such as the English-Speaking Russia and sub-Saharan Africa, who brought fresh, Union and Rotary International to name but two, that informative and inspiring accounts of their activities have a network of branches and clubs throughout the in the field. country and already take an interest in educational Apart from its job in educating Members of exchanges and in giving hospitality and a welcome to Parliament, the work of the British Council in the area overseas visitors. I believe that something useful and of education exchanges at university and other levels, beneficial could be done with these organisations and, in the dissemination of British arts and culture and in indeed, the universities themselves. The British Council the teaching of English is an invaluable asset to this could have the pivotal role of co-ordinating something, country. It increases knowledge and know-how, and which hopefully would not tax future budgets too helps to develop trade and investment links and heavily. I look forward to my noble friend’s reply. opportunities. Certainly, whenever I travel abroad with parliamentary delegations, it is good to know that we 7.18 pm can visit not just the British embassy but the offices of the British Council to get its particular slant on the Lord Kinnock: My Lords, I join the noble Baroness, country that we are visiting. Lady Hooper, in warmly thanking my noble friend The Cultural Olympiad and the World Shakespeare Lord Bach for securing this timely but unfortunately Festival are also vehicles for important British Council short debate. I thank him too for his very kind remarks. input. Most recently, the visit of Aung San Suu Kyi As a former chairman, I say with pride that the underlined the part that the British Council can play British Council has brilliantly undertaken its public in a country such as Burma, which is emerging from diplomacy mission of international cultural and the shadows. I fully support the noble Lord, Lord educational relations for 78 years. It continues to do so Bach, in what he said about future funding and, while with unmatched innovation and skill in an age in recognising the need to find savings and efficiencies in which change in the world has greater breadth, depth, all areas of government policy, I hope that the future penetration and velocity than ever before. The chief activities and expansion of the British Council will not executive, Martin Davidson, and the people who work be unnecessarily curtailed. for the council would never, of course, claim perfection. In an earlier debate this afternoon on the role and But I have to say that, if there was ever a league table performance of the UK Border Agency, I was able to of international public diplomacy institutions, the council refer to the British Council and its campaign to improve would, as the late Mr Brian Clough might put it, be and make more flexible the visa application system for “among the top one”. The history proves that, but I overseas students coming to this country. I cited Mexico have time only to refer to recent years. as a prime example, since every year more than 3,000 By 2004, when I succeeded my noble friend Lady students come to our prestigious UK universities. They Kennedy in the chair, British Council turnover was are paid for by the Mexican Government and, in some £482 million, grant in aid was 36%, 4,800 overseas cases, by their own families, who are then faced with staff and 1,800 teachers were active in 110 countries, all the hurdles and costs of the visa application procedure. and the audience reach was 35 million people. In 2008, It is not exactly a welcoming way for these young as my noble friend indicated, after several years in people to start the education experience, and they are which the council had consistently met the Gershon likely to be the future movers and shakers in their own efficiency target of 3% per annum, we designed and country once they have finished their studies here. began to implement a strategic change programme for I take advantage of this debate to raise a pet theme maintaining excellence in tumultuously changing global of mine, about the welcome and hospitality that is conditions. Our aim, among other things, was to double extended to overseas students coming to this country, turnover, reduce grant in aid as a proportion of that because the British Council has a special role in this rising income to 20%, significantly extend face-to-face respect. In the old days, the British Council had houses contact with users of council provision and hugely throughout the United Kingdom, usually in university expand audience reach, all, of course, without losing cities, that provided centres for overseas students to quality or compromising values. That “scale of ambition” gather and meet local British people interested in programme is working. This year, turnover is £740 million, things international. I remember going along to some the world audience, through IT and the massive diversity of these occasions as a child with my mother, brother of educational and cultural activities, is over 500 million and sister, and forming lasting friendships with students people and about 12.5 million people have direct physical from all over the world. Nowadays, a lot of overseas contact with the council. By 2015, the British Council students, particularly at postgraduate level, find themselves will have a turnover of about £1 billion with commensurate surrounded by other international students and with increases in reach and contact. very little opportunity to meet British people, learn The advance has been made possible by winning about the British way of life and practise their English international competitive contracts, making partnerships with people who speak it as their mother tongue. with global giants such as HSBC, Microsoft and the 457 British Council: Funding[19 JULY 2012] British Council: Funding 458

Premier League, raising productivity through growth 7.25 pm and often painful staff and cost reduction and reconfigurations, all increasing value for taxpayers’ Lord Dholakia: My Lords, earlier today, like my money. It is all being achieved despite cuts in public noble friend Lady Hooper, I participated in the debate provision, referred to already in this debate, of no less on the UK Border Agency secured by my noble friend than 24% in the current spending round which mean Lord Avebury. Much of what I want to say is simply that, in 2014-15, grant in aid will provide just 16% of an extension of this subject, but within the context of income. the important work of the British Council. I first thank the noble Lord, Lord Bach, for securing That could have been a £50 million hammer blow this debate. The noble Lord and I have co-operated on to the work of the council had it not been for the many criminal justice matters, particularly when he changes already under way. As it was, the council and served as the Minister in the previous Administration. its people did not engage in public protest; they simply He is absolutely right that the British Council is the got on with their task. I emphasise heavily to the acceptable face of the British Government abroad. Minister, however, that their creditable ability to sustain Few countries across the world command the respect success in spite of sudden and profound losses does that the British Council enjoys. It is an international not signify an infinite capacity to withstand further organisation that promotes our cultural and educational grievous bodily harm. The grim reality is that any values. These values are essential in building trust and more cuts would be seriously disabling. Because such confidence worldwide, as the noble Lord, Lord Kinnock, funding is spent in areas and on activities which have mentioned. no foreseeable prospect of generating revenues, the vital breadth of the council would be severely curtailed. Some time ago, I promoted a debate in your Lordships’ That would gravely injure the council’s ability to serve House about the migrant integration policy index. Britain by attracting positive perceptions and, crucially, This research, produced by the British Council, was earning trust. In a world in which communication has designed to compare legal provision across Europe on never been easier but understanding has never been the integration of non-EU migrants. I was delighted more fragile, that would directly contradict our country’s that the noble Lord, Lord Kinnock, contributed to strategic need to foster security and stability. that debate. It was a remarkable piece of work at a time when there was an often confused debate about a To underline that: a weakened British Council would cohesive society in which issues of multi-ethnicity and not have been in Tunisia or Libya at the coming of the multiculturalism surfaced. There is a kind of schizophrenia Arab spring or in Syria now. In Afghanistan, Iraq, on matters of immigration on one hand, and community Zimbabwe, South Sudan, Burma and many other cohesion and the pluralist society on the other. This is places, the council would be confined, at best, to often backed up by the perception of the majority formalities of provision. The massive potential of population that, despite all our history and all our growth in China, India and Brazil would be stunted. pride in our tolerance, the majority are somehow not able to live as part of a community of communities. The council has invested in what I call digital public diplomacy and that could continue in just about all It is here that MIPEX provides consistent and conditions, but durable influence and opportunity often reliable stock-taking, with the ability to track policy require presence. Building trust needs people-to-people advances and reversals. Over the years, commentators, contact. Since further shortage of non-earning resources both politicians and press, have pointed to the impact would unavoidably mean contraction and withdrawal, of globalisation and devolution as relevant to the the consequences would be deeply negative. process of migration. Nowhere is this more obvious than in the matter of education. I commend the excellent In recent years lessons have been arduously learnt report on the global skills gap produced by the British about the necessity of developing convincing and effective Council. A survey of senior business leaders conducted public diplomacy—so-called soft power. In the wise by ICM Research gauged the extent to which business words of a US general, international strategy which leaders see global thinking as an important skill among neglects that is, employees and potential recruits to their companies. The key finding, mentioned by the noble Lord, Lord “trying to put out a fire with a hammer”. Kinnock, is that the UK is in danger of being left behind by fast-growing emerging countries such as But soft power is not a soft option. It requires investment, China, India and Brazil, unless young people start to long-term patience and consistency, candour and think globally. transparency in relationships. It must have esoteric and practical usefulness to those who are the objects We should be proud that the British Council has a of soft power. It must manifest mutuality in the presence in 110 countries and has maintained its global development of understanding—the ability to be good reach. No delegation of British parliamentarians is listeners as well as trustworthy communicators. complete without briefings and visits to the British Council’s offices abroad. I know of no other organisation The British Council, with its enlightened and that engages over 30 million people worldwide—the emancipating values, its professionalism and its figure mentioned by the noble Lord, Lord Kinnock—and independence, has those qualities in abundance. They reaches over 600 million through digital media, radio are now irreplaceable and literally priceless. If they and television. Britain, the world’s oldest democracy, were jeopardised or diminished by cuts, it would betray can be proud that freedom, fairness and tolerance are the national interest. That cannot be allowed. at the heart of what the British Council promotes. 459 British Council: Funding[LORDS] British Council: Funding 460

[LORD DHOLAKIA] The International Inspiration programme enriches In this context, I note with increasing concern the the lives of young people in 20 countries, from Azerbaijan control on admissions of overseas students to British to Zambia, plus the UK. It also links 272 British universities. I have seen students from India, Pakistan, schools to 292 schools outside the UK. It helps to Sri Lanka and a number of countries in that part broaden the aspirations of British children, their parents of the world opting to go to Australia, the USA and and their teachers by encouraging them and the wider Germany because of the severe restrictions on their community to look beyond our shores, learn from entry to Britain. In the context of globalisation, this people around the globe and share knowledge and will be our loss. Britain’s economy is shrinking by at experiences. Let me give an example of this: the least 11% and deficit reduction is the top priority of programme recently brought to the UK a young man the coalition Government. However, the impact of from Brazil who was part of the leadership programme. cuts weigh heavily against the service provided by the He took part in the Olympic torch relay. All 20 countries British Council. We are talking of a 26% cut in real who were involved in the programme were able to terms to the government grant for the British Council. select a young person to come and also take part in the It is often forgotten that the British Council generates Olympic torch relay. This is probably not widely known. its own income, and the FCO contribution is just It also brought over leaders to the UK School Games, about 16% of the total turnover. I am seriously concerned which is an important part of the Government’s sports about the impact of cuts on staffing and on the strategy. These young people worked at the games structure of the British Council. with teams from all over the UK, learning about our I am also concerned that this may affect some of food, our culture, and unfortunately also about our its key activities, for example teaching English and weather. administering examinations. This would be a retrograde The International Inspiration programme has reached step at a time when we need international partners in many more people than that: 12.9 million children, far building a strong economy. English is an international above the original expectation. Young people have language and the language of the digital age. The actively participated in sport, physical education and council has set out some very good plans for the play, many for the first time in their lives. The project future. The objective is to expand in key emerging in Pakistan, where monsoons claim tens of thousands markets in Asia and Latin America. This is in our of lives every year, has taught survival techniques to economic interest. The British Council is well placed 80,000 young people. They have been taught to swim to meet this objective, which should help and not and how to save other young people’s lives. More than hinder its progress. 113,000 teachers, coaches and young leaders have been trained to lead in sport, physical activity and play 7.30 pm in their schools. It is also important that we have Baroness Grey-Thompson: My Lords, I, too, thank learnt from them. I have a great interest in the inclusion the noble Lord, Lord Bach, for securing the debate of disabled children in PE in schools. Some of the best this afternoon. It is very apt, considering the area that inclusion I have seen was not in this country, but in I wish to cover: the British Council’s contribution to Jordan. the International Inspiration programme, which arose I went to a school where two young men, both of out of a promise in the Olympic Games bid. This was whom were wheelchair users, were completely integrated to reach out to young people around the world through into their school programme, both in academic lessons sport and to connect them to the inspirational power and physical education. The International Inspiration of the Games. Well, the Games start in just seven days programme made this happen; it had created it. One and 29 minutes and the success of the International young man had a wheelchair, the other, whose family Inspiration programme is considerable and we should could not afford to buy him one, used to be pushed celebrate it. I declare an interest as a member of the around in an old pram. However, the lives of these two All-Party Group on the British Council; I have taken boys had changed because they were accepted in school. part in a See Britain Through My Eyes campaign; and Because of that, they were then accepted in their local I am also an ambassador for International Inspiration. community and the lives of their families changed. I The British Council is one of its partners, alongside spoke to the mum of the young boy with a wheelchair, UK Sport and UNICEF. All are experts in their who told me that people had stopped avoiding her in respective fields. the street. They had been ostracised in the community, I feel privileged to have seen the Council’s work at but had been brought back because of their acceptance first hand on many occasions. Its success in soft politics in school. These are the things that the British Council should not be underestimated. On a visit to one country and the partners have achieved. Also, 36 policies, with my daughter, it helped me to meet local decision- strategies or legislative changes have been influenced makers, and I was able to challenge their views on or implemented because of the work of the British disability, motherhood and girls in lifelong physical Council with this programme. activity. The council’s knowledge of the local landscape, One of the reasons for its success is having that customs, and language has contributed to its success knowledge on the ground. I recently went to Egypt to and, we should also not forget, to the world’s speak at a conference where International Inspiration understanding of the UK. The British Council is is in its early stages. Again, through local knowledge involved in many projects, such as rebuilding education and the work of the programme, we were able to talk in Iraq, English teaching in Sudan and south Sudan, very openly about how disabled people and girls—two science without borders and now, I am glad to say, in groups who are more traditionally excluded from sport sport and physical activity. and physical activity—can be included in lifelong physical 461 British Council: Funding[19 JULY 2012] British Council: Funding 462 activity and learning. That will not only benefit their average of £50,000 for each of those organisations, the health but give them an increased opportunity to total cost of helping 100 of them would be £5 million. contribute to their society. The charities could raise some of this, sponsorship The work that has been achieved by the programme would be forthcoming and, in time, the whole thing with its partners is substantial. However, it is essential would become self-funding. In addition, providing the to ensure that we leave a lasting legacy beyond its final service worldwide would become a source of funding year in 2014. To make that happen, we need to ensure for the British Council. that partners such as the British Council are able to Let me cite DIPEx as an example. I am not asking function in the environment that they work in and that for help here: we will internationalise ourselves with they have the resources to do this. our own resources. This is what we decided to do. In conclusion, and bearing in mind recent cuts, I DIPEx is a charity that has worked closely with the ask the Minister how the council will be able to carry University of Oxford. With the support of the Department on its work. The work of the British Council has of Health, it has raised £10 million and created contributed to Britain’s standing in the world. We should www.healthtalkonline.org. We publish people’s personal not forget this important work or allow it to slip away. experience of health conditions online so that other patients can learn from them. So far, over 10 years, we have covered 70 health conditions, including cancers, 7.36 pm heart diseases and neurological conditions, and life Lord Stone of Blackheath: My Lords, I declare a issues such as bereavement, pregnancy menopause specific interest: I chair DIPEx, an Oxford-based charity. and the like. This year, our website will receive 1 million We are currently internationalising ourselves, and this hits a week and 3 million unique visitors. is my theme. Now, based on training and support from DIPEx Last month, in a debate on the voluntary sector, I UK, organisations in other countries are setting up proposed to Her Majesty’s Government that they may parallel projects in universities and hospitals in Spain, wish to create a hub in the United Kingdom that Germany, Holland, Japan, South Korea, China, Israel would encourage and support other established British and Palestine, and Australia. Together, we will charities and social enterprises to internationalise establish DIPEx International to co-ordinate the activities themselves. The Government have not yet responded. of the group, to collect and publish health experiences In that debate, I mentioned the British Council, which worldwide and, combinedly, to help with fundraising. has for decades promoted our language, education, We have decided to use £50,000 of our DIPEx arts and culture. I said that this was good for Britain charitable reserves to do this. Oxford would then and good for the world. Perhaps I was addressing the become the international centre for the highest quality Government too vaguely and this debate is a more worldwide health charity. As a result of our activity, appropriate forum for my suggestion. Green Templeton College, where we are based in What I suggest is a way of expanding and infusing Oxford, plans to create a health experiences institute, a new activities and eventually more funding into the centre for research into patients’ experiences worldwide. British Council. Here is the suggestion: across the UK DIPEx is just one example of a charity doing this. I many excellent charities and voluntary organisations am suggesting that a conversation may be arranged by have already successfully internationalised themselves, the British Council with people involved in this sector but others are struggling to create organisations that to see whether this programme to help the charity and spread worldwide with the right disciplines and standards, social enterprise field from Britain should be added to and many as yet have not realised the vast potential its mission, and to see if we could make connections and advantages of becoming international. Imagine if and create new ways to spread aid and services to we were to encourage British charities and social countries with which we wish to have relations. enterprises—large, medium-sized and small—to consider Perhaps a conference could be held, to which we researching the issues that they address here in other would invite 30 or 40 people from this field who would countries and linking with groups in those other countries be interested in helping to take the idea forward. The to form international organisations. participants might include five charities, five social Were the British Council to decide that it might be a enterprises, small, medium and large, the Social Enterprise good thing to add the voluntary sector of the United coalition, the Social Investment Consultancy, Prism, Kingdom to its remit, it might start with a trial of, say, the gift fund with which I am involved, Global 10 charities, then 100 and then 1,000. There are 162,000 Philanthropic, Global Tolerance, some experienced charities registered in the UK and thousands of social lawyers in the field, some big UK-based international enterprises. If 2.5% of them—that is, 5,000 charities businesses to help with advice on internationalisation with an average income of around £250,000 a year—were and perhaps funding, and the Charity Commission. to internationalise over time, we would have created in I am sorry that I do not have the resources to the UK an enlightened centre, spreading good works research this more deeply. It is merely a suggestion, around the world, with a turnover of more than but perhaps noble Lords feel that it merits further £1 billion. research, discussion and action. To start, perhaps 100 charities could be encouraged to come forward over the first year to internationalise 7.41 pm themselves. The British Council hub would then give them access to international legal structures and the Lord Alderdice: My Lords, I too am grateful to the ability to set global standards and resources for branding, noble Lord, Lord Bach, for securing this debate. He is marketing and website publishing. Even if it cost an a very distinguished chair of the APPG and I am 463 British Council: Funding[LORDS] British Council: Funding 464

[LORD ALDERDICE] more influence and power through spreading our culture happy to be a member of that group. Like him I have a in all its different ways, and having the rest of the family connection with the British Council. My cousin world coming to us and asking us to do this. David has served in it for a lifetime in many different What is the hindrance? The hindrance is any lack of parts of the world, including Baghdad after the war, vision and appreciation that we might have at government which is not the most comfortable of places. He is level and, to some extent, a sense that promoting finishing his career back home in Northern Ireland. ourselves, our language and our culture is something That is where I would like to start. There has been a we are a little less happy to do than our American lot of discussion about how the British Council’s cousins. We should be proud of it and we should activities display our culture in other parts of the promote it. It is not just in our interests. If we really world and how beneficial that is outside the United believe in it, our culture has a contribution to make to Kingdom. It became clear to me as the Speaker of the the rest of the world and no one does it better than the Northern Ireland Assembly that it was easy to involve British Council. nationalist people and politicians in the work of the British Council despite people’s fears sometimes that 7.46 pm it might be otherwise. The British Council is not the English Council. It presents all the cultures, Welsh, Lord Jay of Ewelme: My Lords, I, too, congratulate Scottish, English, Northern Irish—and not just pro-British the noble Lord, Lord Bach, on securing this debate, Northern Irish, but Irish culture of all kinds. People and I agree with every word that the noble Lord, Lord from the nationalist community, including politicians, Alderdice, said. I must declare an interest: as Permanent were happy to become involved in the British Council’s Secretary at the Foreign Office, I was a trustee of the work. It was a helpful facility in binding people together. British Council, serving on the board under—I often There is a great deal that we have to give. Culture—I used to think that that was the right word exactly—the do not use the word lightly—is not just music, art, noble Lord, Lord Kinnock. I also worked closely with drama and literature. There are important aspects of the British Council as ambassador in , where I our culture in the way that we conduct parliamentary saw clearly the contribution that the council can and democracy: that is part of our culture. Our adherence does make even in an advanced, developed country. It to human rights and the way that we implement them, contributed to English language teaching, to handling policing and the administration of justice are also subjects such as racism in sport, which are more easily aspects of our culture. That is why I am proud that the handled at arm’s length, and to sponsoring avant-garde British Council takes up those things too. It involves British culture. I well remember at least one play the all sorts of people projecting important elements of title of which I do not think that I can decently British culture of all kinds and making a profound mention in your Lordships’ House. contribution to the rest of the world as well as to I am therefore very glad that, despite its funding ourselves. problems, the British Council is determined to maintain It has always astonished me that this remarkable its global reach. As other noble Lords said, the role of organisation is so little known at home and so widely the council in establishing and developing links between respected abroad. If it has one flaw it is perhaps a peoples, between cultural, educational and social classic British flaw. It does not tend to blow its own institutions, and between different religions and languages, trumpet at home, even though it is so well known particularly in a complex, unpredictable and changing abroad. My advice to it is to recognise that at home it world, really is important. That is not something is important that people understand more of its work. which you can just turn on and off at will. Like my noble friends Lord Dholakia and Lady Hooper That the British Council was in Burma in the I participated earlier today in the debate on the UK difficult days will give it real strength when things get Border Agency. In a sense the two organisations are at better. The same is true of Russia where, of course, opposite extremes. One sullies the reputation of the things are still difficult. It is also true of China, where United Kingdom in the way it functions. It costs us a the desire to learn English is huge and the role of the huge amount of money to annoy almost everyone who council is equally important. I stress that it is equally comes in contact with it and brings us no benefits to important that the British learn Mandarin and other our reputation, whatever other good things it might foreign languages. It is something at which we as a do. The other, the British Council, is a remarkable nation are not good. We tend to think of the council’s organisation, which improves the reputation of the role as spreading English and English culture abroad. United Kingdom. Quite extraordinarily, we can get But its role in encouraging, through its language assistance other people in the rest of the world to pay us to schemes, for example, in British schools, the teaching develop the British Council and to teach them our of foreign languages here, is just as important in my language, which benefits us and is absolutely remarkable. view as the work it does in getting others to speak our It is a very long time since a rather dismissive language. military leader questioned how many legions the Vatican However, the expansion and spread of the council’s had—how many legions the Pope had. In doing that, activities comes at a cost, and, as we know, funds are he was dismissing the lack of power of the Vatican. scarce. As I understand it, the FCO grant to the council That military leader is now dead, gone and largely is to be more than halved in the 10 years between 2004 forgotten, and the power of the Vatican continues. and 2014. That is pretty brutal even by today’s standards. Increasingly one might ask how many legions we have I commend the way in which the council has responded in the United Kingdom. The answer is less and less. by taking tough and radical reforming measures, by cutting But there is no reason why we cannot have more and UK staff, by outsourcing to India and by developing 465 British Council: Funding[19 JULY 2012] British Council: Funding 466 partnerships with others. However, these planned I have also worked most of my life on issues relating reductions—for example, of staff in London—must to development. The thing that is often underestimated surely be reaching their limit. Can the Minister assure in sustaining development is the quality of leadership us in his response to the debate that the Government that is available to a country. That involves learning, will not cut the council’s grant so far that it cannot scholarship, wisdom, enhanced judgment, and the perform its vital functions? rest. In that, cultural exchange is incalculably important. Furthermore—this is, perhaps, in parentheses—I In Britain, we are particularly good at universities and note that whereas in 2008, 22% of the Government’s higher education. We are particularly good in our grant was classified as overseas development assistance, cultural and creative activities. We are the envy of the and therefore, presumably, came from DfID’s budget world in theatre, film, and the rest. I believe the rather than that of the Foreign Office, the figure rises council has done terribly important work in making to 66% in 2014-15. I congratulate the Foreign Office our cultural richness available to the world. on this rather clever wheeze, and I rather wish I had It is also important to remember that if we want a thought of it myself when I was responsible for the secure world in which to live, we want to enable the Foreign Office budget. However, could the Minister poorest countries of the world to have the kind of assure us that this shift from the FCO’s budget to leadership and experience that are necessary to make a DfID’s is a consequence of decisions taken by the success of their place in the world. They are far less British Council to focus more on the developing world— likely to be prone to extremism and terrorism if they which is indeed a sensible thing to do—and is not a have good, effective leadership. The council is making desire to shift funding from the Foreign Office budget a crucial contribution there. What seems to be absolutely to the DfID budget, which is distorting the allocation self-evident is that if we make cuts, we are undermining of British Council funds? the work in some of the most important parts of the Finally, the maintenance of the British Council’s world where the council cannot possibly expect to win charitable status is key to its financial well-being. back the cost of its operations from the services it is Could the Minister assure us, too, that the increase in able to sell. revenue-earning activities and partnerships with private This debate seems rightly to involve a fan club of companies does not in any way jeopardise the continuation the council, and it is a real delight for me to sit next to of that charitable status? my noble friend Lord Kinnock, who, as its chair, led To conclude, the role of the British Council really is the council with much enthusiasm and commitment. crucial, and as the noble Lord, Lord Alderdice, said, However, I have one cautionary remark that I would not at all well enough understood in this country. It want to make. My reservation is that in an anxiety to would be a huge mistake if that role were to be pay its way, the British Council must not lose its jeopardised by funding cuts. vision. It must not lose its commitment to the creative arts—the cultural dimension that is so important. It must not forgo its work in the most challenging and 7.52 pm demanding parts of the world, where perhaps the Lord Judd: My Lords, my noble friend Lord Bach is input is disproportionately good, as compared with certainly to be congratulated on having initiated this other parts of the world where it is easier to operate. debate. Furthermore, it was very interesting to hear about his background in the British Council. It must have been a very special experience. 7.56 pm We live, as I said in an earlier debate, in a totally Lord Liddle: My Lords, this short debate has involved interdependent world. That is the first reality of life many excellent speeches and I only wish that the whole for all of us. We will be judged, as a generation, and Cabinet and the mandarins of the Treasury were here certainly as politicians, by the success we make of to listen to it. It was opened by my noble friend Lord belonging to that world, and of finding a positive role Bach with the unique moral authority that he conveys for Britain within it. What are the things that are at in this House. Personally, I am proud of the fact that our disposal in finding that role? We have the British in happier economic times the previous Government Council, with its unrivalled reputation. I have done were able to expand the work of the British Council international work all my life and I have travelled all because it is vital as a jewel of British influence, as over the world. I know the esteem in which it is held many have said, an instrument of soft power, a celebration across quite a wide spectrum of people right across the of British diversity and a multiplier of the creative world. That is important. We also have the BBC strengths that are so important to our economic future. overseas service. I am still fearful of what is happening However, we all accept that we live in difficult to the BBC in that area. We must resist any further economic times, and the British Council has responded cuts, because that is one of our richest assets. with boldness that is typical of the kind of leadership It also seems to me that we have the English language. that my noble friend Lord Kinnock has offered—boldness I endorse what the noble Lord, Lord Jay, said about in terms of facing adversity. The only point that I the importance of the work of the council on languages would make relates to the fear that my noble friend in both directions. However, in this interdependent Lord Judd expressed. Yes, a mixed-economy model is world, English is a predominant language. Therefore, a very good thing for the British Council, but it must to allow people across the world to play their part in never become a privatised model. If there is a privatised that world, having the English language in their hands model, the British Council will not be, as my noble and within their power is also crucial. We are making friend Lord Judd said, where it needs to be. It will not a great contribution there. be offering opportunities to the people who need them. 467 British Council: Funding[LORDS] British Council: Funding 468

[LORD LIDDLE] It is aligned to the priorities of the Government of the It is said that we face a period of prolonged austerity, day, but importantly, it is not part of the Government and that may be the case. The assurance that I seek of the day.Its status—not least its operational status—sets from the noble Lord, Lord Howell, is this simple one: it apart not only from other institutions of ours, but that the present Government do not see the British also from its international peers such as the Goethe Council as a frill that can be cut in the future but as an Institute, the Institut Francais, the Instituto Cervantes, essential investment in our future. That is what it has and now, interestingly, the growing number of Confucius been and that is how it should be. I hope that the noble Institutes, of which there are now 324 in 94 countries. Lord will be able to assure us on that. I think that figure is two years out of date; it is probably more than that now. The Chinese model is 7.58 pm very different from our own, I suspect, in its relationship The Minister of State, Foreign and Commonwealth with its government. It is spreading all the time, and in Office (Lord Howell of Guildford): My Lords, I join in all corners of the earth. thanking the noble Lord, Lord Bach, for introducing The UK has a remarkable set of soft-power assets. this important topic. Like others, I am only sorry that Years ago, in the report I mentioned, we looked the debate has come at the end of the day and that particularly at the BBC World Service and the British we have not had greater opportunities, which we may Council, but of course the whole range of soft-power have in the future, for discussing the whole broad canvas instruments is far greater. It is the central purpose, or of soft power and smart power, and the new techniques aim, or set of tools, in the ability to influence the in this internet age for developing the promotion of actions of others through attraction rather than coercion. our interests, cultures and values, of which the British It is working to exert this influence in order to achieve Council is a central part. our national interests in an interdependent world, and In fact, I will begin at the end and say simply to the to maximise our contribution to the stability, balance noble Lord, Lord Liddle, that I can certainly give that and prosperity of that world. In one of his first speeches assurance. Certainly we see the British Council, as when he took office, my right honourable friend the many of us have done for decades, as a central part of Foreign and Commonwealth Secretary talked of a the promotion of the interests of this nation and, networked world where connections between groups indeed, the promotion of all that we can contribute to and individuals across the globe are a key part of the world peace and stability. I totally agree with much of relations between nations. It is not just a matter of what the noble Lord, Lord Bach, said. In fact, a good government to government, diplomat to diplomat, but deal of it was in the speech I was thinking of making, of engaging fully with all sectors of society on a basis so I do not need to repeat it. I balk only at his point of mutual respect. about blindness. That hurts a little, because some of us have for decades been pointing this out, from the days In the United Kingdom we seek to foster and of the famous House of Commons Foreign Affairs strengthen these connections, and it is in this that the Committee report of the 1980s, when I think the British Council can play such a key role. The message phrase “cultural diplomacy” first began to circulate. of the debate this evening has been perfectly clear; it is certainly one that I am well aware of and will carry As a result of that report, which I had the honour back to all my colleagues in the Government. We see of participating in—although not as chairman of the the immense value of the British Council, and obviously committee—we have increasingly been pointing out there is a wish that its funding and support is not that in the world we are moving into, cultural diplomacy, attenuated. the promotion of values and attitudes, will be as powerful if not more powerful than ranges of carrier People know that talking to the British Council is fleets, rockets and heavy military equipment—as the not the same as talking to the British Government, noble Lord, Lord Alderdice, rightly reminded us. This and that this opens up new avenues for engagement. is the pattern for the future, where hard and soft power Some who engage with the council will obviously be must be brought together in an agile use of smart less willing to engage with the British Government; power within our resources and in a highly effective that is inevitable. So I will highlight that essential role way. I agree with much of that. and, incidentally, highlight one particular aspect of I pay tribute to the work of the council and its staff, it, and that is the role of the Commonwealth network operating sometimes in extremely difficult and dangerous and how the British Council interrelates with it. circumstances. This especially applies to its work in We have talked about linkages and common values, recent years in Afghanistan, Libya and Iraq. and of course the Commonwealth is an exemplar par I agree with those of your Lordships who said that excellence of that. It gives this country a unique advantage the council has a global reputation. It has, as the noble which many other countries envy. The British Council Lord, Lord Bach, reminded us, 191 offices in 110 countries, works in the majority of Commonwealth countries to and many millions of people have passed through the reinforce the bond of trust through education, the doors of the British Council to learn English or to arts, English language programmes and many other make use of the other services that are offered. It is aspects. In fact, the British Council ran the Connecting therefore a key opinion former and shaper. When Classrooms programme which led up to the people think of the United Kingdom, of —of Commonwealth Heads of Government Meeting in what it stands for and what it seeks to do—the picture Perth last autumn. It works closely all the time with the British Council paints is part of the important Commonwealth institutions and expects to be active work that we all seek to do. The council is the cultural in the UK in the build-up to the Commonwealth relations arm of the United Kingdom—of our country. Games to be held in Glasgow in 2014. 469 British Council: Funding[19 JULY 2012] British Council: Funding 470

There is no question but that this Government, like the burden and making proportionate cuts. We accept the previous Government, see the British Council’s fully that this has presented the council with a serious main objective as building trust between countries and challenge. It is clear that it has risen to that challenge. peoples and cultural relations between countries, and It has restructured its operations and reduced staff to improve the level of understanding between their numbers. It has found new ways of working efficiently peoples as well as provide a common space in which to and effectively. meet and engage with each other. This in turn increases The British Council has committed itself to ambitious the level of trust between them. As the noble Lord, expansion plans, increasing the turnover from £707 million Lord Kinnock, pointed out in his eloquent intervention, in 2009-10 to £969 million by 2014-15. That naturally the council states in its annual report that it has means that the grant in aid will fall as a percentage of worked face to face with 12.5 million people in the the total from 26% to 16%. That sounds dramatic, but calendar year up to 2011-12, which is an increase of overall this is the language not of contraction but of 2 million compared with the year before. Overall, as expansion. The budget is set until the end of 2014-15. the noble Lord again pointed out, the council has We have not started on the process of discussing the engaged with 35 million people world-wide. These are next spending review, but the Foreign and Commonwealth achievements that it can be proud of and they go hand Office will ensure that the British Council is kept in hand with a tribute that I am glad to pay to the engaged throughout the process. As your Lordships noble Lord and to the previous chairmen of the will recognise, it is impossible to say what any new British Council, and of course to those who are now budget levels will be. I say to the noble Lord, Lord Jay, operating with it. I concur with the remarks made that designating part of the FCO expenditure as ODA-able about Mr Davidson, who has been extremely effective. does not make any difference to the size of the expenditure I have more than once had the privilege of meeting or where the money comes from; it merely, as I say, him and discussing the council’s work. designates part of our expenditure on the grant in aid The council’s work in promoting Britain has brought as contributing towards the total overseas development more and more visitors to these shores. They come to assistance of the nation. We believe that the current study here, to invest here, and to understand and restructuring of the British Council will provide a firm embrace our culture. It has also helped countless basis for its future expanding operations. We are confident others to build enduring links with this country.Something that the council is maintaining the right balance between which I do not think is always understood outside—the its work in English, arts and education and society, noble Lord, Lord Alderdice, was right to say that its and that all of its activities contribute to its charitable work and its nature is not as widely understood as it purposes. should be—is that, unlike many of its international I reassure the noble Baroness, Lady Grey-Thompson, counterparts, the British Council has two sections: after her very moving speech, that the British Council there is the work that is funded by the FCO through will not merely carry on but can be a more dynamic the grant in aid, about which I shall say more in a and effective partner in our national endeavour—as it moment, and there is the work which is directly tied to has already been over the past 78 years. Its first cultural relations. By far the lion’s share of the council’s charitable objective states, as the noble Lord, Lord present income comes from its commercial work. The Bach, reminded us, that it shall, noble Lord, Lord Kinnock, and others have described how that has been built up with immense success. Its “promote cultural relationships and the understanding of different cultures between people and peoples of the United Kingdom and English language teaching, its examination services other countries”. and, increasingly, its work in managing contracts have all been areas of growth. However, I should emphasise Therefore, I congratulate the British Council on the that there is a firm division between the two sorts of immense success it has had so far. We believe that this work, and each year the council’s auditors certify that success can be built upon despite the economic difficulties their full cost recovery work is not subsidised by the that we face at the moment as a nation. We believe that Government. its work can adapt to the changing world in which we live. I am confident that the council will continue to Like all publicly funded bodies, the council has had spread through the world the values that we hold so to play its part in helping achieve the Government’s dear. I once again reassure your Lordships that the fiscal consolidation plans. I know that there is endless Government are fully apprised of the value of this debate and challenge about the nature of those plans. spearhead of our reputation, our soft power, in a I have to say that when the council’s grant in aid was dangerous and difficult world. cut under the 2010 spending review, that was not done with enthusiasm by someone wishing to make cuts, but under the dictate of the grim necessity of sharing House adjourned at 8.12 pm.

GC 127 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 128

I ploughed through the 155 pages of regulations as Grand Committee best I could with my limited understanding, and on page 105 there is a list of the rates that should apply Thursday, 19 July 2012. for the various elements of council tax support under the scheme. When I read them, I panicked slightly because they are not the current rates that apply to Local Government Finance Bill council tax benefit. They are constructed in the same Committee (5th Day) way but they are different numbers. Again, my noble friend Lady Hollis and I spent some time trying to 2pm work out why that might be and, in the usual way of politicians, ranged through cock-up and conspiracy The Deputy Chairman of Committees (Lord Haskel): theories trying to work out what the Government My Lords, if there is a Division in the Chamber while might mean by that by the wonderful old-fashioned we are sitting, the Committee will adjourn as soon as Kremlinological means. Was this a way of saving 10% the Division Bells are run and resume after 10 minutes. in the scheme itself? Actually, my best answer is that it is probably a mistake and that they are last year’s rates rather than the current year’s rates. Again, it would be Schedule 4: Amendments relating to council tax helpful if the Minister could confirm that the intention reduction schemes is to use the current year’s rates, which were published this January, rather than those for last year. Amendment 79B We know very little about universal credit and the Moved by Baroness Sherlock new system, because in those 155 pages of draft regulations the only substantive reference to universal credit 79B: Schedule 4, page 58, line 8, after “income” insert “including comes in chapter 3 of part 10, which addresses the universal credit” question of income and capital when there is an award of universal credit. That chapter is only 389 words Baroness Sherlock: My Lords, in the absence of my long, and that includes the title. Of course, it would be noble friend Lady Hollis, I move Amendment 79B and hard for it to contain much more because there is a speak to Amendment 83 in my name. My noble friend great deal that we do not yet know about universal asked that I convey her apologies to the Committee. credit, so I do not blame the department for the fact When she tabled her amendments, she believed that that it does not have that detail yet, but that is a point they would come up last Thursday. When that sitting to which I shall come back. At least universal credit was cancelled, they were moved to today when, income will be taken into account. The case for doing unfortunately, she is chairing a meeting of her housing that for everybody is compelling. Has the Minister association, so she asked that I make that clear and had the opportunity to read the IFS report, Reforming apologise to the Committee. Council Tax Benefit? It is a 148-page report that has an Amendment 79B is designed to make clear that entire chapter on integration with universal credit. when a local authority makes a council tax support The report notes that the universal credit system was scheme which takes income into account in determining intended to, entitlement to support, that income should include “simplify the benefit system by reducing the number of different universal credit, not just earnings or other kinds of benefits that claimants and administrators must contend with”. unearned income. I presume that the Minister will As council tax benefit is, need little persuasion of the merits of such an approach, “the means-tested benefit with the largest number of recipients”, as her default scheme takes precisely that approach. My understanding is that the default scheme will take keeping it outside universal credit, account of universal credit income with some deductions “and allowing it to vary … undermines this simplification”, relating to income that is to meet housing and childcare but we are where we are. The report goes on: costs. “Universal Credit is also intended to rationalise work incentives Having read the Explanatory Notes, I wrestled for by replacing a jumble of overlapping means tests with a single some time yesterday trying to work out why the default one, ensuring that overall effective tax rates cannot rise too high. scheme would want to take account of income net of Again, separate means tests for council tax support could undermine the child cost element of universal credit. Why would this, with the potential to reintroduce some of the extremely weak you deduct the element designed to meet the costs of work incentives that Universal Credit was supposed to eliminate”. children? My noble friend Lady Hollis and I had a I shall translate that for simpletons like me. If council debate for some time trying to work out what the tax rebates carry on having a 20% withdrawal rate and Government might be thinking of by this. Having read if universal credit is not counted as income, the effective the draft regulations themselves, I concluded that this marginal tax rate for a basic rate taxpayer could go up was meant to be a reference to the childcare cost to 89.8%. Furthermore, it would mean that, element of universal credit, which of course is completely “income from private pensions, contributory benefits and spousal distinct from the child cost element. Having talked to maintenance would actually make some recipients worse off”— an official—I am very grateful to the Minister that her department gave me access to a member of the Bill more money coming in, less money left behind, which team—that is still my understanding. It would be is really serious— helpful if she could confirm that on the record for the “unless these income sources were ignored when calculating council benefit of those reading the report of our debate. tax rebates, which would be expensive for local authorities”, GC 129 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 130

[BARONESS SHERLOCK] spent on universal credit. It is clear that the Committee as well as complicated. The report continues: should agree to this amendment and direct councils to “This arises because income from these sources will reduce take universal credit income into account. Universal Credit entitlement on a pound-for pound basis”. I turn now briefly to Amendment 83, which would I apologise for getting to this level of detail, but I am require a local authority to consult not just on the trying to illustrate the consequences of not taking scheme it proposes under the current social security universal credit into account as income. system but, at the appropriate time, on the scheme in There is no simple way out of the challenge faced the world of universal credit. The reason is very simple. by local authorities. Some authorities will decide that There is a whole series of decision that a local authority they have to devise their own schemes to avoid having will have to take, even if it sought to devise a scheme to find the money to pay for the 10% saving by next that mirrored as closely as possible in the universal year. The noble Earl, Lord Attlee, gave them some credit era that obtains in the current tax credits and advice during our last sitting, on Monday, saying that benefit system. Simply maintaining the status quo is local authorities, not possible, as the department has already discovered, because universal credit replaces a range of tax credits “could opt to use the default scheme, but perhaps with some amendment to secure some easy savings. Local authorities could and benefits for working-age adults that are currently choose to develop a more sophisticated scheme later, but that is a treated differently for council tax benefit purposes. choice that they will have to make … However, if a local authority For example, tax credits count as income, but income wants to have a complex scheme, it can have one in later years, support does not, and nor does jobseeker’s allowance and it can go for a simple scheme perhaps based on the default or income-based employment and support allowance. scheme in year one”.—[Official Report, 16/7/12; cols. GC 15-17.] In universal credit, if one half of a couple is under A simple scheme based on the default scheme of state pension age, the whole household is treated as 155 pages of draft regulations would be quite difficult. that, as my noble friend Lady Hollis reminded the More complicated still is that any means-tested system Committee last week, but that is different from the is basically a complicated ecosystem. current situation. Somebody on income support, JSA Although I am teasing the Minister, I do not blame or income-related ESA is automatically passported on the department at all for having 155 pages of regulations. to maximum council tax benefit. That will not be It is impossible to devise simple means tests that work possible in future. If universal credit income is taken well; that is why there are 155 pages, and they are into account without making corresponding adjustments based on the regulations for comparable benefits at to the means test, as the IFS noted: the moment. If a council were to try to find an easy “It could be impossible even for those with no private income way forward, the reality is that its most likely step at all to be entitled to maximum rebate”. would be, for example, simply cutting 20% off the top In other words, once a local authority has its own of the applicable amount that goes to everyone or the scheme in place, when universal credit comes in, it will maximum amount, but it may not fully understand be impossible, even for those in the current system, to the consequences of doing that distributionally across know for sure what will happen to their entitlements incomes or different types of activity.It is very complicated. unless there is an additional consultation and more As the IFS notes, it would be simpler for local information is made available. Indeed, although I had authorities to have an independent taper from that a very helpful conversation with an official earlier, used for universal credit, but to do so would be worse which has moved me along in understanding this, I am for effective marginal tax rates. The key question is, not completely clear about what will happen to somebody “Why should we not leave it up to local authorities to in the default scheme. Will the Minister take this decide how they will individually treat universal credit opportunity to tell us on the record? The Explanatory income?”. The answer is that one of the Government’s Notes to the draft regulations for the default scheme main arguments for the upheaval involved in creating state: universal credit is that it would reduce the very high “Applicants with an award of Universal Credit may still marginal tax rates faced by some working claimants, receive 100 per cent support under this system”. so there is a clear risk that council tax rebates will “May” is good; “will” would be better. The Explanatory undermine one of the main advantages of universal Notes also state that use will be made of income and credit, namely the elimination of those high effective other assessments. My understanding from the notes marginal tax rates. and the conversation is that in the default scheme the In other words, it is a policy question. Think for a means test made by the Secretary of State for universal moment about the impact that this could have on the credit purposes will be taken across, certain deductions noble Lord, Lord Freud, the DWP Minister. If the will be made for housing and childcare allowance and Government cannot determine how universal credit it will then be applied. For simplicity, will the Minister income interacts with the taper on the various council tell the Committee whether, if somebody is on income tax support systems, it is impossible for central government support, JSA or ESA and is passported on to maximum to determine the effects of changes it makes to its own council tax benefit, when the new system comes in universal credit systems. The noble Lord, Lord Freud, under the default scheme, that person will still get the could make a decision to do something that is more maximum 100% council tax support, assuming no generous and has a particular effect, but when he pulls complicated changes of circumstances or other unknown that lever he will not know what will move in the factors? Simply person for person, will the very poorest various parts of the country that have devised their still get the most? own schemes. That is simply a bad policy outcome This is an issue for all kinds of councils, especially given the billions of pounds of public money being those that do not use the default scheme or that want GC 131 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 132 to make the 10% saving because they may want to use As my noble friend explained, the amendment refers thresholds but they—and certainly the population—will to universal credit being included as income in devising not know what the consequences will be. Local authorities council tax support schemes. It is really to highlight should simply be told that they must consult again the potential interactions between universal credit and under the universal credit regime. It is particularly an council tax support schemes and why they need to be issue given, as I understand it—and I think we come addressed. The Minister will doubtless tell us that back to this on a later amendment—that authorities local authorities have to decide themselves, but my may not amend their scheme in-year but must determine noble friend Lady Sherlock stated clearly why that it some way ahead, when they may not know how should not be the case and why in this regard at least universal credit is going to work in practice. Finally, there should be a mandation on local authorities. when the Government are consulting they could take Since the amendment was crafted, we have had the the opportunity of combining it with a take-up campaign, benefit of some draft regulations, to which I refer, if they can afford it, of course. I beg to move. including the default scheme. My noble friend referred to the comments of the noble Earl, Lord Attlee, about Lord McKenzie of Luton: My Lords, I shall start on simple systems. We now know that the default scheme a somewhat disagreeable note, which is to register our has 155 pages of simplicity.As we on this side maintained protest about the tardiness of the regulations that we in earlier debates, the creation of a fair benefit system now have before us, to which my noble friend Lady is complex; the multiplicity of circumstances that have Sherlock referred. They were published on Monday, to be catered for are amply reflected in the draft and there was some challenge to get hard copies so default scheme. It is a measure of the challenge that that we could work on them on journeys and when local authorities will face. Whether local authorities away from screens. It is unacceptable, particularly that cannot carry the full cost of a local scheme start bearing in mind the point my noble friend made that it with the default scheme, as the noble Earl suggested was quite possible that this amendment would have that they might, or start from the bottom up, is been taken earlier before we had seen the regulations obviously a matter for them. But the default scheme or known what was published on that day. At least we demonstrates the range of issues that local authorities have the chance now to get into them before Report. will have to weigh and the potential scope of the The scope of the regulations is profound indeed, and evidence base on which they will need to consult to we should at least have had last weekend to review justify their schemes. Clearly, local authorities could them in some depth. I am grateful to my noble friend import chunks of default schemes, particularly round Lady Sherlock; it is clear that she has done so from the the national boundaries of the scheme, into their presentation that she just made. local scheme. But this hardly makes it a local scheme. The default scheme sets out some information and how it will deal with recipients of universal credit; Lord Greaves: I wonder if the noble Lord shares my administratively, as my noble friend said, it will tap alarm at the announcement by the noble Baroness into the assessment of applicable amounts, income that looking at the regulations had made her head and capital, compiled for universal credit, and will hurt, and whether that is something that those of us modify them. The principle is that universal credit is who have not yet had the chance to look at them have taken into account as income but netted for any childcare in store. and housing cost elements. Some issues have already come from the draft Baroness Sherlock: The noble Lord clearly follows regulations in the time that my noble friend has been Twitter—that is all I can conclude. able to spend on them. She has identified the confusion between child costs and childcare costs. 2.15 pm Lord McKenzie of Luton: The noble Lord raises a The Parliamentary Under-Secretary of State, point perhaps in jest, but there is a heck of a lot of Department for Communities and Local Government detail in these regulations that is highly germane to (Baroness Hanham): I can confirm that; it might save some of the debates that we are going to have. To not the noble Lord another six lines of his speech. Childcare have had the chance to review those regulations and costs is correct. plough through them in some depth before we were due to debate them is unfair. Just before I move on, I Lord McKenzie of Luton: Yes, indeed—but the encourage the Minister to have a discussion with the documentation that we had was confused on that noble Lord, Lord Freud, who, in relation to the Welfare matter, which is why the diligence that my noble friend Reform Bill, was very good at holding seminars and brought to bear was important. Also there was the giving us good notice about the seminar meetings issue around the actual rates. Again, I agree with my before the regulations saw the light of day. That is the noble friend that this is not to be overly critical of the more effective way in which to do it—and this is not team. These are complex matters usually dealt with by just nitpicking. We are engaged in this process to DWP officials whose whole life is around benefits. challenge and press amendments, but we want to see That is what drives them. what comes out of this system work as well as the So far as housing costs are concerned, this potentially Government do. On a number of occasions when we deals with the point that, absent such a change, anyone were looking at the Welfare Reform Bill, the input of claiming the housing component of universal credit my noble friends in particular made a difference and would see their council tax support significantly reduced was recognised as having done so. or even eliminated. GC 133 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 134

[LORD MCKENZIE OF LUTON] Baroness Hanham: My Lords, I thank noble Lords So far as childcare costs are concerned, the IFS for both those contributions. From the outset, I must points out that in certain circumstances those previously say that I am surprised at the criticism that the noble on housing benefit will see their effective support for Lord has levied across the Room on the timing of childcare costs reduced. I have not had a chance to the draft regulations. The statement of intent has been look at that in depth in the regulations but perhaps the out since May and it is quite indicative of what Minister can say whether that is the situation on the would happen. The draft regulations are in fact almost basis of the draft scheme that we have. identical to those that currently support council tax My noble friend rightly focused on the issue of benefit—there are probably 196 of those. I appreciate work incentives and the marginal tax rates. Including that the noble Lord finds the timing of this difficult universal credit in the default scheme as income would but while I am sure it is necessary for us to discuss appear to avoid the very high overall withdrawal rates some aspects of those regulations here and to get the of 90%, higher for unearned income, which could principles right, local authorities will already be well be in excess of 100%. But a withdrawal rate of 81% under way with what they are producing for their rather than 90% for effective marginal tax rates is still schemes. high. Lord McKenzie of Luton: Can the noble Baroness One way of avoiding that would be to avoid overlapping then specify the extent to which the default regulations withdrawal of benefits, in particular for council tax before us actually differ from the current detailed support to be withdrawn by the time that universal arrangements? Reference was made to the statement credit is withdrawn. Can the Minister say what modelling of intent—yes, but that is a very broad document and around this issue, clearly on the basis of current does not in itself set out any detail. If falls far short of understanding of allowances, income disregards and the information you would need to devise an effective tapers, has been undertaken for the default scheme? and important scheme. What is the range of effective marginal tax rates that flow from the proposed scheme? Who is affected? Baroness Hanham: But even so, local authorities We also clearly support Amendment 83, which is to have been waiting for and expecting these regulations, do with consultation. There is a timing issue around and they have started off. Also, on consultation, they this. It is clear that more detail, possibly the final are now entitled to do less than the 12 weeks—that is detail, of universal credit will not be known until in the Bill—so they can curtail or tailor their consultation October this year. Even then, that may not be the final to different timescales. Moreover, local authorities detail. That is important for local authorities devising are far better equipped and far further on than noble their schemes. We know that if local authorities are to Lords opposite are giving them credit for. I have hit the timeframe of having a council tax support spoken to quite a lot of local authorities, and if they scheme in place by January next year, they would have do not already have their scheme in embryo they are to be well under way with their consultation by then. all just about there and about to undertake the Therefore, if further information comes through around consultation. While I do not mean any discourtesy universal credit, particularly given its significance over to this Committee about the regulations, the most a number of areas, it must be right that local authorities important aspect of this now is that local authorities have to consult again on that. are getting on with what they are doing and while some may find some difficulties, most are making a The Committee will see the difficulty with the good fist of it. timeframe. If local authorities are consulting now and The noble Lord referred to my noble friend Lord in August, September and maybe October on their Freud. He will appreciate that up until now it has not current understanding and if things change in October been entirely in our gift to have discussions since the when more detail is known, the practical opportunities regulations were published. I do not know the timing for them to consult again will be restricted, but it is for this Bill when we come back but perhaps I can give important that they do. It brings us to an amendment the noble Lord an undertaking that if it is not considered in the name of the noble Lord, Lord Jenkin, that we in the first week, we will make arrangements to have will come to later and that seeks to remove the restriction the discussions he has asked for before we get to on revised schemes having to be promulgated by January Report. We may find that helpful and even if there is a of the preceding year. Effectively, as I understand it, day, we will make sure that we do it on that day. I hope the current arrangement does not give any scope for that is all right. in-year adjustment of a scheme when new information I have clarified to the noble Baroness that we were comes forward—whether that is in relation to universal referring to childcare costs; she was quite right to say credit or anything else. that. While I am picking up on her questions, before I However, we know for certain that more precise read my reply, I should say that the universal credit information about universal credit will come through rates are indeed last year’s and will be updated in later this year, but at a point in time when most November, which is in line with the normal uprating councils will have already started—if not completed—their procedure in the Department for Work and Pensions consultations on the scheme without that extra for this year. information. It is important that it is made clear to local authorities that they should consult around the Baroness Sherlock: I want to be really sure that I consequences of universal credit when that detail is understood that. Separate from the uprating, is it the known. Somehow, in the timetable for these processes, intention that the rates will be the same as those that we need to build in for them the scope to do that. apply at the time? For example, if it were starting this GC 135 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 136 year it would be the 2012-13 rates and if it were for to council tax benefit are, as the noble Baroness will next year it would be the 2013-14 rates, which is know, currently listed in regulations. The draft default slightly separate from the uprating point. scheme regulations confirm that this will still be the case in future and, in relation to the default scheme, Baroness Hanham: My understanding is that the make it clear that universal credit will be among the rate will be this year’s, uprated. I hope that covers that types of income to be taken into account. Of course it point. I think the other question that the noble Baroness is right that references to specific benefit incomes asked me was whether the very poor will still get the should be in regulations given the extent of the detail most. The answer is yes, because their income will still involved. be very low, so this should work. The noble Baroness may be seeking assurance on the way in which universal credit income will be able Baroness Sherlock: I am terribly grateful to the to be taken into account in calculating future awards Minister for indulging me in this. These are the kinds under the default scheme—that is exactly what she of questions that I am wrestling with and that I was doing. Perhaps I could try to reassure her further therefore suspect others who read the record will be. It than I have been able to do so far. Universal credit is a is not just about whether the very poorest will get the working-age benefit and it will normally fall to local most but whether somebody on the equivalent of authorities to design how income from this award will income support, for example, will get maximum council be taken into account in local schemes for working-age tax support under the default scheme? Will they get claimants. However, paragraph 4 of new Schedule 1A 100%? of the Local Government Finance Act 1992 requires the Secretary of State to make regulations providing 2.30 pm for a default scheme. This will come into effect for any authority that has not made a scheme by 31 January Baroness Hanham: The answer to that is yes. Local 2013 and is to be in place for the financial year authorities have been asked simply to take those who 2013-14. have council tax benefit already and those whose applications have been made already and to transfer As the noble Baroness will know, there are pathfinders them on to the new system. for universal credit, which will commence in April 2013, and the migration to universal credit will commence in The noble Lord, Lord McKenzie, asked about housing October 2013, so it is right that the default scheme benefit costs. This relates to applicable amount and should make provision for the treatment of universal income so that it does not skew the award. We will be credit income, although it will not be relevant to start happy to write on this matter, which, judging by the with. The regulations for the default scheme set out noble Lord’s face, would be a very good thing. We are how we intend to treat universal credit income under continuing to work with the Department for Work that scheme. As I said, we will continue to work with and Pensions to develop the treatment of universal the Department for Work and Pensions on the detailed credit as these regulations are finalised. There is still approach. However, we believe that this provides a work to be done, but we will write to the noble Lord clear general indication of how we intend to take and give other Members of the Committee a copy of universal credit income into account in the default that letter, as we have done previously, so that, if we scheme. The draft regulations explain that a person in have to have discussions before the next stage, we will receipt of universal credit will have a means test applied. have the answers. Previously, applicants of three benefits being replaced Let me read the replies that I have, as we need to put by universal credit—income-based jobseeker’s allowance, them on the record. Some of this will answer the income-related employment and support allowance, questions that have been asked and some of it will not, and income support—would automatically have received but it will show what we thought the whole question 100% council tax benefit. However, universal credit was really about. Amendment 79B seeks to clarify that will not distinguish, in the way that those benefits did, income from universal credit can be taken into account between those who are in work, and those who are out in determining eligibility for council tax reduction. We of work. This is an important part of the Government’s touched on this issue in the previous Committee session, welfare reform agenda, ensuring that the return to when my noble friend Lord Attlee explained that, work does not result in benefits dramatically dropping while local authorities would be free to take universal away, so that work pays and is seen to pay. credit income into account as they saw fit in their local scheme, the Government would be prescribing how Claimants will be means-tested, using and appropriately this income would be treated in the default scheme. I modifying the assessment of income made for the am pleased to confirm that the regulations are there— purposes of universal credit. Broadly speaking, after noble Lords have seen them. the application of this means test, those who currently I think that it would be helpful to explain get 100% support will continue to do so. Those with a paragraph 2(2) of new Schedule 1A of the Local higher income will have their support tapered, as at Government Finance Act 1992. This is an illustrative present. So effectively, there will not be much difference. provision, intended to show that local authorities can I can confirm that, in this case, universal credit income define the classes of person entitled to reductions by itself will also be taken into account, as I have said. reference to such matters as a person’s income and An individual in receipt of universal credit will capital and the income and capital of any other person already have undergone a complex Department of who is resident in the dwelling. The many precise types Work and Pensions assessment of income. It is proposed of income that may be taken into account in relation that, to reduce bureaucracy and red tape, this universal GC 137 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 138

[BARONESS HANHAM] on a centrally prescribed set of requirements would credit income assessment should be reused in the serve. We have been clear that council tax support will means test for council tax reduction, with certain not form part of universal credit in future, so a requirement appropriate adjustments for the calculation of council to consult on schemes under that structure similarly tax reductions; for example, the council tax reduction does not seem needed. income disregards will be applied. The noble Baroness may be seeking to make clear It is also envisaged that the DWP universal credit that the consultation should explicitly seek views on assessment of what the person needs to live on will be the interaction between their proposed scheme and used in the means test in the form of the universal other current benefits, or the interaction between the credit maximum award, again with some proposed scheme and universal credit. This is very sensible, but adjustments to take off the housing element, which is it does not require regulation. Local authorities are disregarded under the existing council tax benefit system. already required to consult on their schemes; we have That matter was raised by the noble Lord opposite. been clear that we do not intend to prescribe how this Final figures will not be required to finalise the default consultation should operate, as local authorities routinely scheme regulations, as these refer to elements of universal consult on matters and have settled policies and credit award and calculation, rather than specific amounts. procedures, which we expect they will continue to follow. I have answers to some questions that the noble Baroness asked me, but I should never have too many I recognise that there is a great degree of interest pieces of paper; they are a disaster. Our stated aim is from Members in this Room about how local schemes that the default scheme should be as close as possible will take universal credit into account. I hope that to the existing council tax benefit scheme. I can confirm some of the responses that I have given will provide that we are also pursuing this policy by looking to greater clarity on that. We can perhaps discuss that achieve, through our regulations, equivalence between before Report and have a proper session on it. the applicable amount in council tax benefit and maximum Local authorities’ schemes will be subject to award in universal credit. It is already well known that consultation and authorities will need to be prepared the elements that make up the universal credit maximum to defend their schemes. Members in both Houses and amount and the elements that make up the council tax from both sides of the House have expressed their benefit applicable amount will have some broad support for the principle of localisation. We trust local equivalence. We continue to work closely with the government to administer the key services that will DWP on this as well. make a crucial difference to people’s lives in relation to Clearly, the exact rates for each element of the benefits. universal credit maximum amount have not yet been I hope that with that plethora of explanation, the finalised. The Department for Work and Pensions noble Baroness will feel able to withdraw her amendment. explanatory memorandum for the Social Security Advisory Committee, published in June, states that at paragraph 42. Should it, ultimately, be the case that Lord Greaves: I may be the only person in this the rates awarded to an element were different in Committee who has not completely understood everything universal credit, it would be a simple matter for us to that has been said. If that is the case, I apologise. My adjust that by topping up the relevant element of the noble friend the Minister seemed to say twice that maximum amount so that it was equivalent to the under the default scheme people of working age who council tax reduction applicable amount. That would currently get 100% council tax benefit would continue still relieve local authorities of a considerable additional to get the 100% reduction under the new scheme. Is administrative burden in which they would otherwise that what she said? Under the default scheme, where is be involved. it proposed that that should be paid for, given that there is a 10% cut across board that does not apply to The draft default scheme regulations make clear the pensioners—and therefore it might be up to 20%? Government’s intention that local authorities in their Then there are vulnerable people. If in addition to that schemes should be able to count universal credit income people who currently get 100% council tax benefit as a type of income to determine who is in a class. It is continue to get that 100% reduction, will the cost of not necessary to amend paragraph 2(2) of new that fall on the remaining people of working age who Schedule 1A to refer to universal credit, as authorities are means-tested and get part council tax benefit, or may already take this into account when determining does the council tax benefit assume that the council the class of person entitled to a reduction under a finds the money in some other way? scheme. Furthermore, it is not practical. If we were to refer specifically to universal credit in this provision, we might also need to refer to other individual benefits Baroness Hanham: I think that the last point that and types of income that may be taken into account. the noble Lord made is the right one. We have been at That would entail introducing references to myriad pains to point out that council tax support will come other types of income on the face of the Bill. into the general business rates retention scheme support. Amendment 83 would extend the requirement for The local authority will have to make its decision local authorities to consult on their schemes so that based on its entire income as to how it funds and they were required to do so the current benefit structure creates support for council tax benefit. It is not restricted or under universal credit. At present, council tax only to the amount of council tax benefit support benefit is centrally prescribed. It is not clear to me related solely to that, which will come from the benefit what purpose a requirement for authorities to consult system. GC 139 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 140

Baroness Sherlock: My Lords, I thank the the timeframe becomes pretty impossible, does it not? Minister very much for answering the questions that I That was one question—the need to go again on asked about the default scheme and the universal consultation because of new information. credit, and I look forward to the opportunity to talk The broader issue about being able to change the more with her and her team. However, I do not feel scheme in-year is one that we will come on to in a later that in the end she answered my point of substance amendment, but what work has been done by the about the amendment, and I realise that we have a Government either by the DWP or CLG about the disagreement on this. She is right that at the moment interrelation of tapers on the basis of the information councils may choose to include universal credit; the that we have at the moment—the applicable amounts point of the amendment was meant to be that they and income amounts in the default scheme and what should—not that they may, but that they ought to do we know about the components of universal credit? so. That is the point that I might want to come back to How do those tapers currently correlate? Do we have at a later stage, because I do not think that the Minister much of an overlap, if any, between the withdrawal of answered the policy question as to the impact on the council tax support taper before you get to that central government of being rendered unable effectively position on universal credit? What is the crossover? to determine the consequences of decisions about its What evidence do the Government have and what own universal credit policy, due to an inability to work have they done to try to evaluate that? That is control the interaction with separate tapers and schemes also key to effective tax rates and therefore work around the country. incentives. On the point made by the noble Lord, Lord Greaves, since the default scheme is as the Minister explained in Baroness Hanham: My Lords, I am not sure whether her reply, the real danger about consultation is that the noble Lord would expect me to answer his last those authorities that do not feel able to find the other point, which was about modelling, today. That has 10% cannot use the default scheme. They will have to largely been done by the DWP, and it would be more amend it in some other way or change it. Because I effective if I wrote to the noble Lord giving details of cannot, despite the advice of the noble Earl, Lord that and did not try to muddle my way through today. Attlee, see a simple but fair way of amending the We ought to do it properly. default scheme for a saving on that scale, they will On the question of consultation and the scheme have to engage in some other quite detailed process. that local authorities are working on, I said very Therefore, it is really important that the consultation clearly that the current council tax benefit scheme is is right from the outset. However, since they will have almost transferable into the one that they will have to change that scheme when universal credit comes in to operate from January.People who are already receiving because they cannot simply move over from one to council tax benefits and those in the pipeline will another for the reasons that I explained—obviously automatically be put in, so they will not require any badly—they ought to consult again. That is the point I more work done on that. As far as consultation is wanted to press on the Minister. However, since we are concerned, I have also dealt with this. The consultation in Grand Committee, I thank everybody who has does not have to be 12 weeks. Equally, say if you contributed. just have one consultation going out for your scheme, that will be back before the 12 weeks are up. Where there is a precepting authority involved, this is going 2.45 pm to have to be a joint scheme and one would expect Lord McKenzie of Luton: Perhaps I could follow up discussions to take place, or to have taken place, on two points. I do not think that the Minister dealt before the scheme was put out for consultation. It with the question of consultation and timing. On a should be something that goes smoothly and seamlessly couple of occasions, the expression was used, “We between the two. continue to work on the detail of universal credit with We are satisfied that the work that has been done, the DWP”, and that is fine and we understand. But if the way this has been translated and transferred, and when that detail emerges it has consequences for the the amount of information that is available is absolutely schemes that local authorities are proposing, how will sufficient for local authorities to be working up their that fit into the timeframe? They are consulting now, schemes now. they have to have a scheme in place by January, they have to engage with upper-tier authorities first and Baroness Sherlock: At the risk of prolonging this, I have two rounds of consultations. If they have done wish to respond briefly. Although it is true that if a that on the current understanding of the default scheme local authority were to implement the default scheme as adjusted and of universal credit but the detail as it is now and to find the saving elsewhere then, on changes in a way that might be significant, how can the basis of the assurances the noble Baroness has they feed that into their final schemes? given the Committee today, individuals at the bottom Is it not right that, as proposed, you get a chance would find themselves unaffected, but that will only be every year to change your scheme but you have to have the case if the authority is able to find the money. A that done by January in the preceding year? As a number of authorities clearly may decide not to do practical matter, the timing does not seem to fit, does that, and they will have to make changes. Therefore, it? If in October you get a raft of new information and nobody can be assured from today that they will be presumably there is support for a further round of protected from changes. I do not think the Minister is consultation on that, it will make it impossible to meet in a position to give that assurance. If she is, I invite those deadlines—or extremely difficult. If authorities her to intervene on me now and give it. I am delighted are consulting now to try to get the thing done in time, to pause. GC 141 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 142

Baroness Hanham: We are able to give that assurance reduction for people who get it at the moment. The because means-testing will be carried out so that people schemes that are being looked at in many cases at who have already been means-tested are going to the moment do not involve that, which will mean that transfer without any hitch or halt. the authorities then have to look at where they will find the money from. On my previous intervention, Baroness Sherlock: I am so sorry; this really is not the Minister said that the money would not just come false modesty on my part. If the authority I live out of the council tax reduction money that comes in—and this is just for the sake of argument—decided from the Government. We understand that; it is being it could not afford the default scheme and it took on cut by 10%. It is not being cut for pensioners or another scheme then obviously the Minister is not in a vulnerable people as defined in each area, and if it is position to give that assurance, is she? Or is she, even not being cut for people who are already on 100% in those circumstances? reductions that is another burden on somebody else. It either comes from the rest of the working-age population, Baroness Hanham: If it takes on the default scheme, whether in benefit or otherwise, who will be means-tested, it takes it on exactly. If it has to use a completely or, as the Minister rightly said, it has to come from different scheme, it would have to consult on it and general council resources. indeed it might not be able to give exactly the same Some of us will have to make these decisions, such benefits. as the noble Lord, Lord Smith of Leigh, who is not here today, and we do not have those extra resources. Baroness Lister of Burtersett: I am sorry to prolong We are desperately looking at ways of reducing our this, but I am getting a bit confused—well, not really, councils’ spending overall to comply with whatever because I was confused to begin with. If there were a grant settlement we get next year, and it is simply not modified version of the default scheme, would that going to be possible to say, “Here’s another burden still count as the default? I think my noble friend is that we’ll just take into general resources”. I do not saying that some authorities will not be able to believe that a lot of authorities will give 100% benefits afford the default scheme as it stands because the to people who get them at the moment, and that is a 10% cut has got to come from somewhere, so if they major worry. take it out of the default scheme, would that still be called the default scheme modified or would it be Baroness Hanham: My Lords, we are still on the considered a different scheme, which they would have default scheme. If the council is required to adopt the to consult on? default scheme, the benefits remain at 100%. If it takes on the default scheme as a local scheme, it will make Baroness Hanham: The default scheme is the default its own adjustments to whatever it believes that it can scheme, and the default scheme comes into operation do. If it sets up its own scheme, the 100% will only in two ways. One is that the local authority does not come about for a limited number of people on very have a scheme by the time we get around to 31 January low income, and it can then taper it up and down next year, in which case the default scheme would be depending on people’s income because they will be imposed. The second is that it can choose to use the means-tested at that stage. I am trying to make it clear default scheme as its scheme, and that will then still be that the default scheme is the legal backstop for local the same. If it then does not have enough resources, it authorities that do not have one on 31 January. They has to make the judgment as to where it gets those do not have to adopt it, but they can as their own local resources from. As I already explained to the noble scheme. I hope that I have contributed as much as Lord, Lord Greaves, that would not necessarily come possible on this matter. just from the council tax support; it would come from its wider budget and whole programme. Lord Beecham: I hope not, because I am afraid that Lord Greaves: My Lords, I think I understand this I have another question. Assuming that, as the noble now and I am certainly beginning to look at this whole Baroness says, the scheme operates as a default scheme— scheme in an entirely different light. My understanding assuming that people have not been able to consult in the discussions we had in previous meetings of this and do not have their own schemes, so the default Grand Committee was that lots of authorities would scheme is in position—the 100% people will remain be operating on the basis that everybody of working at 100%. To what extent does the default scheme age would be means-tested and would end up paying provide for other categories of people whose benefits something. We discussed at great length two or three would, presumably, therefore have to be adjusted? Is Committees ago that this would result in a lot of there flexibility within the default scheme—I confess people only paying very small amounts of money—£1 a that I have not ploughed through it—to see the week, and so on—and the difficulty of collecting this. impact on other people, or would there be a requirement I know one thing definitely and have been told another. to provide the current proportion of benefit to those I definitely know that my own authority is looking at a people? If so, the financial problems to which the noble scheme that involves all council tax payers paying Lord, Lord Greaves, referred would be compounded. something, and I am told that that is typical of the schemes being looked at, certainly by councils in our 3pm part of the world. Baroness Hanham: My Lords, if the default scheme We might find out in the next few weeks, but a large is taken on as the main scheme and not a legal backdrop— number of authorities will probably be surprised to learn that the default scheme involves 100% benefit or Lord Beecham: No; as a legal backdrop scheme. GC 143 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 144

Baroness Hanham: I understand that the situation Baroness Sherlock: Indeed it does. I am afraid that is as it would have been had the council not been the choice faced in that authority is very stark. Either changing. The default scheme is the current scheme—the it finds money from very scarce resources, which it current council tax benefit scheme. That will simply probably will not feel able to do, or it devises a scheme transfer and people will be treated the same way for a of its own making that must in the end have the effect year unless it is reset the following year. If it is the of penalising some of its population. Does it penalise local scheme, it does that itself; then it can make the very poor in order that everyone should pay something, decisions about the amount that is reduced for council or does it make it very hard to make work pay by tax benefit. putting that burden on to those in work? That is a Hobson’s choice and I am very glad personally that I do not have to make it. Those who are, in Pendle and Baroness Sherlock: My Lords, I am glad that we elsewhere, have my sympathy. We have aired this as have cleared that up. My understanding, therefore, so much as we can and, given that this is Grand Committee, that we are all clear, is that local authority have two I beg leave to withdraw the amendment. choices. They either adopt or have imposed on them the default scheme or they create a scheme of their Amendment 79B withdrawn. own devising, which may or may not bear some relationship to the structure of the default scheme. The amendment is actually targeted at the second Amendment 80 group of authorities. I have probably confused things Moved by Baroness Lister of Burtersett by asking some questions so that I could better understand the default scheme, but in fact the amendment is 80: Schedule 4, page 58, line 32, at end insert— targeted at those authorities that either do not choose “( ) A scheme must set out the steps, including consulting local to adopt the default scheme or on which it is not charities and organisations providing advice on benefits, which imposed. This amendment is aimed at those authorities the local authority will take to ensure that— that devise their own schemes and it was intending to (a) it estimates the numbers of people eligible to an say that they should be required to take universal application for reduction under the scheme; credit income into account in any means test that they (b) persons entitled to a reduction will be made aware of go on to apply to determine entitlement on the basis of their entitlement; and income. (c) assistance is available to such persons who wish to make an application.” The case for that is very strong. Nothing has been said today in any way diminishes it. It is in fact Baroness Lister of Burtersett: My Lords, in moving strengthened, if anything, by the intervention of the Amendment 80, I will speak also to Amendment 81 as noble Lord, Lord Greaves. There is a real danger that they are linked in terms of their objectives. in attempting to square the kind of circles that have been described, an authority will devise a scheme The Government’s recent report on the 2010 child without having a full understanding of the consequences poverty targets noted that one reason why the child on either individual incomes for universal credit or of poverty target was not met was that, the national position in terms of what the Government “not enough families got the support that they were entitled to”. want to do. That is problematic. It cited the 2009 Child Poverty Unit report that estimated The Minister’s argument, finally, that it would not that, be practical to name universal credit because one “there were 400,000 children living in relative income poverty as a could name lots of other benefits simply does not hold result of their families not receiving all the benefits and tax credits to which they were entitled. Improving take-up and support for water. In fact, the purpose of this is not about the families with children was identified as an important element of individuals who are on it: it is about the national the agenda to tackle child poverty”. policy conference. The reason I am asking this specifically However, the report continues: is to enable the Government to make judgments about “DWP take-up statistics show a downward trend in the take-up universal credit—a single integrated benefit for people of most major benefits among families with children since 1998”. of working age—to be able to do the things that, at Amendment 80 is drafted to address this concern, some considerable length during the passage of the although it is not confined to families with children. Welfare Reform Bill, we were told universal credit Whereas in the past increasing take-up has always would do. The amendment simply seeks to enable that been a win-win situation for local authorities, improving policy aim to be realised. The case is very strong. living standards for their residents and helping the local economy, under the new cash-limited council tax Lord Greaves: I have found a statistic that might reduction schemes, it is a zero-sum game, in which help the Committee and might not because it refers to improved take-up for one group, particularly pensioners, Pendle and nowhere else. There are 6,038 existing means less money available for others. We have already claimants of council tax benefit of working age, if I had a preliminary skirmish around this issue involving have read this correctly. I do not have a proportion on in particular my noble friend Lady Hollis, who cannot 100% but I have a proportion on 90% to 100%, most be in her place today, and the noble Lord, Lord of whom are on 100%. The number is 4,479. Around Greaves. two-thirds of the working-age claimants who are means- For the first time ever, we have an incentive to tested are on 100% benefit in Pendle, if I have read depress take-up written into the template of a statutory these charts correctly, which I think I have. That puts income maintenance scheme. That cannot be right. the thing in context. Take-up of means-tested benefits is a perennial problem GC 145 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 146

[BARONESS LISTER OF BURTERSETT] appear that they are content for people on low incomes and take-up of council tax benefit is among the lowest. not to receive the money to which they are entitled, The latest government statistics show that between despite the arguments put by the Child Poverty Unit, 31% and 38% of those entitled did not claim council and now it would appear that they want to bury the tax benefit, although that may be a slight overestimate evidence of such non-receipt. of non-take-up. In other words, it is possible that as As the Government are, in effect, washing their many as nearly two-fifths of those eligible are not hands of the issue of take-up, it is therefore left to claiming. Take-up is particularly low among pensioners, local authorities and voluntary organisations to do of whom between 39% and 46% are not claiming, and what they can to improve take-up. Local authorities among couples with children, of whom between 41% have an honourable history in this area. They played a and 48%, nearly half, are not claiming. Overall, the key role in countering the impact of benefit cuts in the trend in take-up of council tax benefit has been downward. 1980s by instigating often very successful take-up Since 1993-94, take-up has fallen by at least 6 percentage campaigns. The Child Poverty Unit report and an points for pensioners, by around 7 percentage points earlier DWP best practice guide give examples of the for non-pensioners, and by a massive 15 percentage kind of take-up work that local authorities still do, points for couples with children. However, all those including improving take-up of council tax benefit. figures are approximate. Indeed, under the Social Security Contributions and In its 2009 reports, Take Up the Challenge, the Benefits Act 1992, local authorities now have a statutory Child Poverty Unit set out what it called, responsibility for council tax benefit take-up. Each “a strong argument for local authorities and partners to focus on billing and levying authority, increasing take up of benefits and tax credits by poor families “shall take such steps as appear to it appropriate for the purpose with large unclaimed amounts”. of ensuring that any person who may be entitled to council tax It explained that take-up can contribute to tackling benefit in respect of council tax payable to the authority becomes child poverty and related issues such as social exclusion aware that he may be entitled to it”. and health inequalities. There are also benefits for the Amendment 80 builds on this and would write a local economy with money claimed in benefits and tax similar, if differently worded, responsibility into this credits being spent in local communities. It continued: legislation. “Furthermore, improving take up will help local authorities It has been suggested that the change of name from and partners to ensure that hard to reach and vulnerable families a benefit to a reduction or discount could in itself are receiving support, and are in contact with services”. improve take-up, especially among pensioners. The It pointed out that: noble Lords, Lord Tope and Lord Shipley, suggested “A significant amount of benefits go unclaimed by people that in an earlier discussion. I have no objection to the who are working”, change of name, which could be helpful, but at the same time I return to the fundamental point that the cash-limited so that the: nature of the scheme will, as many organisations have “Lack of awareness of in-work financial support available pointed out, create a disincentive to local authorities through benefits and tax credits can be a barrier to parents to encourage take-up. This is particularly with regard entering and sustaining employment”. to take-up among pensioners, whose entitlement, as To the extent to which the new localised schemes will we have already discussed, is protected by law. As still cover working people, improving take-up will many noble Lords have warned, the more money is reinforce the Government’s aim of tackling poverty paid to pensioners the less there is for other so-called through paid work. vulnerable groups and for low-income working people. The report concludes that, In the face of this dilemma, it will be very tempting “spending on increasing take up can provide good value for for local authorities to keep quiet about council tax money”. reduction schemes and it is therefore crucial that there Given that, it was disappointing and surprising that in continues to be some form of statutory responsibility a Written Answer to my noble friend Lord Beecham, placed upon them to encourage take-up, hence to which he referred in an earlier session, the noble Amendment 80. Another element in the dilemma is Lord, Lord Freud, stated that the Department for that even lower take-up could exacerbate another problem Work and Pensions, identified by organisations such as Citizens Advice “does not promote benefits … The department has not spent and the IFS, which is of more people not meeting their money in the 2011-12 financial year on promoting the take-up of council tax demands and there being extra work for welfare benefits, and we have no planned expenditure to promote local authorities trying to collect the arrears. Already, take-up of welfare benefits for the next financial year”.—[Official according to a recent report in the Guardian, the Report, 23/4/12; col. WA 302.] Consumer Credit Counselling Service has seen a 27% It was even more disappointing and surprising to learn increase in the number of people contacting it for help the other day that the DWP proposes to cease publishing with council tax arrears between 2010 and 2011. estimates of take-up of means-tested benefits. I found As long as local authority council tax reduction that out by accident. I did not find it out as a Member schemes are funded by central government on a cash- of this House; I found it out as a social policy academic. limited basis, the traditional presumption that it is in I also found that my colleagues here were unaware of the interests of both authorities and those eligible for that really rather serious step. assistance that take-up is maximised will, as I have Can the Minister tell the Committee what the said, no longer hold. Personally, I believe it is unethical Government’s position is on improving benefit take-up? to establish an income maintenance scheme for people Do they still believe that take-up is an issue? It would on low incomes on this basis and I hope that the GC 147 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 148

Government will think again. If they are not willing to but the council itself has an obligation. Many of its do so, however, there is one step that they can take to staff are well trained across a range of benefit work. mitigate the double-edged sword that improving take-up They should be required to help, so I fully support would now become. The money transferred to local Amendment 80. authorities, whether or not they are subjected to a I fully understand Amendment 81, but it is not just 10% cut—it goes without saying that I am opposed to a question of provision by the Secretary of State such a cut—should be based on estimates of the because I suspect that the Secretary of State would say numbers currently entitled to council tax benefit, rather that the additional powers given to local authorities than on the numbers actually claiming. The difference over empty homes and second homes will, in some is considerable. In 2009-10, between £1.7 billion and cases, provide the resource required. Here I move to a £2.42 billion was unclaimed in council tax benefit. later amendment to be moved by my noble friend This should be included in the money devolved to Lord Best, which is very important because it will give local authorities, whether or not they are subjected to flexibility to councils to find resource in a number of a 10% cut. ways. It is not just a question of the Secretary of State Amendment 81 is designed to address this issue in a being responsible for funding. Actually, local councils different way by requiring the Secretary of Stage to will have some powers to address the funding issue ensure that there is sufficient funding available to meet themselves through decisions on what they will do the council tax reduction for all eligible claimants, so about empty homes and second homes in their area. I that if take-up improves it does not pose the dilemma agree entirely that not all councils can meet the bill. If that I have outlined for local authorities. In the absence there were a significant rise in the number of people of such a provision, can the Minister tell the Committee applying for council tax support, many councils, even what the Government’s advice to local authorities will among those who currently think that they can cover be as to how they should deal with the take-up dilemma the cost, might not be able to. created by the cash-limiting of the grant they will To conclude, I am happy to support Amendment 80, receive to run council tax reduction schemes? I hope but Amendment 81 perhaps needs further work and that in the interests of maximising take-up the examination of exactly how councils might raise the Government will be minded to accept Amendment 80, money themselves. or to introduce their own amendment to retain a local authority responsibility to promote take-up, but that in doing so they will also address the perverse incentive Baroness Sherlock: My Lords, following that helpful they have created to depress take-up through an contribution, perhaps I may say a brief word. I was amendment on the lines of Amendment 81. I beg to talking to a northern authority recently which could move. not raise significant sums from empty homes for obvious reasons but, as half of its council tax benefit claimants Lord Shipley: My Lords, I support Amendment 80, are pensioners, it was assuming that it would be a 20% so ably moved by the noble Baroness. I will also speak cut across the board for the rest, because that is how on Amendment 81, which is slightly more problematic. the sums work. It did not have the money available. I It perhaps does not cover all of the issues quite as it had a look at its website. If I were living in a band B might. First, there is an issue with the non-claiming of property on my own, even with a single person discount, council tax benefit. There is a whole set of numbers; council tax would be £892.80. If I lost 20% of that, I the noble Baroness mentioned £2.4 billion. These things would be £3.43 a week worse off. That does not sound are notoriously difficult to be certain about, but we like a lot, but actually, out of £71 a week JSA, that is can all agree that it is a very big number. A large about 6% of my income. If I would lose 6% of my number of people who are eligible to do so are not income under the current situation, if the take-up claiming council tax benefit. That gives rise to a conflict were to increase significantly—given the gaps that of interest for local authorities. That is a serious and both my noble friend Lady Lister and the noble Lord, important issue. That must be addressed. It may be in Lord Shipley, described, that is quite possible, especially the financial interest of a local council not to promote with the renaming—that figure would surely rise even or advertise the council tax support scheme. That further. How will the Minister protect those people cannot be right. and what assurances can she give that authorities would not be put in that position? If the take-up goes up and no additional funds were available, they would 3.15 pm simply have to stretch the amount available even further. Amendment 80 addresses that issue, because it requires authorities to work to improve take-up, to estimate the number of people eligible, to make those people aware Lord Beecham: My Lords, there are Ministers in the of their entitlement and to ensure that advice on Government, I think including the Prime Minister and benefits either from the council or from third parties is certainly including the Chancellor, although not, alas, provided. I think that the council should have a the Minister, and there are certainly Members of your requirement to do so itself, so that it cannot simply Lordships’ House, who were not even born when I pass the buck to a third party. Assistance should be first came into contact with what was then the rate made available to such persons who wish to make an rebate scheme. I put out a leaflet promoting that application because many people need advice and help scheme in the ward to which I had recently been with filling in forms and understanding the rules and selected as a Labour candidate. That was in the winter how they can maximise the outcome of the application. of 1966, so we have been living with this system for a It is entirely reasonable to give them that level of help, very long time, and my interest in it and in other GC 149 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 150

[LORD BEECHAM] leadership of the noble Lord, Lord Shipley, to stage a aspects of welfare rights has been continuous throughout benefits summit two or three years ago in which we that period. Indeed, it is 40 years—I am sorry to go brought together a range of people, some major public through this historical saga—since I, as opposition sector employers, such as the health service, trade spokesman on social services, produced a report about unions, community groups and others to look at ways social services for the Labour opposition in Newcastle. in which we could promote a range of benefits. The We included within that the establishment of a welfare council committed some resource to doing that. It rights department; we called for action to promote the certainly led to an increase on top of what was already take-up of all kinds of benefits; and we subsequently being claimed. I think the figure was £8 million or implemented that plan. Incidentally, at that time I was £10 million, so it can be done. advocating a passporting system which, at that point, The previous Government mounted take-up was apparently impossible to achieve. We have something campaigns, usually advertising campaigns, but they at least approaching that now and, in fairness, universal are not actually all that effective. The increase in credit, subject to the qualifications that we have discussed take-up from that kind of media campaign, with adverts today in Committee and on earlier occasions, should in cinemas and perhaps on television, tended to be of move us in the direction of streamlining the system the order of only about 1%. It did not have sufficient and seeing that one door is open to the relevant impact. What is needed is face-to-face or some kind of requirement of support. I commend the Government human contact at least, perhaps even at the end of a for that, at least. telephone, with people in the workplace and elsewhere We are now in a situation in which very many promoting take-up. That is why the first part of my people are clearly not claiming. I have been quoting a noble friend’s amendment is very important. It is figure of £1.8 billion of unclaimed benefit. My noble hugely important to engage local charities, such as friend thinks there is a band between £1.8 million and Help the Aged, although I think that merged into— £2.4 million. Traditionally, the greater proportion of that is not claimed by owner-occupying pensioners. Baroness Eaton: Age UK. About the only good thing about this aspect of the Bill is the change of character from a benefit to a discount or reduction, which was advocated by the Lord Beecham: Yes, Age UK. I should know because LGA—I make no more declarations. I think it was I am the honorary president of the Newcastle branch. included in the two reports on local government finance Perhaps I am suffering some of the consequences of which, I am sorry to say, the previous Government advancing old age myself. But organisations such as kicked rather rapidly into touch. I do not blame my that one are very much involved, along with Citizens noble friend Lord McKenzie of Luton for that. Others Advice and other organisations. We have projects in might, but I am sure that he has changed his mind as my own ward dealing with problems of the elderly, much as the noble Lord, Lord Shipley, appears to have and there will be organisations of that kind and different changed his in a different direction. As we have said groups, such as Child Poverty Action Group. They are many times, the amount will undoubtedly and rightly the first port of call, but they are facing huge extra increase. I would commend the Government for that if demand anyway as a result of other changes currently they provided the wherewithal to pay for it, so my in train, not least around legal aid and advice, so there commendation is qualified. However, the principle is is huge pressure on them in terms of delivery. But right, and it will have that effect. other organisations should be involved. What the Government have apparently decided—it I come back to the workplace point. We have talked was only today that my noble friend Lady Lister of repeatedly about the working poor who are likely to Burtersett discovered this—is that they will not take face increased pressures; not even all the working poor any steps to make any estimate of the number of by any means claim benefits, as we have already heard. people requiring this benefit, let alone promote take-up. It would be useful for local authorities to consult I do not know whether the decision was made by the employers and trades unions and particularly public Minister’s department or the Department for Work sector employers, who ought to have the highest sense and Pensions. Perhaps my noble friend can enlighten of responsibility to their workforce, to engage them in me. the process of helping people to claim their entitlement. Arguably, it is in the interests of any employer to do that, as employers might almost see this—although I Baroness Sherlock: It was the Department for Work am not commending this as an ethical approach—as a and Pensions. way in which to help people without having themselves to bear the cost of increasing wages. I would much Lord Beecham: It is even less forgivable that the rather see wages go up but, in the absence of that and department that has the overall responsibility for dealing in the present economic circumstances, it is perhaps with the problems of poverty and sustaining the income unrealistic to expect them to do that. They could then of pensioners and vulnerable people should apparently at least be engaged in promoting this kind of take-up. not wish to know how many people are eligible nor Therefore, those parts of the amendment moved by how many are claiming. It is not doing what it ought my noble friend that talk about consultation with to be doing and promoting take-up. When it comes to organisations should, as I am sure she would agree, promoting take-up, there are a number of things that embrace not just the charity or third sector but also many councils—in fairness, I think of all political employers and trade unions as well. People should colours—have pursued. I was able to persuade my also be connected to a proper estimate of the likely own council, Newcastle City Council, then under the entitlement. It really is a matter for the Government to GC 151 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 152 rethink their position if, as my noble friend has described paragraph 3(1)(c) of new Schedule 1A of the Local today, they are simply not going to do that, which Government Finance Act 1992. That is inserted in the would be a gross dereliction of duty. It is bad enough Bill by Schedule 4, so that is already there. I do not that they do not seem to be interested in promoting think we can start setting out on the face of the Bill all take-up as a department; it is worse if they do not even those people and organisations to whom local authorities want to know what the extent of the demand really is. might want to put their proposals, so the amendment In respect of Amendment 81, I take the point made is not necessary. I do not say that it is not a sensible by the noble Lord, Lord Shipley. The sense of the point; it is, but it is not necessary. amendment is that it would be in the totality of the Of course, local authorities will have to consider approach to funding that the Government would be carefully the number of potential applicants when required to see that the discount scheme was capable they design the scheme, so that they have a sound basis of dealing with all eligible claimants. That would be for their financial planning. However, I do not think, our preference, but that does not necessarily mean that and I know that it will not be accepted, that creating a it should be directly funded by the Secretary of State. requirement for local authorities to do so would be It would be a question also of the department seeking particularly helpful. To create an additional requirement to know what is happening on the ground in terms of would duplicate what should already be standard good this range of 330 different schemes and different levels practice in their financial management. of discount. The principle is certainly worth looking The amendment also requires authorities to publish at. Perhaps the amendment might need further refinement as part of the scheme the steps that they will take to on Report. The noble Lord has a point, but so does ensure that people are informed of their entitlement my noble friend. and what assistance they will offer. The noble Lord, Lord Shipley, spoke in favour of that. Sub-paragraphs (1) 3.30 pm and (5) of Paragraph 2 of the new Schedule 1A to the I hope that the Minister will look with some sympathy Local Government Finance Act 1992 already require at this, and in particular that she will agree to take authorities to set out the classes of person who are back to her ministerial colleagues the concerns that entitled to a reduction and the procedure for making have been raised today. The noble Baroness is not an application. That seems to cover more or less what responsible for the Department for Work and Pensions— the amendment is about. not yet. I mean, who knows with a reshuffle coming. It In fact, local authorities will want to ensure that is all possible and it would be welcome if someone those who are eligible for support claim what they with her experience and humanity were in that department. need to, so that they avoid going into arrears with However, if she stays in her present post, it would be their council tax, which would not help them or indeed very helpful if she were to engage with her ministerial the local authorities. Again, to stipulate how local colleagues. authorities should do that is to put an unnecessary I am actually a little surprised at the noble Lord, requirement on them when they are already responsible Lord Freud, whom my noble friends found really for the administration of council tax generally and the quite helpful and sympathetic to these points when provisions that already exist. they spent a great deal more time than I did on the We are absolutely clear—and let me make this very Welfare Reform Bill. It may be that this is something clear today—that people should claim what they are that has eluded his attention, in which case a gentle entitled to. It is absolutely true that not all eligible word in his ear from the noble Baroness might just pensioners or people who are eligible for benefits take result in a very welcome and necessary rethink on the them up, and there are a number of reasons for that Government’s part. that I am sure noble Lords could explain. One of the That is certainly necessary and very much a priority reasons is the stigma attached to council tax benefits. if any of us in local government are to be able to do Some people say that they do not particularly want the job of assisting people who desperately need it by their personal circumstances divulged, however beneficial tackling the problems of poverty and its associated it would be for them, and not everybody knows how to issues, which in turn impose huge costs on the public tackle what is sometimes quite a complicated system, purse. Let us not forget that this leads to greater although I accept that there are many organisations expenditure on health and the other benefits that available to help them. Under the Bill, those organisations might accrue because of poverty of lifestyles, education will be available to take claimants through the system, and the like. It is actually an investment, not a simple and they will. There is no barrier to people making a expenditure, to support people in the enjoyment of a claim. reasonable income that meets their needs. I hope, in that sense, that the noble Baroness will be sympathetic As it designs its scheme, the local authority will and engage with her ministerial colleagues. have to take into account the fact that it may not have all the claimants available to it to start with. Part of the reason for putting this scheme of business rates Baroness Hanham: My Lords, this has been an retention and council tax benefits into the hands of interesting discussion. The trouble is that it has local authorities is that it is expected and hoped that been negatived to some extent by the fact that there local authorities will continue to encourage enterprise are already duties on local authorities, as described. and business, as many local authorities do at the With regard to Amendment 80, local authorities already moment, to get people out of benefits and into have a duty to consult persons whom they consider employment. We hope there will be a balancing act likely to have an interest in their schemes under between those who need and are entitled to benefits GC 153 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 154

[BARONESS HANHAM] Baroness Lister of Burtersett: My Lords, I am very and those who are perhaps just working their way grateful to all noble Lords who have contributed to through them on a temporary basis. However, how its this debate, and, in particular, to the noble Lord, Lord scheme takes care of that is a judgment for the local Shipley, for his very welcome support for Amendment 80. authority. I shall come back to a point that the noble Lord made When I was speaking earlier, I pointed out a fact in a moment. that is relevant here: between 1997-98 and 2009-10, My noble friend Lord Beecham echoed my concerns council tax benefits doubled. We are not talking about about ending publication of the take-up statistics, insignificant sums of money but about huge sums of which is currently being consulted on. It is still a money.We are trying to ensure that we get unemployment proposal being consulted on, but I know at least one down so that those benefits are not required in the eminent professor who could not find it on the DWP same way, but the 10%— website. It is quite difficult to get yourself into this consultation. I hope that the Minister will take this Committee’s concerns about the implications back to Lord Greaves: I am again seeking information as I the noble Lord, Lord Freud, particularly with regard do not know as much about this as other members of to the introduction of the universal credit scheme, the Committee. When the Minister says that council which is being used as a justification for withdrawing tax benefit doubled over that period, is that before or the statistics. Improving take-up is one of the arguments after taking account of inflation? It obviously makes a being put to us for why universal credit will be an great deal of difference. improvement on current arrangements. It seems very strange, just at the point when there is a big reform of Baroness Hanham: My Lords, it is after taking the system, partly justified by reference to improving account of inflation, so it is a very substantial increase. take-up, that there is a proposal to stop publishing The 10% saving across the piece in the council tax those statistics. Perhaps the Minister could relay that benefit scheme is making a small contribution to help back to the noble Lord, as I am not sure that he will tackle the deficit. necessarily read the report of these proceedings. Localising support for council tax increases financial I am not very good at picking up regulation-speak accountability and helps to make local authorities and Act-speak. I am not sure whether the Minister fully responsible for decisions over council tax levels. was saying that the duty on local authorities will be They now have a requirement to make sure that that is the duty that I referred to—for example, a duty to do transparent to people who are claiming it and to their best to ensure take-up—or whether it was a much people who are helping with it. weaker duty. I shall read the record, but I sense that it Amendment 81 would not only prevent a reduction is not as strong a duty as we are asking for in terms of in funding to local authorities. It could, in fact, lead to local authorities doing their utmost to maximise take-up an increase in government expenditure because it would of benefits. The current duty is to take such steps as require the Secretary of State to provide funds to appear to be appropriate for the purpose of ensuring cover all eligible claimants under a new local scheme, that any person who may be entitled to council tax however the scheme had been designed. One of the benefit becomes aware that he may be entitled to it. I things that would be quite difficult to work out is how do not think that what the Minister said was as strong many people are eligible for the benefit if they do not as that. I shall look at it and I shall take on board the apply for it. The amendment is simply not credible or suggestions of the noble Lord, Lord Shipley, that if affordable. The saving scored in the spending review those duties are not strong enough, we will want to has to be delivered, and local authorities are charged return to this on Report and take into account the with finding ways to deliver that. suggestions being made about the wording of the amendment. It may be helpful if I tell noble Lords what they already know: local authorities will receive the same The noble Lord, Lord Shipley, made the point that amount of money this year to support council tax I was trying to make very well. He talked about a benefits as they received last year, minus 10%. That conflict of interest. He said that that cannot be right. I will be fixed for seven years until the next business do not think that the Minister addressed what I think rates reset. Meanwhile, if they can get the number of is an ethical issue. It worries me because if they have council tax benefit claims down, if they can get people the money fixed for seven years, if take-up improves, into employment, if they can make a scheme that goes they will have to find other ways of finding the money. across the whole of their business front, then from My noble friend Lady Sherlock pointed out that that now on they will know how much they will get. It is might harm the very people we are trying to help. That extremely helpful to them because they can always is not necessarily an answer. As the noble Lord, Lord work within those parameters. Shipley, said, not in all cases will authorities be able to find the money from second homes, single person discounts and so on. Lord McKenzie of Luton: Will the noble Baroness I do not feel at all reassured. I thank the Minister clarify, with reference to this year and last year, precisely for her very full reply, but I do not think that it dealt which years we are talking about? with—I am not sure that it could deal with—this fundamental ethical question about the conflict of Baroness Hanham: It is 90% each year for seven interest that local authorities face, which was referred years, and that will start in 2013-14. It is based on the to by the noble Lord, Lord Shipley. I suspect that we estimate for 2013-14. shall want to return to this on Report. GC 155 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 156

Baroness Sherlock: Before my noble friend withdraws business rate safety net will ensure that no council’s the amendment, will the Minister clarify something retained rate income falls by more than a set percentage that she said in her reply to the noble Lord, Lord below its baseline funding. Business rates provide a Greaves? She said that council tax benefit expenditure significant revenue stream for local authorities, and had more than doubled in that period. Can she clarify unexpected volatility of rates could have a significant that she means that it has more than doubled in real impact on an authority’s budget, so it is right that we terms? The noble Baroness nods. The reason that I ask make that safety net available. is that it was not clear from the impact assessment, so However, revenue from business rates is of a different I wanted to be clear that I had understood it properly. order of magnitude from the cost of council tax support. In 2010-11, the contribution of business rates Amendment 80 withdrawn. to the pool—that is, the net yield after allowances for collection costs—was more than four times the cost of Amendment 81 not moved. council tax benefit expenditure. During the passage of the Bill, comments have been made about the impact 3.45 pm of a large local employer closing down—the noble Lord used that as his example—on business rate revenue Amendment 81A and demand for council tax support. There is a distinction Moved by Lord McKenzie of Luton between the two. Although there is a clear, direct link between the closure of a business and a reduction in 81A: Schedule 4, page 58, line 32, at end insert— business rate revenue, the impact is likely to be more “( ) Where the Secretary of State has agreed to make a complex in relation to demand for council tax support. payment on account in accordance with paragraph 26 of Schedule 7B, To take one example, employees may not be residents consideration shall also be given to the provision of additional funds for the council tax discount scheme.” of the borough or the council area; they may come from a much wider area, in which case that will affect Lord McKenzie of Luton: My Lords, I do not other local authorities instead. propose to detain the Committee long on this amendment, Councils have greater control over their council tax although it is influenced by the discussion we have just support scheme than over business rates, although had about seven-year fixed resources. It deals with they are encouraged to make sure that those increase. situations where the Secretary of State has agreed that They will be able to design their scheme to reflect their an in-year payment is to be made under the safety net local circumstances and, particularly, to work with provisions of the business rate protection scheme. their major precepting authorities to agree an approach Such payments are to be made under regulations to be to managing risk. Authorities will be able to plan and promulgated by the Secretary of State. The amendment manage council tax reductions carefully, just as they requires that a payment on account under the safety already do for many other vital local services. Mechanisms net provisions should also be a trigger for consideration are already in place to share the effects of a reduction of additional funding under the council tax support in council tax collection rates between billing and arrangements. The point is obvious. As we have discussed major precepting authorities. They will enable financial before, the localisation of council tax support switches pressures which result from increases in demand for risk from central government to local authorities. That support to be shared. In addition, we are making requires local authorities to estimate the effect of their provision in the Bill to enable billing authorities to local discount schemes, including take-up, on their arrange with major precepting authorities to vary the band D equivalent numbers. amount of precept to be paid in-year to reflect any The challenges that that presents to local authorities shortfall in council tax receipts. This could help to in budgeting have already been discussed. In most protect billing authorities from financial pressure in-year, instances, a significant, possibly catastrophic, reduction until they manage to get the matter sorted out. in the business rate base will have other consequences, I hope that with those remarks the noble Lord will which are likely to include employment—or, more feel able to withdraw his amendment. likely, unemployment—consequences. Redundancies will place strain on the benefit system and certainly on any local council tax support scheme. Some of those Lord McKenzie of Luton: I thank the Minister for events may be predictable, but some will not. They her reply. Of course, I will withdraw the amendment as may be the result of decisions taken continents we are in Grand Committee. I accept entirely that the away. Some councils may be able to take the strain; arrangements require an approach to managing risk others may not. All that the amendment would provide and that, particularly in the early years, they will be is a process which triggers consideration of additional new challenges for local authorities. They always have funding being made available in-year to support to manage risk, but the particular risks that come with unpredictable claims on council tax support schemes. the business rate retention and council tax support I beg to move. schemes are new and additional risks. The Minister said that local authorities had Baroness Hanham: As the noble Lord said, this greater control over their council tax support schemes. amendment is shorter than some others and would I accept that point, but they do not have that in-year expand the scope of the business rate safety net into control. One point that we will discuss at a later stage the council tax support scheme, so that there would is the ability of the local authority to change and effectively be a safety net for benefit, as there is for the revise its council tax rebate scheme. My understanding business rate. The provisions we have made for the is that it cannot do that in-year. If it can, I would be GC 157 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 158

[LORD MCKENZIE OF LUTON] gained the least from the boom years of the UK interested to know that. Even if it could, that would economy, and I am anxious that through this Bill their not necessarily help with the problem that we are standard of living is not reduced further. trying to focus on here, when you have a catastrophic I recognise that I am not going to prevail in reversing situation and a closure leads to big reductions in local a Treasury decision on cutting public spending. I have employment. I accept entirely the point that it would learnt from previous efforts to spare those on the not just be people in a particular locality; big factories, lowest incomes from the imposition of the new bedroom so far as they still exist, are likely to draw in labour tax in the Welfare Reform Act that even when your from a number of authorities. In Luton about a Lordships give wholehearted support to such measures, decade ago when the Vauxhall car plant closed we the other place is very likely to overturn the decisions saw what impact that had on the local economy. It taken in your Lordships’ House, no doubt using financial would have had an impact on the council’s finances privilege as the basis for its objection. But while we under these new arrangements. Having said that, I may be powerless to prevent this latest reduction in think that there is only so much merit in pressing the support to local government, because of the overriding case and, for the time being, I beg leave to withdraw necessity for deficit reduction, we can influence the the amendment. way in which that cut in funding is distributed. In particular, my hope is that we can amend the Bill so Amendment 81A withdrawn. that local authorities can safeguard some of our poorest citizens from the necessity to start paying local taxes Amendment 82 out of their very low incomes. Moved by Lord Best From the perspective of local councils, there are practical problems in being asked to raise revenue by 82: Schedule 4, page 58, line 42, leave out from beginning to reducing discounts on council tax for the poorest end of line 13 on page 59 households. The cost of collecting council tax from those with no spare income is likely to be very high. Lord Best: My Lords, I move Amendment 82, and Because arrears and the cost of prosecuting those who will also speak to Amendments 86 and 93ZA in this fall into arrears will be a serious problem, the amount group. This will take a few minutes, but I hope that to be found by each council is likely to be much greater your Lordships will find it worth while. than the headline figure of 10% of last year’s council tax benefit bill. Costs seem certain to grow as more These amendments all relate to the devolution from people become eligible for help. The 10% CTB cut is central government to local government of decision- clearly an underestimate of where this is all going, and making about council tax discount schemes. The it comes on top of the 28% of cuts in government Committee has discussed extensively the principle of funding which local authorities are already having to devolving responsibility for these discounts—the old handle. council tax benefit—from the Department for Work and Pensions to local authorities. The noble Baroness, Amendment 82 and the consequential Amendment 86, Lady Hollis, and others have made the case very which need to be read with the subsequent Amendment eloquently that localising the support for those on low 93ZA in mind, start with the premise that local authorities, incomes has distinct disadvantages over it remaining in facing up to the new cut, need to be able to use their centralised and becoming a part of the new universal discretion, creativity and sense of priorities in determining credit arrangements. The Local Government Association, who should pay in their local communities. What irks of which I am president, and some Members of this local authorities, in being thrust reluctantly into the Committee, most prominently the noble Lord, Lord position of tax collectors from the poor, is that central Deben, take a contrary view. government is giving them new responsibilities but My amendments concentrate not on whether the denying them the autonomy to decide how best to arrangements should be localised, per se, but on the discharge those responsibilities. In several respects, ways in which localisation can be made to work properly. government is tying the hands of councils and requiring The amendments are aimed at making the process of them to implement the cuts in centrally determined localising council tax benefit or discounts fit for purpose ways that are quite counter to the ethos of localism. by allowing local authorities proper discretion to tackle My amendments, put together by the Local the difficult position in which they are placed because Government Association, seek to liberate councils of the requirement on them to save a further £410 million from several straitjackets prescribed by Whitehall and per annum. thereby to enable every local authority to do what it My starting point in pursuing these amendments sees as best in its own local circumstances. Amendment 82 has not been so much about the principle of localisation addresses the insistence by central government that but about addressing the implications of the cuts, current council tax support for pensioners be left which could mean taxing many poorer households alone so that any cuts in benefits fall wholly on those throughout the country. If the £400 million has to be of working age. I have no desire to see the living paid by those currently receiving council tax benefit, standards of any poorer households, including any bringing them into the tax system where they have not low-income pensioners, reduced at this difficult time. I previously been required to pay, those households would want to ring-fence all those least able to pay, as must dip into other benefits provided for them to pay the current arrangements seek to do. But if I were to for their food, clothing, heating and so on. As I spelt single out any one group for less harsh treatment, it out at Second Reading, these are the people who have might not necessarily be the pensioner group. GC 159 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 160

I say this for three reasons. First, since this is the noted that the Government want vulnerable groups to largest group of claimants, excluding everyone in it be excluded. It is hard to see whom among those has serious consequences for the rest. Pensioners account currently obtaining council tax benefit are not vulnerable. for 40% of claimants nationally and for more than Clearly, the case for preserving existing support for half of those eligible for the present CTB in a number disabled people is very strong and, as we discussed of local authority areas. In East Dorset, for example, earlier, it may be illegal to discriminate against people 70% of claimants are pensioners. Preserving the status with disabilities under equality legislation. quo for pensioners hugely increases, and frequently Similarly, families with young children may merit doubles, the burden on the remaining households. special protection, not least in pursuance of the legislation Secondly, this Government and their predecessor have that aims to end child poverty and prevent homelessness. done more to improve the position of pensioners than Many will argue, with good reason, that the help to has been the case for the poorest people who are below carers should be fully preserved. Yet if all the cuts pension age. The recent IFS report, Pensioners and the were then to fall on the working poor, the extra burden Tax and Benefit System, points out that those over on those families on the edges of employment—the state pension age have seen their incomes increase people to whom so much of the welfare reform agenda more quickly than those of working age over the past is addressed—would be quite disproportionate. 15 years. Measures such as winter fuel payments, free eye tests, free bus passes, prescriptions and TV licences If council tax benefits discounts are going to be have given extra help to pensioners. reduced for present claimants, clearly not everyone can be excluded. Amendments 82 and 86 would at least make it possible for local authorities, however 4pm invidious the task, to exercise their local judgment on The Government have also introduced a very important where the axe should fall and use discretion in relation change that favours pensioners over those of working to all types of claimants, not just pensioners. age—the so-called triple lock on the value of the state Let me now cut to the chase and explain how the pension. This ensures that it will rise each year by the amendments work alongside my Amendment 93ZA to greatest of earnings growth, consumer prices index resolve the tough dilemmas created by the Bill. The inflation, and 2.5%. But benefits for people of working amendment joins Amendments 82 and 86 in removing age generally rise only in line with CPI. other central government constraints on council tax The latest report on this theme from the Joseph arrangements, this time relating to the single person Rowntree Foundation, produced by Professor Donald discount. That discount is a concession that benefits Hirsch, shows how benefits, excluding housing costs, all single person households including those on high income support and pension credit, now cover in full incomes. Putting my own cards on the table, I hope the income that independent assessment deems necessary that if councils have the power to take their own for a pensioner couple to reach a minimum standard decisions in these matters, they would avoid cutting of living; that is around £235 per week. But current council tax benefit for the needy groups that currently benefits obtainable by a young couple with two children receive it and consider cutting the single occupancy achieve not 100% of the minimum income standard, discount at present fixed at 25%, which goes to millionaires but only 60%. The same goes for a single parent with and the poorest alike. A third of all properties get the one child, and for a single working-age person: the single person discount. It is received by far more support from the state now covers only 40% of the people than the council tax benefit discount. If it was minimum income that they require. reduced, local authorities would receive extra council While I would have absolutely no desire to reduce tax from those able to pay and would not need to the disposable income of pensioners, the case for change the eligibility for council tax support for those treating them quite differently from younger people on the lowest incomes. Then the Treasury could still on the lowest incomes is not clear, and I am not taking save its £400 million-plus, but without hurting vulnerable into account that some income-poor pensioners are and disadvantaged households, including low-income capital-rich and may be living in quite valuable homes pensioners. while, of course, being eligible for council tax benefit. The Bill opens up the possibilities for councils to Thirdly, the IFS report shows that pensioners will raise more tax on second homes and empty homes. I lose less on average than those of working age from think this is welcomed throughout local government, the benefit changes now being introduced by the but in many areas the opportunities for raising significant Government to deal with the fiscal deficit. I am very sums from second homes and empty properties is aware that it is pensioners alone who have been spared quite limited, and there are doubts over whether it will the other new tax for poor people—the bedroom tax always prove possible to collect council tax where on council housing association tenants who are deemed homes are empty because, for example, they have been to have a spare room—and pensioners are most unlikely repossessed and their owner has no money. Moreover, to be affected by the total benefit caps that will reduce giving some discount ensures that owners are encouraged support for many thousands of families with children. to register their properties as being unoccupied and It is other groups that are currently being most affected thereby enables councils to take other action to get by the newly introduced and forthcoming welfare benefit them back into use. cuts. I have nailed my colours to the mast and suggested Local authorities will undoubtedly want to protect that the best extension to the flexibilities which the Bill some non-pensioner groups who are currently getting is giving to councils would be to vary the level of help to cover their council tax. The Committee has discount for single occupancy. This is the big one GC 161 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 162

[LORD BEST] smallest. As a result of higher incomes in England and when it comes to discounts, but it is not means-tested a smaller proportion of occupiers receiving council and clearly this concession is not targeted on those tax benefit, these very modest costs would be lower in most in need of help. Moreover, it is not necessarily England than in Wales. Frankly, because of the cost of good social policy to reward single occupiers of, for a fairly small reduction in the single person discount example, large properties, yet the larger the property being spread over so many people, I suspect that few and the more valuable the property, the greater will be would notice the difference, particularly in areas where the benefit to the occupier of the single person discount. the flexibility on empty and second homes can raise What about the argument that the level of council some of the funds needed. tax should reflect the amount of use the property’s However, if individual local authorities wanted to occupiers are likely to make of local services? It may use the flexibility which Amendment 93ZA provides be the case that one person living alone will require in more sophisticated ways, the single person discount fewer services from the council than a couple but, of could be reduced on a differential basis. For example, course, some single people may make much heavier there could be a smaller discount for single people in demands than some couples, and this argument is no the most expensive band H properties, with a slightly longer to apply in relation to empty properties and lower reduction for those in band G, so spreading the second homes where there are, no doubt, lower load on a progressive basis. The discount could be requirements for the emptying of bins and the provision retained at the full 25% for those in the lowest value of other services, but where this will no longer necessarily bands. It would be entirely a matter for local authorities lead to substantial discounts if local authorities choose to determine the best arrangements for their area. not to offer them in the future. Raising the necessary funds to satisfy the Treasury The Bill recognises that council tax is a tax on by modifying the single person discount also addresses property, irrespective of the uses made of council some of the key problems facing local authorities in services by those who occupy, or do not occupy, that this regard. This approach addresses the administration property. I cannot think that there are any grounds for problem by being cheap to handle and the collection arguing that a discount should always be applied at a problem since it avoids having to chase very poor fixed 25% by local authorities in all areas to benefit all people for small sums of money, to say nothing of the single occupiers. legal and penal costs in pursuing those who do not I have been greatly helped in preparing for these pay. It removes the need for councils to define who is debates by the report of the Institute for Fiscal Studies vulnerable or to make the terrible choices between called Reforming Council Tax Benefit by Stuart Adam groups in need as to who should pay. It ensures local and James Browne, to which others paid tribute earlier. authorities do not break the law by discriminating I am delighted that the Joseph Rowntree Foundation against certain groups. It would certainly help with the was the major funder of this work, once again proving timing problem in getting a scheme up and running the JRF’s considerable value as a source of support since no very great changes to IT systems and computer for independent evidence and analysis. The IFS report software would be necessary if the single person discount spells out the options which all local authorities should was simply applied at a different percentage to those consider in devising a scheme of their own. It recognises already receiving this concession. Most of all, it would that the option of cutting services still further after the address the fairness problem by removing from councils 28% reduction in support from central government the very onerous and, for many, very objectionable would be nigh impossible as well as unacceptable in task of levying a tax on those least able to pay it and most areas. Instead, it would seem infinitely preferable diminishing the living standards of those who are for councils to be empowered to look at ways of having the toughest time in this period of recession. tweaking the single person discount. The LGA has In summary, these amendments would give local estimated that cutting it altogether would raise some authorities the flexibility to take local decisions on £2.3 billion more in council tax, well over four times as whether pensioners should be included in any changes much as is needed to compensate for the cut in CT to council tax discount arrangements and on whether benefit. No one is suggesting a complete removal of the single person discount should be reduced. This this discount. The IFS has calculated that reducing the would allow good judgment to prevail locally, and no single person discount from 25% to 17.5%, but leaving new burdens would be placed on the poor and vulnerable all pensioners, whatever their incomes, unaffected would groups currently helped by the council tax benefit. I raise enough money to avoid the need for any council beg to move. tax benefit cuts to existing claimants. My preference would be for a reduction across the Lord Jenkin of Roding: My Lords, my noble friend piece from the present 25% to 20%, embracing better-off Lord Tope and I have three amendments that are pensioners just like anyone else and spreading the cost grouped with the amendment that the noble Lord, very widely and thinly. Poorer single people, including Lord Best, has addressed. He made a very compelling poorer single pensioners, would continue to have their speech. If it really is possible to make the reductions council tax paid, as now, and only the better-off would he suggested in the single person relief that would face a change. The extra cost to those affected would eliminate the need to have to make difficult cuts across be well under a £1 a week: IFS modelling of this the board, particularly to those at the bottom end of option in Wales shows that a reduction of the single the income scale—others have devoted a good deal of person discount from 25% to 20% would mean an time in this committee to analysing those problems—it extra £50 a year on average with, of course, less for should be looked at extremely carefully. I must confess those in lower value properties where council tax is that I have not read the IFS report, but I have seen the GC 163 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 164 figures produced by the LGA and they seem pretty tax—nor do I look for them, or expect them. We are persuasive. I look forward to hearing what my noble talking about the poorest pensioners all the time, and friend has to say about them. we should make that absolutely clear. The idea that The other theme from the noble Lord, Lord Best—and there could be more classes, which could be prescribed I say, in parenthesis, that he has absolutely no reason in the same way, seems very difficult to me and should to apologise for the length of his speech, which was at least be the subject of consultation. one of the most important speeches we have heard Another point that I agreed with the noble Lord, during the Committee stage—was the question of Lord Best, on is that the commitment, given publicly, local discretion against central direction. It is to this that no pensioner benefits will ever be taken away, that my three amendments are addressed. They do not seems a bit unreasonable. I declare my interest: I have have quite the sweep of the noble Lord’s amendments, a free bus pass, I get free prescriptions, and then particularly Amendment 93ZA, but they are nevertheless people say, “You’re looking very well” and I say, “Yes, important. it’s the pharmaceutical industry that helps to keep me going.” Some of the benefits that one gets in cash 4.15 pm form go straight to my favourite charities—but it seems to me unreasonable that these benefits should Amendment 82A looks at the problem posed by go to everybody, irrespective of how well off they may Amendment 82, where the Government are making be. That is Amendment 82A; to consult is the least regulations—it is all on pages 58 and 59 of the Bill—to, that we could ask. “prescribe classes of person which must or must not be included in a scheme”, My other two amendments here are essentially and, probing amendments. Amendment 88B raises a conflict to which I think the noble Lord, Lord McKenzie, “prescribe reductions, including minimum or maximum reductions, which must be applicable to persons in prescribed classes”. referred earlier—the conflict of timing in having the requirement to produce a scheme for council tax support This is a sweeping arrogation of power to central and the provisions of the Localism Act, which give the government when in fact the whole philosophy of the public the power to require a referendum if council tax Government, both in the Localism Act 2011 and is imposed at a rate that appears to be unreasonable. If indeed in this Local Government Finance Bill, is to the scheme has to be in force by a particular date increase the discretion of local authorities. I find this and the council is seeking to levy a council tax, while conflict very puzzling. One wonders what is moving recognising that because of the requirements it may my noble friends in Government to adopt this stance. have to put up that council tax and that that may be I addressed this issue at length during the course of subject to the powers of a referendum, there is a the Localism Bill, and I certainly do not want to conflict of timing there. I do not see how it would repeat everything that I said then. However, if one is work. It has been suggested to me that one effect it will going to allow, or say that one wishes to give, local have is to make absolutely certain that a council does authorities a wider choice and broader discretion because not conceivably put itself into the difficulty of provoking they are accountable to their own taxpayers, then to a referendum, which may be what the Government take that away by prescribing centrally what they must want. These seem to be two separate policies which or must not do seems to me to be an inexplicable have not been thoroughly thought out. It may be that I conflict. I do not understand the reasoning, except to have misunderstood and I shall look forward to hearing suspect that people want to talk about localism but my noble friend’s response. they do not actually trust local authorities to have that discretion. That, I think, is what lies behind this. If Amendment 88D is the third to which the noble you are going to adopt a programme of localisation, Lord and I have attached our names. Again, it is about proclaim it as such and hope to gain support from it, it central government taking what seem to be quite seems disingenuous to say at the same time, “We do excessive and unreasonable powers. Yes, there have to not trust them to do that responsibly.”This is something be transitional arrangements, but surely to goodness that the Government must address and the noble local authorities could be trusted to make those Lord, Lord Best, made a very powerful speech on this arrangements themselves. Why do the Government issue. need to have the powers to prescribe transitional provision for the commencement of local schemes? It is the same All that my Amendment 82A is saying is, “Please phenomenon: they do not trust local authorities to may we be assured that local authorities will be consulted do it. before any of the powers in paragraph 2(9) are used.” This does not seem to me to be in the least bit I am now an unabashed supporter of localism and unreasonable. If the Government are going to retain at our last sitting my noble friend Lord Deben, if I these powers, and it seems from the Bill that is what may say so, made a tremendously powerful speech on they want to do, they should at least consult local that subject. He was a very much better Secretary of authorities before they do that. It could have quite a State for the Environment than I was and I listened to dramatic impact if the Government were to propose, him with fascination. However, that is my view too for instance, prescribing a new class in addition to the and I utterly support it. It is quite inconsistent for pension credit beneficiaries. Am I not right in saying the Government to be taking these centralised powers, that when we have been talking about pensioners we over even such things as how the transitional arrangements have been talking about pensioners in receipt of pension are introduced. Is that necessary? Yes, this is a credit? One has to be very careful. I am a pensioner, probing amendment but please could we have an and I do not get any of the benefits, such as council answer? I think what we are all looking forward to is GC 165 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 166

[LORD JENKIN OF RODING] in their local area. If we mean localisation, I do not the answer to the fascinating proposals from the noble think that is a decision for Parliament or the Government. Lord, Lord Best, about the level of the single person That is a consequence of localisation. If the noble benefit. Baroness, Lady Hollis, were here now, she would probably be feeling a little agitated. We need to recognise that as a consequence and know where those decisions Lord Tope: My Lords, my name is with that of the are to be taken. noble Lord, Lord Jenkin, on the amendments to which he has spoken and I endorse all that he has said in The noble Lord, Lord Best, has raised the very speaking to them. I also endorse strongly what he said important issue of the single person’s discount. I very in relation to the amendment moved by the noble much agree, not that Parliament or the Government Lord, Lord Best, to which I am extremely sympathetic. should take that decision, but that the local authority The noble Lord, Lord Jenkin, is right to say that the should be given the flexibility to consider that in their noble Lord, Lord Best, has made a powerful case. armoury when dealing with this issue, just as they will Perhaps I might also reflect on what the noble Lord, have the very welcome flexibility with empty homes Lord Jenkin, said in his conclusion. I certainly do not and second homes, the single person’s discount, part want to adjudge who might or might not have been the of which, of course, is recognising that council tax is best Secretary of State for the Environment—I am not not just a property tax but, in a small part, is a going into such dangerous territory—but he is absolutely personal tax. That flexibility would be very important right in his enthusiasm for localism. Localism means indeed. I hope that the Government will give very that you have to trust local authorities. Inevitably, serious consideration to that during the coming month some local authorities will sometimes take decisions or two before Report stage. with which many of us might disagree, but that is also When considering this sort of legislation, we always what localism means. have to consider, not what the situation is now, but We had what I thought was a very helpful letter this what it will be for the lifetime of the Bill that we will week from the noble Earl, Lord Attlee, to the noble eventually enact. We will not have forever the present Lord, Lord McKenzie, which answered many of the Secretary of State with his very well known commitment points that were made in our session on 10 July. In the to localism and his benevolent approach to these noble Earl’s letter of 16 July, he said that, matters. One day, there may be another Secretary of State—who knows, that day may not be so far off—who “the very point of localisation is that it is the council who has the greatest insight into council tax payers in its area, their ability to takes a less benevolent approach. It is to that future pay council tax and should take these decisions”. Secretary of State that we are giving pretty well unfettered Before that he said: powers to do whatever he or she may choose to do with this scheme, to impose it on local authorities, “Local authorities will be able to take their own decisions about the design of schemes”. with no requirement even to consult. That, as my Elsewhere in the letter he says that local authorities, noble friend Lord Jenkin said, is the least modest requirement of Amendment 82A. “are best placed to take decisions about who should receive support”. Amendments 88B and 88D, also in my name, as he That really makes the case for our amendments and rightly said, are probing amendments. I think he made perhaps I should just sit down, saying that the Minister the case on those very well indeed. As they are probing has made the point for us. That is at the heart of this amendments, I look forward to hearing the results of argument. If we are to have localisation of council tax our probe when the Minister replies. The key issue support—there are varying degrees of enthusiasm for before us in this debate is what do we really mean by that although I think we all accept that it is to happen— localisation and localism and do we really trust local then that is what we should have. However, paragraph 2(8) authorities with the armoury of powers available to of Schedule 4 gives the Secretary of State power to them to make those decisions without the benevolent make regulations prescribing requirements for schemes. eye of the Secretary of State telling them what they Paragraph 2(9) mentions all the things that those can and cannot do. regulations may cover, including prescribing, “classes of person which must or must not be included in a 4.30 pm scheme”. Lord McKenzie of Luton: My Lords, this has been a It has been made very clear that the Secretary of State good debate. We heard a very powerful speech from intends to prescribe that people of pensionable age the noble Lord, Lord Best. We have acknowledged in will be excluded from this. That may or may not be this Committee, on the Welfare Reform Bill and other right, but to me that does not meet the test of localism committees his principled and powerful leadership on set out very fully by the noble Earl, Lord Attlee, in his a range of important issues but I am sorry to say that letter. In no way does that leave local authorities best we cannot travel the whole of the journey that he place to take decisions about who should receive support outlined for us today on this particular occasion. and in no way does it recognise that local authorities I will come to Amendment 93ZA shortly, but our are in the best position to judge what is appropriate for starting point is different. Although we have supported the needs and circumstances of their area. localism across a whole range of areas, our position I do not think that we should be debating here on council tax support or council tax benefit is that it whether pensioners or any other group of vulnerable should be part of universal credit. If that is not people should, or should not, be protected if we possible, it should be a national scheme. That is the believe that it is localism. That is a decision for local right way to structure it. Therefore, anything that moves authorities that are best placed to judge the circumstances us away from that position creates difficulty for us. GC 167 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 168

If Amendment 82 is carried, it would not only deal argued to undermine the integrity of the council tax with the issue of removing the powers in relation to system, although in the context of broader things this pensioners, there is a whole range of other issues that might not be the most important issue. If the starting it would cover. We should look at the draft regulations, integrity of the system is to change, should that be which we now have, which cover things such as temporary done on an ad hoc basis at local level or does the absence from the UK, persons treated as not being in responsibility rest with the Secretary of State? At local GB, persons subject to immigration control and a level, there is no opportunity to redistribute on the whole raft of things which if central government do basis of need the extra revenue that change in the not put down the rules, would be pretty nigh impossible discount would engender. for local authorities to deal with consistently. Whatever Noble Lords have, as we have, referred to the IFS improvements there may have been for pensioners, we report, which analysed the proposition of a reduction do not want to diminish their current living standards. of the discount to 17.5% but with pensioners being We are talking about those on council tax benefit: we protected—and seemingly no other vulnerable groups are not talking about rich pensioners so far as this is being protected. It is not a proposal: it is simply an concerned. example of how it might work on the basis that the Amendment 82A in the name of the noble Lord, change would garner revenues that in total would Lord Jenkin, is simply about consulting. It seems match the 10% cut that the Government seek to impose. entirely reasonable: one could never really object to a But that is not distributed evenly between local authorities. process requiring consultation. The noble Lord, Lord It would raise, for example, 14% in London and almost Jenkin, also spoke to Amendment 88B. When I referred as much in the south-east, but only 8.5% in the north-east. to it earlier, I had a slightly different take on it. His On the IFS example, 20% of people in the poorest particular point is its interrelation with potential council income decile would lose out. The big losers would be tax referendums and how that timing works. Like the single people and lone parents in work. noble Lord, I would be interested to understand the So there are issues about going down this path, and Minister’s response on that. But there is another issue, those issues would be exacerbated and much less which we touched on earlier. If you need to fix a local comprehensively addressed if done on an ad hoc basis council tax support scheme in-year because you realise at individual local authority level. We have not had the that something is going wrong—because you do not opportunity to study the distribution analysis of the have the data right or you have the wrong amounts—what noble Lord’s proposition, which we should clearly do is the process for being able to change that in-year before Report. rather than having to wait for a year and change the scheme in January to operate in the subsequent year? There may be a case for the Government to address That is a problem. the appropriateness of this relief and if they are to do so, to see how the revenues might be redistributed on On Amendment 88D, if we are talking about transition the basis of need. But any change to that has to be provisions between council tax benefit and localised done at national level. Dealt with at individual local council tax support, there must be a role for the authority level, it could certainly generate inconsistencies Secretary of State or for those currently responsible and distributional effects that we would not, overall, for the benefit system. Part of it would be how you be comfortable with. I am afraid that on this particular would deal with back-dated claims—for example what amendment we are not able to follow the noble Lord. happens across the dividing line? That cannot just be left to the individual decisions of local authorities. Surely, central government is entitled to have a say in Baroness Hanham: My Lords, I thank all noble that because it impacts on their bit of the council tax Lords who have taken part from all sides in debate on benefit system. the amendment. I hope that I will be able to provide We had a preview of Amendment 93ZA from the some reassurance as we go through that all is not quite noble Lord, Lord Best, on Monday. As we know, the as terrible as has been put forward. discount is currently set at 25% in legislation, but with Before discussing the detail of these amendments, it a power for the Secretary of State to change the might be helpful for me to set out the Government’s percentage. It is not one of those things currently intentions in relation to regulations. On regulations in subject to local discretion. The origins of the policy general, it is not our intention to prescribe closely the set out in the helpful note provided by the Lords operation of local schemes in relation to working-age Library—and endorsed by my noble friend Lady Hollis, claimants. The Government have said that local authorities who was involved in creating the legislation at the should have flexibility in relation to their local schemes. time—explains that council tax consists of two elements: That is why very few elements of schemes in relation 50% being a property element and 50% a personal to working-age claimants are intended to be prescribed element. The personal element assumes two adults and any that are will be largely administrative. resident in a property. In circumstances where only The Government have been clear from the outset one is present, a 25% discount is given. That is how it that we intend to protect pensioners from any reduction is derived. in support as a result of this reform, and support for The noble Lord argues for the setting of the percentage that has been expressed on both sides of the House. to be devolved to local government, particularly the This policy will be given effect through regulations. I billing authorities, consistent with the Government’s confirm that low-income pensioners will be protected. localism agenda and the provisions to them of powers The default scheme, which we will discuss in detail to settle discounts for empty properties and second when we come to group 38, is intended as a legal homes. Any change from the 25% discount might be backstop to ensure that local authorities cannot avoid GC 169 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 170

[BARONESS HANHAM] and powers currently provided for under social security their duties to bring forward a scheme and so fail to legislation and which will need to be provided for in offer any support to those in financial need in their future under the regulations we bring forward for area. That will be prescribed in regulations. council tax support—for example, the requirements The Government also intend that, in line with for applicants to provide adequate information to wider government policy and existing council tax benefit local authorities in support of their claims. arrangements, non-EEA nationals who have leave to The recent publication of draft regulations covering enter or remain are subject to a prohibition on accessing the default scheme and prescribed requirements, including public funds, and those nationals who are inactive or requirements for pensioners, should put beyond doubt do not satisfy the habitual residence test will be treated the Government’s intention in relation to prescribed as not being in Great Britain and will not have an requirements and the operation of the default scheme. entitlement to council tax reduction. We think that I therefore see no benefit in Amendment 82, which this is important to avoid cost pressures on local would leave low-income pensioners vulnerable to increased authorities, and will give effect to it in regulations. council tax bills. Persons currently unable to claim As noble Lords will be aware, we have published council tax benefit can benefit from local council tax statements of intent setting out what we intend to reduction schemes, and mean that local authorities provide in regulations, and have published draft regulations would not be required to put the effective arrangements for the default scheme and prescribed requirements, so in place for administering such schemes. there can be no doubt as to our plans. My noble friend Lord Jenkin referred to consultation. I turn to the amendments. Amendment 82 Amendment 82A would require the Government to would remove the ability of the Secretary of State to consult on regulations prescribing requirements for prescribe requirements for schemes by regulations under schemes. paragraph 2(8) of new Schedule 1A. The Bill provides I recognise the importance of external scrutiny of that the Secretary of State may prescribe, in regulations, our plans for the detailed framework by which local “other requirements for schemes”. authorities will be required to operate their schemes. That is why, on 17 May, the Government published the As has been referred to many times, the Government statements of intent for the key regulations to deliver have published a detailed statement of intent on that policy and further statements of intent on data regulations. That explains that this power will be used sharing and fraud on 9 July.They provide an opportunity by the Secretary of State to impose requirements on for us to engage with local authorities on the detail of authorities to make provision in their schemes for our plans before draft regulations are brought forward, people of pension credit age—those who are referred and provide them with the key information that they to as pensioners—to exclude certain people of limited need to develop those schemes. That will provide immigration status from schemes, and to put in place further clarity on the content of the regulations and any key administrative requirements for all schemes. enable local authorities and other professional groups The Government have made it clear that they intend to scrutinise them while in draft form. It will also to use prescription to retain, for pensioners, the criteria make clear how we intend to use the key regulation- and allowances currently in place for council tax benefit. making powers in the Bill, while it is subject to The Government have been clear that pensioners who consideration in this House. have worked hard all their lives and have had no Given the publication of statements of intent and draft opportunity to increase their income, should not regulations, there is no need for the additional requirement experience a reduction in support as a result of the to consult local authorities that Amendment 82A would introduction of this reform. The Government will impose. achieve protection of pensioners by prescribing a rules- based scheme in regulations. As at present, that will be means-tested, so the amount of support will be based 4.45 pm on individual circumstances and changes of circumstance Amendment 86 would remove the requirement for will also be taken into account. the default scheme to be compliant with regulations made under paragraph 2(8) of new Schedule 1A to In protecting pensioners and giving consideration the Local Government Finance Act 1992. Under to the design of their local scheme, billing authorities paragraph 2(8), the Secretary of State may make will, of course, have choices about how they manage regulations prescribing matters for schemes. The the reduction in funding under the reform. They will Government’s intention, again set out in the statements be able to choose whether to pass the reduction on to of intent published in May, is that matters covered by council tax payers, use flexibilities over council tax, or the prescribed requirements for all schemes should manage the reduction within their budgets. have identical treatment in the default scheme. This The Government also intend that, in line with relates primarily to the treatment of claimants of wider government policy and existing council tax benefit pension credit age, and persons from abroad of limited arrangements, people from abroad not currently eligible immigration status. to apply for council tax benefit for the reasons I The matters included in the default scheme will outlined before will not be able to apply for council tax differ from the prescribed requirements for all schemes reductions. only in that the default scheme will also include provision Finally, the Government set out in their statement for matters on which the prescribed requirements are of intent that they also intend to prescribe for all silent, and over which local authorities will have freedom, schemes a small number of administrative regulations in particular the design of the scheme for working-age GC 171 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 172 claimants. I do not think that it would be helpful for would give individual local authorities discretion to the prescribed requirements and the default scheme to change the rate of the council tax single person discount take a different approach to dealing with the same from the current 25% and potentially to offer no matters. I see no benefit to local authorities or local discount at all, although I know that was not quite residents in my noble friend’s amendment. what the noble Lord said. He suggested that there Amendment 88B would remove the deadline of might be a discount of lower than 25%. 31 January for making revisions to or wholly revising The technical reforms to council tax in the Bill will schemes. The Government are clear that schemes cannot help local authorities keep the overall level of council be amended in-year but that changes may be made tax down and will thereby support the hard-working between years. It is necessary to set a deadline of and vulnerable bill payers. Changing the single person 31 January for revisions to schemes to provide certainty discount would not be in keeping with this intention. to council tax payers about when a final scheme will Although the amendment would offer local authorities be issued. To remove that deadline, as Amendment 88B some additional flexibility, it would be a potential tax would do, could create significant uncertainty for low- hike on 8 million people, hitting single parents and income groups concerned about what support they some lone pensioners the hardest. This discount has will be able to claim. been in place since council tax was created and has I understand that the intention behind this amendment wide public support. The amendment would also affect is to probe whether the Government have considered the operation of the discount for empty dwellings as the impact of the legislation on the local authority the discount that applies when there is no resident budget and council tax-setting process, particularly could be varied by the billing authority. This change is given the current power for local residents to veto not necessary as the Government have already planned excessive council tax increases under the Localism to extend local authorities’ discretion over discounts Act 2011. The noble Lord can be assured on this for empty dwellings to allow them to set a rate of point. Local authorities will need to take account of anywhere between 0% and 100%. The noble Lord will the potential impact on council tax when designing perhaps not be surprised to hear that the Government their schemes. They will already know their provisional cannot support the amendment. funding allocations, and the Government expect to In summary, the Government have been clear about have published the proposed referendum principles at how they intend to use their regulation-making powers the same time as the provisional local government and, in particular, that they intend to follow the existing finance settlement. The need to consider the affordability system in prescribing support for those of pension of the proposed scheme and its impact on council age and excluding foreign nationals from support. is no different to taking decisions about the level of I do not imagine that the noble Lord intends to funding for other services and their potential impacts increase the administrative burden on local authorities on council tax. and claimants, which would be the effect of Amendment It is correct to say that it will not be possible for 88D, or to allow support for pensioners to be reduced, local authorities to go back and change their scheme if which would be the effect of Amendment 82. I am a referendum is triggered, and a council tax increase sorry that that was rather a long explanation, but I vetoed, but it is absolutely right that we do not create hope that it will help the noble Lord to withdraw his unnecessary uncertainty for people in financial need amendment. about the amount of support that they can claim. Amendment 88D would remove the powers under Lord Best: My Lords, I am grateful to the noble paragraph 9 of new Schedule 1A for the Secretary of Lord, Lord Smith of Leigh, for putting his name to State to make transitional provisions in relation to the my amendment. I am very grateful to the noble Lords, commencement of reduction schemes. That was also Lord Jenkin and Lord Tope, for their support. The included in the statement of intent published in May, noble Lord, Lord McKenzie, is unable to support the which set out the Government’s intention for the amendment because of the combined effect of the two transitional provisions. We have discussed some of amendments. I shall respond to his objections, since I them before. It is intended that regulations will provide hope for support from his side. He objects in principle that a person who is in receipt of, or has made an to the idea that localisation is a way to deal with this application for, council tax benefit immediately before issue. That is a fundamental disagreement of principle, 1 April 2013 is to be treated as having made an and I understand that the Committee is divided on application for a reduction under a local scheme. that point. However, if he is unable to secure the This provision will remove the need for claimants amendments he wants to ensure that localisation does already in receipt of, or who have already applied for, not come about, as a fallback, he and his colleagues council tax benefit to have to apply for a reduction might consider whether the lesser evil here would be under a local council tax reduction scheme. This is a found in allowing local authorities greater discretion sensible measure, which will minimise the administrative to do what they might see as the right thing with the burden on claimants and local authorities. Regulations powers that they are going to be given. will facilitate billing authorities’ use of existing council The noble Lord makes the point that there is a tax benefit applications and information in calculating historic basis for what sounds like a rather pseudo-scientific reductions for council tax bills for local council tax formula for calculating the 25%. The 25% here is a reduction schemes in 2013-14. human invention, based on an assumption that there On Amendment 93ZA, perhaps I ought to declare will be two people in the home and that half of this tax an interest not as a millionaire but as someone who relates to the provision of services. Therefore, if there receives the single person reduction. This amendment is only one person, and if one calculated this on a GC 173 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 174

[LORD BEST] the reaction that he got from both Front Benches. basis that more accurately reflects the real composition Amendment 83ZA is a probing amendment to ask of households—and households have got smaller, as whether we really need to prescribe in this way the we know, over the years—I think that having 1.8 people details of how a local scheme should be produced, or in the home, and halving that, would create the same when the scheme is revised or replaced. position as I find myself in. The precision of a 25% There are very good reasons why, once a scheme is reduction for this purpose is entirely artificial and up and running, the local authority should be perfectly could be changed if anybody wished it so. able to decide if and when revisions are necessary. If The more serious objection made by the noble they are going to have true discretion and flexibility Lord, Lord McKenzie, was that this would bring more over the provision of local support schemes, the procedures people into having to make a larger payment than they relating to the preparation of the schemes and their do at the moment. The average cost across the piece of revision should also be under local control. I beg to a reduction from 25% to 20% might be something like move. 90 pence per person. People in the lower bands, who pay less council tax and for whom the 25% is therefore 5pm a lower amount, would have to pay a rather smaller sum than the 90 pence or so per week that would be Lord Palmer of Childs Hill: My Lords, this particular the average across the piece. I still take the point that amendment finds me echoing the words of the noble some people at the lower end might find themselves Lord, Lord Jenkin of Roding, that the Secretary of paying perhaps 50 pence a week more than they would State is being required to get involved in minutiae. If have done to save people poorer than themselves from one looks at the five regulations in paragraph 3(5), one having to have their council tax benefit reduced. However, almost finds that local authorities are being required it would be possible to nudge the scheme so that those to photocopy both sides of every piece of paper, put in the lower council tax bands were not affected and first-class stamps on everything and so on, and this is remained at 25%. mollycoddling of the greatest degree. If we are talking As the noble Lord rightly says, more distributional about localism, the idea that the Secretary of State can analysis is needed of how one would work it to try to suggest to any local authority that they should do ensure that people on low incomes were not losers in things in this manner tends to assume that it is made that respect, while still keeping the payment that the up of idiots who cannot run anything. That really is rest might have to make at less than £1 a week as a the opposite of localism. target of the additional cost. That distribution sounds This is little more than a probing amendment, as so much more preferable than targeting £3 or £4 a the noble Lord, Lord Jenkin of Roding, said, but one week on the poorest, who currently will have to pay that goes very much to the heart of localism and the the price of this. Secretary of State’s tendency to get involved to a The Minister talked about protection for pensioners. completely unnecessary degree. She is very keen that pensioners are not to be harmed by these new measures, as am I. My point is that other Lord McKenzie of Luton: My Lords, Amendments 84 vulnerable groups also deserve our attention. Pensioners and 87 stand in my name, but I shall first address the may not have done as badly as some other groups in issues in Amendment 83ZA, which has just been spoken terms of other benefit cuts and other ways in which to. It goes without saying that I support Amendment 88 the tax and benefit system have worked over recent in the name of my noble friend Lady Sherlock. years. If it is so obvious to all of us that pensioners As far as Amendment 83ZA is concerned, we are need to be singled out, why not allow local authorities, not enamoured of the Secretary of State having a raft which will no doubt come to that judgment on their of central powers, but we have to balance this against own, to make that decision, rather than pre-empting our concerns about a fragmented system. With the them deciding whether spreading the load more evenly prospect of hundreds of different authorities adopting across pensioners would be seen as a preferable route hundreds of different schemes, all with different criteria, in their own local communities? some standardisation of approach has merit. For example, I feel entirely dissatisfied that my remedies for the form and content of documents to be produced trying to ensure that these measures are not harmful raises the question of what distributional analysis to people on the lowest incomes are not meeting with should be included and what the requirements should universal approval. However, at this stage, I beg leave be for a general impact assessment and indeed an to withdraw the amendment. equality impact assessment. Having some central guidance on these matters may help to head off problems of Amendment 82 withdrawn. potential judicial review for some councils. Amendments 82A and 83 not moved. Amendments 84 and 87 continue the theme of the default scheme which, as we have discussed, has now Amendment 83ZA been produced in all its glory—all 155 pages of it. Despite its lateness, it has moved us on. It has been Moved by Lord Jenkin of Roding difficult in the time available comprehensively to absorb 83ZA: Schedule 4, page 60, line 1, leave out sub-paragraph (4) its content and to read across the existing council tax benefit provisions, and we have an outstanding question Lord Jenkin of Roding: I can deal with this more to the Minister from our earlier amendment about briefly than the previous debate. I to some extent share where the default scheme has not been able to replicate the disappointment of the noble Lord, Lord Best, at existing arrangements. However, given that Amendment 84 GC 175 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 176 is just a probing amendment, I am content to proceed Lister, for Amendment 88, which stands in her name on the basis that any discrepancies or differences are and that of the noble Baroness, Lady Sherlock. minimal, and that the first part of the amendment has It might be a helpful, once again, to explain the been addressed. Government’s intention in relation to the default scheme. That being so, we are seeking from the Government I have done this a couple of times already today. The their view of the protection that their scheme provides Bill provides that a default scheme should come into to vulnerable people. What, on the basis of 155 pages effect only where a billing authority fails to adopt a of regulations, is included in the default scheme for scheme before 31 January 2013. This is intended as a vulnerable people and how does the default scheme safeguard, to ensure that where a local authority fails address their needs? In this age of austerity, we presume to adopt a scheme by the deadline, there is still provision that the Government would not sanction any scheme for people in financial need in that authority’s area to that provides superfluous or excessive relief, so we are receive support with their council tax. simply asking them to spell out how they are providing This scheme will be provided for in regulations and for vulnerable people in the default scheme and which the Government have been clear that this default aspects of the scheme provide particular support for scheme should retain the criteria and allowances currently which groups. Given that the Government have made in place for council tax benefit. To this end, the judgments about who should be protected by the Government have published a detailed statement of default scheme, they should have a view about who intent, setting out how they expect to provide for the should be considered under local schemes. The default scheme in regulations, and confirming that the amendment does not require any local authority to intention is to recreate, as far as possible, the current follow the Government’s view on this; they can exercise council tax benefit system in operation. Monday’s their own judgments, but should be able to do so publication of draft regulations covering the default armed with the knowledge of why the Government scheme should put beyond doubt our intentions in have made certain decisions. relation to the operation of the scheme. These regulations also give an indication of how Baroness Lister of Burtersett: My Lords, perhaps I the default scheme will deal with claimants on universal may crave the Committee’s indulgence and go back to credit, which we were discussing earlier. Regulations an issue that we discussed at our last meeting. Although will need to take account of these claimants, but this is not technically about the default scheme, it is because of changes in the underlying calculation of about vulnerable people and about carers. The Minister the universal credit award, there may be some possible very kindly wrote to my noble friend Lord McKenzie changes in the level of council tax support for those and copied the letter to other members of the Committee. moving to universal credit. This is as a consequence of It responded to our concerns about carers not being wider changes to benefits and the design of universal mentioned as a vulnerable group. In her letter, the credit, and not a direct consequence of localisation. It Minister said, is not intended that the default scheme will provide for “The guidance we have published on the statutory requirements any reductions in support where there is no change in in relation to vulnerable groups does not refer to carers”— circumstances; for example, which might be because as we said— someone has moved from an existing benefit to universal “but as was made clear in the discussion, it is not intended to be credit. Local authorities will still need to manage the exhaustive”. 10% reduction in funding and there will therefore be a The guidance talks about disabled people, duties under strong financial incentive for local authorities to avoid the Child Poverty Act, homelessness, and even the the imposition of a default scheme, as this will limit Armed Forces covenant. When local authorities have their ability to adjust awards to manage the funding ticked all those boxes, and when they have addressed reduction. the requirement on them to take account of work Amendment 83ZA would remove the default scheme incentives, very few local authorities will say, “Hang from the Bill altogether. For the reasons I have explained, on, let’s see if there are any other vulnerable groups the amendment cannot be accepted. The default scheme that we should be thinking about”, and turn their is designed to be a safeguard to ensure that where a attention to carers. local authority fails to adopt a scheme by the deadline, I ask the Minister to take this away, not to put it on there is still provision for people in financial need in the face of the Bill, but perhaps the department would that authority’s area to receive support for their council consider reissuing the guidance so that it specifically tax. That safeguard needs to remain in place. mentions carers among vulnerable groups. I have not Amendments 87 and 88 are intended to guarantee heard the Minister say anything to suggest that she that under the default scheme there will be no reduction does not think that carers are a vulnerable group. So if in the level of support for working-age persons and to the Government accept that carers are a vulnerable put in place transitional protection for the persons group, and as we do not have concern for any other whose support is reduced under the terms of the vulnerable groups that are not mentioned in the guidance, default scheme. Amendment 84 seeks similar protection is there any reason why they could not be put in the for vulnerable groups. guidance? My fear is that, yet again, carers will be I agree with the intention behind the amendments, overlooked. but the Government already fully intend that the default scheme will retain the current criteria and Baroness Hanham: My Lords, I thank my noble allowances and do not intend there to be any change friend Lord Jenkin and the noble Lord, Lord McKenzie, in the level of award where an individual’s circumstances for their amendments and the noble Baroness, Lady are unchanged. In May, the Government published a GC 177 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 178

[BARONESS HANHAM] people. If the Government are imposing such decisions, detailed statement of intent on the default scheme, they should take responsibility for making those explaining that this will closely follow existing council judgments. tax benefit regulations, so the amendments are unnecessary. Lord Jenkin of Roding: I beg leave to withdraw the The noble Baroness asked whether the statutory amendment. guidance would include carers. I think that is probably not necessary. The difficulty is that once you include Amendment 83ZA withdrawn. carers, you have to include a whole lot of other people, which reduces the discretion. 5.15 pm Baroness Lister of Burtersett: The point is that a Amendment 83A whole lot of other people are already in the guidance that has already been issued. I am not sure whether it Moved by Lord Beecham is statutory, but I worry that so many other groups are 83A: Schedule 4, page 60, line 18, at end insert— mentioned. I know that the list is not exclusive, but “( ) If a local billing authority is subject to judicial review in carers should be in the list because if they are not, they respect of a failure to complete the steps set out in sub-paragraph 1 will be overlooked. I am not asking for any change in because of any delay in the issue of regulations or guidance, or in the statute or for the noble Baroness to give an answer the coming into force of this paragraph, the Secretary of State now but for her to take it away to consider whether the shall reimburse the authority for any costs incurred in connection department could reissue the guidance so that it explicitly with such a review.” mentions carers. Lord Beecham: My Lords, this should be a fairly Baroness Hanham: I am very happy to look to see short debate. Given the limited time for consultation, what the guidance actually includes and whether that particularly the limited period between now and the would up with us trailing a huge long list, but I will do end date of January by which schemes have to be that before our next sitting and let the noble Baroness approved, the risk exists that some councils—particularly know in advance. those in shire county areas, to which my noble friend Lady Hollis has referred fairly frequently throughout Baroness Lister of Burtersett: Thank you very much. the Committee—will have difficulty in conducting a full consultation process. The Government have indicated Lord Jenkin of Roding: The whole Committee will that the normal three-month period may be reduced. be grateful to my noble friend for her careful answer to However, in any event we will have a summer month— the points made in the debate. We shall want to read well, a month—when people are likely to be away. carefully what she has said and, if so advised, to return August is almost upon us, and that is not a good time to the matter later. Before I withdraw the amendment, to engage in proper or full consultation with the range perhaps I may say that I am about to withdraw myself. of individuals, organisations and precepting authorities I have to make preparations to get off to celebrate my that will be required, particularly in the shire county diamond wedding in Scotland. I hope that I may be areas. forgiven. With that, I beg leave to withdraw Given the proliferation of schemes we are likely to the amendment. see, there is therefore a danger that when people begin to compare one with another, as they no doubt eventually Lord McKenzie of Luton: Before the noble Lord will, there may be a challenge to some authorities’ withdraws his amendment—I would not wish to keep schemes. That will perhaps be in good part because him from his celebration and we pass on our best the local authority has not been able to consult as fully wishes to him for it—I note that, again, the Government as it would have wished or would be expected to do. refuse to give any practical help to local authorities Since that would be a consequence of this government- on the issue of vulnerable people. We know why that imposed timetable, particularly its start and end dates, is, as they are leaving local authorities high and dry it seems only reasonable in that event—providing that to make those difficult decisions, not wanting to a court would be satisfied that it is a question of the take any responsibility themselves. That will be a externally imposed timetable, rather than any culpability continuing theme of the Bill, and I am sure that we on the part of the local authority—for the Secretary of will return to it. State to reimburse the local authority for any costs. Baroness Hanham: My Lords, I cannot let that go I hope that this is an academic point and will not unchallenged. It has been clear from the outset of the materialise in practice. It may be that the Bill is not discussion on the Bill that the intention is to give local necessarily the place for it. However, I seek some authorities the maximum flexibility to decide how assurance from the Government that if an authority is they want the scheme to operate. The noble Lord may caught out in these circumstances, they would look not agree with that, but it is not the intention of the sympathetically at its plight and seek to make good Government not to give support but to ensure that any cost to the authority incurred otherwise than by local authorities manage their own affairs. its own neglect. That is because any additional costs will ultimately fall not upon the council but upon the Lord McKenzie of Luton: In a sense, the noble very council tax payers for whom these benefits—or Baroness is saying that the Government are imposing discounts, as they will become—are intended in the on local authorities the judgment on whether to help first place. That would be reasonable; there should not vulnerable people at the expense of slightly less vulnerable be many cases, but there may be some. It would be GC 179 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 180 hard on an authority for its council tax payers to have Lord Beecham: One basic premise underlies the to bear that cost, particularly in the shire districts that Minister’s assertions, which is that the Bill will pass in have to consult with a number of precepting authorities, its present form. I think that is a somewhat premature including their county. I hope that the Minister will conclusion. Changes could be made. We are not yet at look at that position sympathetically, not necessarily Report stage, let alone at Third Reading or Royal in the form of legislation, as this is a probing amendment, Assent, and authorities are being asked to proceed but by way of a policy stance. with these schemes in advance of the completion of the legislation. If the Government had accepted, as they should have done, the proposal to delay Baroness Hanham: My Lords, I thank the noble implementation, particularly in respect of this aspect Lord for his explanation of this amendment. of the Bill, there would not be a problem. There would Paragraph 3(1) of new Schedule 1A to the 1992 Act be ample time to consult properly and, indeed, to requires local authorities to consult with their major prepare schemes thoroughly. precepting authorities, publish a draft scheme and consult on that scheme with, As for the information that is supplied, I have here “such other persons as it considers are likely to have an interest”, two of the three documents that were published last in its operation of that scheme before they make it. Friday—I can just about hold them—entitled Draft The amendment seeks to require the Government to Council Tax Reduction Scheme (Prescribed Requirements) indemnify a local authority for costs associated with Regulations. If authorities had been consulting before any legal challenge made to it in respect of a failure now—there were, no doubt, in general terms—they fully to comply with the requirements if that failure are going to have to go back and wade through this was because of any delay in the sub-paragraph coming document, which is not 150 pages, but only 87 pages, into force or the late issuing of guidance or regulations. coupled with Explanatory Notes which, at first glance, The Government have taken—and will be taking—steps explain very little. That is before the default scheme, to ensure that no local authority is in a position where which we discussed earlier this afternoon. I do not it cannot comply with the requirements in Paragraph 3(1). have a copy of that at the moment, but I think it is the Let me clearly reiterate that local authorities have 150-page document that the Minister said is very clear been aware of this policy and its proposed implementation and apparently does not much change the existing for some time. The policy was first announced in the scheme. I do not know whether that is the case because spending review of 2010. In August 2011, we published I have not seen the document. It would be interesting a consultation on this policy, followed by a government to know whether the Explanatory Notes refer to any response alongside the draft Bill in December 2011. changes between the existing scheme and the current Since then, we have provided information and funding scheme because if it was just the existing scheme, it to help local authorities design their schemes. would presumably not be necessary to publish anything. People would just be referred to existing schemes, so I On Report in the other place, the Government am assuming there must be changes, otherwise it would amended the Bill to allow for consultation on a scheme not require the publication of anything very much. to take place before the Bill receives Royal Assent and the provision comes into force. Paragraph 3(2) of new The Minister referred to the consultation requirement. Schedule 1A means this should not be a barrier to In fact, as my noble friend Lord McKenzie implied local authorities proceeding. The Government have earlier, there are two consultations because you have published detailed statements of intent for the key sets to consult the precepting authorities first. In county of regulations and draft regulations for the two key areas, there is the shire county and there may also be a areas, the default scheme and the prescribed requirements, police authority. Sometimes it is part of the county including requirements for pensioners, while the Bill is council, and sometimes it is not. If we take the Thames still in this House. Since then we have provided valley, for example, there would be a precepting authority information, tools and funding to help local authorities for policing covering a number of counties, so the design their schemes. The Government have already districts in those areas will have to consult it as a published the guidance they promised on existing precepting authority and perhaps also a separate fire local authority responsibilities in relation to vulnerable authority. I am not sure about other areas, but in groups and promoting work incentives. The Government metropolitan areas, there will also be a passenger have issued a funding consultation setting out provisional transport authority as well as the police and fire funding allocations for all authorities. We have also authorities, so there will be at least three precepting provided a free online calculator to help local authorities authorities to consult. District councils will presumably analyse the potential impacts of their proposed schemes, want to consult each other, if only because of the and we have announced and paid out £30 million of relationship with the precepting authorities. This is initial funding to help meet the costs of planning and not a simple process. It is to be conducted not only in analysing draft schemes. advance of legislation, but in a hurry. It does not seem to me that there are any grounds It may be all right on the night, but if it is not, it is for the noble Lord’s amendment, since local authorities not likely to be the fault of authorities, particularly already have the detailed information they need to small authorities with limited resources. That has not design and consult on a scheme and need not be happened. As the Opposition, all we are asking for is constrained by the timescale for primary or secondary an understanding on the part of the Government if legislation coming into force to comply with the things go wrong in terms of a judicial review and that, requirements on them to consult. With this explanation, if it can be established that the authority is not at I hope the noble Lord will feel able to withdraw his fault, but simply has not been able to manage this amendment. complex process, then they will meet the costs. The GC 181 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 182

[LORD BEECHAM] should make to manage their finances generally. Frankly, noble Baroness has pointed out, perfectly fairly, that I do not think that the amendment is needed. £30 million has been provided to help local authorities Individual authorities already decide what reserves through the process. I do not think we are looking at they are going to budget for, and would be free to anything like that amount in the event of a few charges decide to hold reserves for the purpose of easing by way of judicial review. The noble Baroness is not council tax benefit if they needed to. Determining the giving any ground tonight. I hope she will look at this level and use of reserves is a matter for individual again before Report stage and consult with colleagues authorities, as part of their overall financial and risk and perhaps with the Local Government Association management. There is no prescriptive national guidance as well, which I do not think has expressed a view on the minimum or maximum level of reserves, either about this, but which may do well to consider its as an absolute amount or as a percentage of the budget. position. The LGA will no doubt help its member Reserves can help authorities to respond to unexpected authorities, but these are not straightforward, simple situations, and give them room for manoeuvre on their matters. As I say, the whole thing rests on an assumption finances, including helping to protect key front-line that may yet prove to be unfounded, that the Bill will services. All authorities should keep sufficient reserves pass in its present form. so that they have a financial cushion to meet sudden unexpected costs. What is sufficient should be determined Baroness Hanham: My Lords, before the noble by the authority themselves, in relation to their overall Lord makes a decision about his amendment, it might budgets and their individual circumstances. be helpful to remind the Committee that when we were talking about the amendment of the noble Lord, Amendment 88C also requires the auditor to agree Lord McKenzie, earlier, we said that we would write to the level of reserves. I do not think that that would be him and set out the very few differences that there are appropriate, because that could prejudice the independence in these regulations. I am advised that the annex to the of the auditor, who might wish to comment later on Explanatory Notes sets out those limited number of the level of reserves. I do not think that the auditor changes and the relationships between the two lots. could give a blessing to a certain amount of reserves before any auditing was done. Lord Beecham: I beg leave to withdraw the amendment, The overall level of reserves is agreed by the authority while hoping that we return to the matter. at the start of the financial year. Under Section 25 of the Local Government Act 2003, the chief financial Amendment 83A withdrawn. officer is required to make a formal report to the Amendments 84 to 88B not moved. authority on the budget and adequacy of the reserves. Although I am very grateful to the noble Lord for raising this issue, I do not think that the amendment is Amendment 88C needed, or that the proposal that the auditor should Moved by Lord McKenzie of Luton agree the reserves would work legally. 88C: Schedule 4, page 62, line 3, at end insert— “(4) Both billing and precepting authorities shall be entitled to 5.30 pm hold such balances to deal with shortfalls in council tax receipts Lord McKenzie of Luton: I thank the noble Baroness as agreed with their auditors.” for her reply. I did not—although I can see that one Lord McKenzie of Luton: My Lords, perhaps I can could—read the amendment to say that the auditor move the amendment on behalf of my noble friend had to be part of the process of agreeing reserves Lord Smith of Leigh. He did not provide me with a rather than taking a view in due course, as it would on script, but I believe I understand what was in his mind the totality of the accounts, but the point is well made. when he crafted the amendment. This is a relatively The amendment may, in part, have been prompted straightforward issue. It requires that: by concerns—real or imagined—that the Secretary of “Both billing and precepting authorities shall be entitled to State has his eye on local authority balances and on hold such balances to deal with shortfalls in council tax receipts putting down a marker that, in the new era into which as agreed with their auditors”. local authorities are moving, it should be recognised We have touched on this at various stages of our that appropriate balances should be permitted, not discussions. We have touched on the fact that both the challenged and viewed by the Secretary of State as a business rate retention scheme and the council tax means of chopping back other resources. However, support scheme will make budgeting that more complex what the noble Baroness said has been helpful, and I for local authorities. They will be challenged with new beg leave to withdraw the amendment. issues around the level of balances and what reserves should be held against them for contingencies that Amendment 88C withdrawn. might flow. I imagine that if the provisions are agreed with auditors, that would be validation enough, but in Amendment 88D not moved. moving the amendment I am interested to hear what the Minister puts on the record in this regard. This issue is important to a number of local authorities. Amendment 88E Moved by Baroness Hanham Baroness Hanham: My Lords, I thank the noble 88E: Schedule 4, page 66, line 19, at end insert— Lord for moving this amendment on behalf of his “LGFA 1988 noble friend. I agree with him that local authorities 1A In Part 1 of Schedule 11 to the LGFA 1988 (the Valuation will want to consider what sensible provisions they Tribunal for England), after paragraph A18 insert— GC 183 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 184

“Power for member of First-tier Tribunal to act as member of the When determining a person’s entitlement to a reduction Tribunal under a scheme, a billing authority may need to carry A18A (1) A member of the First-tier Tribunal (an “FTT out a detailed assessment of a person’s means. That member”) may act as a member of the Valuation Tribunal for may be necessary to comply with the regulations England. prescribing reductions for persons in receipt of pension (2) An FTT member may only act as a member of the credit, if the default scheme is in place, or if a billing Tribunal— authority’s own scheme includes a means-tested element. (a) at the request of the President and with the approval of It is therefore important that the valuation tribunal the Senior President of Tribunals, can access the right expertise in considering appeals (b) in relation to an appeal that relates, in whole or in part, which relate to means-testing. The amendments allow to a council tax reduction scheme made or having effect as if made by a billing authority in England, and the valuation tribunal to be supplemented by members of the First-tier Tribunal for this purpose. (c) if the FTT member is not disqualified from being, or acting as, a member of the Tribunal. Amendment 88E inserts a new paragraph A18A (3) A request under sub-paragraph (2)(a)— into Part 1 of Schedule 11 to the Local Government (a) may relate to a particular appeal or to appeals of a Finance 1988 Act to allow a member of the First-tier particular kind, Tribunal to act as member of the Valuation Tribunal (b) may be made only if the President thinks that FTT for England. Paragraph A18A(2) places conditions on members are likely to have particular expertise that is when a First-tier Tribunal member may act as a member relevant to the determination of the appeal, or to of the Valuation Tribunal for England. It may only be appeals of the kind, to which it relates. at the request of the president of the Valuation Tribunal (4) An approval under sub-paragraph (2)(a) may relate to a particular appeal or to appeals of a particular kind. for England and with the approval of the Senior (5) The President may withdraw a request at any time; and an President of Tribunals in relation to an appeal that FTT member acting as a Tribunal member in response to a relates, in whole or in part, to a council tax reduction request must cease to do so if it is withdrawn. scheme, and if the First-tier Tribunal member is not (6) References in this Schedule and in regulations made under disqualified from being or acting as a member of the paragraph A19 to a member of the Tribunal include an FTT Valuation Tribunal for England. member acting as a member of the Tribunal. (7) But sub-paragraph (6) does not apply— Paragraph A18A(3) imposes conditions on whether requests may be imposed for a First-tier Tribunal (a) to paragraph A7, A8, A9, A10 or A12 (which make provision about the appointment and removal of, member to act as a member of the Valuation Tribunal numbers of, and payments to, members of the Tribunal); for England. Such a request may relate to a particular (b) to regulations under paragraph A19, if and to extent appeal or to appeals of a particular kind and may be that the regulations provide that it does not apply. made only if the president of the Valuation Tribunal (8) The Valuation Tribunal Service may make payments to the for England considers that members of the First-tier Lord Chancellor in respect of the expenditure incurred by the Tribunal are likely to have relevant expertise. Lord Chancellor in paying remuneration, allowances or expenses Paragraph A18A(4) allows the Senior President of to an FTT member whilst acting as a member of the Tribunal. Tribunals to approve a First-tier Tribunal member (9) In this paragraph— acting as a member of the Valuation Tribunal for (a) references to an appeal include a review by the Tribunal England for a particular appeal or for appeals of a of a decision made by it on an appeal, particular kind. Paragraph A18A(5) allows the president (b) “council tax reduction scheme” has the same meaning as of the Valuation Tribunal for England to withdraw his in Part 1 of the Local Government Finance Act 1992 request at any time, and requires a First-tier Tribunal (see section 13A(9) of that Act).”” member acting as a Valuation Tribunal for England member to cease to do so if the request is withdrawn. Baroness Hanham: My Lords, these amendments enable First-tier Tribunal judges and other members Paragraph A18A(6) provides that references in to sit as members of the Valuation Tribunal for England Schedule 11 of the Local Government Finance Act 1988, when requested to do so by the president of the and in regulations made under paragraph A19 of that tribunal for England, when that request is approved by schedule, to a member of the tribunal include a member the Senior President of Tribunals. That is so that the of the First-tier Tribunal acting as a member of the expertise of First-tier Tribunal members, who currently tribunal. Paragraph A18A(7) makes certain exceptions hear appeals relating to council tax benefit, can be to when references to a member of the tribunal includes utilised in determining appeals on decisions made on a member of the First-tier Tribunal acting as a member council tax reduction schemes—something which the of the tribunal, specifically paragraphs A7 to A10 and noble Earl, Lord Lytton, was keen to see cleared up. A12, which make provision about the appointment The Government are clear that there will be a single and removal of, numbers of, and payments to members appeals process for unresolved disputes on claims for of the Valuation Tribunal for England. These do not council tax support by a body independent of the need to apply to acting members of the Valuation local authority. The majority of those who expressed Tribunal for England because they will continue to an opinion on the matter in the consultation document hold office on the terms and conditions under which and at engagement events support that view. they were appointed to the First-tier Tribunal. The Department for Communities and Local Paragraph A18A(8) empowers the Valuation Tribunal Government has agreed with the valuation tribunal Service, the body that provides administrative support and the Ministry of Justice to enable members of the to the Valuation Tribunal for England, to make payments First-tier Tribunal to sit as members of the Valuation to the Lord Chancellor in respect of the expenditure Tribunal for England when requested to do so. incurred by the Lord Chancellor, in paying a First-tier GC 185 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 186

[BARONESS HANHAM] Tribunal member remuneration, allowances or expenses, Amendments 88F to 88H while acting as member of the Valuation Tribunal for England. Further work is being undertaken with the Moved by Baroness Hanham valuation tribunal and Her Majesty’s Courts and Tribunals 88F: Schedule 4, page 67, line 5, at end insert— Service to determine the most efficient approach to administering payments to First-tier Tribunal members. “6A The Local Government Act 2003 is amended as follows.” This amendment ensures that the Valuation Tribunal 88G: Schedule 4, page 67, line 6, leave out “of the Local Service has the power to make these payments, should Government Act 2003” it be concluded that this be the most efficient approach. 88H: Schedule 4, page 67, line 7, at end insert— Amendments 88F to 88H make consequential “8 In section 105(2)(aa) (functions of the Valuation Tribunal amendments to the Local Government Act 2003, which Service: payments to members of the Valuation Tribunal for are needed as a result of new paragraph A18A(8). England), after “A14” insert “or A18A(8)”.” With these explanations, I hope that noble Lords will Amendments 88F to 88H agreed. feel able to approve these amendments. Amendments 89 to 91 not moved. The Earl of Lytton: My Lords, I welcome in general the amendment and will not detain the House very Schedule 4, as amended, agreed. long. It follows what I have been espousing earlier in our debates—namely, the streamlining and consolidation of the appeals process. However, I have two questions Amendment 92 for the Minister. As I have not given prior notice of either question, I would fully understand if she would Moved by Lord McKenzie of Luton prefer to reserve her position and write to me later. 92: Before Clause 10, insert the following new Clause— First, will the benefit hearings element, which will now “Report on effects of provisions be transferred to the Valuation Tribunal Service, be At a date no later than three years from the implementation hybridised with assessment appeals? My concern has of this Act, the Secretary of State shall prepare a report always been that once the benefit comes under question detailing the effect of these provisions on— and there is an appeal on the question of benefit, it is (a) the number of people receiving or eligible to receive only a minor step for an advisory service to advise a council tax support in each local authority, including the benefit claimant or potential benefit claimant to appeal number in employment, the number actively seeking also the assessment, or possibly the liability. The question work, and the number of pensionable age; is how are they going to be dealt with, when previously (b) the costs incurred by each authority in running the they would have gone to the tribunal for the benefit scheme, including the cost of appeals; and element and the question of the assessment—in other (c) the impact on work incentives.” words the banding—would have been dealt with through the valuation tribunal. If they are going to be consolidated Lord McKenzie of Luton: My Lords, I beg to move in some way, will they be completely aggregated together Amendment 92 on behalf of my noble friend Baroness or will the benefit element have its own listing and Sherlock and speak to Amendment 93ZB, which programme? The reason I ask this particular point is effectively covers the same ground. Amendment 92 because my understanding is that there is a considerable would require the Secretary of State to report on the backlog of listings for the valuation tribunal, so the effect of these provisions within three years of their risk is that moving the benefits cases may exacerbate implementation and specifically to report on three what is already an unsatisfactory situation. How they aspects of these changes. are managed will be critical. First, it would require the Secretary of State to My second question relates to paragraph (8) of the prepare a report on take-up of council tax support in insertion, relating to the valuation tribunal service each local authority, detailing eligibility and take-up, making payments to the Lord Chancellor. That is fine, including figures for those who are in work, actively but can the Minister confirm that the Valuation Tribunal seeking work and pensioners. This information will be Service will be given additional financial resources crucial in enabling an assessment of what impact the commensurate with the costs it incurs in dealing with changes have had on eligibility, support by different what would otherwise have been benefits tribunal cases, groups and, crucially, take-up. As the noble Lord, which have been transferred to it? I hope that the Lord Shipley, reminded us so powerfully earlier, there Minister will be able to clarify both those points. is a potential disincentive for local authorities to encourage higher take-up because they would have to absorb the Baroness Hanham: My Lords, those questions are cost of any increased take-up as the funding will no quite detailed and if the noble Lord will forgive me, I longer be demand-related and will come not from shall write to him with the answers, as I think he DEL but AME. suggested, and make sure that the Members of the The amendment would also require the Secretary Committee receive copies. of State to report on two other aspects: the costs incurred by each authority in running the scheme and The Earl of Lytton: I would be very happy with the impact on work incentives. That is simply good that. governance. We are having robust debates here about the likely effect of these changes. We fear these changes Amendment 88E agreed. could damage incentives; while the noble Earl, Lord GC 187 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 188

Attlee, has opined that they would have the opposite response to amendments from the noble Lord, Lord effect by incentivising local authorities to encourage Best, was a commitment to monitor various aspects of their residents into high-paying jobs. Some noble Lords the changes. believe take-up may fall; others that it may rise and be That is important, regardless of what the noble expensive. Either way, the Government are confident Lord has just said. We are making a big change to the that that will not be a problem. basic safety net by removing it from being a national This report will answer three questions and many benefit to being a local one. At the very least, we need more. We can simply reconvene in 2015-16, if we are to know as a Parliament what impact that is having on still here, and find out who is right. More importantly, some of the poorest people in our communities. I am policy-makers of the future will learn lessons and, if sure that the Minister will do this, but I cannot believe necessary, a future Government can make changes to that the Government have no plans whatever to collect legislation in this area. The Minister may say that this some form of information so that we know what effect is unnecessary, that the Secretary of State will collect it will have, especially if the DWP take-up statistics are this information anyway, but we have heard from my now in doubt. noble friend Lady Lister today that even the DWP If we can achieve nothing else in this Committee, it proposes to stop collecting take-up statistics. Certainly, would be good if we could achieve some commitment we want to return to press that issue. I submit that the to monitoring the impact of what is a very significant need is clear. Government should gather this information change. My noble friend Lady Hollis has explained and Parliament has the right to see it. I beg to move. very well why it is such a significant change to our 5.45 pm income maintenance provisions. Lord Shipley: My Lords, I make a brief contribution on the amendment. I am strongly in favour of there Baroness Hanham: My Lords, I thank noble Lords being a report, but April 2016, although that is in the for their contributions. It will not be entirely a surprise end no later than three years, is too far away. Indeed, if when I say that I support my noble friend Lord there were to be changes consequential to that date, Deben’s general emphasis on this issue. implementation of those changes may take even longer. Paragraph 7 of new Schedule 1A to the Local I would have thought that it would be possible to have Government Finance Act 1992 is inserted by Schedule 4 a report no later than two years from the implementation to the Bill and enables the Secretary of State to require of the Act, which would be April 2015. I hope that the authorities to supply specified information to the Secretary Minister will bear that in mind in her response. of State. The Government, in their equality impact assessment of this reform, made it clear that the Lord Deben: My Lords, I have a real difficulty with powers could be used to collect information to support the amendment because it seems to be another example future evaluation of the policy. of trying all the time to limit localism. There are too many mechanisms for that. One is to stop it being Council tax support will become part of the council localised in the first place and the other is to make it so tax system that we have been through today. The difficult for people by having to report in so many Government already collect key data for the council ways that you remove the whole advantage. tax system, including data on exemptions and discounts. We are currently working with other government For me, the advantage is that localities make their departments and local government to determine the own decisions. If there are circumstances in which the necessary data that will be required in future as part of Secretary of State feels that concern is so widely held the council tax system, or through other mechanisms, that he ought to find out more about it, he has all the to monitor the policy and how best to collect this. To powers to do that. We really do not want a situation ensure proper scrutiny, new requests for data from where every time we give powers to localities, the local government will need approval by the single data clever Dicks from the centre say, “We can’t let them get list gateway group, which has been established by this away with it. We have to have a whole series of ways to Government to consider and challenge new data make sure that they report on everything”. requirements from local government. My real objection is that this is all part of a pattern that we have seen for years. We promise localism, but Amendment 92 requires a report on the impact of do not quite give it to them. If we get away with a bit work incentives. To do so would place another of localism, then let us make sure that that there is a administrative burden on local authorities. The purpose whole lot of reporting, measurement and all the rest of of the policy is not to make local authorities report to it. I would like local authorities to make their decisions the Government on work incentives; rather it is to about this. Only if there is a real reason and a real encourage local authorities to get people back into concern should we take any further action at all. When work. It will not be in the interest of local authorities there is a real reason and real concern, I am all in to lock their residents into poverty and low aspirations. favour of immediate action, but putting this sort of They will want to design schemes which support claimants thing into operation is otiose. into work, and the department has issued guidance helping local authorities to understand the importance Baroness Lister of Burtersett: My Lords, I take a of work incentives and how they can design schemes rather different position, as the noble Lord would which support the objectives of universal credit. probably expect. Some of us here are refugees from The second part of Amendment 93ZB would require the Welfare Reform Bill, which sat for what felt like the Government to adjust funding allocations to reflect many years, but certainly for many months. One of the any changes in the number of eligible claimants. The few things that we achieved on that Bill, partly in amendment does not make it clear whether this is GC 189 Local Government Finance Bill[LORDS] Local Government Finance Bill GC 190

[BARONESS HANHAM] Amendment 92A had been withdrawn from the Marshalled funding from within the council tax support scheme List. or additional funding from outside. Funding for council tax support will be included as a fixed allocation Amendment 93 had been renumbered as Amendment 73A. within the business rate retention scheme. Councils will have the responsibility and flexibility to deal with Clause 10 agreed. these on a local level. Councils, in designing their schemes, will need to consider the risk of variation in Amendments 93ZA and 93ZB not moved. demand. In relation to in-year fluctuations in demand, mechanisms are already in place to enable billing Clause 11 : Power to set higher amount for long-term authorities and major precepting authorities to enter empty dwellings into arrangements. This will enable financial pressures as a result of unexpected increases to be shared. Amendment 93ZBA The Government do not think that it will be Moved by Lord McKenzie of Luton necessary or helpful for local authorities to be asked to provide that a report be published in Parliament. 93ZBA: Clause 11, page 7, line 44, after “unoccupied” insert There are transparency requirements on local authorities “or substantially unfurnished” to make sure that all of what they do is understood and made clear and, where possible, put on the internet. Lord McKenzie of Luton: My Lords, Amendment 93ZBA We think that that will be sufficient to ensure that is a narrow and technical amendment. It relates to there is wide knowledge of what each local authority long-term empty dwellings and the power given to is doing. local authorities to terminate entitlement to discounts and increase council tax by up to 50% of the applicable rate, so councils will have the power to charge up to Lord McKenzie of Luton: My Lords, I thank the 150% of council tax provided that the property has Minister for that reply and the noble Lord, Lord been unoccupied and substantially unfurnished for Shipley, for his support. The noble Lord made the more than two years. It is accepted that the term point that two years may be more appropriate than “substantially unfurnished” is not specifically defined three, and I think that we would happily take that on anywhere in legislation and has been the subject of board when we approach the subsequent stage. case law. Clause 11(9) appears to treat property as My noble friend Lady Lister dealt with a point unoccupied despite short interim periods when it was made by the noble Lord, Lord Deben, about the occupied. However, such intermittent occupancy might significance of the change that we have here. About imply that the property was not substantially unfurnished 5 million people are in receipt of council tax benefit at during that period, so it would cease to be a long-term the moment, and those people—the most disadvantaged empty property.That would seem to negate the purpose and poorest in our community—are the ones who of Clause 11(9), so the amendment seeks to ensure that are going to be subject to this new system. Our intention any concomitant period when the property was not is not to limit the localising process, although we do substantially unfurnished is equally ignored. I beg to not like it, this is simply about the Government move. understanding the consequences of their policies. From what the Minister said, it seems that there are potential Baroness Hanham: My Lords, this short amendment requirements on authorities to provide a range of specifies that in determining whether a property has information anyway, so that provision does not seem been unfurnished for any period of six weeks or less to be limiting the Government’s thirst for localism. during which it was furnished should also be disregarded. The impact on work incentives is crucial. It is a major Clause 11 sets out that a dwelling is classified as plank of the Government’s policy, not only on the long-term empty and subject to a premium if it has business rate retention scheme but to the council tax been unoccupied and substantially unfurnished for a support scheme. The whole thing is designed and continuous period of two years. Any period of six driven by trying to get more people into work. There weeks or less during which the dwelling was occupied are issues about where the jobs are going to come from is disregarded. The amendment would add a second and how that is going to work, but it must be of consideration of time to the application of the period interest to the Government to know how that part of by requiring a billing authority to take into account its policy will work in practice. I cannot see why it any periods during which the dwelling was furnished. would not be. This would add an unnecessary level of complication We will return to this issue on Report. It is important to the administration of the empty homes premium. It that there is a transparent process back to Parliament. would potentially require billing authorities to monitor It does not negate what local authorities will do or the interplay of periods of occupation and furnishing limit the powers or scope that they have under the Bill. of a dwelling. Clear criteria for the scheme and ease of All it asks for is a report by the Secretary of State back administration are highly desirable for billing authorities to Parliament to evaluate how it is working in practice and, perhaps more importantly, council tax payers to and whether it is delivering what the Government know where they are. believe that it will—and what we, for our part, are sceptical about. Given that and given the hour, I beg Lord Deben: I am mystified about why the Government leave to withdraw the amendment. have not merely given local authorities the power to make these decisions as they wish. I do not understand Amendment 92 withdrawn. why we still want to control them on these matters. If GC 191 Local Government Finance Bill[19 JULY 2012] Local Government Finance Bill GC 192 this would add complication, why do we not get rid of Clause 12 : Mortgagee in possession to be liable for the complication that is here already and say that local council tax authorities can make up their own minds? Amendment 93ZC Baroness Hanham: I think my noble friend was unfortunately not here during the earlier stages when Moved by Baroness Hanham we went through this point in some detail. I resisted 93ZC: Clause 12, page 9, line 5, leave out subsection (2) and those amendments. I hear what my noble friend says, insert— but that is not the situation. I hope the noble Lord, “(2) This section comes into force on such day as the Secretary Lord McKenzie of Luton, is willing to withdraw his of State may by order made by statutory instrument appoint.” amendment. Baroness Hanham: My Lords, this minor government 6pm amendment allows the Secretary of State to commence the provisions of Clause 12 by order, rather than Lord McKenzie of Luton: My Lords, I do not want having them come into force automatically on 1 April to prolong this but I am not sure whether we are at 2013. The Government remain committed to the principle cross purposes. The amendment was meant to be that mortgagees in possession of a dwelling should be helpful and quite narrow. If the legislation is saying liable for council tax but are proposing this amendment that despite the fact that the dwelling is occupied, it is for practical reasons. As stated in their response to treated for certain periods as being unoccupied—it is consultation on this reform, the Government do not understood why that would be the case—the problem intend to implement this provision until discussions with that is that when it is actually occupied, is there have taken place with the mortgage lenders’ sector, not a greater risk that it will be treated as being not leading to satisfactory and workable administrative substantially unfurnished, because it would need to be arrangements. These discussions are being pursued furnished for somebody to occupy it? All this amendment and the Government intend to implement the provisions tries to do is to ask: when you disregard that period of as soon as practical. However, I move this amendment occupation, why not also assume it to be “substantially and hope it is accepted. unfurnished”? Unless you do that, in a sense you negate in large measure the effect of subsection (9). It Lord McKenzie of Luton: My Lords, we clearly do may be that the Minister wishes to take it away but not disagree with this amendment but I note a certain that was the only purpose of this amendment. It is not timing discretion given in respect of these circumstances meant to otherwise complicate it or create other difficulties, that is not allowed to local authorities for the big or to disrupt and undermine the localism agenda. It is challenges that they have, but that is a debate for a very narrow point. another time.

Baroness Hanham: My Lords, I think I need to Amendment 93ZC agreed. come back to the noble Lord. Amendment 93ZD had been withdrawn from the Marshalled List. Lord McKenzie of Luton: I thank the Minister for that and look forward to the reply in due course. In the Clause 12, as amended, agreed. mean time, I beg leave to withdraw the amendment. Earl Attlee: My Lords, it may be a convenient Amendment 93ZBA withdrawn. moment to adjourn the Committee until Tuesday at 3.30 pm. Clause 11 agreed. Committee adjourned at 6.03 pm.

WS 53 Written Statements[19 JULY 2012] Written Statements WS 54

a UK payments industry that promotes and develops Written Statement new and existing payment networks; and Thursday 19 July 2012 UK payments systems that are stable, reliable and efficient. The Government have proposed two options to Payments Industry meet this agenda. Statement The first option builds on the current system of self-regulation within the UK payments strategy setting The Commercial Secretary to the Treasury (Lord functions. It sets out a series of proposed changes to Sassoon): The Government are today publishing a the way the Payments Council is organised. These consultation which invites views on options for reforming changes complement the reforms already underway the regulation and governance of payments networks within the Payments Council and would make that in the UK. body more responsive to end users, including consumers. The payments industry is central to the functioning This option would not increase the regulatory burden of the economy and touches consumers and industry on industry but would not bring any increased regulatory alike. However, it has not always been responsive to oversight to the payments industry in the UK. the needs of all users. In 2009, the Payments Council, The second option proposes creating a Payments the strategy setting body for the payments industry in Strategy Board, to monitor, report on and make public the UK, took a decision that cheques would be phased recommendations to the payments industry. It would out by banks and building societies from 2018. This be run by a mixture of senior industry and non-industry decision caused considerable anxiety for many people representatives and independent directors and be overseen in the UK, particularly those who were elderly, by the new Financial Conduct Authority. This approach housebound or relied on cheques to conduct their day brings payments strategy, but not the Payments Council to day business, a point made by the Financial Secretary itself, into regulation, with a limited increase in the to the Treasury in a letter to the Treasury Select regulatory burden. Committee (TSC). The subsequent investigation by The Government believe that this option strikes a the TSC found that the Payments Council was dominated good balance between ensuring that the Payments by the banks and other payments industry members Strategy Board represents the payments industry, balanced with the result that other users were entitled to be by appropriate consumer groups and independent suspicious of its motives when proposing measures directors, and that its recommendations are public, that were in the financial interest of its members. For bringing increased transparency and accountability. example, the dominance of the big banks might create The Payments Strategy Board would ensure competition difficulties for smaller players, and barriers to entry, concerns and consumer views are fully considered innovation and effective competition. when payments strategy is being formulated, and meet Following pressure from the TSC and the Government, the Government’s aims at relatively low cost to the the Payments Council reversed its decision to abolish industry. At this stage of the consultation process, this cheques in July 2011. However, in the light of the TSC is the Government’s preferred option. findings, the Government accepted the case for bringing Finally, a third approach would be to create a new the Payments Council within the scope of financial regulator for the payments industry on a similar model regulation and proposed developing a number of options to those in other regulated sectors such as gas, electricity for potential reforms. This consultation is the result of and water. This option would considerably increase that commitment. the regulatory, and financial burden on industry and The Government believe that the UK payments would take time to design and implement in a way that industry needs to meet the current and future needs of integrates with, and does not conflict with, the roles of consumers, businesses, other users and the wider economy existing regulators. Given these considerations, the without imposing disproportionate regulatory costs Government have not considered this approach in on businesses. This means having: detail but if consultation responses demonstrate that UK payments networks that operate for the benefit the marginal benefits would outweigh the costs relative of all users including consumers; to option two, the Government will give it further UK payments networks that facilitate competition consideration. by permitting open access to participants or potential The Government are inviting views in response to participants on reasonable commercial terms; the consultation document by Wednesday 10 October.

WA 71 Written Answers[19 JULY 2012] Written Answers WA 72

The Minister of State, Foreign and Commonwealth Written Answers Office (Lord Howell of Guildford): The Government continue to follow the situation in Bahrain closely. We Thursday 19 July 2012 engage with a wide range of interlocutors and this includes members of Al Wefaq. The Parliamentary Under-Secretary of State for Abortion Foreign and Commonwealth Affairs, my honourable Question friend the Member for North East Bedfordshire (Mr Burt) visited Bahrain on 12 June and met representatives Asked by Lord Alton of Liverpool from several political parties and opposition groups To ask Her Majesty’s Government how many including Al Wefaq. He has also met members of the abortions have been performed under the provisions opposition in London. of the Abortion Act 1967 (as amended by Section 37 We continue to call on all parties to enter into an of the Human Fertilisation and Embryology Act 1990) inclusive and constructive political dialogue without to the latest date available; and how many of those pre-conditions in order to achieve long-term stability abortions were to save the life of the pregnant and prosperity for Bahrain. woman. [HL1563]

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): Between 1968 and 2011 (the Banking: latest year for which figures are available) there have Question been 6.4 million abortions performed on residents of Asked by Lord Myners England and Wales. Of these, 143 (0.006%) were performed under Section 1(4), ie where the termination To ask Her Majesty’s Government further to the is immediately necessary to save the life of the pregnant Written Answer by Lord Sassoon on 29 March 2011 woman or to prevent grave permanent injury to the (WA235–6), which stated that the Financial Services physical or mental health of the pregnant woman. Authority (FSA) might “in certain circumstances” A further 23,778 (0.37%) abortions were performed consider the conduct of firms in setting the LIBOR, under Section 1(1)(c), ie that the continuance of pregnancy whether the FSA did review the conduct of these would involve the risk to the life of the woman, greater firms; and, if so, what were the circumstances that than if the pregnancy were terminated. led to it doing so. [HL1369]

Aviation: Passenger Duty The Commercial Secretary to the Treasury (Lord Question Sassoon): The Financial Services Authority’s (FSA’s) own report of the Barclays investigation makes Asked by Lord Monks clear that it began investigating issues relating to LIBOR in 2009. The FSA and competition authorities and To ask Her Majesty’s Government how many regulators in North America, Europe (including DG times in each of the past five years (1) British Competition), Switzerland and Japan are currently Airways, (2) easyJet, (3) Virgin Atlantic, (4) United investigating LIBOR, EURIBOR and other leading Airlines, and (5) Ryanair, have been audited in benchmark rates for alleged manipulation at other respect of collection and payment of air passenger banks, both by banks and individual traders. duty. [HL1502]

The Commercial Secretary to the Treasury (Lord Sassoon): I refer the noble Lord to the answer I gave Barnett Formula on3July(Official Report, col. WA 134). Airlines are Question audited on a rolling basis, in line with many of the other taxes managed by HM Revenue and Customs Asked by Lord Wigley (HMRC). To ask Her Majesty’s Government what assessment The frequency of these audits for individual airlines they have made of the accuracy of the calculations is subject to HMRC rules on taxpayer confidentiality. and conclusions reached by the Holtham Commission on the adequacy of funding provided to Wales by the Barnett Formula in order to sustain acceptable Bahrain levels of public services in Wales. [HL1497] Question Asked by Lord Patten The Commercial Secretary to the Treasury (Lord To ask Her Majesty’s Government whether they Sassoon): A programme of talks between the UK have had any direct contact with the Shia political Government and the Welsh Government on funding is group Wefaq in Bahrain. [HL1650] ongoing. WA 73 Written Answers[LORDS] Written Answers WA 74

Cycling: Funding Diets: Green Coffee Bean Questions Question Asked by Lord Harrison Asked by Lord Jones of Cheltenham To ask Her Majesty’s Government what assessment To ask Her Majesty’s Government what assessment they have made of whether the level of funding they they have made of green coffee bean extract as an have allocated to addressing cycling blackspots is aid for weight loss; and whether they have any plans sufficient, based on the number of applications for to allow the National Health Service to prescribe funding they have received. [HL1577] the extract for obese patients. [HL1544] To ask Her Majesty’s Government what assessment they have made of the case for funding to address The Parliamentary Under-Secretary of State, Department cycling blackspots in areas outside of London. of Health (Earl Howe): The department has not [HL1578] undertaken an assessment of green coffee bean extract To ask Her Majesty’s Government whether they as an aid for weight loss. will consider applications for funding to address Green coffee bean extract is not a licensed medicine cycling blackspots from councils who do not have in the United Kingdom. Doctors wishing to prescribe the resources to match the funding. [HL1579] medicines to treat obesity should use a licensed medicine in the first instance.

Earl Attlee: On 26 June the Government announced £15 million of capital support to improve safety at Disabled People: Children’s Holidays junctions identified as having a record of road incidents Question that have resulted in cyclists being killed or seriously injured. The Government will be writing to authorities Asked by Lord Alton of Liverpool shortly to set out how the bidding process will work. To ask Her Majesty’s Government, further to Although there are no plans to specify a minimum the Written Answer by Lord Hill of Oareford on contribution from local authorities we are keen to 27 February (WA 230–1) relating to the Heswall ensure the funding goes as far as possible through Disabled Children’s Holiday Fund, when they expect match funding. to conclude their inquiries and make a decision in This funding is in addition to the unringfenced connection with the regulatory framework.[HL1081] £1.8 billion of integrated transport block funding, and £600 million Local Sustainable Transport Fund, for local authorities outside London. The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford): We will be consulting on changes to the regulatory framework from September 2012. This consultation will be for one month. Cycling: Penalties This will enable changes to take effect by April 2013. Question Asked by Lord Stoddart of Swindon Driving: Breathalyser Tests To ask Her Majesty’s Government why the penalty Questions for the offence of cycling on pavements was not Asked by Lord Bradshaw uprated in the recent increases in penalties for other road traffic offences, and whether they will now To ask Her Majesty’s Government further to the review the existing penalty to bring it into line with Written Answer by Earl Attlee on 3 July (WA 142), inflation and the seriousness of the offence.[HL1678] what assessment they have made of the burden that the carrying of disposable breathalysers would place on motorists. [HL1580] Earl Attlee: The Department for Transport issued a To ask Her Majesty’s Government, further to consultation paper on 14 June proposing to increase the Written Answer by Earl Attlee on 3 July (WA142), the penalties for a wide range of motoring fixed penalty whether they have consulted the police on their offences. The fixed penalty notice penalty for cycling views on disposable breathalysers. [HL1581] on a footway is currently £30 and has been that level since 2000. One of the options in the consultation document is to increase £30 penalties to £45 where Earl Attlee: As I indicated in Written Answer (WA142) they apply to motoring fixed penalty offences, other on 3 July, the Government have not assessed the than for parking. Pedal cycle offences are listed in the potential impact of requiring the carrying of the disposable document as one of the types of offence in the scope breathalysers system by drivers in the UK, because of this option. they have no plans to introduce such a system. One All the proposals are being consulted about, with risk of such a system is that more drivers might be the consultation closing on 5 September. None of the tempted to drive when close to the legal limit. The proposed increases to fixed penalty notices has yet Government will however be interested to learn from been implemented. the experience in France. WA 75 Written Answers[19 JULY 2012] Written Answers WA 76

We therefore have not made an official assessment proposed energy taxation directive; and whether of the burden on motorists of such as system or the directive itself will affect the power of the House formally consulted the police. of Commons over taxation. [HL1469]

The Commercial Secretary to the Treasury (Lord Energy: Renewable Energy Sassoon): EU minimum levels of energy taxation are Question already set out in the current energy taxation directive which has been in force since 2004. The Government Asked by Lord Reay accept there is now a case for reviewing these minimum To ask Her Majesty’s Government, in the light taxation levels, for example to take account of inflation of the policy of the to obtain since these levels were set in 2003. all of Scotland’s electricity from renewable energy The Government are committed to ensuring there sources by 2020, what estimates they have made of is no further transfer of sovereignty or powers to the the impact this will have on household and industrial EU over the course of this Parliament. Government’s bills in (1) England, (2) Scotland, and (3) Wales. views on the proposal are set out in the Explanatory [HL1495] Memorandum [9270/11 which was submitted to Parliament in June 2011. Baroness Stowell of Beeston: Latest estimates of the average impact on household and industrial bills from Extradition measures to support renewable energy are given in the Question 1 renewable obligation banding consultation , feed-in Asked by Lord Hodgson of Astley Abbotts tariff Government response phase 2A2 and feed-in tariff consultation phase 2B3 (links to these documents To ask Her Majesty’s Government, further to are below). These estimates are based on the cost of the Written Answer by Lord Henley on 30 April renewable electricity needed to keep the UK on track (WA 402), what were the full details of extradition to meet its overall renewable energy target of 15% by requests received and surrenders made under the 2020. European arrest warrant, broken down by country, Any difference in bill impacts in England, Scotland in each year between 2004 and 2010 inclusive. and Wales will depend on the amount of electricity [HL986] consumed each year and the extent to which electricity is sourced from on-site generation—which would not The Minister of State, Home Office (Lord Henley): be subject to the renewable obligation subsidy. It is not possible to provide data on the number of http://www.decc.gov.uk/en/content/cms/ extradition requests and surrenders to each European consultations/cons_ro_review/cons_ro_review.aspx Union member state prior to 1 April 2009. http://www.decc.gov.uk/en/content/cms/ According to the Serious Organised Crime Agency’s consultations/fits_rev_ph2a/fits_rev_ph2a.aspx records, the following tables show the total number of extradition requests received and surrenders which http://www.decc.gov.uk/en/content/cms/ were made under the European arrest warrant in each consultations/fits_rev_ph2b/fits_rev_ph2b.aspx. year between 2004-10 inclusive, the details of the requests received for April to December 2009 and for 2010 and the details of the surrenders made for April Energy: Wind Turbines to December 2009 and for 2010. Question Asked by Lord Radice Part one Requests Year Received Part one Surrenders To ask Her Majesty’s Government whether they will introduce a minimum separation distance between 2004 1,865 24 industrial wind turbines and residential properties 2005 5,986 77 2006 5,020 151 in England. [HL1561] 2007 2,280 332 2008 3,307 515 The Parliamentary Under-Secretary of State, Department Jan-Mar 2009 984 136 for Communities and Local Government (Baroness Hanham): Apr-Dec 2009 3,020 492 Planning policy does not include an exclusion zone Total 2009 4,004 628 between wind turbines and dwellings. Rather, impacts 2010 4,578 1,068 should be assessed on a case by case basis taking into account the context, such as the local topography. Part one Requests Received by Country Apr-Dec 2009 2010 EU: Taxation Austria 26 37 Question 52 185 Bulgaria 32 61 Asked by Lord Stoddart of Swindon Cyprus 6 11 To ask Her Majesty’s Government why they Czech Republic 82 195 agreed at the meeting of ECOFIN on 2 July that Denmark 2 3 minimum taxation levels should be laid down in the Estonia 5 4 WA 77 Written Answers[LORDS] Written Answers WA 78

Part one Requests The Minister of State, Foreign and Commonwealth Received by Country Apr-Dec 2009 2010 Office (Lord Howell of Guildford): The media environment in Georgia remains largely polarised, with limited Finland 3 5 independent or impartial reporting available. A new France 86 123 law on media ownership transparency was passed in Germany 183 430 2011 and the Government of Georgia are currently Gibraltar 0 0 introducing “Must Offer, Must Carry” legislation which Greece 19 5 stipulates that cable operators must carry all Georgian Hungary 49 133 channels with news programmes during the 60 day Ireland 30 45 period before this autumn’s parliamentary elections. Italy 73 103 We believe that further reform would encourage greater Latvia 41 74 media transparency and pluralism. Lithuania 136 157 Georgia is one of several countries currently subject Luxembourg 1 2 to the Council of Europe’s monitoring procedure. Malta 3 7 This assesses compliance with Council of Europe Netherlands 83 173 obligations and commitments, including on media Poland 1752 2160 freedom. The Council of Europe is co-funding a project Portugal 18 25 with the European Union on promoting media freedom, Romania 155 335 professionalism and pluralism in the South Caucasus Slovakia 38 81 and Moldova. Slovenia 3 8 Spain 135 194 Asked by Lord Laird Sweden 7 22 To ask Her Majesty’s Government whether they Total 3020 4578 will ask the Council of Europe to send observers to oversee the forthcoming elections in Georgia. Part one Surrenders [HL1505] by Country Apr-Dec 2009 2010

Austria 1 1 Lord Howell of Guildford: The President of Georgia Belgium 5 8 has invited the Parliamentary Assembly of the Council Bulgaria 1 1 of Europe (PACE) to monitor the parliamentary election Cyprus 3 2 in October. PACE has confirmed it will send observers, Czech Republic 25 47 and the delegation list has now been approved. Denmark 0 0 Estonia 7 2 Finland 0 3 Government Departments: Cars France 16 9 Question Germany 14 29 Asked by Lord Hoyle Gibraltar 0 0 Greece 1 9 To ask Her Majesty’s Government what is the Hungary 4 29 make and model of the official cars used by each Ireland 14 24 Secretary of State. [HL1541] Italy 6 12 Latvia 11 25 Earl Attlee: Since 23 April 2012 the Government Lithuania 38 84 Car and Despatch Agency has supplied cars to Luxembourg 1 0 departments as departmental pool cars for use by all Malta 2 0 Ministers. Cars are no longer allocated to an individual Netherlands 14 15 and therefore there is no single official car used by Poland 290 701 each Secretary of State. Portugal 3 7 Romania 14 26 Slovakia 7 12 Government: Ministerial Visits Slovenia 1 0 Question Spain 11 16 Sweden 3 6 Asked by Baroness Nicholson of Winterbourne Grand Total 492 1068 To ask Her Majesty’s Government, further to the Written Answer by Lord Hill of Oareford on Georgia 15 March (WA 107–9), whether the Secretary of Questions State for Education visited Durand Academy on 24 November 2010, 30 June, 1 September 2011 and Asked by Lord Laird 30 November 2011. [HL488] To ask Her Majesty’s Government what assessment they have made of the level of media freedom in The Parliamentary Under-Secretary of State for Georgia; and whether they will ask the Council of Schools (Lord Hill of Oareford): My right honourable Europe to investigate this issue. [HL1504] friend the Secretary of State for Education visited WA 79 Written Answers[19 JULY 2012] Written Answers WA 80

Durand Academy on 24 November 2010, 30 June 2011 The Parliamentary Under-Secretary of State, Department and 1 September 2011. He did not visit Durand Academy of Health (Earl Howe): The Government are committed on 30 November 2011. to the principle of tariffs for education and training A further search shows that there were five other as the foundation to a transparent funding regime. We school visits which were not listed in the published will introduce tariffs for non-medical education and response (Official Report, 15 March, col. WA 107-9). training and undergraduate clinical placements for I apologise on behalf of officials for this error. medical students in the hospital sector from April 2013, phased over a number of years. The department is The answer should have confirmed that my right working with strategic health authorities and service honourable friend the Secretary of State for Education providers during 2012-13 to develop transition plans. visited the following schools during this academic year (2011-12): We are also working with stakeholders to develop proposals for tariffs for postgraduate medical training Schools Administrative Type programmes. We will continue to work with stakeholders to develop tariffs for postgraduate medical training 8 Primary Schools 3 Community Schools programmes and consider an appropriate pace of 1 Converter Academy transition, taking into account the financial impact of 2 Free Schools the other tariffs. 1 Sponsored Academy There are a number of diverse views on the proposal 1 Voluntary Aided Schools to raise the education and training budget through a 14 Secondary Schools 3 Community Schools levy on providers. This illustrates the complexity associated 3 Converter Academies with the proposal and the need for detailed work 5 Sponsored Academies before firm proposals can be brought forward for 3 Voluntary Aided Schools consultation. 1 All-through School 1 Sponsored Academy Asked by Baroness Finlay of Llandaff 2 Special Schools 1 Community Special School 1 Sponsored Academy To ask Her Majesty’s Government, under the provisions of the Health and Social Care Act 2012, what recourse secondary care providers will have in The following table below shows his visits to schools circumstances where they have evidence that a during the previous academic year (2010-11): commissioning decision is adversely affecting patient diagnosis or care. [HL1556] Schools Administrative Type 14 Primary Schools 8 Community Schools Earl Howe: There is no general provision under the 4 Converter Academies Health and Social Care Act for providers to object to 2 Voluntary Aided Schools the decisions commissioners make concerning the services 24 Secondary Schools 7 Community Schools they commission for their patient population. 3 Converter Academies Section 75 of the Health and Social Care Act 2012 2 Foundation Schools provides for the Secretary of State to make regulations 1 Independent School on requirements for commissioners to adhere to good 6 Sponsored Academies practice in the procurement of healthcare services. The onus will be on commissioners to act transparently 4 Voluntary Aided Schools and to be able to demonstrate the rationale for their 1 Voluntary Controlled School decisions in terms of patient benefits. 3 All-through Schools (primary 3 Sponsored Academies and secondary provision) A provider could make a complaint to Monitor 1 Special School 1 Community School where it considered that a commissioner had acted in breach of the regulations and the commissioner may be required to justify its decisions. He also visited three Further Education colleges Draft policy proposals for these regulations will be during 2010-11. published for public consultation later this summer. Since September 2010, the Secretary of State for Asked by Baroness Thomas of Winchester Education has visited Twyford Church of England High School twice and Durand Academy three times. To ask Her Majesty’s Government how contracts entered into by specialised commissioning groups will be honoured in circumstances where those Health and Social Care Act 2012 groups are abolished under the provisions of the Questions Health and Social Care Act 2012 before those contracts end. [HL1558] Asked by Baroness Finlay of Llandaff To ask Her Majesty’s Government, under the Earl Howe: All clinical contracts held for specialised provisions of the Health and Social Care Act 2012, services that continue post March 2013 will be transferred how the training tariff for medical and dental to the NHS Commissioning Board under the transfer postgraduate training will be calculated, particularly schemes and orders as required by the Health and in relation to the training levy. [HL1552] Social Care Act 2012. WA 81 Written Answers[LORDS] Written Answers WA 82

House of Lords: Leader’s Group on The Minister of State, Foreign and Commonwealth Working Practices Office (Lord Howell of Guildford): We understand there was an Israeli Defence Force exercise in Al Aqaba Question in June, during which live fire was reportedly used. We Asked by Lord Butler of Brockwell have not raised this specific incident with the Israeli To ask the Leader of the House which authorities. recommendations of the Leader’s Group on Working More broadly, we remain concerned by social and Practices he has not yet brought forward for resolution economic developments in Area C of the West Bank. by the House. [HL1728] The European Union has formally demarched Israel to outline our shared concern at worrying developments The Chancellor of the Duchy of Lancaster (Lord in Area C. These developments were a major theme of Strathclyde): A minority of the Leader’s Group’s the meeting of European Foreign Ministers on 14 May. recommendations can be implemented by means of a (http://www.consilium.europa.eu/uedocs/cms_Data/ resolution of the House. Of those that can, the only docs/pressdata/EN/foraff/130195.pd. recommendations that have not been put to the House for decision are recommendation 27—the adoption of a resolution affirming the House’s intention to use Kosovo votes on delegated legislation “to delay, rather than Question finally to defeat, such legislation”—and recommendation 55, Asked by Lord Hylton which would introducea2pmsitting time for the House To ask Her Majesty’s Government whether they on Mondays, Tuesdays and Wednesdays. will propose that the part of Kosovo north of the The majority of the Leader’s Group’s recommendations River Ibar should remain under international required further development, principally through the administration until its future is settled by agreement. domestic committees of the House, before they could [HL1559] be put to the House for decision. At my instigation, the majority of recommendations from the Leader’s Group The Minister of State, Foreign and Commonwealth were considered in this way.Some of them were subsequently Office (Lord Howell of Guildford): The UK is a put to the House for decision while others were rejected longstanding supporter of an independent, sovereign by the relevant committee before the House could take Kosovo, within its current borders. This includes the a view (see 8th, 10th and 11th Reports from the Procedure territory north of the River Ibar. Committee, Session 2010-12; 3rd Report from the Liaison The Government believe the European Union- Committee, Session 2010-12; and the minutes of the facilitated dialogue between Pristina and Belgrade is relevant meetings). crucial for helping to address the challenges in northern Of those recommendations that have been put to the Kosovo and for improving the lives of those who live Housefordecision,themostsignificantrecommendations—for there. We encourage both sides to re-engage constructively example, recommendation 1 in respect of the role of in the dialogue once government formation in Serbia the Lord Speaker and recommendation 20 in respect of is complete. the commitment of Bills to Grand Committee—have WesupporttheEuropeanCommission’srecommendation been rejected by the House. that the Kosovo Government should set out and implement a strategy for addressing the challenges in northern Iraq Kosovo. In this context, we welcome the opening of Question the Mitrovica North Administrative Office, which represents Asked by Lord Hylton the first step in the Kosovo Government’s efforts to provide real, practical support to its Serb citizens in To ask Her Majesty’s Government whether they the north. will ask the Government of Iraq to prevent court- ordered virginity tests. [HL1535] Personnel Recovery Centres The Minister of State, Foreign and Commonwealth Question Office (Lord Howell of Guildford): We are aware of recent reports about the use of court-ordered virginity Asked by Lord Lee of Trafford tests in Iraq. We deplore any instances where women’s To ask Her Majesty’s Government how many rights have been violated. We will discuss these reports service veterans are currently receiving support from with the Government of Iraq and continue to urge the the Personnel Recovery Centres; and how many are Iraqi authorities to respect the human rights of all currently waiting to receive support. [HL1478] Iraqi citizens. The Parliamentary Under-Secretary of State, Ministry Israel of Defence (Lord Astor of Hever): Personnel Recovery Question Centres offer residential facilities to those wounded, injured and sick, serving personnel from across the Asked by Baroness Tonge Armed Forces undergoing recovery as well as providing To ask Her Majesty’s Government whether they facilities for day attendees. Working in partnership will make representations to the Government of with Help for Heroes and the Royal British Legion, Israel concerning their alleged use of live fire in they are focused on helping an individual reach a recent military exercises in Al Aqaba village in the point where they are able to return to duty or transition Jordan valley. [HL1522] to civilian life. WA 83 Written Answers[19 JULY 2012] Written Answers WA 84

As such the centres have not been established to Rail Subsidy—Toc Data 2011-12 provide support to service veterans. However, under certain conditions and where there is spare capacity, Train Operating Company Subsidy/(premia) £m our partners may allocate spaces to veterans. These Cross Country Trains Limited 6.7 spaces are funded by the service charities and the Arriva Trains Wales3 (21.3) Ministry of Defence does not record these numbers. C2c Rail Limited (12.1) The Chiltern Railway Company 6.5 Railways: Electrification Limited Question Trains Limited (40.4) Asked by Lord Wigley First Capital Connect Limited (162.7) First Greater Western Limited (110.1) To ask Her Majesty’s Government whether they First/Keolis TransPennine 78.1 plan to undertake electrification of the railway line Limited from Crewe to Holyhead. [HL1499] London and Birmingham 65.3 Railway Limited (London Earl Attlee: The Government have no current plans Midland) to electrify the line between Crewe and Holyhead. East Coast Trains Limited (187.7) Northern Rail Limited 96.7 Stagecoach South Western (228.6) Railways: Franchises Trains Limited Question London and South Eastern 86.7 Asked by Lord Patten Railway Limited (South Eastern) To ask Her Majesty’s Government, further to New Southern Railway Limited (16.7) the Written Answer by Earl Attlee on 3 July (WA162), (Southern) whether they will now conduct such assessments. West Coast Trains Limited (165.7) (Virgin) [HL1539] Greater Anglia (Abellio)— (16.9) Earl Attlee: We have no current plans to conduct an Current Franchisee National Express East Anglia (72.6) assessment of Salisbury to Exeter route. (NXEA)—Franchise Ended 5 February 2012. Railways: Freight Charges Question Asked by Lord Berkeley Railways: Manchester Airport and Chester Question To ask Her Majesty’s Government what assessment they have made of what impact the proposal of the Asked by Lord Wigley Office of Rail Regulation to increase charges for To ask Her Majesty’s Government whether they carrying iron by rail will have on the future plan to construct a direct railway line from Manchester prospects of the steel industry in Scunthorpe. Airport to Chester. [HL1500] [HL1571] Earl Attlee: The Government have no current plans Earl Attlee: The track access charges levied on rail to construct a new rail line between Manchester Airport freight operators in the next railway funding control and Chester. period from 2014 to 2019 are matters for the Office of Rail Regulation (ORR), which is the independent Schools: Free Meals economic and safety regulator for the railways in Great Britain. Question Some elements of these charges are the subject of a Asked by Lord Storey current ORR consultation on the variable usage charge To ask Her Majesty’s Government what action and a freight specific charge which can be found on they are taking to encourage parents and guardians the ORR’s website at http://www.rail-reg.gov.uk. to register their children as eligible for free school meals so as to ensure schools receive their maximum Railways: Funding pupil premium allocation. [HL1568] Question The Parliamentary Under-Secretary of State for Asked by Lord Berkeley Schools (Lord Hill of Oareford): The Government are To ask Her Majesty’s Government what funding committed to increasing the take-up of free school has been provided to or from the Department for meals for all pupils who are entitled to them. We want Transport by or for each of the rail passenger disadvantaged children to benefit from a nutritious franchises, and Network Rail, during the past financial meal, and for their schools to receive pupil premium year. [HL1572] funding which will help them to help raise the attainment of disadvantaged pupils. Earl Attlee: The subsidy paid and premia received In addition to the work that we have funded the by the Department for Transport from rail passenger School Food Trust to undertake on our behalf to franchises for 2011-12 is detailed below: increase the take-up of school lunches, the department WA 85 Written Answers[LORDS] Written Answers WA 86 encouraged registration for free school meals in November they will place in the Library of the House a copy 2011 by sending registration messages to parents, schools of the parental demand survey for the Beccles Free and local authorities. This was to encourage registration School. [HL1542] just before the January 2012 school census, on which pupil premium funding is based. The school census figures published on 21 June 2012 The Parliamentary Under-Secretary of State for show that registration for free school meals increased Schools (Lord Hill of Oareford): Free school proposers by 0.1% in both primary and secondary schools nationally. are required to provide strong evidence of demand This masks some considerable variation at local level, from parents for places at the school as well as undertake where registrations fell by as much as 5.9% in some a public consultation, to allow people to express their areas but increased by 4.1% in others. We shall therefore views on the free school proposal. This includes the turn our attention again to the issue this autumn, views of parents who wish to send their children to the including encouraging local campaign activity where free school. registration figures are particularly low. The Secretary of State considers evidence of demand Our funding for the School Food Trust enables it to for places at the school, alongside other information, carry out further work to improve the take-up of and takes the consultation into account when considering healthy school lunches, and specifically to increase whether to enter into a funding agreement with the take-up of free school meals. The trust has just published academy trust. Once approved, proposers are also the results of its annual take-up survey, and this shows expected to continue to market their schools throughout that take-up of school lunches was 46.3% in primary the pre-opening stage. schools and 39.8% in secondary schools. This represents The consultation report on Beccles Free School was an increase over 2010-11 of 2.2 percentage points in published on the school’s website and a copy can be both the primary and secondary sectors. This equates seen at: httr://www.becclesfreeschool.org.uk/. to about 167,000 more pupils taking school lunches in 2011-12. We have also streamlined the application process for free school meals by developing an on-line eligibility checking system, which allows local authorities to South Korea check data held by DWP, HMRC and the Home Question Office to establish a family’s free school meal eligibility Asked by Lord Kennedy of Southwark very quickly. We are encouraging local authorities to increase their use of this resource, which as well as To ask Her Majesty’s Government what reducing bureaucracy and cost for local authorities is representations have they made to the Government also encouraging more parents to sign up their children of South Korea following reports they are to start for a free school lunch. For those authorities that whaling for scientific purposes. [HL1400] choose to use it, the eligibility checking service allows parents to check their own eligibility and to apply on-line for free school meals. The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): The Government Schools: Free Schools are strongly opposed to all forms of whaling other Question than limited whaling operations by indigenous people for clearly defined subsistence purposes. Asked by Lord Lucas We are aware of reports that South Korea is planning To ask Her Majesty’s Government, in the light to resume whaling for scientific purposes. Our ambassador of the approval granted by the Department for to Seoul raised the UK’s concerns about this issue Education for the Beccles Free School, whether with officials in the president’s office on 6 July 2012. Thursday 19 July 2012

ALPHABETICAL INDEX TO WRITTEN STATEMENT

Col. No. Col. No. Payments Industry...... 53

Thursday 19 July 2012

ALPHABETICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. Abortion...... 71 Government Departments: Cars...... 78

Aviation: Passenger Duty...... 71 Government: Ministerial Visits...... 78

Bahrain...... 71 Health and Social Care Act 2012...... 79

Banking: LIBOR ...... 72 House of Lords: Leader’s Group on Working Practices..... 81

Barnett Formula ...... 72 Iraq...... 81 Israel...... 81 Cycling: Funding ...... 73 Kosovo ...... 82 Cycling: Penalties...... 73 Personnel Recovery Centres...... 82 Diets: Green Coffee Bean ...... 74 Railways: Electrification ...... 83 Disabled People: Children’s Holidays...... 74 Railways: Franchises...... 83 Driving: Breathalyser Tests...... 74 Railways: Freight Charges ...... 83 Energy: Renewable Energy...... 75 Railways: Funding...... 83 Energy: Wind Turbines...... 75 Railways: Manchester Airport and Chester ...... 84 EU: Taxation ...... 75 Schools: Free Meals...... 84 Extradition ...... 76 Schools: Free Schools ...... 85 Georgia...... 77 South Korea ...... 86 NUMERICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. [HL488] ...... 78 [HL1500] ...... 84

[HL986] ...... 76 [HL1502] ...... 71

[HL1081] ...... 74 [HL1504] ...... 77

[HL1369] ...... 72 [HL1505] ...... 78

[HL1400] ...... 86 [HL1522] ...... 81

[HL1469] ...... 76 [HL1535] ...... 81

[HL1478] ...... 82 [HL1539] ...... 83

[HL1495] ...... 75 [HL1541] ...... 78

[HL1497] ...... 72 [HL1542] ...... 86

[HL1499] ...... 83 [HL1544] ...... 74 Col. No. Col. No. [HL1552] ...... 79 [HL1572] ...... 83

[HL1556] ...... 80 [HL1577] ...... 73

[HL1558] ...... 80 [HL1578] ...... 73 [HL1579] ...... 73 [HL1559] ...... 82 [HL1580] ...... 74 [HL1561] ...... 75 [HL1581] ...... 74 [HL1563] ...... 71 [HL1650] ...... 71

[HL1568] ...... 84 [HL1678] ...... 73

[HL1571] ...... 83 [HL1728] ...... 81 Volume 739 Thursday No. 38 19 July 2012

CONTENTS

Thursday 19 July 2012 Questions Democratic Republic of Congo...... 333 NHS: Health Workers...... 336 Credit Unions...... 338 Police: Working Conditions ...... 340 Late Night Levy (Application and Administration) Regulations 2012 Motion to Refer to Grand Committee...... 343 Wales: Devolution Motion to Take Note ...... 344 UK Border Agency Motion to Take Note ...... 380 EU Drugs Strategy: EUC Report Motion to Take Note ...... 415 British Council: Funding Question for Short Debate ...... 452 Grand Committee Local Government Finance Bill Committee (5th Day)...... GC 127 Written Statement ...... WS 53 Written Answers...... WA 7 1