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Lord Newby: My Lords, does the noble Lord accept that there is a strong argument for including fluctuations in house prices in the index? Without that, you run the risk, as we have seen, that interest rates are too low in a housing boom and too high in a severe downturn.

Lord Davies of Oldham: My Lords, the noble Lord knows exactly the problem that follows from his suggestion; namely, if the Monetary Policy Committee of the Bank of England increases interest rates to get a grip on inflation, it would, by that very action, if interest rates were included in the framework of the CPI, be increasing inflation. That is why it is not a practicable proposition to do what he says. It is right to say that we have two indices: one objectively measures our performance against all other economies, and the retail prices index measures much more closely the costs for households. That is the basis of benefits and pensions increases.

Lord Foulkes of Cumnock: My Lords—

Baroness Gardner of Parkes: My Lords, it is this side; we have had only the opening Question. The noble Lord just said in his reply that the consumer prices index is reviewed only once a year. Is that correct? That surprised me, because the RPI comes out monthly. Does he not agree that ordinary people going out to buy foodstuffs now are totally unconvinced by any of these figures? They see not only their food bills but their fuel bills rising at an alarming rate.

Lord Davies of Oldham: My Lords, of course they do; families are very sensitive to these increases. We are all sensitive to price increases but, by the same token, when the price of certain goods in the basket goes down, that may not be noticed so much. Take the most obvious things: television prices have gone down and so have telephone bills and telecommunications generally. It may be thought that average families are not likely to notice that. They may not notice it, but they appreciate it, because it is reflected in the household budget, unless there is a recondite Member of your Lordships’ House who thinks that families never buy television sets.

Lord Foulkes of Cumnock: My Lords, will my noble friend welcome the concern expressed by Members opposite for the poor of this country, however recent and opportunistic it may be? Will he confirm that the real problem with rising prices of foodstuffs, particularly wheat, rice and milk, is in the third world, where there are extremely poor people who are devastated by what is happening? Will he confirm that our Government will continue to expand and develop our support for the World Food Programme, in contrast to the Tory Government, who halved development assistance?

Lord Davies of Oldham: My Lords, I can confirm the latter point, although it is some way away from the index of inflation in this country. On the earlier point, I emphasise that we did not see any of the

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measures designed to assist poor families when the Opposition enjoyed the fruits of office, yet their inflation rates were more than double those under this Administration.

Lord Elton: My Lords, my noble friend Lady Gardner asked about the frequency of the review of the CPI. Will the Minister answer that?

Lord Davies of Oldham: My Lords, the RPI is about the price of a basket of goods and is adjusted monthly. The CPI is an annual review. Ever since its introduction, it has been an annual review. It is a measurement of year-on-year inflation in the United Kingdom economy.

Higher Education: Foreign Funding

2.59 pm

Baroness Cox asked Her Majesty’s Government:

The Parliamentary Under-Secretary of State, Department for Innovation, Universities and Skills (Baroness Morgan of Drefelin): My Lords, UK further and higher education institutions are autonomous. They guard their academic reputations jealously and enjoy a global reputation for high quality. The integrity of their courses and their processes for appointing academic staff is, therefore, of the utmost importance to them. They are free to seek funding from a variety of sources and to determine their own staff recruitment and curriculum policies.

Baroness Cox: My Lords, I thank the Minister for her reply. Is she aware that since 1995 Islamic and Arab funders have donated more than £235 million to British universities—more than any other source of external funding—and 50 per cent of that money has been invested in teaching Islamic studies? That underpinned a report in the Guardian on 17 April, which highlighted serious concerns regarding the danger that such massive funding had serious implications for academic freedom by inhibiting balanced critical analysis of Islam and Islamic-related political issues. What unequivocal assurances can the Minister give that there is no compromise whatever associated with such massive funding from potentially partisan sources?

Baroness Morgan of Drefelin: My Lords, I am delighted to offer the noble Baroness full and unequivocal reassurance on this question. I have read the article to which she refers and, just to be clear, the level of funding that it highlighted represents around 0.2 per cent of university funding in this country. I do not believe that universities would compromise their academic independence and reputations because of it.

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Lord Anderson of Swansea: My Lords, nevertheless, this is a question of principle. Would my noble friend ensure that all academic institutions publish their sources of finance from overseas donors?

Baroness Morgan of Drefelin: My Lords, my noble friend makes a very important point on financial accountability in higher education. Each higher education institution has a financial memorandum agreed with the Higher Education Funding Council for England. This sets out the terms and conditions to be met if they are to receive public funding. These agreements include governance and accounting arrangements. The annual accounts of higher education institutions have to show all income and expenditure from public and private sources. They also report expenditure, under a number of headings, to the Higher Education Statistics Agency, which identifies overseas funding.

The Lord Bishop of Leicester: My Lords, can the Minister assure us that, when an academic institution is funded by a faith organisation from overseas, provision is made in terms of governance for students to engage with other faiths and with wider society generally?

Baroness Morgan of Drefelin: My Lords, I can reassure the right reverend Prelate. In January of this year, my honourable friend the Minister for Lifelong Learning, Further and Higher Education reissued guidance to vice-chancellors on promoting good campus relationships, including advice to higher education institutions, to ensure that they engage with faith organisations of all faiths within campus.

Lord Wallace of Saltaire: My Lords, I declare an interest as someone who has been involved in raising funds for the LSE from orthodox Greece and arranging partnerships with what is still officially communist China. Does the Minister not agree that variety of funding is most important in defending academic integrity? Does she recall that during their early years, the Thatcher Government interfered in the academic integrity of some universities? I was one of those who defended the academic integrity of the peace studies department in Bradford from a rather sharp Conservative attack.

Baroness Morgan of Drefelin: My Lords, I thank the noble Lord for that question. I agree that diversity of funding is healthy for any institution, including higher education institutions, and that it is essential that higher education is adequately funded. I am therefore delighted that this Government have increased funding by 30 per cent for higher education and by 52 per cent for further education. So there is adequate and diverse funding to create a strong sector.

Lord Quirk: My Lords, I have no doubt that there are dangers, as pointed out by the noble Baroness, Lady Cox, but I was astonished to find University College London commented on by the rather alarmist Centre for Social Cohesion. University College, London, as with many other universities—doubtless most—has

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robust procedures in place to check on precisely this kind of influence. The vice-provost for academic and international affairs has written to me this week pointing out that UCL fiercely protects its reputation and would never accept any endowment that might impugn its academic autonomy.

Baroness Morgan of Drefelin: My Lords, academic freedom and financial independence will foster a continually successful higher education sector in this country, and I am delighted that this House continues to support that.

Lord Soulsby of Swaffham Prior: My Lords, if one can include as foreign funding overseas fees, which, as we all know, are an indispensable source of academic funding in various universities, can the Minister give an estimate of the ratio of overseas funding—overseas fees, for example—to domestic funding through HEFCE to academic institutions?

Baroness Morgan of Drefelin: My Lords, the funding that higher education institutions receive from overseas students is very important. The number of overseas students has increased significantly, but so, too, has the number of UK and EU students. However, vitally, the funding that we receive from overseas provides an enormous boost to the economy in this country. Overseas students are essential in promoting the future prosperity and diversity of the education system in this country, and I think it is right that we should continue to promote their further development.

Merits of Statutory Instruments Committee

3.06 pm

The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That Lord Rosser be appointed a member of the Select Committee in place of Lord Tunnicliffe, resigned.—(The Chairman of Committees.)

On Question, Motion agreed to.

Regulatory Enforcement and Sanctions Bill [HL]

3.07 pm

Read a third time.

Clause 7 [Guidance to local authorities: enforcement]:

Viscount Eccles moved Amendment No. 1:

The noble Viscount said: My Lords, before introducing my amendment, I need to alert the House to a printing error. In the last line of Amendment No. 2, which is in this group, the figures “5” and “6” have been transposed. It should read “6(5)” and not

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“5(6)”. The Public Bill Office is aware of this printing error and I understand that it in no way precludes me from proceeding with moving my amendment.

Lord Elton: My Lords, I think that my noble friend would do a service to the House if he were to repeat what he has just said.

Viscount Eccles: My Lords, I shall certainly do that for my noble friend Lord Elton. There is a printing error on the Marshalled List. In the final line of Amendment No. 2, “section 5(6)” should read “section 6(5)”. The Public Bill Office has been alerted to this and I understand that I need do no more than draw it to the attention of the House.

The Earl of Erroll: My Lords, it might assist if the noble Viscount were to move across to the microphone.

Viscount Eccles: My Lords, the purpose of my amendments is twofold: first, to look for clarification on the Government’s expectations which follow from the LBRO’s power to issue directions on its own behalf and on behalf of Clause 12 regulators; and, secondly, to set out a rule of engagement for the process leading up to a decision to direct or not to direct by including the period of one year between LBRO publication and direction.

As background, two arguments have been made by the Government for this LBRO power. The first is that it has been done before in Chapter 16 of the Food Act. It is true that the Food Standards Agency has the power to issue directions to local authorities about the implementation of food law. The 400-page code-of-practice documents are all about how to apply EU and domestic food law—not about guidance LBRO style. No direction has yet been issued and none is expected, despite the frequent enforcement of law. Law is often enforced, but guidance, in this way, has never been before. Secondly, the Government have said that others want them to introduce this power of enforcement. One in five said something along those lines during consultation; four in five said, “No, thank you”; so the one in five is winning the day—some consultation.

The Bill is the Government’s responsibility—not the responsibility of others—and so my first question is: what do the Government expect to happen under Clause 7 as it relates to Clauses 5, 6 and 11? How will the LBRO be expected to progress from its objectives, guidance and priorities to enforcement? In asking those questions, I rely on the assurances given that directions are a reserve power, which will be in prospect only when there is identifiable recalcitrance and/or a persistent disregard of guidance. Recalcitrance and disregard are clearly against the public interest. May we be assured that that definition is in all essentials correct?

Perhaps I may say a few words about recalcitrance. It does not seem likely that just one authority will stick it out when 399 agree. It seems much more like that when and if recalcitrance is encountered it will be by a group of local authorities—safety in numbers. My amendment sets a period of a year as the time

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between the LBRO publishing guidance and the enforcement of that guidance by direction. It thus deals with Clause 7(1)(a) and Clause 6(5). It does not deal with Clause 7(1)(b). I shall explain why.

Clause 7(1)(b) reads:

Therefore, Clause 7(1)(b) refers to regulators. It is that subsection which so exercises the Delegated Powers and Regulatory Reform Committee. It involves many parties: the local authorities concerned, the relevant regulator seeking enforcement, the LBRO, the Secretary of State and such others as the LBRO considers appropriate—LACORS or the Cabinet Office, for example. Is there a demand from Clause 12 regulators for enforcement action to be taken by the LBRO because they do not have the relevant powers in existing legislation? If there is a demand, what is it? How detailed have discussions been to date between regulators and the LBRO? Of course, if there is no demand, so much the better.

One example of Clause 7(1)(b) in operation might be as follows. Let us suppose that the Food Standards Agency goes, as it could, to the LBRO and, considering it to be the appropriate body, asks that it issues a direction under Section 40 of the Food Act 1984 to 20 local authorities. Then the LBRO will look for evidence of recalcitrance and/or persistent disregard on their part. Consultation and negotiation will take place and 10 local authorities may satisfy the LBRO that they are back in line, and 10 not so. Indeed, these 10 may be preparing legal action because of the legislative nature of the Food Standards Agency using the LBRO powers as a supplement to its own. Meanwhile, the Secretary of State is preparing an order which needs a 12-week consultation period and to follow the 21-day rule for parliamentary scrutiny. Due diligence and reasonableness is required of one and all. From past experience of being the chief executive of one non-departmental public body and the chairman of another, this hopelessly wasteful and bureaucratic exercise about guidance is bound to take at least a year; the multitude of variables will ensure it.

We do at least have track records for the regulators. The position with the LBRO’s own guidance is very different. It has, as yet, produced no drafts of guidance. Consulting the LBRO’s website is not much help. A 21-page strategy paper went out to stakeholders in November; its comments on guidance were very general. Answers were due on 14 March. The website was last updated on 12 February. What has been the stakeholders’ response? As yet, we know very little about the LBRO’s intentions, but we know that it is to be a small organisation which leads us to speculate about what its priorities will be. What will its guidance policy be? I suspect that the arrangements set out for primary authorities in Clauses 24 and 25 will be an LBRO priority, which will itself be a large, nation-wide task. As to its duty to set priorities for local authorities, included in Clause 11, I expect that it will follow Rogers.

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However, what do the Government expect its work programme priorities to be when matching resources to its statutory duties? Where is guidance in all this? We have no idea how the LBRO will approach this task, or of how its consultations have gone to date. Will the LBRO go down the philosophical, readily disputable, route and try to define “transparency” for all 400 local authorities, set out to decide for all time how to calculate whether or not an unnecessary burden is being created and determine how to be sure that targeting leads only to necessary action? All are subjects for the prolonged discussion of differing views, rather than for “must comply”. Or will the LBRO go down another less complicated route? Will it determine its preferred allocation of local authority resources of regulation money and staff leading to solutions fit for all 400 and to local authority league tables of bureaucratic compliance? There are worrying hints of that mechanistic approach between the lines of the strategy document.

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