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House of Lords

Thursday, 16 October 2008.

The House met at eleven o'clock: the LORD SPEAKER on the Woolsack.

Prayers—Read by the Lord Bishop of Southwark.

Introduction: Lord Carter of Barnes

Lord Carter of Barnes—Stephen Andrew Carter, Esquire, having been created Baron Carter of Barnes, of Barnes in the London Borough of Richmond upon Thames, for life, was introduced between the Lord Currie of Marylebone and the Lord Puttnam.

EU: Georgia and Ukraine

11.12 am

Lord Dykes asked Her Majesty’s Government:

The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): My Lords, UK Ministers and officials frequently discuss relations with Georgia and Ukraine with French counterparts in Paris, Brussels and in the region. In addition, there are intensive consultations at EU level. The Foreign Secretary most recently discussed Georgia and Ukraine with his EU counterparts at the European Council yesterday and the Prime Minister is likely to discuss this subject at the European Council today.

Lord Dykes: My Lords, I thank the Minister for that Answer. Is the position on financial and economic matters and on foreign policy now much more coherent and unified in the European Union as a result of recent ministerial meetings, and in this field with the very successful meeting—so they say, anyway—between President Sarkozy and President Medvedev at Evian on 8 October? Given the perfectly valid enthusiasm of both Georgia and Ukraine to have stronger links with the European Union, can that be achieved without offending Russian sensitivities as regards its own backyard?

Lord Bach: My Lords, I agree with the noble Lord’s analysis of recent improvements, but it must be remembered at all times that both Georgia and Ukraine are independent countries which must be allowed to request their own futures in terms of organisations they want to join. There are various difficulties, as is the case with many countries which want to join NATO or the EU. It is very important that these countries should have the ability and the right to make their applications in the normal way and not feel threatened or under pressure not to do so.

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Baroness Gardner of Parkes: My Lords, I have just returned from a visit to Ukraine as a member of the Inter-Parliamentary Union delegation. Is the Minister aware that Ukraine is wildly enthusiastic about joining both the European Community and NATO? The only difference as regards the views expressed in different parts of Ukraine and by different speakers seemed to be which one they considered more important to join first. However, I understand that there is a major problem with Ukraine’s gross domestic product. We should do everything we can to encourage Ukraine in that regard to improve people’s lives. I understand that British firms are improving land use in Ukraine.

Lord Bach: My Lords, I am very grateful to the noble Baroness. Ukraine is a huge country; it is the largest country in Europe in land size and it has a population of 46 million, so obviously British trade interests are very much involved. It is interesting to hear how keen the noble Baroness found Ukrainians were to be members of those organisations that we are members of. One of our concerns is that the political crisis in Ukraine makes it more difficult for it to carry on with the excellent work that it is doing on economic and political reform. We very much hope that the political crisis will be resolved by the use of democratic norms, and we are pretty sure that that is what will happen.

Lord Harrison: My Lords, as another member of the IPU delegation which visited Ukraine in September, I can confirm that the Foreign Secretary’s speech to the Ukraine the previous week was very well received. What view does my noble friend take of the forthcoming elections, where I am afraid that personalities rather than policies hold sway and are unlikely to change the jigsaw of the parties that will come to power? There will be a need to find solutions that take Ukraine forward, and I hope that the United Kingdom will play a vital role.

Lord Bach: My Lords, my noble friend tempts me, but I must resist all his blandishments to comment on the political situation in Ukraine. It is for the Ukrainians to resolve their political issues. I made the point in answer to the previous question that the sooner the political crisis comes to an end, the quicker Ukraine can move on with the political and economic reform that it has achieved so far.

Lord Howell of Guildford: My Lords, does the EU civilian so-called peacekeeping mission in Georgia, which I think is mainly French and Italian-staffed, have access to the regions to which it needs to have access, or is it still being barred by the Russians? On a wider basis, is it our Government’s view that South Ossetia and Abkhazia should still be part of Georgia? Do we reject the Russian support for their independence? Is that also the French view? Is there a common EU view on these matters or is there some rather deep division about how one should face the Russian demand for their independence?

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Lord Bach: My Lords, our view is clearly that we will not support the independence of South Ossetia and Abkhazia. We believe that they are integral parts of Georgia. As I understand it, that is the view of the EU, and the Russian declaration of support for their independence was not at all in line with EU thinking. I understand that the monitors are enjoying freedom of movement.

Lord Morris of Aberavon: My Lords, will the Government exercise extreme care in distinguishing between membership of NATO as opposed to membership of the EU? There is a great danger of provoking the Russians if membership of NATO was allowed to go through without consideration of the obligations of the existing members of NATO to defend any incident in the Ukraine or Georgia.

Lord Bach: My Lords, as always, my noble and learned friend makes an excellent point. NATO membership and EU membership are two hugely different topics. The British Government are very well aware of the differences between them. In general terms, we are in favour of NATO membership for both countries. That is the general decision that was taken at the Bucharest summit. The issues that arise are when and how.

Lord Wallace of Saltaire: My Lords, given what has happened in the present conflicts in South Ossetia and Abkhazia, are the Government doing their best with their European Union partners to make sure that the present conflict in Moldova with Transnistria is resolved? Transnistria is a semi-criminal non-state with all sorts of things being smuggled through it, just as South Ossetia has been. The conflict has been badly neglected by west European Governments. Are we now going to move as fast as we can to try to resolve that conflict in eastern Europe?

Lord Bach: My Lords, I have to be frank; I am not briefed very well on the topic raised by the noble Lord. Perhaps I may write to him with the British Government’s view on that after these Questions.

Walking and Cycling

11.20 am

Lord Krebs asked Her Majesty’s Government:

The Minister of State, Department for Transport (Lord Adonis): My Lords, local authorities have prime responsibility for this, but the Government are supporting them through the £577 million local transport plan settlements. We have funded more than 3,200 schools to encourage safe walking, and are funding projects to promote cycling, including cycle training for an extra 500,000 children. We strongly support the Mayor of London’s plan to introduce an equivalent of the Paris Vélib bike rental scheme and are ourselves funding Bristol to do the same.

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Lord Krebs: My Lords, I thank the Minister for that most helpful Answer and I am delighted to hear that the Government, with local authorities, are encouraging walking and cycling in urban areas, especially in light of last year’s Foresight report, which emphasised that tackling two objectives of government policy, namely obesity and climate change, will involve encouraging people to walk and cycle more. The Minister will of course be aware that last year’s report from the Commission for Integrated Transport showed that Britain has a long way to go. We are bottom of the European league table for walking and fourth from the bottom for cycling. We have a lot of catching up to do.

What does the Minister intend to do about local authorities such as Oxfordshire County Council which are removing cycle lanes and footpaths to make more space for cars and buses? Does the noble Lord agree that this is contrary to government policy, and what does he intend to do about it?

Lord Adonis: My Lords, I am at one with HG Wells, who said:

“Every time I see an adult on a bicycle, I no longer despair for the future of the human race”.

I take that to be a view which the noble Lord shares, and I hope that it is one which Oxfordshire County Council will take close to heart. I cannot comment on its particular plans, but I can tell the noble Lord that my department is never wanting in the advice that it gives to local authorities. We are just about to send them an 86-page document, Cycle Infrastructure Design, which advises on how they can give proper priority to cycling in their areas. Its opening paragraph states:

“Encouraging more people to cycle is increasingly being seen as a vital part of any local authority plan to tackle congestion, improve air quality, promote physical activity and improve accessibility ... by bringing together relevant advice in a single document, this guide will make it easier for local authorities to decide what special provision ... is required to encourage more people to cycle”.

A huge amount of good advice is given. I will give a copy to the noble Lord, so that he can pass it on to Oxfordshire County Council.

Baroness Sharples: My Lords, can the noble Lord tell us how many successful prosecutions have been brought against cyclists who have jumped red lights?

Lord Adonis: No, my Lords, but we do of course deprecate the practice.

Lord Clark of Windermere: My Lords, while it must be right that we encourage people to go to our national parks to enjoy their leisure, it is equally—probably more—important that they take their leisure by cycling and walking within our urban areas. Is the Minister aware of the pioneering work by the Northwest Regional Development Agency? We have planted many forests, in conjunction with the Forestry Commission, all of which encourages access on foot and on bikes. Is he aware that, for example, in recent years 2 million trees have been planted in the borough of Knowsley, 2 million in the borough of Warrington, 1 million in the borough of Wigan, 1 million in Ellesmere Port and 1 million in St Helens? The agency is truly transforming the lives of the citizens in their area. Will he try to spread the message from the north-west development agency?

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Lord Adonis: My Lords, my noble friend does outstanding work in his role in connection with forests and trees. Indeed, I imagine that every one of those trees was planted with his personal authorisation and consent. He highlights a very positive story.

With regard to cycling, what strikes me most forcefully is that, on the one hand, there is a very high level of cycle ownership. The latest survey for 2007 shows that 42 per cent of individuals aged over five own a bicycle and that 18 per cent of those are over 60. The big problem is that they do not feel safe taking the bicycles on to roads. Therefore, the biggest single obstacle to cycling—that is, people owning a bicycle—we have already overcome; the big challenge for us is to see that children and adults alike feel confident in riding their bicycles on the streets and taking them out into those superb national parks and other areas of rural beauty and extremely healthful living that my noble friend highlighted.

Lord Bradshaw: My Lords, I accept that Oxfordshire County Council, among others, is not taking the Government’s advice—and advice is easy to give. However, where the Government have leverage, for example, in relation to the number of secure parking spaces for bicycles at railway stations and they can specify these in the franchises. Will the Minister consider whether, in future, sufficient emphasis is given to that?

Lord Adonis: My Lords, the noble Lord is absolutely right that having adequate bicycle parking facilities at stations is crucial, and it is part of the Government’s policy. The Strategic Rail Authority’s policy document on cycling published in 2004 aspired to see 95 per cent of rail journeys originate from stations with adequate cycle parking facilities by 2009. Many train operating companies have improved cycle parking facilities at stations and have increased the number of spaces, and my department is paying for cycle parking stands, shelters and some CCTV at more than 100 stations in a project which was completed in 2006. Therefore, we are alive to the need to improve the facilities in the way that the noble Lord has described.

Lord Hanningfield: My Lords, a lot has been said about cycling but not as much has been said about walking, although all the evidence shows that the amount of walking that people do is declining. I know what keeps me walking: it is my dog. Perhaps the Government should consider encouraging more people to keep dogs.

Lord Adonis: Perhaps or perhaps not, my Lords; there are pros and cons. Of course, it is absolutely vital that people feel safe when they are walking but Her Majesty’s Government have not seen it as a priority to teach people how to walk, so we give more emphasis to policy promoting cycling. If I were to publish a walking strategy document, it might be thought to be the ultimate example of the nanny state.

Lord Tanlaw: My Lords, those of us who walk daily in Battersea Park are threatened by bicyclists cycling down a pedestrian area which is segregated for children and dogs and for deaf people like me who cannot hear them coming. The park police have some difficulty in

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bringing these people to a magistrates’ court, but they could give on-the-spot fines. Will the Minister see what he can do to make that possible?

Lord Adonis: My Lords, I will certainly look at the issue raised by the noble Lord and write to him.

Finance: Short Selling

11.28 am

Lord Hoyle asked Her Majesty’s Government:

Lord Davies of Oldham: We welcome the measures that the Financial Services Authority has taken on short selling against the backdrop of the present turbulence in the markets. The FSA will review their effectiveness and the general policy in this area, consulting where appropriate. An extension of these measures will be kept under review in the light of market conditions.The UK authorities will continue to work together to take all necessary steps to ensure the stability of the UK financial system.

Lord Hoyle: My Lords, I thank my noble friend for that reply. Will he use all efforts possible to prevent an early resumption of short-term selling, which led to avarice and greed, the casino society and the destabilisation of certain companies? Will he also join me in congratulating the Prime Minister on his efforts to solve the credit crisis not only in this country and in Europe but throughout the world?

Lord Davies of Oldham: My Lords, I take pleasure in the second part of that question. It shows the importance of an overall strategy, which is being adopted and followed worldwide. Short selling is a relatively small dimension of the crisis in the markets, as I am sure my noble friend appreciates. That is why we have put restrictions on it—120 days—and we will keep the position under review, as I indicated in my original Answer.

Baroness Kingsmill: My Lords, does my noble friend agree that right now, at a time of instability in the financial sector, the limitation on short selling is a wise and sensible move but that, in the longer term, short selling is quite a useful market pricing mechanism and that it would be a great shame if it were villainised as being the cause of the problems that we now have?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend because she has helped to establish the context in which the issue needs to be analysed. There is no doubt that in the extreme turbulence in the market, short selling played its part in aggravating the problem. She is also quite right that in more normal times short selling is an indicator of the value of a company and therefore plays its part in the genuine valuation of company operations.

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Lord Oakeshott of Seagrove Bay: My Lords, first, I congratulate the FSA and the Government on bringing in the ban on short selling. I wish they had done it rather sooner, as was called for by my colleague, Vince Cable. Does the Minister agree—from the answer that we have just had, he obviously does not—that short selling, particularly in banks, is very dangerous indeed because it is effectively a bet against the taxpayer? He should understand that the hedge fund hyenas should not be allowed to do that.

Secondly—I disagree with the noble Baroness, Lady Kingsmill—I have been managing pension funds for 30 years; I must have done 20,000 or 30,000 transactions but I have never short sold and I do not believe that that hurt my funds. Is it not time that the Stock Exchange got back to its real purpose, which is to raise money for companies so that they can invest, employ and serve their customers? Frankly, short selling is a wart on the face of capitalism.

Lord Davies of Oldham: My Lords, I certainly agree with the noble Lord that the primary responsibility of the Stock Exchange is to raise capital for companies so that they can develop their operations. I agree that short selling can be—indeed, was—an abuse and a contributory factor in all the major economies to the problems that we have experienced. We will review the position because we do not regard it as a fundamental cause of the crisis; nor do we think that short selling is always and in all circumstances necessarily exploitative or a bad thing.

Lord Marlesford: My Lords, what plans are there for the House to have the opportunity of a full debate on the crisis? Is it not a little curious that there has not been such an opportunity already? Does the Minister agree that, first, it would not be adequate to wait until the debate on the Queen’s Speech and, secondly, that the Government might find helpful the knowledge and views that might be expressed in this House?

Lord Davies of Oldham: My Lords, the Government certainly do find helpful the knowledge and views expressed in this House; they are expressed forcefully on fairly frequent occasions in my immediate recollection. The noble Lord will recognise that in this period there are great pressures on government business, and he will see how demanding that business is over the next six or seven weeks. I appreciate his point about the value of an economics debate and would personally look forward to one, so I shall relay it to the usual channels.

Lord Lawson of Blaby: My Lords, I support the suggestion made by my noble friend Lord Marlesford. On the specific question of short selling, is the Minister aware—I suspect that he is—that there may be arguments against short selling and arguments, which were well put by the noble Baroness, in favour of short selling, but that it is all rather academic? In the real globalised world in which we live, a long-term ban on short selling would, quite simply, be unenforceable.

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